Amerisafe’s Q4 Profit Sinks 69%

Louisiana-based Amerisafe Inc., a writer of high hazard workers’ compensation insurance, said its fourth-quarter profit fell 69 percent due to $13.4 million in realized capital losses.

Net income for the quarter dropped to $5.7 million, or 28 cents per share, compared with earnings of $18.6 million, or 92 cents per share, during the same quarter a year earlier.

Operating income, which excludes realized capital losses, totaled $19.1 million, or 94 cents per share, during the final three months of 2008. Amerisafe’s operating income during the final quarter of 2007 was $18.6 million, or 92 cents per share.

Analysts surveyed by Thomson Reuters, on average, forecast earnings of 57 cents per share for the quarter. Analysts do not always include special charges and gains in their estimates.

Net income was hurt by $13.4 million in realized losses and impairment charges the company took during the quarter tied to holdings in exchange-traded funds and the sale of equity securities. Many insurance firms have posted capital losses in recent quarters because of the declining value of equity investments as markets have tumbled.

Net premiums written during the quarter increased to $59.5 million, from $56.8 million during the comparable period a year earlier. The increase in premiums was due to new and renewal premiums, the company said in a statement.

Amerisafe’s combined ratio increased slightly to 73.7 percent during the fourth quarter, from 73 percent during the final quarter in 2007.

Combined ratio measures the amount of money an insurer generates from writing new premiums compared with how much it pays out in claims and other expenses. A ratio above 100 percent means an insurer is paying out more in claims and expenses than it receives from generating new policies.

For the full year, Amerisafe’s profit slipped to $43.8 million, or $2.15 per share, from $50.2 million, or $2.47 per share, in 2007.

Topics Profit Loss