Main Street America Posts 14.4 Percent Return on Equity

The Main Street America Group of Jacksonville, Fla. has announced that its return on equity in 2004 was 14.4 percent, its second consecutive year of strong ROE performance. In 2003, the Jacksonville, Fla.-based insurance holding company achieved a 20.5 percent return on equity.

Other 2004 financial highlights for The Main Street America Group include:

∙ Direct premium written increased $44 million to $757 million, an 8.7 percent increase vs. 2003 when the company’s net written premium was $713 million.

∙ Surplus and equity grew $57 million to $495 million, a 12 percent increase over the 2003 total of $438 million.

∙ Combined ratio of 99.3.

∙ AM Best affirmed the company’s “A” rating.

“Despite gross claims paid of nearly $80 million (approximately $39 million net) due to the four catastrophic hurricanes that struck the Southeastern United States in August and September, our financial results were very satisfying and in line with the industry average,” Tom Van Berkel, president and chief executive officer said. He added that Main Street America benefited from its careful and conservative planning, especially regarding reinsurance. The impact of the hurricanes was over 5 percentage points on the company’s combined ratio.

“Our three regions not impacted by the hurricanes all reported combined ratios under 94, with an average of just over 92, and shared those good results by paying out over $20 million in profit-sharing commissions to our independent agent-customers,” Van Berkel said. “Our personal lines and commercial lines operations both reported combined ratios under 100. This was a particularly fine result for commercial lines, as the hurricane losses added 10 percentage points to its loss ratio.”

Also in 2004, Main Street America generated $107 million in net cash flow and grew its invested assets by $135 million.

“We exceeded our investment plan for the year by $15.9 million, mostly coming from our equity portfolios,” Van Berkel said. He added the company’s better-than-planned investment results are partially due to the general performance of the investment markets. In 2004, the Standard & Poors Index was up 11 percent and the Russell 3000 increased 12 percent.

“Our performance outpaced the indices with a 15.3 percent return after fees. Our fixed-income portfolio also performed well, as it exceeded the Lehman Aggregate Index by .5 percent after fees,” Van Berkel said.

Complete financial results for The Main Street America Group are published in the company’s 2004 Annual Report, available at www.msagroup.com.

Topics Hurricane