Florida insurer Homeowners Choice, Inc. reported that its net premiums nearly doubled to $19.6 million and its profit rose seven percent to $3 million in the second quarter, thanks in great part to its taking on policies from the state-backed Citizens Property Insurance.
Net premiums earned for the second quarter of 2009 nearly doubled to $19.6 million from $9.8 million in the prior year quarter, primarily as a result of policy growth driven by the company’s assumption of policies from Citizens, according to company officials.
Overall revenue nearly doubled in the three months that ended June 30 to $20.4 million, compared to $10.5 million in the same period a year earlier.
Homeowners Choice reported investment income of $361,000 for the second quarter compared to $381,000 in the prior year period.
Other income, which primarily represents policy fee income earned with respect to the issuance of renewal policies, was $376,000 in the second quarter of 2009 compared with $284,000 in the second quarter of 2008.
Losses and loss adjustment expenses for the second quarter were $12.6 million compared to $4.2 million in the prior year period. The company said the increase reflects the impact of claims incurred and an increase in claim reserves resulting primarily from the increase in policies and insured values.
Policy acquisition and other underwriting expenses for the second quarter of 2009 and 2008 were $1.6 million and $1.3 million, respectively. Other operating expenses, which include a variety of general and administrative costs, were $1.3 million in the second quarter compared with $469,000 in the prior year period.
Chief Executive Officer F.X. McCahill said that while the policy count was up for the quarter, it will drop next quarter because the insurer does not not add new policies during hurricane season. During the fourth quarter, he said he expects to grow again by assuming additional policies from Citizens, adding voluntary policies through independent agents or by taking advantage of the anticipated pullback by larger national carriers.
“We believe with our existing systems and personnel we can handle a substantial increase in policies from current levels,” he said.
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