Reno, Nev.-based Employers Holdings Inc. reported results for the third quarter and nine months ended Sept. 30, 2007. Consolidated net income was $29.9 million, or $0.58 per share, for the third quarter of 2007, compared to $77 million, or $1.54 per pro forma share, in the third quarter of 2006. Net income for the nine months ended Sept. 30, 2007, was $88.5 million ($1.69 per pro forma share, and $1.55 per share for the period February 5 through Sept. 30, 2007) compared to $116.5 million, or $2.33 per pro forma share, for the nine months ended Sept. 30, 2006.
The third quarter change in net income relative to the company’s performance in 2006 largely relates to the timing of the adjustments to the losses and LAE reserves in 2006 compared to 2007, the company indicated. In the first nine months of 2006, Employers recognized $81.7 million in favorable prior accident year development. Of that amount, approximately 84 percent, or $68.9 million, was recognized in the third quarter of 2006. In the first nine months of 2007, favorable prior accident year development totaled $43.4 million with $7.4 million recognized in the third quarter of 2007.
Commenting on the company’s performance, President and CEO Douglas D. Dirks said, “The company’s performance on a year-over-year basis was as expected. Premiums written and net earned premium increased relative to the second quarter, while underwriting and other operating expenses declined slightly relative to the last two quarters. Net income was consistent with our solid performance in the first two quarters of this year. We continue to see benefits from declining loss trends in California, although these benefits year to date are lower than last year.”
Third quarter net premiums earned declined 7.8 percent to $88.5 million in 2007 from $96 million in 2006. Net premiums earned for the nine months ended Sept. 30, 2007, were $262.4 million compared to $300.1 million for the same period in 2006, a decrease of 12.6 percent. The declines were largely due to continuing rate decreases resulting from previously enacted reforms in California, the company said. The impact of these rate decreases was partially offset by an overall in-force policy count increase of 12.7 percent since Sept. 30, 2006.
For more information, visit www.employers.com/.
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