Reno, Nev.-based Employers Holdings Inc. reported second quarter net income of $20.3 million compared with $27.4 million in the second quarter of 2008, a decrease of $7 million. Net income includes amortization of the deferred reinsurance gain related to the Loss Portfolio Transfer Agreement. Consolidated net income before the impact of the LPT was $16 million in the second quarter of 2009 and $22.8 million in the second quarter of 2008.
Net income for the six months ended June 30, 2009, was $41.2 million compared with $52.9 million for the six months ended June 30, 2008. For the first six months of 2009, net income before the impact of the loss portfolio transfer was $32.5 million or $0.68 per share compared to $43.5 million or $0.88 per share for the same period in 2008.
President and CEO Douglas D. Dirks commented: “We are pleased with our performance in the second quarter and first six months of the year, particularly in light of the continuing economic contraction and low interest rate environment. Our acquisition is yielding intended results. Since June 30, 2008, we grew direct written premium 41 percent. Our book of business at June 30, 2009, is more diversified with 45 percent of direct written premium in California; 21 percent in Florida, Wisconsin, and Nevada; and the remaining 34 percent in our 26 other states.
The second quarter 2009 combined ratio was 97.4 percent, an increase from the second quarter 2008 combined ratio of 77 percent. Acquired operations contributed 12.1 percentage points of the increase. For the first six months in 2009, the combined ratio was 98.6 percent, an increase of 18.6 percentage points from 80 percent for the same period in 2008, with acquired operations contributing 11.8 percentage points of the increase. Lower premiums earned, prior rate reductions, competitive pressures, and overall economic conditions also contributed to the higher combined ratios, the company said.
“While improved from the first quarter, our combined ratio is not yet optimal,” Dirks said. “We are seeing benefits from expense controls and integration activities as our expenses excluding acquired operations and integration/restructuring charges are declining – $2.9 million in the quarter and $4.0 million in the first six months of the year. Year-to-date at June 30, 2009, restructuring expenses added 2.0 percentage points to the combined ratio.”
Source: Employers Holdings
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