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Reno, Nev.-based Employers Holdings Inc. has reported fourth quarter net income of $20.1 million compared with $11.3 million in the fourth quarter of 2009, an increase of $8.9 million in net income.
The company said net income in the fourth quarter of 2010 was driven largely by expense reductions, realized gains from equity sales in the quarter and increased written premium.
Written premium was impacted by a $2.8 million favorable adjustment in the final audit accrual rate in the fourth quarter of 2010 relative to the fourth quarter of 2009 and a $1.6 million reinsurance reinstatement premium paid that lowered written premium in the fourth quarter of 2009. In force premium of $321.1 million at Dec. 31, 2010 declined $63.9 million or 16.6 percent relative to year-end 2009 and 2.2 percent since September 30, 2010.
Net income for the full year of 2010 was $62.8 million compared with $83.0 million for the full year 2009.
The fourth quarter 2010 combined ratio was 107.6 percent, compared with 106.5 percent for the fourth quarter of 2009, an increase of 1.1 percentage points in the GAAP combined ratio. For the full year of 2010, the combined ratio was 106.8 percent , an increase of 8.8 percentage points from 98 percent for the same period in 2009.
President and CEO Douglas D. Dirks, said, “We are pleased that our growth initiatives, implemented in late July, are beginning to yield results. In the last six months of 2010, we added 1,228 policies, despite the fact that unemployment rates in three of our largest states – California, Florida and Nevada – were at or near their 35-year peaks.”
“By actively managing our operations, in the fourth quarter of 2010 we have made substantial progress in improving our underwriting and other operating expense ratio of 27.4 percent, which declined 12.7 percentage points year over year,” Dirks continued.
Dirks said the company increased its loss provision rate to 73 percent compared to 71.5 percent in the fourth quarter of 2009, to reflect increased severity trends in California, which represents half of the company’s book of business. The company is raising pure premium rates 2.5 percent in California effective March 15, 2011.
Throughout 2011, the company will focus on increasing the number of new policies and agents.