Specialty Underwriters' Alliance, Inc. Reports Third Quarter 2009 Financial Results
November 09 2009 - 4:01PM
PR Newswire (US)
CHICAGO, Nov. 9 /PRNewswire-FirstCall/ -- Specialty Underwriters'
Alliance, Inc. (NASDAQ:SUAI) ("SUA" or the "Company") today
announced financial results for the quarter and nine months ended
September 30, 2009. Financial Results Gross written premiums were
$70.5 million for the three months ended September 30, 2009, versus
$44.2 million in the third quarter of 2008. For the nine months
ended September 30, 2009, gross written premiums were $143.4
million versus $110.0 million for the same period in 2008. Earned
premiums were $44.3 million for the third quarter of 2009 compared
to $37.2 million for the same quarter of 2008. Earned premiums were
$114.4 million for the nine months ended September 30, 2009
compared to $107.2 million for the comparable period in 2008. Total
expenses for the three months ended September 30, 2009, were $48.1
million, consisting of loss and loss adjustment expenses of $31.8
million, acquisition expenses of $10.5 million and other operating
expenses of $5.8 million. Total expenses for the three months ended
September 30, 2008, were $37.2 million, consisting of loss and loss
adjustment expenses of $22.4 million, acquisition expenses of $8.5
million and other operating expenses of $6.3 million. Total
expenses for the nine months ended September 30, 2009, were $122.7
million, consisting of loss and loss adjustment expenses of $75.8
million, acquisition expenses of $27.4 million and other operating
expenses of $19.5 million. Total expenses for the nine months ended
September 30, 2008, were $106.5 million, consisting of loss and
loss adjustment expenses of $64.4 million, acquisition expenses of
24.5 million and other operating expenses of $17.6 million. For the
third quarter of 2009, net loss and loss adjustment expense ratio
was 71.8 percent versus 60.2 percent for the comparable quarter in
2008. For the nine months ended September 30, 2009, net loss and
loss adjustment expense ratio was 66.3 percent versus 60.1 percent
for the comparable nine months in 2008. Net investment income for
the three months ended September 30, 2009, was $2.7 million,
compared to $2.6 million for the prior year period. Total revenues
were $46.0 million for the third quarter of 2009, compared to $39.0
million for the third quarter of 2008. Net investment income for
the nine months ended September 30, 2009, was $8.3 million,
compared to $7.9 million for the prior year period. Total revenues
were $121.3 million for the nine months ended September 30, 2009,
compared to $114.3 million for the comparable period in 2008. Net
loss for the quarter ended September 30, 2009, was $1.3 million,
compared to net income of $1.3 million for the comparable period in
2008. Net loss for the nine months ended September 30, 2009, was
$0.8 million, compared to net income of $7.0 million for the
comparable period in 2008. Losses per share for the three months
ended September 30, 2009, was $0.08 compared to earnings per share
of $0.08 for the same period in 2008. Losses per share for the nine
months ended September 30, 2009, was $0.05 compared to earnings per
share of $0.45 for the same period in 2008. Financial Condition As
of September 30, 2009, the Company reported investments of $304.6
million, total assets of $491.9 million, total liabilities of
$347.6 million and stockholders' equity of $144.3 million. Book
value per share as of September 30, 2009, was $9.06 and tangible
book value per share was $8.39. As of December 31, 2008, the
Company reported investments of $263.4 million, total assets of
$454.9 million, total liabilities of $318.6 million and
stockholders' equity of $136.3 million. Book value per share as of
December 31, 2008 was $8.62 and tangible book value per share was
$7.94. Book value includes unrealized gains of $5.5 million as of
September 30, 2009 as compared to unrealized losses of $2.2 million
as of December 31, 2008. About Specialty Underwriters' Alliance,
Inc. Specialty Underwriters' Alliance, Inc., through its subsidiary
SUA Insurance Company, is a specialty property and casualty
insurance company providing commercial insurance products through
exclusive wholesale Partner Agents that serve niche groups of
insureds. These targeted customers require highly specialized
knowledge due to their unique risk characteristics. Examples
include tow trucks, professional employer organizations, public
entities, and contractors. SUA's innovative approach provides
products and claims handling, allowing the Partner Agent to focus
on distribution and customer relationships. Safe Harbor Statement
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. This release or any
other written or oral statements made by or on behalf of the
company may include forward-looking statements that reflect the
company's current views with respect to future events and financial
performance. All statements other than statements of historical
fact included in this release are forward-looking statements.
Forward-looking statements can generally be identified by the use
of forward-looking terminology such as "may," "will," "plan,"
"expect," "intend," "estimate," "anticipate," "believe" or
"continue" or their negative or variations or similar terminology.
All forward-looking statements address matters that involve risks
and uncertainties. Accordingly, there are or will be important
factors that could cause our actual results to differ materially
from those indicated in these statements. We believe that these
factors include but are not limited to ineffectiveness or
obsolescence of our business strategy due to changes in current or
future market conditions; increased competition on the basis of
pricing, capacity, coverage terms or other factors; greater
frequency or severity of claims and loss activity, including as a
result of natural or man-made catastrophic events, than our
underwriting, reserving or investment practices anticipate based on
historical experience or industry data; the effects of acts of
terrorism or war; developments in the world's financial and capital
markets that adversely affect the performance of our investments;
changes in regulations or laws applicable to us, our subsidiaries,
brokers or customers; acceptance of our products and services,
including new products and services; changes in the availability,
cost or quality of reinsurance and failure of our reinsurers to pay
claims timely or at all; decreased demand for our insurance or
reinsurance products; loss of the services of any of our executive
officers or other key personnel; the effects of mergers,
acquisitions and divestitures; changes in rating agency policies or
practices; changes in legal theories of liability under our
insurance policies; changes in accounting policies or practices;
and changes in general economic conditions, including inflation and
other factors. Forward-looking statements speak only as of the date
on which they are made, and the company undertakes no obligation to
update publicly or revise any forward-looking statement, whether as
a result of new information, future developments or otherwise.
Summary Financial Data (in millions, except per share data) For the
Three Months For the Nine Moths Ended September 30, Ended September
30, 2009 2008 2009 2008 ---- ---- ---- ---- Results of operations
Gross written premiums $70.5 $44.2 $143.4 $110.0 Net written
premiums 68.3 42.1 137.1 103.8 Earned premiums $44.3 $37.2 $114.4
107.2 Net investment income 2.7 2.6 8.3 7.9 Net Realized gains
(losses) (1.0) (0.8) (1.4) (0.8) ---- ----- ---- ---- Total
revenues 46.0 39.0 121.3 114.3 ---- ---- ----- ----- Loss and loss
adjustment expenses 31.8 22.4 75.8 64.4 Acquisition expenses 10.5
8.5 27.4 24.5 Other operating expenses 5.8 6.3 19.5 17.6 --- ---
---- ---- Total expenses 48.1 37.2 122.7 106.5 ---- ---- -----
----- Pre-tax income (loss) (2.1) 1.8 (1.4) 7.8 Income tax
benefit/(expense) 0.8 (0.5) 0.6 (0.8) --- ---- --- ---- Net income
(loss) $(1.3) $1.3 $(0.8) $7.0 ===== ==== ===== ==== Key ratios Net
loss and loss adjustment expense ratio 71.8% 60.2% 66.3% 60.1%
Ratio of acquisition expenses to earned premiums 23.7% 22.8% 24.0%
22.9% Ratio of all other expenses to gross written premiums 8.2%
14.3% 13.6% 16.0% Net income (loss) per share Basic and diluted
$(0.08) $0.08 $(0.05) $0.45 Weighted Average Shares Outstanding
Basic 15.9 15.5 15.9 15.6 Diluted 15.9 15.6 15.9 15.7 Summary
Financial Data (in millions, except per share data) As of As of
September 30, December 31, Assets 2009 2008 ------ ---- ----
Investments $304.6 $263.4 Cash 1.5 0.2 Insurance premiums
receivable 59.2 60.7 Reinsurance recoverable on unpaid loss and
loss adjustment expenses* 73.9 79.6 Prepaid reinsurance premiums
0.3 0.3 Investment income accrued 2.5 2.5 Equipment and capitalized
software at cost (less accumulated depreciation of $20.5 and $15.5)
12.4 13.6 Intangible assets 10.7 10.7 Deferred acquisition costs
21.4 18.2 Federal income tax recoverable 1.2 0.1 Deferred tax asset
- 3.2 Other assets 4.2 2.4 --- --- Total assets $491.9 $454.9
====== ====== Liabilities Loss and loss adjustment expense
reserves* $222.2 $215.0 Unearned insurance premiums 103.3 80.6
Insured deposit funds 13.3 15.8 Deferred tax liability 0.7 -
Accounts payable and other liabilities 8.1 7.2 --- --- Total
liabilities 347.6 318.6 ----- ----- Stockholders' equity Common
stock at $0.01 par value per share - authorized: 30.0 shares;
issued: 14.8 and 14.7 shares; outstanding: 14.6 shares and 14.4
shares 0.1 0.1 Class B common stock at $0.01 par value per share -
authorized: 2.0 shares; issued and outstanding: 1.4 shares and 1.4
shares 0.0 0.0 Paid in capital - Common Stock 130.6 129.9 Paid in
capital - Class B Common Stock 7.8 8.1 Accumulated earnings 1.3 1.7
Treasury stock (1.0) (1.3) Accumulated other comprehensive income
(loss) 5.5 (2.2) --- ----- Total stockholders' equity 144.3 136.3
----- ----- Total liabilities and stockholders' equity $491.9
$454.9 ====== ====== Book value data Shares outstanding at end of
period 16.1 15.8 Book value per share $9.06 $8.62 Tangible book
value per share $8.39 $7.94 * Includes $43.7 million and $53.2
million as of September 30, 2009 and December 31, 2008 of direct
gross loss and loss adjustment expense reserves of Potomac
Insurance Company of Illinois, which reinsured all of its direct
liabilities to OneBeacon Insurance Company and is reflected on
SUA's balance sheet as a reinsurance recoverable. Gross Written
Premium Data For the Three Months Ended September 30 (in millions,
except percentages) Three Months Ended Three Months Ended September
30, 2009 September 30, 2008 ------------------ ------------------
Percentage Percentage Gross of Gross Gross of Gross Written Written
Written Written Premium Premium Premium Premium ------- -------
------- ------- (dollars in millions) Specialty Risk Solutions, LLC
$42.6 60.4% $16.1 36.5% Risk Transfer Programs, LLC 6.7 9.5% 12.5
28.3% American Team Managers 6.1 8.7% 6.2 14.0% Appalachian
Underwriters, Inc. 5.7 8.1% 1.6 3.6% AEON Insurance Group, Inc. 3.8
5.4% 5.1 11.5% Northern Star Management, Inc. 3.7 5.2% 1.6 3.6%
First Light Program Manages, Inc. 1.6 2.3% 0.6 1.4% Insential, Inc.
0.2 0.3% 0.3 0.7% Flying Eagle Insurance Services, Inc. - 0.0% 0.1
0.2% Other 0.1 0.1% 0.1 0.2% --- ---- --- ---- Total $70.5 100.0%
$44.2 100.0% ===== ====== ===== ====== Three Months Ended Three
Months Ended September 30, 2009 September 30, 2008
------------------ ------------------ Percentage Percentage Gross
of Gross Gross of Gross Written Written Written Written Premium
Premium Premium Premium ------- ------- ------- ------- (dollars in
millions) California $51.0 72.4% $26.0 58.8% Florida 5.1 7.2% 3.3
7.5% Texas 2.5 3.5% 6.9 15.6% Other states 11.9 16.9% 8.0 18.1%
---- ----- --- ----- Total $70.5 100.0% $44.2 100.0% ===== ======
===== ====== Three Months Ended Three Months Ended September 30,
2009 September 30, 2008 ------------------ ------------------
Percentage Percentage Gross of Gross Gross of Gross Written Written
Written Written Premium Premium Premium Premium ------- -------
------- ------- (dollars in millions) General liability $43.5 61.7%
$18.8 42.5% Workers' compensation 15.5 22.0% 15.7 35.5% Commercial
automobile 10.9 15.4% 9.0 20.4% All other 0.6 0.9% 0.7 1.6% ---
---- --- ---- Total $70.5 100.0% $44.2 100.0% ===== ====== =====
====== Gross Written Premium Data For the Nine months Ended
September 30 (in millions, except percentages) Nine months Ended
Nine months Ended September 30, 2009 September 30, 2008
------------------ ------------------ Percentage Percentage Gross
of Gross Gross of Gross Written Written Written Written Premium
Premium Premium Premium ------- ------- ------- ------- (dollars in
millions) Specialty Risk Solutions, LLC $46.7 32.6% $17.0 15.4%
Risk Transfer Programs, LLC 35.3 24.6% 44.0 40.0% American Team
Managers 18.0 12.6% 18.9 17.2% Appalachian Underwriters, Inc. 17.1
11.9% 5.5 5.0% AEON Insurance Group, Inc. 11.2 7.8% 15.8 14.4%
Northern Star Management, Inc. 8.3 5.8% 3.6 3.3% First Light
Program Manages, Inc. 5.8 4.0% 2.0 1.8% Insential, Inc. 0.6 0.4%
1.0 0.9% Flying Eagle Insurance Services, Inc. 0.1 0.1% 0.6 0.5%
Other 0.3 0.2% 1.6 1.5% --- ---- --- ---- Total $143.4 100.0%
$110.0 100.0% ====== ====== ====== ====== Nine months Ended Nine
months Ended September 30, 2009 September 30, 2008
------------------ ------------------ Percentage Percentage Gross
of Gross Gross of Gross Written Written Written Written Premium
Premium Premium Premium ------- ------- ------- ------- (dollars in
millions) California $70.9 49.5% $51.7 47.0% Florida 18.7 13.0%
15.7 14.3% Texas 9.6 6.7% 13.1 11.9% Other states 44.2 30.8% 29.5
26.8% ---- ----- ---- ----- Total $143.4 100.0% $110.0 100.0%
====== ====== ====== ====== Nine months Ended Nine months Ended
September 30, 2009 September 30, 2008 ------------------
------------------ Percentage Percentage Gross of Gross Gross of
Gross Written Written Written Written Premium Premium Premium
Premium ------- ------- ------- ------- (dollars in millions)
Workers' compensation $59.6 41.6% $53.9 49.0% General liability
49.8 34.7% 26.9 24.5% Commercial automobile 32.3 22.5% 27.0 24.5%
All other 1.7 1.2% 2.2 2.0% --- ---- --- ---- Total $143.4 100.0%
$110.0 100.0% ====== ====== ====== ====== DATASOURCE: Specialty
Underwriters' Alliance, Inc. CONTACT: Scott Goodreau of Specialty
Underwriters' Alliance, Inc., 1-888-782-4672, ; or Leslie Loyet of
Financial Relations Board, +1-312-640-6672, , for Specialty
Underwriters' Alliance, Inc.
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