GEORGE TOWN, Cayman Islands, Feb. 16 /PRNewswire-FirstCall/ --
United America Indemnity, Ltd. (NASDAQ:INDM) today reported net
income for the twelve months ended December 31, 2009 of $74.6
million or $1.44 per share compared to net loss of ($141.6) million
or ($3.87) per share for 2008. Net income for the three months
ended December 31, 2009 was $23.9 million or $0.40 per share
compared to net loss of $(120.4) million or $(3.44) per share for
the same period of 2008. (Logo:
http://www.newscom.com/cgi-bin/prnh/20060706/MXTH001LOGO ) Selected
Operating and Balance Sheet Data (Dollars in millions, except For
the Three Months For the Twelve Months per share data) Ended
December 31, Ended December 31, 2009 2008 2009 2008 Net income /
(loss) $23.9 $(120.4) $74.6 $(141.6) Net income / (loss) per share
$0.40 $(3.44) $1.44 $(3.87) Operating income / (loss) $14.7 $(10.1)
$63.5 $(15.2) Operating income / (loss) per share $0.24 $(0.29)
$1.23 $(0.42) Operating income / (loss), a non-GAAP financial
measure, is equal to net income / (loss) excluding after-tax net
realized investment gains (losses) and excluding goodwill and
intangible asset impairment charges. A reconciliation of operating
income is set forth at the end of this press release. As of As of
As of (Dollars in millions except per share December September
December amounts) 31, 2009 30, 2009 31, 2008 Book value per share $
13.76 $ 13.51 $12.00 (1) Shareholders' equity $ 833.2 $ 817.8 $
632.0 Cash & invested assets $1,733.4 $1,742.0 $ 1,599.5 (1)
Actual book value per share, prior to the Company's offering of
28,613,665 shares in connection with the $100,000,000 rights
offering completed on May 5, 2009, was $19.94 as of December 31,
2008. Selected Financial Data for the Twelve Months Ended December
31, 2009: -- Net income of $74.6 million or $1.44 per share. --
Operating income of $63.5 million or $1.23 per share. -- Gross
premiums written of $341.0 million. -- Current accident year
combined ratio of 99.0. -- Calendar year combined ratio of 96.0. --
After tax investment return of 6.3%, including $31.6 million of
unrealized investment gains net of tax. -- Shareholders' equity
grew 31.8%. -- Book value per share grew 16.4% (excluding the
impact of $100 million rights offering completed on May 5, 2009).
Selected Financial Data for the Three Months Ended December 31,
2009: -- Net income of $23.9 million or $0.40 per share. --
Operating income of $14.7 million or $0.24 per share. -- Gross
premiums written of $74.5 million. -- Current accident year
combined ratio of 99.1. -- Calendar year combined ratio of 93.1. --
After tax annualized investment return of 3.1% -- Shareholders'
equity grew 1.9%. -- Book value per share grew 1.9%. United America
Indemnity's Combined Ratio for the Twelve Months Ended December 31,
2009 and 2008 The combined ratio is a key measure of insurance
profitability. The components comprising the combined ratio are as
follows: Twelve Months Ended December 31, 2009 2008 Loss Ratio:
Current Accident Year 59.2 70.7 Changes to Prior Accident Year
(3.0) 9.1 Loss Ratio - Calendar Year 56.2 79.8 Expense Ratio 39.8
37.3 Combined Ratio 96.0 117.1 For the twelve months ended December
31st, the calendar year loss ratio improved by 23.6 points to 56.2
points in 2009 from 79.8 points in 2008. -- The current accident
year loss ratio improved by 11.5 points to 59.2 points in 2009 from
70.7 points in 2008 due to improvements in both the property and
casualty loss ratios. - The property loss ratio decreased by 22.7
points to 46.5 points in 2009 from 69.2 points in 2008 due in part
to the growth and performance of our property business in
reinsurance operations and improved performance of our property
business in insurance operations. In addition, 2008 results include
$21.5 million of net loss and loss adjustment expense related to
catastrophes, primarily the result of hurricanes Ike and Gustav in
the third quarter, and storms in the Midwest during the first half
of 2008. - The casualty loss ratio improved 3.0 points to 68.4
points in 2009 from 71.4 points in 2008 due primarily to the growth
and improved performance of the casualty business in reinsurance
operations and improved performance in the casualty business in
insurance operations. -- A 12.1 point improvement in net loss and
loss adjustment expense related to prior accident years. In 2009,
$9.1 million of reserves were released due to positive emergence of
approximately $5.5 million in property lines, approximately $2.9
million in casualty lines and a decrease in the reinsurance
allowance of approximately $0.7 million compared to $31.8 million
of prior year adverse reserve development in 2008 related primarily
to casualty lines, and a $3.1 million increase in the reinsurance
reserve allowance. For the twelve months ended December 31st, the
expense ratio increased from 37.3 in 2008 to 39.8 in 2009. -- The
expense ratio increase is mainly attributable to a decline in net
premiums earned and the incurrence of infrastructure costs related
to new product development, information technology upgrades,
additional office locations, and redomestication. United America
Indemnity's Twelve Months Ended December 31, 2009 and 2008 Gross
and Net Premiums Written Results by Business Unit (Dollars in
thousands) Twelve Months Ended December 31, Gross Premiums Written
Net Premiums Written 2009 2008 2009 2008 Insurance Operations
Penn-America $ 124,914 $ 172,869 $ 101,320 $ 158,136 United
National 62,059 88,884 50,036 74,964 Diamond State 81,019 91,377
66,908 72,379 Total Insurance 267,992 353,130 218,264 305,479
Operations Reinsurance Operations Wind River 73,007 25,570 72,731
3,601 Total $340,999 $378,700 $290,995 $309,080 Insurance
Operations: Gross premiums written for the twelve months ended
December 31, 2009 decreased 24.1%, and net premiums written for the
twelve months ended December 31, 2009 decreased 28.6%, compared to
the same period in 2008. The reduction in gross premium is
comprised mainly of the following: - $35.2 million of the decline
is due to terminated programs and agents. - $49.9 million of the
decline is due to price decreases in aggregate of approximately
2.6% and other market factors. Reinsurance Operations: Gross
premiums written for the twelve months ended December 31, 2009
increased $47.4 million and net premiums written increased $69.1
million, excluding the intercompany reinsurance treaty, compared to
the same period in 2008. The increase in gross and net premiums
written is primarily due to new excess of loss and quota share
treaties. United America Indemnity's Combined Ratio for the Three
Months Ended December 31, 2009 and 2008 The combined ratio is a key
measure of insurance profitability. The components comprising the
combined ratio are as follows: Three Months Ended December 31, 2009
2008 Loss Ratio: Current Accident Year 57.3 68.8 Changes to Prior
Accident Year (6.0) 17.9 Loss Ratio - Calendar Year 51.3 86.7
Expense Ratio 41.8 42.0 Combined Ratio 93.1 128.7 For the three
months ended December 31st, the calendar year loss ratio improved
35.4 points to 51.3 points in 2009 from 86.7 points in 2008. -- The
current accident year loss ratio improved 11.5 points to 57.3
points in 2009 from 68.8 points in 2008 due to improvements in both
the property and casualty loss ratios. - The property loss ratio
improved 11.4 points to 41.9 points in 2009 from 53.3 points in
2008 primarily due to the growth and performance of our property
business in reinsurance operations. - The casualty loss ratio
improved 10.6 points to 67.8 points in 2009 from 78.4 points in
2008 due in part to the growth and performance of the casualty
business in reinsurance operations and the improved performance of
the casualty business in insurance operations. For the three months
ended December 31st, the calendar year loss ratio improved 35.4
points to 51.3 points in 2009 from 86.7 points in 2008 (continued).
-- A 23.9 point improvement in net loss and loss adjustment expense
related to prior accident years. In 2009, $4.6 million of reserves
were released due to positive emergence of approximately $3.1
million in property lines, approximately $1.2 million in casualty
lines and a decrease in the reinsurance allowance of approximately
$0.3 million, compared to $14.2 million of prior year adverse loss
reserve development in 2008. For the three months ended December
31st, the expense ratio decreased from 42.0 points in 2008 to 41.8
points in 2009. -- The expense ratio decrease is mainly
attributable to increased premium production from reinsurance
operations which is partially offsetting infrastructure costs
related to new product development, information technology
upgrades, and additional office locations. United America
Indemnity's Three Months Ended December 31, 2009 and 2008 Gross and
Net Premiums Written Results by Business Unit (Dollars in
thousands) Three Months Ended December 31, Gross Premiums Written
Net Premiums Written 2009 2008 2009 2008 Insurance Operations
Penn-America $ 26,632 $ 35,200 $ 21,647 $ 32,234 United National
15,686 17,718 12,964 14,817 Diamond State 17,999 19,607 14,883
14,450 Total Insurance Operations 60,317 72,525 49,494 61,501
Reinsurance Operations Wind River 14,208 3,765 14,478 700 Total $
74,525 $ 76,290 $ 63,972 $ 62,201 Insurance Operations: Gross
premiums written for the three months ended December 31, 2009
decreased 16.8%, and net premiums written for the three months
ended December 31, 2009 decreased 19.5%, compared to the same
period in 2008. The reduction in gross premium is comprised mainly
of the following: -- $4.9 million of the decline is due to
terminated programs and agents. -- $7.3 million of the decline is
due to price decreases in aggregate of approximately 3.0% and other
market factors. Reinsurance Operations: Gross premiums written for
the three months ended December 31, 2009 increased $10.4 million
and net premiums written increased $13.8 million, excluding the
intercompany reinsurance treaty, compared to the same period in
2008. The increase in gross and net premiums written is primarily
due to new excess of loss and quota share treaties. Note: Tables
follow United America Indemnity, Ltd. Consolidated Statements of
Operations (Unaudited) (Dollars and shares in thousands, except per
share data) For the Three For the Twelve Months Months Ended
December 31, Ended December 31, 2009 2008 2009 2008 Gross premiums
written $74,525 $76,290 $340,999 $378,700 Net premiums written
$63,972 $62,201 $290,995 $309,080 Net premiums earned $75,509
$79,267 $301,674 $382,508 Investment income, net 14,916 16,345
68,965 67,830 Net realized investment gains / (losses) 12,447
(26,199) 15,862 (50,259) Total revenues 102,872 69,413 386,501
400,079 Net losses and loss adjustment expenses 38,708 68,746
169,382 305,174 Acquisition costs and other underwriting expenses
31,579 33,296 119,929 142,767 Corporate and other operating
expenses 4,438 4,515 16,752 13,918 Interest expense 1,754 1,967
7,216 8,657 Impairment of goodwill and intangible assets - 96,449 -
96,449 Income / (loss) before income taxes 26,393 (135,560) 73,222
(166,886) Income tax expense / (benefit) 3,064 (17,462) 3,872
(29,216) Net income before equity in net income / (loss) of
partnership 23,329 (118,098 69,350 (137,670) Equity in net income /
(loss) of partnership, net of tax 534 (2,333) 5,276 (3,890) Net
income / (loss) $23,863 $(120,431) $74,626 $(141,560) Weighted
average shares outstanding-basic 60,329 34,979 51,712 36,556
Weighted average shares outstanding-diluted 60,403 34,979 51,763
36,556 Net income / (loss) per share - basic $0.40 $(3.44) $1.44
$(3.87) Net income / (loss) per share - diluted $0.40 $(3.44) $1.44
$(3.87) Combined ratio analysis: Loss ratio 51.3 86.7 56.2 79.8
Expense ratio 41.8 42 39.8 37.3 Combined ratio 93.1 128.7 96 117.1
Certain prior period amounts have been reclassified to conform to
the 2009 presentation. In 2008, "Diluted" loss per share is the
same as "Basic" loss per share since there was a net loss for the
quarter and twelve months ended December 31, 2008. The loss ratio,
expense ratio and combined ratio are non-GAAP financial measures
that are generally viewed in the insurance industry as indicators
of underwriting profitability. The loss ratio is the ratio of net
losses and loss adjustment expenses to net premiums earned. The
expense ratio is the ratio of acquisition costs and other
underwriting expenses to net premiums earned. The combined ratio is
the sum of the loss and expense ratios. UNITED AMERICA INDEMNITY,
LTD. CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands,
except per share data) ASSETS As of As of December December 31,
2009 31, 2008 Bonds: Available for sale securities, at fair value
(amortized cost: 2009 - $1,285,523 and 2008 - $1,192,385) $
1,332,651 $ 1,204,974 Preferred shares: Available for sale
securities, at fair value (cost: 2009 - $1,509 and 2008 - $4,665)
2,599 4,665 Common shares: Available for sale securities, at fair
value (cost: 2009 - $50,709 and 2008 - $46,316) 63,057 50,613 Bank
Loans: Available for sale securities, at fair value (cost: 2009 -
$137,527 and 2008 - $0) 138,921 - Other invested assets: Available
for sale securities, at fair value (cost: 2009 - $4,323 and 2008 -
$19,689 9,953 39,219 Securities classified as trading, at fair
value (cost: 2009 - $529 and 2008 - $5,151) 1,145 7,453 Total
investments 1,548,326 1,306,924 Cash and cash equivalents 185,126
292,604 Agents' balances 69,423 57,117 Reinsurance receivables
543,351 679,277 Federal income taxes receivables 3,771 16,487
Deferred federal income taxes 12,922 32,532 Deferred acquisition
costs 33,184 34,734 Intangible assets 9,236 9,309 Prepaid
reinsurance premiums 16,546 23,960 Other assets 25,098 24,115 Total
assets $2,446,983 $2,477,059 LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities: Unpaid losses and loss adjustment expenses $1,257,741
$1,506,429 Unearned premiums 131,582 149,677 Ceded balances payable
16,009 25,165 Contingent commissions 11,169 6,695 Notes and
debentures payable 121,569 121,845 Payable for securities 37,258
710 Other liabilities 38,476 34,545 Total liabilities 1,613,804
1,845,066 Shareholders' equity: Common shares, $0.0001 par value,
900,000,000 common shares authorized; Class A common shares issued:
42,486,690 and 25,032,618, respectively; Class A common shares
outstanding: 36,430,477 and 19,013,462, respectively; Class B
common shares issued and outstanding: 24,122,744 and 12,687,500,
respectively 7 4 Additional paid-in capital 619,469 524,345
Accumulated other comprehensive income 50,495 25,108 Class A common
shares in treasury, at cost: 6,056,213 and 6,019,156 shares,
respectively (100,720) (100,446) Retained earnings 263,928 182,982
Total shareholders' equity 833,179 631,993 Total liabilities and
shareholders' equity $2,446,983 $2,477,059 UNITED AMERICA
INDEMNITY, LTD. SELECTED INVESTMENT DATA (Unaudited) (Dollars in
millions) Market Value as of Dec 31, Dec 31, 2009 2008 Bonds
$1,332.7 $1,205.0 Bank Loans 138.9 - Cash & cash equivalents
185.1 292.6 Total bonds and cash and cash equivalents 1,656.7
1,497.6 Equities and other invested assets 76.7 101.9 Total cash
and invested assets $1,733.4 $1,599.5 December 31, 2009 (a) Three
Months Twelve Months Ended Ended Net investment income $12.4 $50.3
Net realized investment gain 9.1 11.1 Net equity in net income of
partnerships 0.5 5.3 Net unrealized investment gains / (losses)
(8.7) 31.6 Net gain from liquidation of partnerships - 5.6 Net
realized and unrealized investment 0.9 53.6 Total investment return
$13.3 $103.9 Average cash and invested assets (b) $1,716.7 $1,647.5
Total investment return % annualized 3.1% 6.3% (a) Amounts in this
table are shown on an after-tax basis. (b) Simple average of
beginning and end of period. UNITED AMERICA INDEMNITY, LTD. SUMMARY
OF OPERATING INCOME / (LOSS) (Unaudited) (Dollars and shares in
thousands, except per share data) For the Three For the Twelve
Months Months Ended December 31, Ended December 31, 2009 2008 2009
2008 Operating income / (loss) $14,724 ($10,130) $63,497 ($15,238)
Adjustments: Net realized investment gains / (losses), net of tax
9,139 (18,123) 11,129 (34,144) Impairments of goodwill &
intangible assets, net of tax - (92,178) - (92,178) Total after-tax
adjustments 9,139 (110,301) 11,129 (126,322) Net income / (loss)
$23,863 ($120,431) $74,626 ($141,560) Weighted average shares
outstanding - basic 60,329 34,979 51,712 36,556 Weighted average
shares outstanding - diluted 60,403 34,979 51,763 36,556 Operating
income / (loss) per share - basic $0.24 ($0.29) $1.23 ($0.42)
Operating income / (loss) per share - diluted $0.24 ($0.29) $1.23
($0.42) In 2008, "Diluted" loss per share is the same as "Basic"
loss per share since there was a net loss for the quarter and
twelve months ended December 31, 2008. In computing the basic and
diluted weighted share counts the number of shares outstanding
prior to May 5, 2009 (the date that the common stock was issued in
conjunction with the stockholders' rights offering) was adjusted by
a factor of 1.114 to reflect the impact of a bonus element
associated with the rights offering in accordance with GAAP. Note
Regarding Operating Income Operating income, a non-GAAP financial
measure, is equal to net income excluding after-tax net realized
investment gains (losses). Operating income is not a substitute for
net income determined in accordance with GAAP, and investors should
not place undue reliance on this measure. About United America
Indemnity, Ltd. United America Indemnity, Ltd. (NASDAQ:INDM),
through its several direct and indirect wholly owned subsidiary
insurance and reinsurance companies, is a national and
international provider of excess and surplus lines and specialty
property and casualty insurance and reinsurance, both on an
admitted and non-admitted basis. The Company's four principal
divisions include: - Insurance Operations: -- Penn-America, which
includes property and general liability products for small
commercial businesses distributed through a select network of
wholesale general agents with specific binding authority; -- United
National, which includes property, general liability, and
professional lines products distributed through program
administrators with specific binding authority; -- Diamond State,
which includes property, general liability, and professional lines
products distributed through wholesale brokers and program
administrators with specific binding authority. - Reinsurance
Operations: -- Wind River Reinsurance Company, Ltd., a Bermuda
based treaty and facultative reinsurer of excess and surplus lines
and specialty property and casualty insurance. For more
information, visit the United America Indemnity, Ltd. website at
http://www.uai.ky/. Teleconference and Webcast for Interested
Parties Larry A. Frakes, President and Chief Executive Officer of
United America Indemnity Ltd., and Thomas McGeehan, Chief Financial
Officer of United America Indemnity, Ltd. will conduct a
teleconference for interested parties on February 17, 2010 at 8:30
a.m. Eastern Time to discuss the fourth quarter 2009 results. To
participate in the teleconference, please telephone (800) 230-1085
(U.S. and Canada) or (612) 332-0335 (International) and you will be
greeted by an operator. Please reference UAI Fourth Quarter 2009
Earnings Call or reference Larry Frakes. The teleconference is
being webcast by AT&T and can be accessed at the Company's
website at http://www.uai.ky/. Please access the site at least 15
minutes prior to the teleconference to register, download and
install any necessary software. The webcast is also being
distributed over AT&T's Audio-Only Web ConferenceCast. To
access live or archived event, please use this URL:
http://65.197.1.15/att/confcast, Conference ID#: 144437 and click
GO. The teleconference will be available for replay beginning at
10:30 a.m. Eastern Time on February 17, 2010 until 11:59 p.m. March
15, 2010. To listen to the replay, please telephone (800) 475-6701
(U.S. and Canada) or (320) 365-3844 (International) then enter
144437. Forward-Looking Information This release contains
forward-looking information about United America Indemnity, Ltd.
and the operations of United America Indemnity, Ltd. that is
intended to be covered by the safe harbor for forward-looking
statements provided by the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are statements that are not
historical facts. These statements can be identified by the use of
forward-looking terminology such as "believe," "expect," "may,"
"will," "should," "project," "plan," "seek," "intend," or
"anticipate" or the negative thereof or comparable terminology, and
include discussions of strategy, financial projections and
estimates and their underlying assumptions, statements regarding
plans, objectives, expectations or consequences of the
transactions, and statements about the future performance,
operations, products and services of the companies. The business
and operations of United America Indemnity, Ltd. is and will be
subject to a variety of risks, uncertainties and other factors.
Consequently, actual results and experience may materially differ
from those contained in any forward-looking statements. Such risks,
uncertainties and other factors that could cause actual results and
experience to differ from those projected include, but are not
limited to, the following: (1) the ineffectiveness of United
America Indemnity, Ltd.'s business strategy due to changes in
current or future market conditions; (2) the effects of
competitors' pricing policies, and of changes in laws and
regulations on competition, including industry consolidation and
development of competing financial products; (3) greater frequency
or severity of claims and loss activity than United America
Indemnity, Ltd.'s underwriting, reserving or investment practices
have anticipated; (4) decreased level of demand for United America
Indemnity, Ltd.'s insurance products or increased competition due
to an increase in capacity of property and casualty insurers; (5)
risks inherent in establishing loss and loss adjustment expense
reserves; (6) uncertainties relating to the financial ratings of
United America Indemnity, Ltd.'s insurance subsidiaries; (7)
uncertainties arising from the cyclical nature of United America
Indemnity, Ltd.'s business; (8) changes in United America
Indemnity, Ltd.'s relationships with, and the capacity of, its
general agents; (9) the risk that United America Indemnity, Ltd.'s
reinsurers may not be able to fulfill obligations; (10) investment
performance and credit risk; and (11) uncertainties relating to
governmental and regulatory policies. The foregoing review of
important factors should be read in conjunction with the other
cautionary statements that are included in United America
Indemnity, Ltd.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 2008, as well as in the materials filed and to
be filed with the U.S. Securities and Exchange Commission (SEC).
United America Indemnity, Ltd. does not make any commitment to
revise or update any forward-looking statements in order to reflect
events or circumstances occurring or existing after the date any
forward-looking statement is made.
http://www.newscom.com/cgi-bin/prnh/20060706/MXTH001LOGO
http://photoarchive.ap.org/ DATASOURCE: United America CONTACT:
Linda Hohn, Associate General Counsel, United America,
+1-610-660-6862, Web site: http://www.uai.ky/
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