NEW YORK, Aug. 3 /PRNewswire-FirstCall/ -- NYMAGIC, INC. (NYSE:NYM)
reported today the results of consolidated operations for the
second quarter ended June 30, 2009. The Company reported net income
of $14.2 million, or $1.65 per diluted share for the three months
ended June 30, 2009, compared with net losses of $(4.7) million, or
$(.55) per diluted share, for the second quarter of 2008. Net
income for the six months ended June 30, 2009 totaled $17.7
million, or $2.05 per diluted share, compared with net losses of
$(34.5) million, or $(3.98) per diluted share, for the six months
ended June 30, 2008. Book value per share, calculated on a fully
diluted basis, increased from $19.11 at December 31, 2008 to $21.74
at June 30, 2009. This was an increase of 13.8%. INSURANCE
OPERATIONS Gross premiums written totaled $50.3 million and net
premiums written totaled $35.3 million for the second quarter of
2009, compared with gross premiums written of $47.6 million and net
premiums written of $34.3 million during the second quarter of
2008. This represented increases of 6% and 3%, respectively. Gross
premiums written totaled $117.9 million and net premiums written
totaled $88.3 million for the six months ended June 30, 2009,
compared with gross premiums written of $119.2 million and net
premiums written of $94.2 million during the first six months of
2008. This represented decreases of 1% and 6%, respectively. The
Company's decision to terminate a cargo program at the end of 2007
caused reductions in both gross and net premiums written totaling
approximately $1.9 million and $4.7 million for the three months
and six months ended June 30, 2009, respectively. Net premiums
earned totaled $39.0 million for the second quarter of 2009,
compared with net premiums earned of $43.1 million during the
second quarter of 2008. This represented a decrease of 9%. All of
this decrease occurred within the Ocean Marine segment and a
substantial portion of this was attributable to termination of the
cargo program referred to above. Net premiums earned totaled $79.2
million for the six months ended June 30, 2009, compared with net
premiums earned of $88.0 million during the first six months of
2008. This represented a decrease of 10%. Most of this decline
occurred within the Ocean Marine segment and a substantial portion
of this was attributable to termination of the cargo program
referred to above. The Company's combined ratio was 93.0% for the
three months ended June 30, 2009 as compared with 130.1% for the
same period of 2008. The Company's combined ratio was 96.4% for the
six months ended June 30, 2009 as compared with 114.4% for the same
period of 2008. A settlement of certain disputed reinsurance
receivables contributed 28.8% and 14.1% to the combined ratios for
the second quarter and six months ended June 30, 2008,
respectively. Favorable loss reserve development amounted to $6.2
million and $9.3 million for the second quarter and six months
ended June 30, 2009. Favorable loss development in 2009 occurred in
each business segment primarily as a result of favorable loss
reporting trends including $1.8 million in the aviation line of
business in the second quarter of 2009. For the second quarter and
six months ended June 30, 2008, adverse loss reserve development
amounted to $10.1 million and $9.1 million, respectively. Adverse
development included $12.4 million attributable to reinsurance
receivables write-offs that was partially offset by favorable
development in the ocean and inland marine lines of business.
INVESTMENTS Net investment income amounted to $13.2 million for the
second quarter of 2009 compared with net investment income of $4.9
million for the same period of 2008. For the six months ended June
30, 2009, net investment income was $19.7 million as compared with
a net investment loss of $(8.1) million for the same period of
2008. Investment income for the six months ended June 30, 2009
includes $5.6 million from increases in the market value of
investments categorized as trading securities, which are primarily
tax-exempt securities, and commercial loans. In addition, $9.2
million of income was recorded from limited partnerships. Net
investment loss for the six months ended June 30, 2008 included
losses of $(11.7) million due to declines in the market value of
trading securities and commercial loans. During 2008, trading
securities included municipal bonds, preferred stocks, hedged
positions and exchange-traded funds. Net realized investment gains
were $1.7 million for the second quarter of 2009, as compared with
net realized investment gains of $898,000 for the same period of
2008. Net realized investment gains for the six months ended June
30, 2009 were $1.3 million compared with net realized investment
losses of $(31.4) million for the same period in 2008. The net
realized investment gains in 2009 resulted primarily from the sale
of selected municipal securities and US Treasury securities
undertaken to further reposition the Company's holdings. Net
realized investment losses for the six months ended June 30, 2008
were almost entirely attributable to the decline in the market
value of the Company's investments in residential mortgage backed
securities that was recorded at that time. Net income for the
second quarter and six months ended June 30, 2009 included tax
benefits of $3.3 million or $.38 per diluted share as a result of
the partial reversal of the deferred tax valuation allowance
previously provided for capital losses. This resulted from capital
gains achieved within the investment portfolio during the first six
months of 2009. At June 30, 2009 the Company's total cash,
investments and net receivable for securities sold amounted to
$617.9 million, compared with $593.2 million at March 31, 2009 and
$572.4 million at December 31, 2008. The investment portfolio at
June 30, 2009 consisted of cash, short-term investments and net
receivable for securities sold of $198.9 million, or 32.2%; fixed
maturities and other debt investments of $298.8 million, or 48.3%;
and limited partnership hedge funds of $120.2 million, or 19.5%.
ACCUMULATED OTHER COMPREHENSIVE INCOME Effective April 1, 2009, the
Company adopted a new accounting standard promulgated by the FASB
(FSP FAS 115-2), which applies to the Company's investment
portfolio. The Company's total stockholders' equity was unchanged
by adopting this new accounting standard. However, retained
earnings were increased by $26.1 million and accumulated
comprehensive income was reduced by the same amount. These changes
are attributable to a reclassification of non-credit investment
impairment losses previously recognized on the Company's
residential mortgage backed securities holdings that are currently
being held to maturity. The chief consequence of this change in
subsequent reporting periods is that the Company will record any
future principal payments received on its residential mortgage
backed securities in excess of its carrying amount as credits to
other comprehensive income instead of recording the excess in the
Company's income statement. Separately, other comprehensive income
was favorably impacted by $5.0 million due to unrealized
appreciation in the Company's corporate and municipal bond
portfolios that are carried as available for sale. This increased
stockholders equity by the same amount. SUBSEQUENT EVENT In the
third quarter of 2009, the Company will report an after tax gain of
approximately $3.0 million resulting from its receipt as the
beneficiary of the proceeds of a life insurance policy on a former
director. MANAGEMENT COMMENT George Kallop, President and Chief
Executive Officer, in commenting on the quarter said, "The Company
is very pleased with the overall results in the second quarter of
2009. Within insurance operations, the Company achieved increases
in gross and net written premiums over the prior year's second
quarter, and our loss ratio was excellent. At the same time, our
investment returns were exceptional. We have achieved a 13.8%
increase in book value per share since the beginning of the year,
and we are very pleased with the return on our stockholders equity
during this period." NYMAGIC, INC. will hold a conference call on
its second quarter 2009 financial results live on Tuesday, August
4, 2009 at 9:00 A.M. ET. The call will last for up to one hour.
Investors and interested parties will have the opportunity to
listen to and join in the call by calling 800-374-0763 entering ID#
22447666 and registering with the operator. Please call no later
than 10 minutes prior to the start of the call to register. A
replay of the conference call will be available for 30 days by
dialing 800-642-1687 and entering ID 22447666. NYMAGIC, INC. is an
insurance holding company whose property and casualty insurance
subsidiaries specialize in writing ocean marine, inland marine and
non-marine liability insurance, and whose agency subsidiaries
specialize in establishing markets for such business. The Company
maintains offices in New York and Chicago. This report contains
certain forward-looking statements concerning the Company's
operations, economic performance and financial condition,
including, in particular, the likelihood of the Company's success
in developing and expanding its business. Any forward-looking
statements concerning the Company's operations, economic
performance and financial condition contained herein, including
statements related to the outlook for the Company's performance in
2009 and beyond, are made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
are based upon a number of assumptions and estimates which
inherently are subject to uncertainties and contingencies, many of
which are beyond the control of the Company. Some of these
assumptions may not materialize and unanticipated events may occur
which could cause actual results to differ materially from such
statements. These include, but are not limited to, the cyclical
nature of the insurance and reinsurance industry, premium rates,
investment results and risk assessments, the estimation of loss
reserves and loss reserve development, uncertainties associated
with asbestos and environmental claims, including difficulties with
assessing latent injuries and the impact of litigation settlements,
bankruptcies and potential legislation, the uncertainty surrounding
the loss amounts related to the attacks of September 11, 2001, and
hurricanes Katrina and Rita, the occurrence and effects of wars and
acts of terrorism, net loss retention, the effect of competition,
the ability to collect reinsurance receivables and the timing of
such collections, the availability and cost of reinsurance, the
possibility that the outcome of any litigation or arbitration
proceeding is unfavorable, the ability to pay dividends, regulatory
changes, changes in the ratings assigned to the Company by rating
agencies, failure to retain key personnel, the possibility that our
relationship with Mariner Partners, Inc. could terminate or change,
and the fact that ownership of our common stock is concentrated
among a few major stockholders and is subject to the voting
agreement, as well as assumptions underlying any of the foregoing
and are generally expressed with words such as "intends," "intend,"
"intended," "believes," "estimates," "expects," "anticipates,"
"plans," "projects," "forecasts," "goals," "could have," "may have"
and similar expressions. These and other risks could cause actual
results for the 2009 year and beyond to differ materially from
those expressed in any forward-looking statements made. Investors
are referred to the full discussion of risks and uncertainties
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2008, including those specified under the
caption "I. A. Risk Factors" and in other documents filed by the
Company with the U.S. Securities and Exchange Commission. The
Company undertakes no obligation to update publicly or revise any
forward-looking statements made. (Comparative Table Attached)
NYMAGIC, INC. TABLE OF RESULTS (Unaudited) (In thousands, except
per share data) Three Months Ended Six Months Ended June 30, June
30, 2009 2008 2009 2008 ---- ---- ---- ---- Revenues: --------- Net
premiums earned $39,041 $43,092 $79,171 $ 87,997 Net investment
income (loss) 13,191 4,911 19,743 (8,105) Net realized investment
gains (losses) after impairment 1,713 898 1,296 (31,350) Commission
and other income 122 80 127 139 --- -- --- --- Total revenues
54,067 48,981 100,337 48,681 Expenses: --------- Net losses &
loss adjustment exp. 17,329 36,870 38,012 62,891 Policy acquisition
expenses 8,530 9,510 17,826 19,345 General & administrative
Expenses 10,434 9,671 20,478 18,438 Interest expense 1,684 1,680
3,364 3,356 ----- ----- ----- ----- Total expenses 37,977 57,731
79,680 104,030 Income (loss) before income taxes 16,090 (8,750)
20,657 (55,349) Total income tax expense (benefit) 1,886 (4,004)
2,975 (20,855) ----- ------- ----- -------- Net income (loss)
$14,204 $(4,746) $17,682 $ (34,494) Earnings per share: Basic $1.69
$(.55) $2.10 $(3.98) ----- ------ ----- ------- Diluted $1.65
$(.55) $2.05 $(3.98) ----- ------ ----- ------- Weighted average
shares outstanding: Basic 8,424 8,638 8,418 8,672 Diluted 8,625
8,638 8,608 8,672 June 30, December 31, Balance sheet data: 2009
2008 ------------------- ---- ---- Shareholders' equity $187,572
$164,073 Book value per share (1) $21.74 $19.11 (1) Calculated on a
fully diluted basis. Supplementary information:
-------------------------- NYMAGIC Gross Premiums Written
------------------------------ By Segment Three months ended Six
months ended June 30, June 30, -----------------------
---------------------- 2009 2008 Change 2009 2008 Change ---- ----
------ ---- ---- ------ (Dollars in thousands) Ocean marine $24,516
$23,316 5% $44,600 $45,557 (2%) Inland marine/fire 5,095 4,971 2%
11,291 8,539 32% Other liability 20,739 19,268 8% 62,039 65,042
(5%) ------ ------ --- ------ ------ --- Subtotal 50,350 47,555 6%
117,930 119,138 (1%) Runoff lines (Aircraft) (74) 13 NM 9 58 NM ---
--- --- --- --- --- Total $50,276 $47,568 6% $117,939 $119,196 (1%)
======= ======= === ======== ======== === NYMAGIC Net Premiums
Written ---------------------------- By Segment Three months ended
Six months ended June 30, June 30, ----------------------
---------------------- 2009 2008 Change 2009 2008 Change ---- ----
------ ---- ---- ------ (Dollars in thousands) Ocean marine $15,719
$16,190 (3%) $29,937 $33,744 (11%) Inland marine/fire 1,869 1,413
32% 3,776 2,654 42% Other liability 17,823 16,667 7% 54,739 57,711
(5%) ------ ------ --- ------ ------ --- Subtotal 35,411 34,270 3%
88,452 94,109 (6%) Runoff lines (Aircraft) (123) 18 NM (149) 96 NM
---- --- --- ---- --- --- Total $35,288 $34,288 3% $88,303 $94,205
(6%) ======= ======= === ======= ======= === NYMAGIC Net Premiums
Earned --------------------------- By Segment Three months ended
Six months ended June 30, June 30, ----------------------
---------------------- 2009 2008 Change 2009 2008 Change ---- ----
------ ---- ---- ------ (Dollars in thousands) Ocean marine $14,137
$18,310 (23%) $27,425 $36,133 (24%) Inland marine/fire 1,567 1,556
1% 2,749 3,201 (14%) Other liability 23,460 23,208 1% 49,146 48,567
1% ------ ------ --- ------ ------ --- Subtotal 39,164 43,074 (9%)
79,320 87,901 (10%) Runoff lines (Aircraft) (123) 18 NM (149) 96 NM
---- --- --- ---- --- --- Total $39,041 $43,092 (9%) $79,171
$87,997 (10%) ======= ======= === ======= ======= ==== Investment
income results: Three months ended Six months ended June 30, June
30, -------------- -------------- 2009 2008 2009 2008 ---- ----
---- ---- (in millions) Fixed maturities, held to maturity $0.5 $-
$1.1 $- Fixed maturities, available for sale 2.7 1.7 4.7 3.7 Fixed
maturities, trading securities 0.7 (0.7) 3.7 (11.4) Short-term
investments 0.1 0.5 0.3 1.5 Equity in earnings of limited
partnerships 8.0 3.7 9.2 0.6 Commercial loans 1.8 0.8 1.9 (0.3) ---
--- --- ---- Total investment income 13.8 6.0 20.9 (5.9) Investment
expenses (0.6) (1.1) (1.2) (2.2) ---- ---- ---- ---- Net investment
income $13.2 $4.9 $19.7 $(8.1) ===== ==== ===== ===== CONTACT:
NYMAGIC, INC. A. George Kallop, 212-551-0744 or Richard Lewis
Communications Cecelia Heer or Gregory Tiberend, 212-827-0020
DATASOURCE: NYMAGIC, INC. CONTACT: A. George Kallop, NYMAGIC, INC.,
+1-212-551-0744; or Cecelia Heer or Gregory Tiberend, both of
Richard Lewis Communications, +1-212-827-0020
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