NEW YORK, Feb. 26 /PRNewswire-FirstCall/ -- NYMAGIC, INC. reported
today the results of consolidated operations for the fourth quarter
ended December 31, 2009. The Company reported net income of $13.2
million, or $1.53 per diluted share for the three months ended
December 31, 2009, compared with net losses of $(19.8) million, or
$(2.36) per diluted share, for the fourth quarter of 2008. Net
income for the year ended December 31, 2009 totaled $45.5 million,
or $5.26 per diluted share, compared with net losses of $(104.3)
million, or $(12.23) per diluted share, for the year ended December
31, 2008. Book value per share, calculated on a fully diluted
basis, increased from $19.11 at December 31, 2008 to $24.84 at
December 31, 2009. This was an increase of 30%. INSURANCE
OPERATIONS Gross premiums written totaled $46.2 million and net
premiums written totaled $36.7 million for the fourth quarter of
2009, compared with gross premiums written of $42.6 million and net
premiums written of $31.4 million during the fourth quarter of
2008. This represented increases of 8% and 17%, respectively. Gross
premiums written totaled $213.6 million and net premiums written
totaled $162.6 million for the year ended December 31, 2009,
compared with gross premiums written of $217.3 million and net
premiums written of $165.4 million for the year ended December 31,
2008. Each decrease was 2%. The Company's decision to terminate a
cargo program at the end of 2007 caused reductions in each of gross
premiums written and net premiums written totaling $8.6 million for
the year ended December 31, 2009 when compared to the 2008 year.
Net premiums earned totaled $39.3 million for the fourth quarter of
2009, compared with net premiums earned of $38.6 million during the
fourth quarter of 2008. This represented an increase of 2%. Net
premiums earned totaled $157.0 million for the year ended December
31, 2009, compared with net premiums earned of $167.1 million
during the year ended December 31, 2008. This represented a
decrease of 6%. Most of this decline occurred within the Ocean
Marine segment, of which a substantial portion was attributable to
the termination of the cargo program referred to above. The
Company's combined ratio was 99.9% for the three months ended
December 31, 2009 as compared with 100.3% for the same period of
2008. The Company's combined ratio was 98.7% for the year ended
December 31, 2009 as compared with 112.1% for the same period of
2008. Hurricanes Gustav and Ike and a settlement of certain
disputed reinsurance receivables contributed 11.4% to the year
ended 2008 combined ratio. Favorable loss reserve development
amounted to $6.8 million and $20.0 million for the fourth quarter
and year ended December 31, 2009. Favorable loss development in
2009 occurred in each business segment primarily as a result of
favorable loss reporting trends. Favorable loss reserve development
amounted to $4.5 million during the fourth quarter of 2008. For the
year ended December 31, 2008, adverse loss reserve development
amounted to $(2.7) million. 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 $7.3 million for the fourth quarter of 2009 compared
with net investment loss of $(16.0) million for the same period of
2008. For the year ended December 31, 2009, net investment income
was $41.7 million as compared with a net investment loss of $(63.5)
million for the same period of 2008. Net investment income for the
year ended December 31, 2009 includes $6.4 million from increases
in the market value of investments categorized as trading
securities, which are primarily tax-exempt securities, and
commercial loans. In addition, $26.7 million of income was recorded
from limited partnerships. Net investment loss for the year ended
December 31, 2008 included losses of $(43.8) million due to
declines in the market value of trading securities and commercial
loans as well as losses of $(26.8) million from limited
partnerships. During 2008, trading securities included municipal
bonds, preferred stocks, hedged positions and exchange-traded
funds. Net realized investment gains after impairment were $13.4
million for the fourth quarter of 2009, as compared with net
realized investment losses after impairment of $(1.4) million for
the same period of 2008. Net realized investment gains after
impairment for the year ended December 31, 2009 were $15.3 million
compared with net realized investment losses after impairment of
$(47.7) million for the same period in 2008. The net realized
investment gains in 2009 resulted primarily from the sale of
selected municipal, corporate and US Treasury securities undertaken
to further reposition the Company's holdings. Net realized
investment losses after impairment for the year ended December 31,
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
fourth quarter and year ended December 31, 2009 included tax
benefits of $0.3 million, or $.03 per diluted share, and $6.2
million, or $.72 per diluted share, respectively, 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 2009
year. At December 31, 2009 the Company's total cash and investments
amounted to $675.7 million, compared with $547.0 million at
December 31, 2008. The investment portfolio at December 31, 2009
consisted of cash and short-term investments of $75.6 million, or
11.2%; fixed maturities and other debt investments of $448.1
million, or 66.3%; and limited partnership hedge funds and equity
securities of $152.0 million, or 22.5%. For the year ended December
31, 2009, the Company reported an after tax gain of $3.2 million
resulting from its receipt of proceeds as the beneficiary of a life
insurance policy on a former director. MANAGEMENT COMMENT George
Kallop, President and Chief Executive Officer, in commenting on the
quarter said, "We are very pleased with the Company's Net Income
for the fourth quarter and year ended 2009 which contributed to a
30% increase in book value per share for the year. Insurance
markets continue to be challenging, but we are maintaining
underwriting discipline as evidenced by our excellent loss ratio.
We remain focused on increasing premium volumes where we believe
underwriting profits can be achieved, and declining underpriced
business. Our investment results have been excellent this year, and
our investment balances have risen by over $100 million since the
beginning of the year due to strong cash flow from operations,
opportunistic investment sales and appreciation in our investments.
Our expense ratio continues to be a challenge, but we are hopeful
that we will be able to increase premium volumes in coming quarters
and we expect to moderate growth in expenses to reduce our combined
ratio. We look forward to more continued success in 2010." NYMAGIC,
INC. will hold a conference call on its fourth quarter 2009
financial results live on Monday, March 1, 2010 at 9:00 A.M. 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# 58822563 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
58822563. 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 2010 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 losses related to the
attacks of September 11, 2001, as well as those associated with
catastrophic hurricanes, 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 2010 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. NYMAGIC, INC. TABLE OF RESULTS
(Unaudited) (In thousands, except per share data) Three Months
Ended Year Ended December 31, December 31, 2009 2008 2009 2008
Revenues: Net premiums earned $ 39,294 $ 38,599 $ 156,971 $ 167,073
Net investment income (loss) 7,347 (15,963) 41,668 (63,503) Net
realized investment gains (losses) after impairment 13,413 (1,351)
15,255 (47,665) Commission and other income 163 168 3,601 276 Total
revenues 60,217 21,453 217,495 56,181 Expenses: Net losses &
loss adjustment exp. 17,661 18,987 75,504 109,958 Policy
acquisition expenses 9,953 9,271 36,853 38,670 General &
administrative expenses 11,676 10,470 42,552 38,612 Interest
expense 1,683 1,680 6,731 6,716 Total expenses 40,973 40,408
161,640 193,956 Income (loss) before income taxes 19,244 (18,955)
55,855 (137,775) Total income tax expense (benefit) 6,038 812
10,392 (33,440) Net income (loss) $13,206 $ (19,767) $ 45,463 $
(104,335) Earnings per share: Basic $ 1.57 $ (2.36) $5.39 $ (12.23)
Diluted $ 1.53 $ (2.36) $5.26 $ (12.23) Weighted average shares
outstanding: Basic 8,428 8,388 8,428 8,534 Diluted 8,659 8,388
8,637 8,534 Balance sheet data: December 31, December 31, 2009 2008
Shareholders' equity $216,010 $164,073 Book value per share (1)
$24.84 $19.11 (1) Calculated on a fully diluted basis.
Supplementary information: NYMAGIC Gross Premiums Written Three
months ended Year ended By Segment December 31, December 31, 2009
2008 Change 2009 2008 Change (Dollars in thousands) Ocean marine
$11,855 $13,818 -14% $73,269 $82,751 -11% Inland marine/fire 4,556
3,443 32% 20,306 16,128 26% Other liability 29,752 25,343 17%
119,913 118,378 1% Subtotal 46,163 42,604 8% 213,488 217,257 -2%
Runoff lines (Aircraft) 14 (31) NM 92 (3) NM Total $46,177 $42,573
8% $213,580 $217,254 -2% NYMAGIC Net Premiums Written Three months
ended Year ended By Segment December 31, December 31, 2009 2008
Change 2009 2008 Change (Dollars in thousands) Ocean marine $8,221
$9,862 -17% $49,885 $59,200 -16% Inland marine/fire 1,864 714 161%
7,045 4,538 55% Other liability 26,575 20,634 29% 105,785 101,424
4% Subtotal 36,660 31,210 17% 162,715 165,162 -1% Runoff lines
(Aircraft) (5) 203 NM -68 222 NM Total $36,655 $31,413 17% $162,647
$165,384 -2% NYMAGIC Net Premiums Earned Three months ended Year
ended By Segment December 31, December 31, 2009 2008 Change 2009
2008 Change (Dollars in thousands) Ocean marine $11,993 $13,279
-10% $51,682 $64,713 -20% Inland marine/fire 1,655 1,120 48% 5,733
5,710 0% Other liability 25,651 23,997 7% 99,624 96,428 3% Subtotal
39,299 38,396 2% 157,039 166,851 -6% Runoff lines (Aircraft) (5)
203 NM -68 222 NM Total $39,294 $38,599 2% $156,971 $167,073 -6%
Net investment income (loss) results: Three months ended Year ended
December 31, December 31, 2009 2008 2009 2008 (in millions) Fixed
maturities, held to maturity $0.3 $0.8 $1.9 $0.8 Fixed maturities,
available for sale 1.6 1.8 8.7 7.4 Trading securities - (5.1) 4.5
(42.3) Short-term investments - 0.9 0.3 3.0 Equity in earnings of
limited partnerships 6.2 (12.9) 26.7 (26.8) Commercial loans (0.2)
(0.9) 1.9 (1.5) Total investment income (loss) 7.9 (15.4) 44.0
(59.4) Investment expenses (0.6) (0.6) (2.3) (4.1) Net investment
income (loss) $7.3 $(16.0) $41.7 $(63.5) CONTACT: NYMAGIC, INC. A.
George Kallop, 212-551-0744 or Tiberend Strategic Advisors Gregory
Tiberend, 212-827-0020 DATASOURCE: NYMAGIC, INC. CONTACT: A. George
Kallop, NYMAGIC, INC., +1-212-551-0744; or GregoryTiberend,
Tiberend Strategic Advisors, +1-212-827-0020 Web Site:
http://www.nymagic.com/
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