NEW YORK, May 3 /PRNewswire-FirstCall/ -- NYMAGIC, INC.
(NYSE: NYM) reported today the results of consolidated operations
for the first quarter ended March 31,
2010. The Company reported net income of $6.8 million, or $.78 per diluted share for the three months ended
March 31, 2010, compared with net
income of $3.5 million, or
$.40 per diluted share, for the first
quarter of 2009. Book value per share, calculated on a fully
diluted basis, increased to $25.36 at
March 31, 2010 from $24.84 at December 31,
2009.
Net income for the first quarter ended March 31, 2010 included tax benefits of
$3.2 million, or $.37 per diluted share, primarily as a result of
the reversal of the deferred tax valuation allowance previously
provided for capital losses that are now considered ordinary. There
were no tax benefits recorded from the reversal of the deferred tax
valuation allowance during the first quarter ended March 31, 2009.
INSURANCE OPERATIONS
Gross premiums written totaled $70.5
million and net premiums written totaled $60.1 million for the first quarter of 2010,
compared with gross premiums written of $67.7 million and net premiums written of
$53.0 million during the first
quarter of 2009. This represented increases of 4% and 13%,
respectively. The increases in gross and net premiums written were
largely derived from both growth in MMO Agencies and commercial
auto liability writings.
Net premiums earned increased by 9% to $43.7 million for the first quarter of 2010, when
compared with net premiums earned of $40.1
million during the first quarter of 2009.
The Company's combined ratio was 103.1% for the three months
ended March 31, 2010 as compared with
99.7% for the same period of 2009.
Favorable loss reserve development amounted to $2.7 million and $3.1 million during the first quarter of
2010 and 2009, respectively, primarily as a result of overall
favorable loss reporting trends.
INVESTMENTS
Net investment income amounted to $7.0
million for the first quarter of 2010 as compared with net
investment income of $6.6 million for
the same period of 2009.
Net investment income for the quarter ended March 31, 2010 and 2009 includes $4.7 million and $1.2
million, respectively, of income from limited partnerships.
There was no net investment income recorded from trading securities
for the quarter ended March 31, 2010
as compared to $3.1 million for
the quarter ended March 31, 2009,
which resulted primarily from increases in the market value of
tax-exempt securities.
Net realized investment gains after impairment were $1.5 million for the first quarter of 2010, as
compared with net realized investment losses after impairment of
$(417,000) for the same period of
2009.
The net realized investment gains for the quarter ended
March 31, 2010 resulted primarily
from the sale of selected U.S. Treasury securities.
The net realized investment losses for the quarter ended
March 31, 2009 resulted primarily
from the sale of selected municipal securities, which were
partially offset by realized investment gains arising from
principal collections on the Company's residential mortgage backed
securities.
At March 31, 2010 the Company's
total cash and investments amounted to $662.2 million. The investment portfolio at
March 31, 2010 consisted of cash and
short-term investments of $77.7
million, or 11.7%; fixed maturities and other debt
investments of $387.1 million, or
58.5%; and limited partnership hedge funds and equity securities of
$197.4 million, or 29.8%.
MANAGEMENT COMMENT
George Trumbull, President and
Chief Executive Officer, in commenting on the quarter said, "We are
pleased with the Company's results for the first quarter ended
2010. Insurance markets remain competitive and challenging,
but we are maintaining underwriting discipline as evidenced by our
excellent loss ratio of 53.9%. We remain focused on
increasing premium volume where we believe underwriting profits can
be achieved, and declining underpriced business. We continue
to be optimistic about the growth in premiums from MMO Agencies,
which recorded $5.4 million during
the first quarter of 2010. Our investment results have been
excellent this quarter largely due to strong returns from limited
partnerships. Our expense ratio continues to be a problem,
but we believe that by increasing premium volume in the coming
quarters as well as by aggressively pursuing opportunities to
reduce our operating expenses, we will be able to reduce this
ratio."
Commenting further, Mr. Trumbull said of the oil rig explosion
in the Gulf of Mexico, "Our
analysis to date is that the Company's current exposure to claims
related to this loss is slightly more than $1.2 million, net of reinsurance."
NYMAGIC, INC. will hold a conference call on its first quarter
2010 financial results live on Tuesday, May
4, 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#
72379233 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 72379233.
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, 2009, 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
|
|
|
March 31,
|
|
|
2010
|
2009
|
|
Revenues:
|
|
|
|
Net premiums earned
|
$ 43,705
|
$ 40,130
|
|
Net investment income
|
7,045
|
6,552
|
|
Net realized investment
|
|
|
|
gains (losses) after impairment
|
1,524
|
(417)
|
|
Commission and other income
|
4
|
5
|
|
|
|
|
|
Total revenues
|
52,278
|
46,270
|
|
|
|
|
|
Expenses:
|
|
|
|
Net losses & loss adjustment exp.
|
23,537
|
20,682
|
|
Policy acquisition expenses
|
10,233
|
9,297
|
|
General & administrative expenses
|
11,272
|
10,044
|
|
Interest expense
|
1,683
|
1,680
|
|
|
|
|
|
Total expenses
|
46,725
|
41,703
|
|
|
|
|
|
Income before income taxes
|
5,553
|
4,567
|
|
|
|
|
|
Total income tax (benefit) expense
|
(1,294)
|
1,089
|
|
|
|
|
|
Net income
|
$6,847
|
$3,478
|
|
|
|
|
|
Earnings per share:
|
|
|
|
Basic
|
$ .81
|
$ .41
|
|
Diluted
|
$ .78
|
$ .40
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
Basic
|
8,473
|
8,411
|
|
Diluted
|
8,749
|
8,590
|
|
|
|
|
Balance sheet data:
|
March 31,
|
December 31,
|
|
|
2010
|
2009
|
|
Shareholders' equity
|
$222,941
|
$216,010
|
|
Book value per share (1)
|
$25.36
|
$24.84
|
|
|
|
|
|
(1) Calculated on a fully diluted
basis.
|
|
|
|
|
Supplementary information:
|
|
|
|
|
|
|
|
|
|
|
|
NYMAGIC Gross
Premiums Written
|
|
By
Segment
|
Three months ended
March 31,
|
|
|
|
2010
|
|
2009
|
Change
|
|
|
|
(Dollars in
thousands)
|
|
|
Ocean marine
|
$
|
17,655
|
$
|
20,084
|
-12%
|
|
|
Inland marine/fire
|
|
5,585
|
|
6,196
|
-10%
|
|
|
Other liability
|
|
47,116
|
|
41,300
|
14%
|
|
|
|
Subtotal
|
|
70,356
|
|
67,580
|
4%
|
|
|
Aircraft
|
|
115
|
|
84
|
NM
|
|
|
Total
|
$
|
70,471
|
$
|
67,664
|
4%
|
|
|
|
|
NYMAGIC Net
Premiums Written
|
|
By
Segment
|
Three months ended
March 31,
|
|
|
|
2010
|
|
2009
|
Change
|
|
|
|
(Dollars in
thousands)
|
|
|
Ocean marine
|
$
|
13,266
|
$
|
14,218
|
-7%
|
|
|
Inland marine/fire
|
|
2,779
|
|
1,907
|
46%
|
|
|
Other liability
|
|
43,972
|
|
36,916
|
19%
|
|
|
|
Subtotal
|
|
60,017
|
|
53,041
|
13%
|
|
|
Aircraft
|
|
116
|
|
(26)
|
NM
|
|
|
Total
|
$
|
60,133
|
$
|
53,015
|
13%
|
|
|
|
|
NYMAGIC Net
Premiums Earned
|
|
By
Segment
|
Three months ended
March 31,
|
|
|
|
2010
|
|
2009
|
Change
|
|
|
|
(Dollars in
thousands)
|
|
|
Ocean marine
|
$
|
12,385
|
$
|
13,289
|
-7%
|
|
|
Inland marine/fire
|
|
2,015
|
|
1,182
|
71%
|
|
|
Other liability
|
|
29,277
|
|
25,686
|
14%
|
|
|
|
Subtotal
|
|
43,677
|
|
40,157
|
9%
|
|
|
Aircraft
|
|
28
|
|
(27)
|
NM
|
|
|
Total
|
$
|
43,705
|
$
|
40,130
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
March 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(in millions)
|
|
Fixed maturities, held to
maturity
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
Fixed maturities, available
for sale
|
|
|
2.5
|
|
|
|
2.0
|
|
|
Fixed maturities, trading
securities
|
|
|
--
|
|
|
|
3.1
|
|
|
Short-term
investments
|
|
|
--
|
|
|
|
0.2
|
|
|
Equity in earnings of limited
partnerships
|
|
|
4.7
|
|
|
|
1.2
|
|
|
Commercial loans
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment
income
|
|
|
7.6
|
|
|
|
7.2
|
|
|
Investment expenses
|
|
|
(0.6)
|
|
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
$
|
7.0
|
|
|
$
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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CONTACT:
|
NYMAGIC,
INC.
|
|
|
A. George Trumbull,
212-551-0610
|
|
|
or
|
|
|
Tiberend Strategic
Advisors
|
|
|
Gregory Tiberend,
212-827-0020
|
|
|
|
SOURCE NYMAGIC, INC.