Hallmark Financial Services, Inc.
DALLAS, Nov. 14, 2023 (GLOBE NEWSWIRE) — Hallmark Financial Services, Inc. (“Hallmark”) (NASDAQ: HALL) today filed its Form 10-Q and announced financial results for the third quarter and nine months ended September 30, 2023.
| Third Quarter | Year-to-Date | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| $ in millions: | |||||||||||||
| Net loss from continuing operations | $ | (16.7 | ) | $ | (29.2 | ) | $ | (73.7 | ) | $ | (104.9 | ) | |
| Net (loss) income from discontinued operations | $ | (4.8 | ) | $ | 1.1 | $ | 1.1 | $ | 4.2 | ||||
| Net loss | $ | (21.5 | ) | $ | (28.1 | ) | $ | (72.6 | ) | $ | (100.7 | ) | |
| Operating loss from continuing operations(1) | $ | (11.7 | ) | $ | (20.6 | ) | $ | (29.1 | ) | $ | (69.2 | ) | |
| $ per diluted share (2): | |||||||||||||
| Net loss from continuing operations | $ | (9.16 | ) | $ | (16.08 | ) | $ | (40.53 | ) | $ | (57.72 | ) | |
| Net (loss) income from discontinued operations | $ | (2.67 | ) | $ | 0.60 | $ | 0.62 | $ | 2.28 | ||||
| Net loss | $ | (11.83 | ) | $ | (15.48 | ) | $ | (39.91 | ) | $ | (55.44 | ) | |
| Operating loss from continuing operations (1) | $ | (6.43 | ) | $ | (11.30 | ) | $ | (16.00 | ) | $ | (38.09 | ) | |
| (1) See “Non-GAAP Financial Measures” below | |||||||||||||
| (2) Per share amounts have been restated to reflect one-for-ten reverse stock split | |||||||||||||
| a) | As previously disclosed in Hallmark’s public filings, certain of Hallmark’s subsidiaries were parties to an arbitration proceeding relating to a Loss Portfolio Transfer Reinsurance Contract with DARAG Bermuda Ltd. and DARAG Insurance Limited. On May 4, 2023, the arbitration panel rendered an interim final award, which resulted in a write-off of $32.9 million recognized during the first quarter of 2023, subject to final determination of certain amounts under settlement which may increase or decrease our total write-off. As of March 31, 2023, our consolidated balance sheet included $3.9 million of account receivable from DARAG related to cost incurred in which we contended we have right of reimbursement. On June 2, 2023, the final definitive binding award was declared by the arbitration panel which resulted in an additional write-off to Hallmark of $3.9 million, or $3.1 million if tax effected, during the second quarter of 2023. This additional write-off results in a total write-off of $36.8 million, or $29.1 million if tax effected, included in our year-to-date net loss. | |
Third Quarter and Year-to-Date 2023 Financial Measures
| Third Quarter | Year-to-Date | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| ($ in thousands) | ||||||||||||||
| Gross premiums written | $ | 54,293 | $ | 52,520 | $ | 165,976 | $ | 167,857 | ||||||
| Net premiums written | $ | 43,738 | $ | 36,618 | $ | 129,994 | $ | 115,325 | ||||||
| Net premiums earned | $ | 36,779 | $ | 36,380 | $ | 108,906 | $ | 112,732 | ||||||
| Investment income, net of expenses | $ | 4,212 | $ | 3,721 | $ | 12,573 | $ | 8,700 | ||||||
| Investment gains (losses), net | $ | 144 | $ | (2,821 | ) | $ | (248 | ) | $ | (6,764 | ) | |||
| Net (loss) from continuing operations | $ | (16,661 | ) | $ | (29,253 | ) | $ | (73,692 | ) | $ | (104,943 | ) | ||
| Net (loss) income from discontinued operations | $ | (4,847 | ) | $ | 1,100 | $ | 1,133 | $ | 4,154 | |||||
| Net (loss) income | $ | (21,508 | ) | $ | (28,153 | ) | $ | (72,559 | ) | $ | (100,789 | ) | ||
| Operating (loss) income from continuing operations (2) | $ | (11,805 | ) | $ | (20,553 | ) | $ | (29,194 | ) | $ | (69,240 | ) | ||
| Net (loss) income per share from continuing operations basic & diluted (1) | $ | (9.16 | ) | $ | (16.08 | ) | $ | (40.53 | ) | $ | (57.72 | ) | ||
| Net (loss) income per share from discontinued operations – basic & diluted | $ | (2.67 | ) | $ | 0.60 | $ | 0.62 | $ | 2.28 | |||||
| Net loss per share – basic & diluted | $ | (11.83 | ) | $ | (15.48 | ) | $ | (39.91 | ) | $ | (55.44 | ) | ||
| Operating (loss) per share from continuing operations – basic & diluted (2) | $ | (6.49 | ) | $ | (11.30 | ) | $ | (16.06 | ) | $ | (38.09 | ) | ||
| Book value per share | $ | (4.27 | ) | $ | 36.18 | $ | (4.27 | ) | $ | 36.18 | ||||
| (1) Per share amounts have been restated for a reverse stock split | ||||||||||||||
| (2) See “Non-GAAP Financial Measures” below | ||||||||||||||
Non-GAAP Financial Measures
The Company’s financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). However, the Company also presents and discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for planning and budgeting purposes. However, these non-GAAP financial measures should not be viewed as an alternative or substitute for the results reflected in the Company’s GAAP financial statements. In addition, the Company’s definitions of these items may not be comparable to the definitions used by other companies.
Operating income and operating income per share are calculated by excluding net investment gains and losses and asset impairments or valuation allowances from GAAP net income from continuing operations. Asset impairments and valuation allowances are unusual and infrequent charges for the Company. Management believes that operating income and operating income per share provide useful information to investors about the performance of and underlying trends in the Company’s core insurance operations. Net income from continuing operations and net income per share from continuing operations are the GAAP measures that are most directly comparable to operating earnings and operating earnings per share. A reconciliation of operating income and operating income per share to the most comparable GAAP financial measures is presented below.
| ($ in thousands) | Income (Loss) from Continuing Operations Before Tax | Less Tax Effect | Net After Tax | Weighted Average Shares Diluted | Diluted Per Share | ||||||||||
| Third Quarter 2023 | |||||||||||||||
| Reported GAAP measures | $ | (16,205 | ) | $ | 456 | $ | (16,661 | ) | 1,818 | $ | (9.16 | ) | |||
| Excluded deferred tax valuation allowance | $ | – | $ | (4,970 | ) | $ | 4,970 | 1,818 | $ | 2.73 | |||||
| Operating loss | $ | (16,205 | ) | $ | (4,514 | ) | $ | (11,691 | ) | 1,818 | $ | (6.43 | ) | ||
| Third Quarter 2022 | |||||||||||||||
| Reported GAAP measures | $ | (30,260 | ) | $ | (1,007 | ) | $ | (29,253 | ) | 1,819 | $ | (16.08 | ) | ||
| Excluded tax valuation allowance | $ | – | $ | (6,471 | ) | $ | 6,471 | 1,819 | $ | 3.56 | |||||
| Excluded investment (gains)/losses | $ | 2,821 | $ | 592 | $ | 2,229 | 1,819 | $ | 1.23 | ||||||
| Operating loss | $ | (27,439 | ) | $ | (6,886 | ) | $ | (20,553 | ) | 1,819 | $ | (11.30 | ) | ||
| Year-to-Date 2023 | |||||||||||||||
| Reported GAAP measures | $ | (73,903 | ) | $ | (211 | ) | $ | (73,692 | ) | 1,818 | $ | (40.53 | ) | ||
| Excluded deferred tax valuation allowance | $ | – | $ | (15,209 | ) | $ | 15,209 | 1,818 | $ | 8.37 | |||||
| Excluded write-off receivable from reinsurer | $ | 36,826 | $ | 7,733 | $ | 29,093 | 1,818 | $ | 16.00 | ||||||
| Excluded investment (gains)/losses | $ | 392 | $ | 82 | $ | 310 | 1,818 | $ | 0.17 | ||||||
| Operating loss | $ | (36,685 | ) | $ | (7,605 | ) | $ | (29,080 | ) | 1,818 | $ | (16.00 | ) | ||
| Year-to-Date 2022 | |||||||||||||||
| Reported GAAP measures | $ | (99,701 | ) | $ | 5,242 | $ | (104,943 | ) | 1,818 | $ | (57.72 | ) | |||
| Excluded tax valuation allowance | $ | – | $ | (30,359 | ) | $ | 30,359 | 1,818 | $ | 16.70 | |||||
| Excluded investment (gains)/losses | $ | 6,764 | $ | 1,420 | $ | 5,344 | 1,818 | $ | 2.94 | ||||||
| Operating income | $ | (92,937 | ) | $ | (23,697 | ) | $ | (69,240 | ) | 1,818 | $ | (38.09 | ) | ||
Underlying combined ratio is calculated by excluding the impact of net favorable or unfavorable prior year loss development and catastrophe losses from the calculation of the net combined ratio. Management believes that the underlying combined ratio provides useful information to investors about the current performance of the Company’s insurance operations absent historical developments and uncontrollable events. Combined ratio is the GAAP measure most comparable to underlying combined ratio. A reconciliation of the underlying combined ratio to the combined ratio is presented below.
| 3rdQ 2023 | 3rdQ 2022 | YTD 2023 | YTD 2022 | |
| Net combined ratio | 150.1% | 177.1% | 173.8% | 184.1% |
| Impact on net combined ratio | ||||
| Net Unfavorable (Favorable) Prior Year Development | 9.7% | 56.7% | 13.9% | 67.3% |
| Catastrophes, net of reinsurance inclusive of reinstatement premium of $2.3 million | 36.9% | 5.9% | 15.0% | 2.8% |
| Write-off receivable from reinsurer | 0.0% | 0.0% | 33.8% | 0.0% |
| Underlying combined ratio | 103.6% | 114.5% | 111.1% | 114.0% |
A copy of our Form 10-Q is available on our website at www.hallmarkgrp.com or on the SEC website at www.sec.gov. Readers are urged to review the Form 10-Q for a more complete discussion of our financial performance.
About Hallmark
Hallmark is a property and casualty insurance holding company with a diversified portfolio of insurance products written on a national platform. With six insurance subsidiaries, Hallmark markets, underwrites and services commercial and personal insurance in select markets. Hallmark is headquartered in Dallas, Texas and its common stock is listed on NASDAQ under the symbol “HALL.”
Forward-looking statements in this release are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, continued acceptance of the Company’s products and services in the marketplace, competitive factors, interest rate trends, general economic conditions, the availability of financing, underwriting loss experience and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.
For further information, please contact:
Chris Kenney
Chief Executive Officer
817.348.1600
www.hallmarkgrp.com
| Hallmark Financial Services, Inc. and Subsidiaries | ||||||
| Consolidated Balance Sheets | ||||||
| ($ in thousands, except par value) | Sep. 30 | Dec. 31 | ||||
| ASSETS | 2023 | 2022 | ||||
| Investments: | ||||||
| Debt securities, available-for-sale, at fair value (amortized cost: $299,544 in 2023 and $434,119 in 2022; allowance for expected credit losses of $0 in 2023) | $ | 267,684 | $ | 426,597 | ||
| Equity securities (cost: $24,284 in 2023 and $30,058 in 2022) | 19,759 | 28,199 | ||||
| Total investments | 287,443 | 454,796 | ||||
| Cash and cash equivalents | 75,667 | 59,133 | ||||
| Restricted cash | 11,029 | 29,486 | ||||
| Ceded unearned premiums | 30,881 | 237,086 | ||||
| Premiums receivable | 54,393 | 78,355 | ||||
| Accounts receivable | 2,384 | 10,859 | ||||
| Receivable from reinsurer | 0 | 58,882 | ||||
| Receivable for securities | 1,981 | 945 | ||||
| Reinsurance recoverable (net of allowance for expected credit losses of $200 in 2023) | 591,936 | 578,424 | ||||
| Deferred policy acquisition costs | 14,676 | 8 | ||||
| Federal income tax recoverable | 86 | 2,668 | ||||
| Prepaid pension assets | 277 | 163 | ||||
| Prepaid expenses | 1,294 | 1,508 | ||||
| Other assets | 20,875 | 24,389 | ||||
| Total Assets | $ | 1,092,922 | $ | 1,536,702 | ||
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||
| Liabilities: | ||||||
| Senior unsecured notes due 2029 (less unamortized debt issuance costs of $599 in 2023 and $648 in 2022) | $ | 49,426 | $ | 49,352 | ||
| Subordinated debt securities (less unamortized debt issuance costs of $666 in 2023 and $691 in 2022) | 56,049 | 56,011 | ||||
| Reserves for unpaid losses and loss adjustment expenses | 719,987 | 880,869 | ||||
| Unearned premiums | 107,574 | 292,691 | ||||
| Reinsurance payable | 76,362 | 128,950 | ||||
| Accounts payable and other liabilities | 91,292 | 68,535 | ||||
| Total Liabilities | 1,100,690 | 1,476,408 | ||||
| Commitments and contingencies | ||||||
| Stockholders’ equity: | ||||||
| Common stock, $1.00 par value, authorized 3,333,333 shares; issued 2,087,283 shares in 2023 and 2022 | 2,087 | 2,087 | ||||
| Additional paid-in capital | 124,913 | 124,740 | ||||
| (Accumulated deficit) retained earnings | (105,454 | ) | (33,407 | ) | ||
| Accumulated other comprehensive loss | (4,680 | ) | (8,492 | ) | ||
| Treasury stock (268,801 shares in 2023 and 2022), at cost | (24,634 | ) | (24,634 | ) | ||
| Total Stockholders (Deficit) Equity | (7,768 | ) | 60,294 | |||
| Total Liabilities & Stockholders (Deficit) Equity | $ | 1,092,922 | $ | 1,536,702 | ||
| Hallmark Financial Services, Inc. and Subsidiaries | |||||||||||||
| Consolidated Statements of Operations | Three Months Ended | Year-to-Date | |||||||||||
| ($ in thousands, except per share amounts) | September 30, | September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| Gross premiums written | $ | 54,293 | $ | 52,520 | $ | 165,976 | $ | 167,857 | |||||
| Ceded premiums written | (10,555 | ) | (15,902 | ) | (35,982 | ) | (52,532 | ) | |||||
| Net premiums written | 43,738 | 36,618 | 129,994 | 115,325 | |||||||||
| Change in unearned premiums | (6,959 | ) | (238 | ) | (21,088 | ) | (2,593 | ) | |||||
| Net premiums earned | 36,779 | 36,380 | 108,906 | 112,732 | |||||||||
| Investment income, net of expenses | 4,212 | 3,721 | 12,573 | 8,700 | |||||||||
| Investment gains (losses), net | 144 | (2,821 | ) | (248 | ) | (6,764 | ) | ||||||
| Finance charges | 836 | 937 | 2,347 | 2,900 | |||||||||
| Other income | (72 | ) | 15 | 62 | 45 | ||||||||
| Total revenues | 41,899 | 38,232 | 123,640 | 117,613 | |||||||||
| Losses and loss adjustment expenses | 39,473 | 49,141 | 105,989 | 161,168 | |||||||||
| Operating expenses | 16,595 | 17,816 | 85,682 | 51,967 | |||||||||
| Interest expense | 2,036 | 1,528 | 5,872 | 4,158 | |||||||||
| Amortization of intangible assets | 0 | 7 | 0 | 21 | |||||||||
| Total expenses | 58,104 | 68,492 | 197,543 | 217,314 | |||||||||
| Loss from continuing operations before tax | (16,205 | ) | (30,260 | ) | (73,903 | ) | (99,701 | ) | |||||
| Income tax expense (benefit) from continuing operations | 456 | (1,007 | ) | (211 | ) | 5,242 | |||||||
| Net (loss) income from continuing operations | $ | (16,661 | ) | $ | (29,253 | ) | $ | (73,692 | ) | $ | (104,943 | ) | |
| Discontinued operations: | |||||||||||||
| Total pretax (loss) income from discontinued operations | $ | (4,847 | ) | $ | 2,801 | $ | 1,133 | $ | 10,573 | ||||
| Income tax expense on discontinued operations | – | 1,701 | – | 6,419 | |||||||||
| (Loss) income (loss) from discontinued operations, net of tax | $ | (4,847 | ) | $ | 1,100 | $ | 1,133 | $ | 4,154 | ||||
| Net loss | $ | (21,508 | ) | $ | (28,153 | ) | $ | (72,559 | ) | $ | (100,789 | ) | |
| Net (loss) basic income per share: | |||||||||||||
| Net loss from continuing operations | $ | (9.16 | ) | $ | (16.08 | ) | $ | (40.53 | ) | $ | (57.72 | ) | |
| Net (loss) income from discontinued operations | (2.67 | ) | 0.60 | 0.62 | 2.28 | ||||||||
| Basic net (loss) income per share | $ | (11.83 | ) | $ | (15.48 | ) | $ | (39.91 | ) | $ | (55.44 | ) | |
| Net (loss) diluted income per share: | |||||||||||||
| Net loss from continuing operations | $ | (9.16 | ) | $ | (16.08 | ) | $ | (40.53 | ) | $ | (57.72 | ) | |
| Net (loss) income from discontinued operations | (2.67 | ) | 0.60 | 0.62 | 2.28 | ||||||||
| Diluted net (loss) income per share | $ | (11.83 | ) | $ | (15.48 | ) | $ | (39.91 | ) | $ | (55.44 | ) | |
| Hallmark Financial Services, Inc. and Subsidiaries | |||||||||||||||||||||||||||||
| Consolidated Segment Data | |||||||||||||||||||||||||||||
| Three Months Ended Sep. 30 | |||||||||||||||||||||||||||||
| Commercial Lines Segment | Personal Lines Segment | Runoff Specialty Segment | Corporate | Consolidated | |||||||||||||||||||||||||
| ($ in thousands, unaudited) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Gross premiums written | $ | 31,096 | $ | 34,557 | $ | 23,194 | $ | 15,638 | $ | 3 | $ | 2,325 | $ | – | $ | – | $ | 54,293 | $ | 52,520 | |||||||||
| Ceded premiums written | (10,461 | ) | (15,801 | ) | (105 | ) | (76 | ) | 11 | (25 | ) | – | – | (10,555 | ) | (15,902 | ) | ||||||||||||
| Net premiums written | 20,635 | 18,756 | 23,089 | 15,562 | 14 | 2,300 | – | – | 43,738 | 36,618 | |||||||||||||||||||
| Change in unearned premiums | 617 | (207 | ) | (7,577 | ) | 38 | 1 | (69 | ) | – | – | (6,959 | ) | (238 | ) | ||||||||||||||
| Net premiums earned | 21,252 | 18,549 | 15,512 | 15,600 | 15 | 2,231 | – | – | 36,779 | 36,380 | |||||||||||||||||||
| Total revenues | 21,271 | 18,574 | 16,343 | 16,529 | (71 | ) | 2,229 | 4,356 | 900 | 41,899 | 38,232 | ||||||||||||||||||
| Losses and loss adjustment expenses | 26,070 | 14,484 | 11,826 | 14,735 | 1,577 | 19,922 | – | – | 39,473 | 49,141 | |||||||||||||||||||
| Pre-tax (loss) income | $ | (13,654 | ) | $ | (2,762 | ) | $ | (773 | ) | $ | (3,637 | ) | $ | (2,041 | ) | $ | (19,612 | ) | $ | 263 | $ | (4,249 | ) | $ | (16,205 | ) | $ | (30,260 | ) |
| Net loss ratio (1) | 122.7 | % | 78.1 | % | 76.2 | % | 94.5 | % | N/A (2) | 893.0 | % | 107.3 | % | 135.1 | % | ||||||||||||||
| Net expense ratio (1) | 41.6 | % | 37.9 | % | 28.8 | % | 30.3 | % | N/A (2) | 45.1 | % | 42.8 | % | 42.0 | % | ||||||||||||||
| Net combined ratio (1) | 164.3 | % | 116.0 | % | 105.0 | % | 124.8 | % | N/A (2) | 938.1 | % | 150.1 | % | 177.1 | % | ||||||||||||||
| Impact on net combined ratio | |||||||||||||||||||||||||||||
| Net Unfavorable (Favorable) Prior Year Development | 3.9 | % | 1.6 | % | 6.4 | % | 11.6 | % | N/A (2) | 830.5 | % | 9.7 | % | 56.7 | % | ||||||||||||||
| Catastrophes, net of reinsurance including reinstatement premium | 61.5 | % | 10.9 | % | 3.2 | % | 0.8 | % | N/A (2) | 0.0 | % | 36.9 | % | 4.9 | % | ||||||||||||||
| Write-off receivable from reinsurer | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | N/A (2) | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||
| Underlying combined ratio (1) | 98.9 | % | 103.5 | % | 95.4 | % | 112.4 | % | N/A (2) | 107.6 | % | 103.6 | % | 115.5 | % | ||||||||||||||
| Net Unfavorable (Favorable) Prior Year Development | 825 | 300 | 990 | 1,810 | 1,764 | 18,528 | – | – | 3,579 | 20,638 | |||||||||||||||||||
| (1) | The net loss ratio is calculated as incurred losses and loss adjustment expenses divided by net premiums earned, each determined in accordance with GAAP. The net expense ratio is calculated as total underwriting expenses offset by agency fee income divided by net premiums earned, each determined in accordance with GAAP. The net combined ratio is calculated as the sum of the net loss ratio and the net expense ratio. The underlying combined ratio is the net combined ratio excluding the impact of net prior year reserve development and catastrophes and excluding the write-off of a receivable from reinsurer. | |
| (2) | The Company’s Runoff Segment has reached a point of maturity that earned premium is minimal and renders any ratios no longer meaningful. | |
| Hallmark Financial Services, Inc. and Subsidiaries | ||||||||||||||||||||||||||||||
| Consolidated Segment Data | ||||||||||||||||||||||||||||||
| Year-to-Date Ended Sep. 30 | ||||||||||||||||||||||||||||||
| Commercial Lines Segment | Personal Lines Segment | Runoff Segment | Corporate | Consolidated | ||||||||||||||||||||||||||
| ($ in thousands, unaudited) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Gross premiums written | $ | 113,733 | $ | 110,013 | $ | 51,919 | $ | 47,589 | $ | 324 | $ | 10,255 | $ | – | $ | – | $ | 165,976 | $ | 167,857 | ||||||||||
| Ceded premiums written | (35,460 | ) | (51,434 | ) | (316 | ) | (226 | ) | (206 | ) | (872 | ) | – | – | (35,982 | ) | (52,532 | ) | ||||||||||||
| Net premiums written | 78,273 | 58,579 | 51,603 | 47,363 | 118 | 9,383 | – | – | 129,994 | 115,325 | ||||||||||||||||||||
| Change in unearned premiums | (12,239 | ) | (3,584 | ) | (8,859 | ) | (350 | ) | 10 | 1,341 | – | – | (21,088 | ) | (2,593 | ) | ||||||||||||||
| Net premiums earned | 66,034 | 54,995 | 42,744 | 47,013 | 128 | 10,724 | – | – | 108,906 | 112,732 | ||||||||||||||||||||
| Total revenues | 66,082 | 55,064 | 45,087 | 49,889 | 42 | 10,724 | 12,429 | 1,936 | 123,640 | 117,613 | ||||||||||||||||||||
| Losses and loss adjustment expenses | 59,483 | 40,398 | 36,469 | 41,408 | 10,037 | 79,362 | – | – | 105,989 | 161,168 | ||||||||||||||||||||
| Pre-tax (loss) income | $ | (15,151 | ) | $ | (4,261 | ) | $ | (7,265 | ) | $ | (7,989 | ) | $ | (49,266 | ) | $ | (73,929 | ) | $ | (2,221 | ) | $ | (13,522 | ) | $ | (73,903 | ) | $ | (99,701 | ) |
| Net loss ratio (1) | 90.1 | % | 73.5 | % | 85.3 | % | 88.1 | % | N/A (2) | 740.0 | % | 97.3 | % | 143.0 | % | |||||||||||||||
| Net expense ratio (1) | 32.9 | % | 35.7 | % | 31.8 | % | 30.3 | % | N/A (2) | 40.3 | % | 76.5 | % | 41.1 | % | |||||||||||||||
| Net combined ratio (1) | 123.0 | % | 109.2 | % | 117.1 | % | 118.4 | % | N/A (2) | 780.3 | % | 173.8 | % | 184.1 | % | |||||||||||||||
| Impact on net combined ratio | ||||||||||||||||||||||||||||||
| Net Unfavorable (Favorable) Prior Year Development | 2.4 | % | 0.5 | % | 9.3 | % | 11.1 | % | N/A (2) | 656.1 | % | 13.9 | % | 67.3 | % | |||||||||||||||
| Catastrophes, net of reinsurance including reinstatement premium | 23.4 | % | 5.4 | % | 2.1 | % | 0.4 | % | N/A (2) | 0.0 | % | 15.0 | % | 2.8 | % | |||||||||||||||
| Write-off receivable from reinsurer | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | N/A (2) | 0.0 | % | 33.8 | % | 0.0 | % | |||||||||||||||
| Underlying combined ratio (1) | 97.2 | % | 103.3 | % | 105.7 | % | 106.9 | % | N/A (2) | 124.2 | % | 111.1 | % | 114.0 | % | |||||||||||||||
| Net Unfavorable (Favorable) Prior Year Development | 1,594 | 250 | 3,982 | 5,218 | 9,603 | 70,365 | 15,179 | 75,833 | ||||||||||||||||||||||
| (1) | The net loss ratio is calculated as incurred losses and loss adjustment expenses divided by net premiums earned, each determined in accordance with GAAP. The net expense ratio is calculated as total underwriting expenses offset by agency fee income divided by net premiums earned, each determined in accordance with GAAP. The net combined ratio is calculated as the sum of the net loss ratio and the net expense ratio. The underlying combined ratio is the net combined ratio excluding the impact of net prior year reserve development and catastrophes and excluding the write-off of a receivable from reinsurer. | |
| (2) | The Company’s Runoff Segment has reached a point of maturity that earned premium is minimal and renders any ratios no longer meaningful. | |
A photo accompanying this release is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/a204b59d-618d-45a4-823f-f2fc7a049fbd
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