Specialty Underwriters' Alliance, Inc. Reports First Quarter 2007 Financial Results
May 03 2007 - 6:00PM
PR Newswire (US)
CHICAGO, May 3 /PRNewswire-FirstCall/ -- Specialty Underwriters'
Alliance, Inc. (NASDAQ:SUAI) today announced financial results for
the quarter ended March 31, 2007. Highlights: -- Gross written
premium of $35.0 million rose 13.6% from the prior year period; --
Earned premium of $35.4 million increased 51.9 % over the prior
year period; -- Net income of $3.0 million versus a loss of $0.2
million for the prior year period; -- Earnings per share of $0.20
versus a loss per share of $0.01 for the prior year period.
Courtney Smith, president and chief executive officer, stated,
"While our premium was not at the level we expected, we are pleased
with our results on a comparable quarter-over-quarter basis in
earned premium, net income and earnings per share. The market
continues to be competitive, but our underwriting and pricing
discipline allows us to continue to achieve our loss ratio targets
as we grow our premium." Net investment income increased 90.9
percent from $1.1 million for the three months ended March 31, 2006
to $2.1 million for the three months ended March 31, 2007. Total
revenues were $37.5 million for the first quarter of 2007, an
increase of 53.7 percent from $24.4 million for the comparable
period in 2006. Total expenses for the three months ended March 31,
2007 were $34.4 million, consisting of loss and loss adjustment
expenses of $20.1 million, acquisition expenses of $8.6 million and
other operating expenses of $5.6 million. Other operating expenses
consisted of $1.6 million of salaries and benefit costs (excluding
$1.6 million of salary and benefit costs classified as loss
adjustment and acquisition expenses), $1.2 million of professional
and consulting fees, $1.0 million of depreciation and amortization,
$0.3 million of stock based compensation expense and $1.5 million
of other expenses. Total expenses for the three months ended March
31, 2006 were $24.5 million. Total expenses consisted of loss and
loss adjustment expense of $14.0 million, acquisition expenses of
$5.5 million and other operating expenses of $5.0 million. Other
operating expenses consisted of $1.4 million of salaries and
benefit costs (excluding $1.1 million of salary and benefit costs
classified as loss adjustment and acquisition expenses), $1.1
million of professional and consulting fees, $0.4 million of
depreciation and amortization, $0.3 million of stock based
compensation expense and $1.8 million of other expenses. Net income
for the first quarter of 2007 was $3.0 million compared to a net
loss of $0.2 million for the first quarter of 2006. Earnings per
share for the three months ended March 31, 2007 was $0.20 compared
to loss per share of $0.01 for the same period in 2006. As of March
31, 2007, the company reported investments of $182.0 million, total
assets of $377.0 million, total liabilities of $258.9 million and
shareholders' equity of $118.1 million. Book value per share was
$7.68 and tangible book value per share was $6.98. As of December
31, 2006, the company reported investments of $164.1 million, total
assets of $363.3 million, total liabilities of $249.3 million and
shareholders' equity of $114.0 million. Book value per share for as
of December 31, 2006 was $7.42 and tangible book value per share
was $6.72. Smith continued, "We remain committed to growing
premium. We signed a partner agent program agreement with Flying
Eagle Insurance Services, Inc. at the end of the first quarter of
2007. Flying Eagle provides general liability to artisan and
general contractors and roofers in the western region. We are
excited about this opportunity to expand our current contractors
book. Further, we are in discussions with additional potential
partner agents. As we begin to realize the success of our business
model, we are also exploring other business opportunities that
could lead to additional growth and profitability." Conference Call
Details SUAI will host a conference call on Friday, May 4, 2007 at
10:00 a.m. Central Time to discuss first quarter results.
Interested parties may access a live webcast by going to the
"Investor Relations" page of SUAI's website at
http://www.suainsurance.com/ or by calling 800-706-7741. A replay
of the call will be available by dialing 888-286-8010, passcode
65309561 through May 11, 2007. A replay of the call will also
remain on the company's website for 90 days following the event.
About Specialty Underwriters' Alliance, Inc. Specialty
Underwriters' Alliance, Inc., through its subsidiary SUA Insurance
Company, is a specialty property and casualty insurance company
providing commercial insurance products through exclusive wholesale
Partner Agents that serve niche groups of insureds. These targeted
customers require highly specialized knowledge due to their unique
risk characteristics. Examples include tow trucks, professional
employer organizations, public entities, and contractors. SUA's
innovative approach provides products and claims handling, allowing
the Partner Agent to focus on distribution and customer
relationships. Safe Harbor Statement The Private Securities
Litigation Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. This release or any other written or
oral statements made by or on behalf of the company may include
forward-looking statements that reflect the company's current views
with respect to future events and financial performance. All
statements other than statements of historical fact included in
this release are forward-looking statements. Forward-looking
statements can generally be identified by the use of
forward-looking terminology such as "may," "will," "plan,"
"expect," "intend," "estimate," "anticipate," "believe" or
"continue" or their negative or variations or similar terminology.
All forward-looking statements address matters that involve risks
and uncertainties. Accordingly, there are or will be important
factors that could cause our actual results to differ materially
from those indicated in these statements. We believe that these
factors include but are not limited to ineffectiveness or
obsolescence of our business strategy due to changes in current or
future market conditions; increased competition on the basis of
pricing, capacity, coverage terms or other factors; greater
frequency or severity of claims and loss activity, including as a
result of natural or man-made catastrophic events, than our
underwriting, reserving or investment practices anticipate based on
historical experience or industry data; the effects of acts of
terrorism or war; developments in the world's financial and capital
markets that adversely affect the performance of our investments;
changes in regulations or laws applicable to us, our subsidiaries,
brokers or customers; acceptance of our products and services,
including new products and services; changes in the availability,
cost or quality of reinsurance and failure of our reinsurers to pay
claims timely or at all; decreased demand for our insurance or
reinsurance products; loss of the services of any of our executive
officers or other key personnel; the effects of mergers,
acquisitions and divestitures; changes in rating agency policies or
practices; changes in legal theories of liability under our
insurance policies; changes in accounting policies or practices;
and changes in general economic conditions, including inflation and
other factors. Forward-looking statements speak only as of the date
on which they are made, and the company undertakes no obligation to
update publicly or revise any forward-looking statement, whether as
a result of new information, future developments or otherwise.
Financial Tables Follow Summary Financial Data (in millions, except
per share data) For the Three Months Ended March 31, 2007 2006
Results of operations Gross written premiums $35.0 $30.8 Net
written premiums 31.6 27.4 Earned premiums $35.4 $23.3 Net
investment income 2.1 1.1 Total revenues 37.5 24.4 Loss and loss
adjustment expenses 20.1 14.0 Acquisition expenses 8.6 5.5 Other
operating expenses 5.6 5.0 Total expenses 34.4 24.5 Pre-tax income
3.1 (0.1) Federal income tax (expense) (0.1) (0.1) Net income
(loss) $3.0 $(0.2) Key ratios Net loss and loss adjustment expense
ratio 56.9% 60.2% Ratio of acquisition expenses to earned premiums
24.4% 23.8% Ratio of all other expenses to gross written premiums
16.0% 16.3% Net income (loss) per share Basic and diluted $0.20
$(0.01) Average common shares outstanding (basic and diluted) 15.4
15.0 Summary Financial Data (in millions, except per share data) As
of As of Financial Condition March 31, 2007 December 31, 2006
Investments $182.0 $164.1 Total assets $377.0 $363.3 Loss and loss
adjustment expense reserves* $150.8 $141.2 Unearned insurance
premiums $86.1 $89.8 Other liabilities $22.0 $18.3 Shareholders'
equity $118.1 $114.0 Book value data Shares outstanding 15.4 15.4
Book value per share $7.68 $7.42 Tangible book value per share
$6.98 $6.72 * Includes $67.6 million and $71.6 million as of March
31, 2007 and December 31, 2006 of direct gross loss and loss
adjustment expense reserves of Potomac Insurance Company of
Illinois, which reinsured all of its direct liabilities to
OneBeacon Insurance Company and is reflected on SUA's balance sheet
as a reinsurance recoverable. Gross Written Premium Data (in
millions, except percentages) Three Months Ended Three Months Ended
March 31, 2007 March 31, 2006 Percentage of Percentage of Gross
Gross Gross Gross Written Written Written Written Premium Premium
Premium Premium Risk Transfer Holdings, Inc. $14.1 40.2% $18.3
59.4% American Team Managers 11.2 32.0% 7.2 23.4% AEON Insurance
Group, Inc. 5.0 14.3% 3.5 11.4% Appalachian Underwriters, Inc. 4.4
12.6% 1.8 5.8% Specialty Risk Solutions, LLC 0.0 0.0% 0.0 0.0%
Insential, Inc. (American Patriot Insurance Agency, Inc.) 0.3 0.9%
0.0 0.0% Total $35.0 100.0% $30.8 100.0% Three Months Ended Three
Months Ended March 31, 2007 March 31, 2006 Percentage of Percentage
of Gross Gross Gross Gross Written Written Written Written Premium
Premium Premium Premium Florida $7.3 20.9% $9.8 31.8% California
13.8 39.5% 10.4 33.8% Other States 13.9 39.6% 10.6 34.4% Total
$35.0 100.0% $30.8 100.0% Three Months Ended Three Months Ended
March 31, 2007 March 31, 2006 Percentage of Percentage of Gross
Gross Gross Gross Written Written Written Written Premium Premium
Premium Premium Workers' compensation $18.7 53.4% $20.9 68.0%
General liability 8.6 24.6% 6.2 20.0% Commercial automobile 7.0
20.0% 3.3 10.7% All other 0.7 2.0% 0.4 1.3% Total $35.0 100.0%
$30.8 100.0% To learn more about Specialty Underwriters' Alliance
Inc., please visit http://www.suainsurance.com/. DATASOURCE:
Specialty Underwriters' Alliance, Inc. CONTACT: Leslie Loyet of
Financial Relations Board, +1-312-640-6672, , for Specialty
Underwriters' Alliance, Inc.; or Scott Goodreau of Specialty
Underwriters' Alliance, Inc., 1-888-782-4672, Web site:
http://www.suainsurance.com/
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