Net loss ratio represents net losses and loss adjustment expenses (“LAE”) as a percentage
of net premiums earned.
Net expense ratio represents policy acquisition costs (“PAC”) and general and administrative
(“G&A”) expenses as a percentage of net premiums earned. Ceding commission income is reported as a reduction of PAC and G&A expenses.
Net combined ratio represents the sum of net losses and LAE, PAC and G&A expenses as a percentage of net premiums earned. The net combined ratio is
a key measure of underwriting performance traditionally used in the property and casualty industry. A combined ratio under 100% generally reflects profitable underwriting results.
Third Quarter 2024 Results:
Third quarter 2024 net
income was $8.2 million or $0.27 per diluted share, compared to net loss of ($7.4) million or ($0.28) per diluted share in the prior year quarter, primarily driven by the increase in net premiums earned and higher net investment income
outpacing the increase in higher acquisition costs, with lower losses and loss adjustment expenses and general expenses. The improvement in net income is attributable to the positive impact of rate actions, underwriting actions, and targeted
exposure management taken over the last several years, which continue to favorably impact results. These and other actions resulted in growth of 12.6% in net premiums earned, a 42.7% increase in net investment income, and a 1.0% decrease in net
losses and LAE. Policy acquisition costs increased 14.4%, which was attributable to costs that vary with gross premiums written and changes in unearned premium, as well as a reduction in ceding commission income on the net quota share reinsurance
contract. General and administrative costs decreased 1.5% driven primarily by human capital and consulting costs, partly offset by a reduction of the benefit of ceding commission income.
Premiums-in-force were $1.4 billion as of third quarter 2024, an increase
of 6.0% compared to $1.3 billion as of third quarter 2023. The third quarter 2024 represents our eleventh consecutive quarter of driving higher in-force premium despite reductions in policy count.
Gross premiums written of $313.0 million were up 1.1% from $309.5 million in the prior year quarter, reflecting a higher average premium per policy
throughout the book of business. The increase in average premium is driven by rating actions and use of inflation guard, which ensures appropriate property values, partly offset by specific intentional targeted exposure management, which is expected
to level.
Gross premiums earned were $354.2 million, up 5.1% from $337.0 million in the prior year quarter, reflecting higher gross premiums
written over the last twelve months as described above.
Net premiums earned were $198.8 million, up 12.6% from $176.6 million in the prior year
quarter, reflecting higher gross premium earned coupled with a reduction in ceded premiums for the quarter, driven by a reduction in ceded premiums associated with the net quota share program.
Ceded premium ratio was 43.9%, down 3.7 points from 47.6% in the prior year quarter driven by growth in gross premiums earned and less ceded premium as
described above.
Net loss ratio decreased to 65.4%, a 9.0 point improvement from 74.4% in the same quarter last year reflecting higher net premiums
earned, coupled with slightly lower net losses and LAE. The reduction in net losses and LAE was driven primarily by a reduction of attritional losses which was partly offset by higher weather losses and adverse development. Net weather losses for
the current accident quarter were $63.0 million, an increase of $11.4 million from $51.6 million in the prior year quarter. Catastrophe losses in the current quarter were $48.7 million compared to $40.1 million in the prior
year quarter. Other weather losses totaled $14.3 million, an increase from the prior year quarter amount of $11.5 million. Additionally, the net loss ratio was impacted by net unfavorable loss development of $6.3 million during the
third quarter of 2024, compared to net unfavorable loss development of $0.8 million in the third quarter of 2023.
The net expense ratio was 35.2%, a
1.2 point improvement from the prior year quarter amount of 36.4%, driven primarily by the increase in net premiums earned outpacing the increase in higher policy acquisition costs.
Net combined ratio of 100.6% improved 10.2 points from 110.8% in the prior year quarter, driven by a lower net loss ratio and lower net expense ratio as
described above.
