CRM Holdings, Ltd. ("CRM" or “the Company”) (Nasdaq: CRMH), a
provider of a full range of products and services for the workers'
compensation insurance industry, today announced results for the
third quarter ended September 30, 2009.
Three Months Ended September 30, 2009
In the third quarter of 2009, the Company incurred a net loss
from continuing operations of $15.7 million, or $(0.93) per diluted
share. In the same quarter of the prior year, the Company incurred
a net loss from continuing operations of $2.9 million, or $(0.18)
per diluted share. Unless otherwise stated, all further results
discussed in this release refer to continuing operations for 2009
and results on a comparable basis for 2008.
The net loss includes a non-cash valuation allowance of $11.3
million, or ($0.72) per diluted share, with respect to the
Company’s net deferred tax assets, representing an allowance of the
full amount of that asset. This relates future tax deductions in
the Company's domestic operations (including tax loss
carry-forwards) and arises because the Company re-evaluated the
realizability of the asset in light of the decline in the Company’s
domestic taxable income. The tax loss carry-forward remains
available to offset taxes over the next 20 years.
Total revenues in the third quarter of 2009 were $21.8 million,
compared to $29.2 million in the same quarter of the prior year.
The Company enjoyed higher rates on policy renewals and growth in
the number of policies written in its major market of California.
However, three principal items more than offset these gains,
resulting in an overall decline in revenue. First, underwriting
actions taken on business written by the company’s primary
insurance subsidiary, Majestic Insurance Company (“Majestic”),
reduced business in New York by $2.8 million. Second, the execution
of quota share treaties between Majestic and third party reinsurers
resulted in Majestic ceding 47% of earned premiums effective July
1, 2009, as compared to Majestic ceding 40% under a quota share
treaty that was in place in the third quarter of 2008. The increase
in ceded premiums accounted for approximately $2.3 million of
reduced net premiums earned by Majestic. Finally, prior year loss
sensitive reinsurance treaties required the accrual of additional
premiums payable (“reinstatement premiums”) of $3.1 million.
Investment income during the quarter increased to $3.5 million
from $2.9 million in the third quarter of 2008. Excluding the
benefits of realized capital gains, interest income earned was
relatively unchanged from 2008.
Total underwriting expenses for the third quarter declined to
$20.9 million from $23.8 million a year ago. Loss and loss
adjustment expenses were reduced due to the 47% ceded quota share
treaties that commenced on July 1, 2009, as compared to the 40%
ceded party quota share treaty that was in place in third quarter
of 2008. For the third quarter of 2009, the Company’s overall loss
ratio was 99.2% and the overall combined ratio was 142.1%, as
compared to an overall loss ratio of 81.0% and an overall combined
ratio of 124.2% for the third quarter of 2008.
Book value per share on a diluted basis decreased by $1.56 to
$5.04 at September 30, 2009, from $6.60 per diluted share at
December 31, 2008.
“Our results for the third quarter were below our expectations,
mainly due to the impact of adjustments originating in prior
periods. Even as the market continues to be competitive, we are
seeing a strong flow of business opportunities in California where
our reputation for outstanding levels of service in loss control
and claims continues to provide a distinct competitive advantage.
We are focusing on other territories where improvement is needed,
and we remain confident our results will return to acceptable
levels as we move forward,” said James J. Scardino, Chief Executive
Officer.
Primary Insurance
During the quarter, Majestic experienced a decline in revenues
compared to the same quarter of 2008. Net earned premiums for the
quarter ended September 30, 2009, were $14.1 million, compared to
$20.5 million in the same quarter a year ago, largely as a result
of underwriting actions taken on the Company’s New York primary
insurance business, the 47% ceded quota share treaties, and the
reinstatement premiums discussed previously. These effects were
partly offset by higher rates on renewing business and growth in
the number of policies written in California.
The loss ratio for the 2009 third quarter of 112.4% was
increased due to the effects of reinstatement premiums and $1.4
million of prior year development. Excluding those items, the loss
ratio for third quarter of 2009 was 80.6%.
Majestic’s underwriting loss was $8.2 million for the quarter
ended September 30, 2009, compared to an underwriting loss of $6.9
million a year ago. This increase was principally due to the
reinstatement premiums and unfavorable loss reserve development,
somewhat offset by reduced underwriting expenses.
Despite declining payroll and deliberate underwriting actions in
New York, Majestic’s submissions and premium written remained
robust. As of September 30, 2009, in-force premiums from primary
insurance policies at Majestic were $152.0 million, compared with
$154.3 million at the same time last year.
Reinsurance
The Company’s reinsurance segment, Twin Bridges, generated $3.2
million of net earned premiums in the third quarter of 2009, down
from $4.0 million in the third quarter of the prior year. The
reduction was principally due to a decrease in the volume of
reinsurance premiums earned on excess insurance policies issued to
the self-insured groups managed by the Company’s fee-based business
segment. The underwriting profit of $0.9 million for the quarter
was essentially unchanged from the same quarter of 2008. Losses and
loss adjustment expenses were 41.3% of net premiums earned for the
three months ended September 30, 2009, compared to 46.9% of net
premiums earned for the same three months in 2008. Twin Bridges’
combined ratio for the quarter was 70.9%, compared to 76.5% a year
ago.
Fee-based Business
Fee-based management services revenues were $1.1 million for the
third quarter of 2009, compared to $2.0 million in the third
quarter of 2008. The reduction reflected a decline in insured
payroll in the self-insured groups managed by the Company and a
reduction of the number of groups from 5 in the third quarter of
2008 to 2 in the third quarter of 2009. Effective January 1, 2010,
the Contractors Access Program self-insured group will terminate
active operations and the Company will have one self-insured group
under management going forward. The continuing fee-based management
services operations, which are now focused solely on the California
market, produced a pre-tax operating loss of $15 thousand, compared
to pre-tax operating income of $0.5 million in the same quarter of
2008.
Nine Months Ended September 30, 2009
For the first nine months of 2009, the Company’s net loss from
continuing operations was $25.9 million, or ($1.55) per diluted
share, compared to net income from continuing operations of $8.3
million, or $0.50 per diluted share, in 2008. The major factors
contributing to the swing in profits were the establishment of a
tax valuation allowance, a decrease in net earned premiums, which
includes the reinstatement premiums incurred in the third quarter
of 2009, favorable loss reserve development in 2008 as compared to
unfavorable development in 2009 and severance expense related to
the former co-CEOs incurred in the first quarter of 2009. As a
result of these changes, during the first nine months of 2009, the
combined ratio for the primary insurance segment was 130.9%,
compared to 99.7% in 2008. The combined ratio for the reinsurance
segment was 104.0%, compared to 76.6% a year ago.
Investment Portfolio
At September 30, 2009, the Company had no exposure to equities,
collateralized debt obligations or collateralized mortgage
obligations. The overall credit rating of Majestic’s fixed income
portfolio was AA+. The following tables illustrate Majestic’s
investment portfolio distribution by sector and average credit
rating.
Portfolio Distribution by Sector Portfolio Distribution
by Credit Rating
9/30/2009 12/31/2008 9/30/2009
12/31/2008 Average
Average % of Credit % of Credit
Portfolio Rating Portfolio Rating
Credit Quality Government 22.1% AAA 17.1% AAA Agency 5.2%
AAA 7.4% AAA AAA 50.8% 58.7% Corporate 25.3% A+ 16.5% A+ AA 26.2%
23.3% Mortgage backed securities 16.6%
AAA
20.4% A A 20.9% 14.7% Asset backed securities 3.0% AA+ 2.8% AAA BBB
1.9% 3.3% Municipal 27.8% AA
35.8% AA Below BBB 0.2% 0.0%
Total 100.0% AA+ 100.0%
AA+ Average credit rating AA+ AA+
The effective portfolio duration was 3.4 years, and the average
portfolio yield was 3.7%. Net unrealized gains in the portfolio
increased by $4.4 million from $5.0 million at December 31, 2008 to
$9.4 million at September, 30, 2009.
Conference Call
The Company will host a conference call at 9:00 a.m. ET on
Thursday, November 5, 2009, to discuss earnings for the third
quarter ended September 30, 2009. To participate in the event by
telephone, please dial 877-795-3610 five to 10 minutes prior to the
start time (to allow time for registration) and reference passcode
3485848. International callers should dial 719-325-4833. The
conference call will be broadcast live over the Internet and can be
accessed by all interested parties at CRM’s Web site at
http://www.CRMHoldingsLtd.bm/events.cfm. To listen to the call
please go to this Web site at least 15 minutes prior to the start
of the call to register, download, and install any necessary audio
software. For those unable to participate during the live webcast,
an audio replay of the conference call will be archived for 90 days
on CRM’s Web site at http://www.CRMHoldingsLtd.bm/events.cfm. A
digital replay of the call will also be available on Thursday,
November 5, at approximately 11:00 a.m. ET through Wednesday,
November 11, at midnight ET. Dial 888-203-1112 and enter the
conference ID number 3485848. International callers should dial
719-457-0820 and enter the same conference ID number.
About CRM Holdings, Ltd.
CRM Holdings, Ltd. is a provider of workers’ compensation
insurance products. Its main business activities include
underwriting primary workers’ compensation insurance policies,
underwriting workers’ compensation reinsurance and excess insurance
policies, and providing fee-based management and other services to
self-insured entities. The Company provides primary workers’
compensation insurance to employers in California, Arizona,
Florida, Nevada, New Jersey, New York, and other states. The
Company reinsures some of the primary business underwritten and
provides excess workers’ compensation coverage for self-insured
organizations. CRM is also a provider of fee-based management
services to self-insured groups in California. Further information
can be found on the CRM Web site at www.CRMHoldingsLtd.bm.
CRMH-E
Forward-Looking statements
This press release contains forward-looking statements within
the meaning of federal securities law, including statements
concerning plans, objectives, goals, strategies, projections of
future events or performance and underlying assumptions (many of
which are based, in turn, upon further assumptions). These
statements are based on our current expectations and projections
about future events and are identified by terminology such as
“may,” “will,” “should,” “expect,” “scheduled,” “plan,” “seek,”
“intend,” “anticipate,” “believe,” “estimate,” “aim,” “potential,”
or “continue” or the negative of those terms or other comparable
terminology.
All forward-looking statements involve risks and uncertainties.
Although the Company believes that its plans, intentions and
expectations are reasonable, the Company may not achieve such
plans, intentions or expectations. There are or may be important
factors that could cause actual results to differ materially from
the forward-looking statements the Company makes in this document.
Such risks and uncertainties are discussed in the Company's Form
10-K for the year ended December 31, 2008 and in other documents
filed by the Company with the Securities and Exchange Commission.
The Company believes that these factors include, but are not
limited to the following:
- The cyclical nature of the
insurance and reinsurance industry;
- Premium rates;
- Investment results;
- Legislative and regulatory
changes;
- The estimation of loss reserves
and loss reserve development;
- Reinsurance may be unavailable
on acceptable terms, and we may be unable to collect
reinsurance;
- The occurrence and effects of
wars and acts of terrorism;
- The effects of competition;
- The possibility that the outcome
of any litigation, arbitration or regulatory proceeding is
unfavorable;
- Failure to retain key
personnel;
- Economic downturns; and
- Natural disasters.
These risks and others could cause actual results to differ
materially from those expressed in any forward-looking statements
made. The Company undertakes no obligation to update publicly or
revise any forward-looking statements made.
Table 1 CRM Holdings, Ltd. Consolidated
Balance Sheets
Unaudited
September December 30, 2009
31, 2008 (Dollars in
thousands)
Assets Investments: Fixed-maturity securities,
available-for-sale (amortized cost $300,020 and $308,607) $ 309,454
$ 313,622 Short-term investments 9,261 113 Investment in
unconsolidated subsidiary 1,083
1,083 Total investments 319,798 314,818 Cash and cash
equivalents 35,734 28,044 Cash and cash equivalents, restricted
874 2,000 Total
cash and cash equivalents 36,608 30,044 Accrued interest receivable
2,491 3,184 Premiums receivable, net 7,876 11,935 Reinsurance
recoverable and prepaid reinsurance 97,416 63,801 Accounts
receivable, net 5,098 3,099 Deferred policy acquisition costs 894
1,084 Current income taxes, net 6,622 3,208 Deferred income taxes,
net - 7,809 Goodwill and other intangible assets 3,135 3,252
Prepaid expenses 1,863 1,836 Other assets 2,922
3,330
Total assets
$ 484,723
$ 447,400 Liabilities and
shareholders' equity Reserve for losses and loss adjustment
expenses $ 281,380 $ 245,618 Reinsurance payable 12,892 9,424
Unearned premiums 12,648 13,090 Unearned management fees 77 26
Long-term debt and other secured borrowings 44,083 44,083 Payable
for investments purchased 18,861 - Other liabilities
29,777 26,299 Total
liabilities 399,718
338,540 Common shares
Authorized 50 billion shares; $.01
par value; 16.5 and 16.2 million common shares issued and
outstanding
165 162 0.4 million Class B shares issued and outstanding 4 4
Additional paid-in capital 70,852 69,743 Retained earnings 7,852
35,619 Accumulated other comprehensive gain, net of tax
6,132 3,332 Total
shareholders' equity 85,005
108,860
Total liabilities and shareholders'
equity $ 484,723
$ 447,400
Table 2 CRM Holdings, Ltd. Unaudited Consolidated
Statements of Income
Three Months
EndedSeptember 30,
Nine Months
EndedSeptember 30,
2009 2008
2009 2008
(Dollars in thousands, except per share amounts)
Revenues
Net premiums earned $ 17,324 $ 24,504 $ 61,033 $ 98,040 Fee-based
management services 902 1,806 3,636 5,598 Investment income
3,529 2,922
9,561
9,272 Total revenues
21,755 29,232
74,230 112,910
Expenses Losses and loss adjustment expenses
17,193 19,841 52,081 61,230 Policy acquisition costs 3,663 3,935
11,638 15,203 Fees paid to general agents and brokers 412 534 1,598
3,473 Selling, general and administrative expenses 6,880 9,275
28,500 22,189 Interest expense 952
922
2,739 2,799 Total
expenses 29,100
34,507 96,556
104,894 (Loss) income
from continuing operations before income taxes (7,345 ) (5,275 )
(22,326 ) 8,016 Tax benefit from continuing operations (3,029 )
(2,352 ) (7,728 ) (254 ) Valuation allowance for deferred taxes
from continuing operations 11,342
-
11,342 -
(Loss) income
from continuing operations
(15,658 ) (2,923 )
(25,940 )
8,270 Discontinued
operations Loss from discontinued operations before income
taxes (749 ) (1,307 ) (1,478 ) (6,008 ) Tax benefit from
discontinued operations (117 ) (464 ) (362 ) (1,997 ) Valuation
allowance for deferred taxes from discontinued operations
711 -
711
-
Loss on discontinued
operations
(1,343 )
(843 )
(1,827 ) (4,011 )
Net (Loss) Income $
(17,001 ) $ (3,766
) $ (27,767
) $ 4,259 (Loss)
earnings per share from continuing operations Basic ($0.93 ) ($0.18
) ($1.55 ) $ 0.50 Diluted ($0.93 ) ($0.18 ) ($1.55 ) $ 0.50 Loss
per share from discontinued operations Basic ($0.08 ) ($0.05 )
($0.11 ) ($0.24 ) Diluted ($0.08 ) ($0.05 ) ($0.11 ) ($0.24 ) Net
(loss) earnings per share Basic ($1.01 ) ($0.23 ) ($1.66 ) $ 0.26
Diluted ($1.01 ) ($0.23 ) ($1.66 ) $ 0.26 Weighted average shares
outstanding: Basic 16,853 16,466 16,749 16,425 Diluted 16,853
16,466 16,749 16,425
Table 3
CRM Holdings, Ltd. Unaudited Consolidated
Statements of Cash Flow Nine Months Ended September 30,
2009
2008 (Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $
(27,767 ) $ 4,259
Adjustments to reconcile net
(loss) income to net cash provided by operating activities:
Depreciation and amortization 586 1,380 Amortization of unearned
compensation, restricted stock 1,052 1,021 Amortization of premiums
and discounts on available-for-sale investments 1,191 412
Net realized gains on sale and
impairment of available-for-sale investments
(1,801 ) (1,320 ) Change in deferred taxes 6,190 56 Changes in:
Accrued interest receivable 693 (402 ) Premiums receivable, net
4,058 (2,338 ) Reinsurance recoverable and prepaid reinsurance
(33,615 ) (18,268 ) Accounts receivable, net 15 2,142 Deferred
policy acquisition costs 190 (1,496 ) Goodwill and other intangible
assets - 196 Current income taxes, net (3,413 ) (3,506 ) Prepaid
expenses (58 ) 510 Other assets 63 (126 ) Reserve for losses and
loss adjustment expenses 35,762 38,891 Reinsurance payable 3,468
12,356 Unearned premiums (442 ) 4,101 Unearned management fees 51
(95 ) Other liabilities
3,479
2,493 Net cash provided by operating
activities (10,298 )
40,266
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale investments (294,544 ) (313,706 )
Proceeds from sales of available-for-sale investments 87,346
127,292 Proceeds from maturities of available-for-sale investments
216,395 138,134 Net purchases, sales and maturities of short-term
investments (9,148 ) 694 (Increase) decrease in receivable for
securities sold (2,014 ) 94 Increase in payable for investments
purchased 18,861 10,862 Acquisition of intangible assets - (82 )
Purchases of fixed assets (134 ) (674 ) Disposals of fixed assets
39 237 Payments on loans receivable, net
-
3 Net cash used in investing
activities 16,801
(37,146 )
CASH FLOWS FROM FINANCING ACTIVITIES Change
in restricted cash and cash equivalents 1,126 -
Repayments under long-term debt
and other secured borrowings
- (1 ) Issuance of common shares - employee stock purchase plan 73
160 Retirement of common shares - share-based compensation
(12 )
(47 ) Net cash provided
by financing activities
1,187
112 Net increase in cash 7,690 3,232 Cash and
cash equivalents Beginning
28,044
34,286
Ending
$ 35,734
$ 37,518
Table 4 CRM Holdings,
Ltd. Quarter to Date Income by Segments
For the three months ended September 30, 2009
Primary
Insurance
Reinsurance
Fee-Based Management
Services
Corporate and
Other
Elimina-tions
Total
(Dollars in thousands)
Revenues: Net premiums earned $
14,112 $ 3,212 $ - $ - $ - $ 17,324 Management fees - - 1,090 -
(188 ) 902 Net investment income 2,435 307 (4 ) 22 (289 ) 2,471 Net
realized gains 1,058 -
- -
- 1,058 Total
revenues 17,605 3,519
1,086 22
(477 ) 21,755
Expenses: Underwriting expenses 18,892 2,152 - - (188 )
20,856 Operating expenses 3,449 126 1,101 2,616 - 7,292 Interest
expense 364 -
- 877
(289 ) 952 Total expenses
22,705 2,278
1,101 3,493
(477 ) 29,100
(Loss) income from continuing operations before taxes
$ (5,100 ) $ 1,241
$ (15 ) $
(3,471 ) $ -
$ (7,345 )
Total assets
$ 490,285 $
57,731 $ 4,467
$ 298,111 $
(357,731 ) $ 492,863
For the three months ended September 30,
2008
Primary
Insurance
Reinsurance
Fee-Based Management
Services
Corporate and
Other
Elimina-tions
Total
(Dollars in thousands)
Revenues: Net premiums earned $
20,477 $ 4,027 $ - $ - $ - $ 24,504 Management fees - - 2,010 -
(204 ) 1,806 Net investment income 2,582 491 (2 ) 38 (384 ) 2,725
Net realized gains 197 -
- -
- 197 Total
revenues 23,256 4,518
2,008 38
(588 ) 29,232
Expenses: Underwriting expenses 21,096 2,884 - - (204 )
23,776 Operating expenses 6,239 197 1,502 1,871 - 9,809 Interest
expense 384 -
- 922
(384 ) 922 Total expenses
27,719 3,081
1,502 2,793
(588 ) 34,507
(Loss) income from continuing operations before taxes
$ (4,463 ) $ 1,437
$ 506 $
(2,755 ) $ -
$ (5,275 )
Total assets
$ 430,567 $
60,192 $ 5,079
$ 307,504 $
(357,024 ) $ 446,318
Table 4 CRM Holdings,
Ltd. Year to Date Income by Segments
For the nine months ended September 30, 2009
Primary
Insurance
Reinsurance
Fee-Based Management
Services
Corporate and
Other
Elimina-tions
Total
(Dollars in thousands)
Revenues: Net premiums earned $
53,243 $ 7,790 $ - $ - $ - $ 61,033 Management fees - - 3,988 -
(352 ) 3,636 Net investment income 7,486 1,103 (13 ) 67 (883 )
7,760 Net realized gains 1,771
30 - -
- 1,801
Total revenues 62,500
8,923 3,975
67 (1,235 ) 74,230
Expenses: Underwriting expenses 56,678 7,393 - - (352
) 63,719 Operating expenses 13,007 707 4,043 12,341 - 30,098
Interest expense 959 -
- 2,663
(883 ) 2,739 Total
expenses 70,644 8,100
4,043 15,004
(1,235 ) 96,556
(Loss) income from continuing operations before
taxes $ (8,144 )
$ 823 $ (68 )
$ (14,937 )
$ - $ (22,326
)
Total assets $ 490,285
$ 57,731 $
4,467 $ 298,111
$ (357,731 )
$ 492,863 For the nine months
ended September 30, 2008
Primary
Insurance
Reinsurance
Fee-Based Management
Services
Corporate and
Other
Elimina-tions
Total
(Dollars in thousands)
Revenues: Net premiums earned $
72,904 $ 25,136 $ - $ - $ - $ 98,040 Management fees - - 6,307 -
(709 ) 5,598 Net investment income 6,908 1,563 (5 ) 183 (697 )
7,952 Net realized gains 1,296
24 - -
- 1,320
Total revenues 81,108
26,723 6,302
183 (1,406 )
112,910
Expenses: Underwriting expenses 58,626
18,516 - - (709 ) 76,433 Operating expenses 14,061 733 6,175 4,693
- 25,662 Interest expense 697
- - 2,799
(697 ) 2,799
Total expenses 73,384
19,249 6,175
7,492 (1,406 )
104,894
Income (loss) from continuing
operations before taxes $ 7,724
$ 7,474 $
127 $ (7,309 )
$ - $
8,016
Total assets $
430,567 $ 60,192
$ 5,079 $
307,504 $ (357,024
) $ 446,318
Table 5
CRM Holdings, Ltd. Revenues by Segment
Three months ended Nine months
ended September 30, September 30, 2009
2008 2009 2008 (Dollars in thousands)
Revenues from Fee-Based Management Services California $ 1,090
$ 2,010 $ 3,988 $
6,307 1,090 2,010
3,988 6,307
Revenues from Primary Insurance California 9,177 11,332 32,899
43,926 New York/New Jersey 4,454 8,054 17,906 26,138 Other (1)
481 1,091 2,438
2,840 14,112
20,477 53,243
72,904 Revenues from Reinsurance California
2,581 2,614 6,054 15,830 New York/New Jersey 563 650 1,382 7,291
Other (2) 68 763
354 2,015 3,212
4,027 7,790
25,136 Investment income (3) 3,529 2,922 9,561
9,272 Eliminations (4) (188 ) (204 ) (352 ) (709 )
Total revenues
from continuing operations $ 21,755 $ 29,232
$ 74,230 $ 112,910
(1)
Includes primary insurance
premiums for policies written in Washington, Alaska, Arizona,
Nevada, Florida, Oregon & Hawaii.
(2)
Includes reinsurance premiums for
policies written in Washington, Alaska, Arizona, Nevada, Florida,
Oregon & Hawaii.
(3)
Includes the elimination of $289
thousand and $384 thousand of Twin Bridges intercompany interest
income on funds withheld by Majestic for the three months ended
September 30, 2009 and 2008, respectively, and the elimination of
$883 thousand and $697 thousand of Twin Bridges intercompany
interest income on funds withheld by Majestic for the nine months
ended September 30, 2009 and 2008, respectively.
(4)
Elimination of fee-based
management intercompany commissions against primary insurance
policy acquisition costs for the three months ended September 30,
2009 and 2008, respectively. Elimination of fee-based management
intercompany commissions against primary insurance policy
acquisition costs for the nine months ended September 30, 2009 and
2008, respectively.
Table 6 CRM Holdings, Ltd.
Fee-Based Management Services Segment Data (1)
September 30, 2009 2008 Number of Groups
California 2 5 Number of Group Members California 225 408
Aggregate Annualized Premiums (2) California ($000's) $
29,686 $ 52,332
(1)
Excludes the fee-based management
services segment data for CRM NY, which has been reclassified as
discontinued operations for all periods presented.
(2)
Aggregate annualized premiums are
the annualized total of the actual premiums payable to our groups
by their members as in effect at the dates specified.
Table 7
CRM Holdings, Ltd. Primary Insurance Segment Data
Three months ended
Nine months ended September 30, September 30,
2009 2008 2009 2008 (Dollars in
thousands) (Dollars in thousands) Net primary insurance
premiums earned $ 14,112 $ 20,477 $ 53,243 $ 72,904 Loss and loss
adjustments expenses 15,864 17,952 46,843 49,181 Underwriting,
acquisition and insurance expenses (1) 6,477
9,383 22,842
23,506 Underwriting loss $ (8,229 ) $
(6,858 ) $ (16,442 ) $ 217 Loss Ratio
(2) 112.4 % 87.7 % 88.0 % 67.5 % Expense Ratio (3) 45.9 % 45.8 %
42.9 % 32.2 % Combined Ratio (4) 158.3 % 133.5 % 130.9 % 99.7 %
(1)
Does not include the elimination
of $188 thousand and $204 thousand of Majestic policy acquisition
costs against fee-based management commissions for the three months
ended September 30, 2009 and 2008, respectively. Does not include
the elimination of $352 thousand and $709 thousand of Majestic
policy acquisition costs against fee-based management commission
for the nine months ended September 30, 2009 and 2008,
respectively.
(2)
The loss ratio is calculated by
dividing loss and loss adjustment expense by net primary insurance
premiums earned.
(3)
The expense ratio is calculated by
dividing underwriting, acquisition and insurance expenses for the
period by net primary insurance premiums earned.
(4)
The combined ratio is the sum of
the loss ratio and the expense ratio.
Table 8 CRM Holdings,
Ltd. Reinsurance Segment Data Three months
ended Nine months ended September 30,
September 30, 2009 2008 2009
2008 (Dollars in thousands) (Dollars in thousands)
Net reinsurance premiums earned $ 3,212 $ 4,027 $ 7,790 $ 25,136
Loss and loss adjustments expenses 1,328 1,889 5,238 12,046
Underwriting, acquisition and insurance expenses 950
1,192 2,862
7,203 Underwriting (loss) profit $ 934
$ 946 $ (310 ) $ 5,887
Loss Ratio (1) 41.3 % 46.9 % 67.2 % 47.9 % Expense Ratio (2) 29.6 %
29.6 % 36.7 % 28.7 % Combined Ratio (3) 70.9 % 76.5 % 104.0 % 76.6
%
(1)
The loss ratio is calculated by
dividing loss and loss adjustment expense by net reinsurance
premiums earned.
(2)
The expense ratio is calculated by
dividing underwriting, acquisition and insurance expenses for the
period by net reinsurance premiums earned.
(3)
The combined ratio is the sum of
the loss ratio and the expense ratio.
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