NEW YORK, Nov. 2 /PRNewswire-FirstCall/ -- NYMAGIC, INC. (NYSE:NYM)
reported today the results of consolidated operations for the third
quarter ended September 30, 2009. The Company reported net income
of $14.6 million, or $1.68 per diluted share for the three months
ended September 30, 2009, compared with net losses of $(50.1)
million, or $(5.96) per diluted share, for the third quarter of
2008. Net income for the nine months ended September 30, 2009
totaled $32.3 million, or $3.74 per diluted share, compared with
net losses of $(84.6) million, or $(9.85) per diluted share, for
the nine months ended September 30, 2008. Book value per share,
calculated on a fully diluted basis, increased from $19.11 at
December 31, 2008 to $23.85 at September 30, 2009. This was an
increase of 25%. INSURANCE OPERATIONS Gross premiums written
totaled $49.5 million and net premiums written totaled $37.7
million for the third quarter of 2009, compared with gross premiums
written of $55.5 million and net premiums written of $39.8 million
during the third quarter of 2008. This represented decreases of 11%
and 5%, respectively. Gross premiums written totaled $167.4 million
and net premiums written totaled $126.0 million for the nine months
ended September 30, 2009, compared with gross premiums written of
$174.7 million and net premiums written of $134.0 million during
the first nine months of 2008. This represented decreases of 4% and
6% respectively. The Company's decision to terminate a cargo
program at the end of 2007 caused reductions in both gross and net
premiums written totaling approximately $3.0 million and $7.9
million for the three months and nine months ended September 30,
2009, respectively. Net premiums earned totaled $38.5 million for
the third quarter of 2009, compared with net premiums earned of
$40.5 million during the third quarter of 2008. This represented a
decrease of 5%. Substantially all of this decrease occurred within
the Ocean Marine segment and in large part due to the termination
of the cargo program referred to above. Net premiums earned totaled
$117.7 million for the nine months ended September 30, 2009,
compared with net premiums earned of $128.5 million during the
first nine months of 2008. This represented a decrease of 8%. Most
of this decline occurred within the Ocean Marine segment and a
substantial portion of this was attributable to termination of the
cargo program referred to above. The Company's combined ratio was
102.1% for the three months ended September 30, 2009 as compared
with 118.2% for the same period of 2008. The Company's combined
ratio was 98.3% for the nine months ended September 30, 2009 as
compared with 115.6% for the same period of 2008. Hurricanes Gustav
and Ike contributed 17.7% and 5.7% to the third quarter and nine
months ended 2008 combined ratio, respectively. In addition, a
settlement of certain disputed reinsurance receivables contributed
9.6% to the combined ratio for the nine months ended September 30,
2008. Favorable loss reserve development amounted to $3.9 million
and $13.2 million for the third quarter and nine months ended
September 30, 2009. Favorable loss development in 2009 occurred in
each business segment primarily as a result of favorable loss
reporting trends. Favorable loss reserve development amounted to
$1.9 million during the third quarter of 2008. For the nine months
ended September 30, 2008, adverse loss reserve development amounted
to $(7.2) million. Adverse development included $12.4 million
attributable to reinsurance receivables write-offs that was
partially offset by favorable development in the ocean and inland
marine lines of business. INVESTMENTS Net investment income
amounted to $14.6 million for the third quarter of 2009 compared
with net investment loss of $(39.4) million for the same period of
2008. For the nine months ended September 30, 2009, net investment
income was $34.3 million as compared with a net investment loss of
$(47.5) million for the same period of 2008. Net investment income
for the nine months ended September 30, 2009 includes $6.6 million
from increases in the market value of investments categorized as
trading securities, which are primarily tax-exempt securities, and
commercial loans. In addition, $20.5 million of income was recorded
from limited partnerships. Net investment loss for the nine months
ended September 30, 2008 included losses of $(37.9) million due to
declines in the market value of trading securities and commercial
loans as well as losses of $(14.0) million from limited
partnerships. During 2008, trading securities included municipal
bonds, preferred stocks, hedged positions and exchange-traded
funds. Net realized investment gains after impairment were $0.5
million for the third quarter of 2009, as compared with net
realized investment losses of $(15.0) million for the same period
of 2008. Net realized investment gains for the nine months ended
September 30, 2009 were $1.8 million compared with net realized
investment losses of $(46.3) million for the same period in 2008.
The net realized investment gains in 2009 resulted primarily from
the sale of selected municipal securities and US Treasury
securities undertaken to further reposition the Company's holdings.
Net realized investment losses for the nine months ended September
30, 2008 were almost entirely attributable to the decline in the
market value of the Company's investments in residential mortgage
backed securities that was recorded at that time. Net income for
the third quarter and nine months ended September 30, 2009 included
tax benefits of $2.7 million, or $.31 per diluted share, and $5.9
million, or $.69 per diluted share, respectively, as a result of
the partial reversal of the deferred tax valuation allowance
previously provided for capital losses. This resulted from capital
gains achieved within the investment portfolio during the first
nine months of 2009. At September 30, 2009 the Company's total cash
and investments amounted to $667.2 million, compared with $572.4
million at December 31, 2008. The investment portfolio at September
30, 2009 consisted of cash and short-term investments of $128.9
million, or 19.3%; fixed maturities and other debt investments of
$379.5 million, or 56.9%; and limited partnership hedge funds of
$158.8 million, or 23.8%. In the third quarter of 2009, the Company
reported an after tax gain of $3.2 million resulting from its
receipt as beneficiary of proceeds of a life insurance policy on a
former director. MANAGEMENT COMMENT George Kallop, President and
Chief Executive Officer, in commenting on the quarter said, "We are
very pleased with the Company's Net Income for the third quarter
and first nine months of 2009, as well as the 25% increase in book
value per share so far this year. Insurance markets continue to be
challenging, but we are maintaining underwriting discipline as
evidenced by our excellent loss ratio. We remain focused on
increasing premium volumes where we believe underwriting profits
can be achieved, and declining underpriced business. Our investment
results have been excellent this year, and our investment balances
have risen by almost $95 million since the beginning of the year.
Our expense ratio continues to be a challenge, but we are hopeful
that we will be able to increase premium volumes in coming quarters
and moderate growth in expenses to reduce our combined ratio. The
company's financial strength continued to grow in the third
quarter." NYMAGIC, INC. will hold a conference call on its third
quarter 2009 financial results live on Tuesday, November 3, 2009 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# 38644855 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 38644855. 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
2009 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 2009 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, 2008,
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 Nine Months Ended September 30, September 30, 2009
2008 2009 2008 ---- ---- ---- ---- Revenues: Net premiums earned
$38,506 $40,477 $117,677 $128,473 Net investment income (loss)
14,578 (39,435) 34,321 (47,540) Net realized investment gains
(losses) after impairment 546 (14,963) 1,842 (46,314) Commission
and other income 3,312 (32) 3,439 108 ----- --- ----- --- Total
revenues 56,942 (13,953) 157,279 34,727 Expenses: Net losses &
loss adjustment exp. 19,832 28,081 57,843 90,972 Policy acquisition
expenses 9,073 10,053 26,900 29,398 General & administrative
expenses 10,399 9,703 30,877 28,141 Interest expense 1,683 1,680
5,047 5,036 ----- ----- ----- ----- Total expenses 40,987 49,517
120,667 153,547 Income (loss) before income taxes 15,955 (63,470)
36,612 (118,820) Total income tax expense (benefit) 1,380 (13,396)
4,355 (34,252) ----- ------- ----- ------- Net income (loss)
$14,575 $(50,074) $32,257 $(84,568) Earnings per share: Basic $1.73
$(5.96) $3.83 $(9.85) ----- ------ ----- ------ Diluted $1.68
$(5.96) $3.74 $(9.85) ----- ------ ----- ------ Weighted average
shares outstanding: Basic 8,432 8,406 8,422 8,583 Diluted 8,657
8,406 8,624 8,583 Balance sheet data: September 30, December 31,
2009 2008 ---- ---- Shareholders' equity $206,700 $164,073 Book
value per share (1) $23.85 $19.11 (1) Calculated on a fully diluted
basis. Supplementary information: NYMAGIC Gross Premiums Written
----------------------------------------------- By Segment Three
months ended Nine months ended September 30, September 30,
-------------------- ---------------------- 2009 2008 Change 2009
2008 Change ---- ---- ------ ---- ---- ------ (Dollars in
thousands) $16,814 $23,375 (28%) $61,414 $68,933 (11%) Ocean marine
Inland marine/fire 4,458 4,146 8% 15,750 12,685 24% Other liability
28,121 27,993 0% 90,161 93,035 (3%) ------ ------ --- ------ ------
--- Subtotal 49,393 55,514 (11%) 167,325 174,653 (4%) Runoff lines
(Aircraft) 69 (30) NM 78 27 NM ------------ --- --- --- --- --- ---
Total $49,462 $55,484 (11%) $167,403 $174,680 (4%) ----- -------
------- --- -------- -------- --- NYMAGIC Net Premiums Written
---------------------------------------------- By Segment Three
months ended Nine months ended September 30, September 30,
-------------------- ---------------------- 2009 2008 Change 2009
2008 Change ---- ---- ------ ---- ---- ------ (Dollars in
thousands) Ocean marine $11,727 $15,594 (25%) $41,664 $49,338 (16%)
Inland marine/fire 1,405 1,170 20% 5,181 3,825 35% Other liability
24,470 23,080 6% 79,210 80,790 (2%) ------ ------ --- ------ ------
--- Subtotal 37,602 39,844 (6%) 126,055 133,953 (6%) Runoff lines
(Aircraft) 86 (77) NM (63) 18 NM ------------ --- --- --- --- ---
--- Total $37,688 $39,767 (5%) $125,992 $133,971 (6%) ----- -------
------- --- -------- -------- --- NYMAGIC Net Premiums Earned
---------------------------------------------- By Segment Three
months ended Nine months ended September 30, September 30,
-------------------- ---------------------- 2009 2008 Change 2009
2008 Change ---- ---- ------ ---- ---- ------ (Dollars in
thousands) Ocean marine $12,264 $15,300 (20%) $39,689 $51,433 (23%)
Inland marine/fire 1,329 1,390 (4%) 4,078 4,590 (11%) Other
liability 24,827 23,864 4% 73,973 72,431 2% ------ ------ ---
------ ------ --- Subtotal 38,420 40,554 (5%) 117,740 128,454 (8%)
Runoff lines (Aircraft) 86 (77) NM (63) 19 NM ------------ --- ---
--- --- --- --- Total $38,506 $40,477 (5%) $117,677 $128,473 (8%)
----- ------- ------- --- -------- -------- --- Investment income
results: Three months ended Nine months ended September 30,
September 30, -------------- ------------- 2009 2008 2009 2008 ----
---- ---- ---- (in millions) Fixed maturities, held to maturity
$0.4 $- $1.5 $- Fixed maturities, available for sale 2.4 1.9 7.1
5.6 Trading securities 0.8 (25.8) 4.5 (37.2) Short-term investments
0.2 0.7 0.3 2.2 Equity in earnings of limited partnerships 11.3
(14.6) 20.5 (14.0) Commercial loans 0.1 (0.4) 2.1 (0.7) --- ----
--- ---- Total investment income 15.2 (38.2) 36.0 (44.1) Investment
expenses (0.6) (1.2) (1.7) (3.4) ---- ---- ---- ---- Net investment
income $14.6 $(39.4) $34.3 $(47.5) ===== ====== ===== ======
CONTACT: NYMAGIC, INC. A. George Kallop, 212-551-0744 or Tiberend
Strategic Advisors Gregory Tiberend, 212-827-0020 DATASOURCE:
NYMAGIC, INC. CONTACT: NYMAGIC, INC., A. George Kallop,
+1-212-551-0744, or Tiberend Strategic Advisors, Gregory Tiberend,
+1-212-827-0020
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