Fremont Michigan InsuraCorp Inc. a Michigan-based provider of property and casualty insurance, announced first-quarter 2006 operating results including its wholly owned subsidiary, Fremont Insurance Company, highlighted by revenue growth and substantially increased profitability for the quarter ended March 31, 2006, as compared to the quarter ended March 31, 2005.
Fremont reported total revenues of $10.4 million in the first quarter of 2006, a 7.7 percent increase from the year-ago period.
In October of 2004, Fremont Insurance Company was formed as the successor to Fremont Mutual Insurance Company through a conversion from a “mutual” to a “stock” form of insurance company. In the conversion, Fremont Insurance Company became a wholly owned subsidiary of Fremont Michigan InsuraCorp Inc. Immediately following the conversion, Fremont Michigan InsuraCorp Inc. also completed its public offering of 862,118 shares of common stock.
Fremont cited several key growth drivers in the first quarter of 2006, including increased premium activity across all of its business segments. Direct premiums written increased 8.4 percent to $9.6 million, compared to $8.8 million in the year ago period. Net premiums earned rose to $9.6 million, up 4.9 percent, compared to $9.1 million in the first quarter of 2005.
Fremont noted that while the overall market remains soft in both personal and commercial lines, they continued to add market share in key product segments. Direct premiums written for the personal segment increased 9.6 percent, primarily due to an increase of 18.1 percent in premiums written for the automobile line, which has been an important addition to Fremont’s product mix.
On the expense side, Fremont’s first-quarter losses and loss adjustment expenses (LAE) as compared to the prior year quarter dropped 22 percent to $4.5 million, primarily due to a decline in claim severity for the period. The Company’s first-quarter Loss and LAE Ratio (incurred losses and LAE divided by net premiums earned) improved to 47.5 percent compared to 63.9 percent last year.
The company also reported a first-quarter improvement in its combined ratio: the sum of net losses, loss adjustment expenses and policy acquisition and other underwriting expenses divided by the net premiums earned. Fremont’s combined ratio decreased 15.2 percentage points to 82.1 percent, down from 97.3 percent in the year-ago period. The marked improvements are primarily attributable to growth in premiums earned and a decline in losses and loss adjustment expenses.
Source: Fremont Michigan InsuraCorp
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