James River Group, Inc. in Chapel Hill, N.C., announced financial results for the quarter ended March 31, including net income of $6.8 million compared to $4.6 million for the first quarter of 2005; an overall combined ratio of 85.8%; and 45.0% growth in gross written premiums to $68.2 million.
It also reported an annualized return on stockholders’ equity of 15.3% and a loss on workers’ compensation for the quarter.
Earnings per diluted share for the first quarter of 2006 were $0.43 compared to earnings per diluted share of $0.46 for the first quarter of 2005.
For the first quarter, the excess and surplus insurance segment wrote $57.8 million in gross written premiums reflecting a 38.3% increase. This segment’s combined ratio was 79.5% for the first quarter of 2006.
The workers’ compensation segment wrote $10.4 million in gross written premiums in the first quarter of 2006 compared to $5.3 million in the first quarter of 2005, an increase of 98.0%. Its combined ratio was 107.6% for the quarter. The company said its underwriting loss in the workers’ compensation was driven by “uncharacteristically high loss activity in the quarter and significantly increased costs from the company’s allocation of the involuntary state workers’ compensation pool’s operating results.”
“Our premium growth remains strong and pricing across our business remains attractive,” said J. Adam Abram, president and chief executive officer. “We believe we have significant opportunities for profitable growth. We continue to make progress in settling our losses from the 2005 hurricanes and saw little change in our estimated cost of those events during the first quarter. We have also significantly reduced our property exposure going into the 2006 hurricane season.
“For 2006, we continue to anticipate achieving an annual return on average equity of at least 15% and writing at a combined ratio of between 80% and 90%. We also expect growth in gross written premiums of between 20% and 30% for 2006.”
Abram added that he expects its workers’ compensation unit will earn an underwriting profit for the year.
James River Group will hold a conference call to discuss the results on May 4, 2006, at 9:00 a.m. Eastern time. Investors may access the conference call through the Internet by going to www.james-river-group.com and clicking on the Investor Relations link, or by going to www.earnings.com. Please visit the website at least 15 minutes early to register, download and install any necessary audio software.
A replay will be available shortly after the call and through the end of business on May 11, 2006, at (617) 801-6888 (passcode: 42183175) and at the websites.
James River Group, Inc. is an insurance holding company that owns and manages specialty property/casualty insurance companies. Each of the company’s two insurance company subsidiaries is rated “A-” (Excellent) by A.M. Best Company. Founded in September 2002, the company wrote its first policy in July 2003 and currently underwrites in two specialty areas: excess and surplus lines in 48 states and the District of Columbia; and workers’ compensation, primarily for the residential construction industry in North Carolina.
Source: James River Insurance Group
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