Houston-based HCC Insurance Holdings, Inc. released earnings for the first quarter of 2003.
Net earnings increased 30 percent for the first quarter of 2003 to $30.3 million or $0.48 per share from $23.3 million or $0.37 per share for the same period of 2002.
Stephen Way, chairman and CEO, noted, “We are extremely pleased with our record first quarter results, which are in line with our 2003 business plan. We are now firing on all cylinders and the future looks very bright indeed.”
Total revenue grew substantially during the first quarter of 2003 to $210.7 million, a 39 percent increase from $151.7 million in the first quarter of 2002. This increase was primarily due to the growth in the insurance company subsidiaries’ earned premium, as market conditions in its specialty lines continue to show strength. HCC’s underwriting agencies’ and intermediaries’ revenue also grew solidly and overall revenue is expected to continue to increase for the rest of this year and into 2004.
Gross written premium of its insurance company subsidiaries increased 53 percent to $379.4 million during the first quarter of 2003 compared to the first quarter of 2002. During the same period, net written premium increased by 57 percent to $192.5 million and net earned premium increased by 46 percent to $162.4 million. The record levels were achieved as a result of higher rates, increased retentions and strong growth, particularly in HCC’s Diversified Financial Products line of business.
The GAAP combined ratio was substantially the same for the first three months of 2003 at 88.8 percent compared to the corresponding period of 2002. Way noted that, “This continuing strong underwriting performance should be viewed as even more impressive, considering we maintained our margins on substantially increased earned premium.”
Due to the higher amount of ceded reinsurance in HCC’s Diversified Financial Products line of business, its overall recoverables grew in the first quarter of 2003 primarily in the IBNR category, although case loss recoverables were reduced and paid losses were only slightly increased. There were no new recoverable issues.
Management fees increased 28 percent during the first quarter of 2003 to $24.9 million, from $19.4 million in the first quarter of 2002, due to increased business and acquisitions completed in 2002.
During the same period, commission income also returned to growth, rising 13 percent to $11.5 million, due to growth in its non-affiliated business.
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