Dallas-based insurer, Gainsco Inc., announced net losses for the fourth quarter and the year for 2008, but the losses are far less than those the company reported in 2007.
The company said its net loss for the fourth quarter 2008 was $0.2 million, or $0.01 per common share, basic and diluted, compared to a fourth quarter 2007 net loss of $11.0 million, or $0.44 per common share, basic and diluted. Net loss for the year ended Dec. 31, 2008 was $3.5 million, or $0.14 per common share, basic and diluted. This compares to a net loss of $18.6 million for the year ended Dec. 31, 2007, or $0.74 per common share, basic and diluted.
In the fourth quarter of 2008, Gainsco recorded net realized losses of approximately $0.6 million ($0.03 per diluted common share); net realized losses were approximately $6.3 million ($0.26 per diluted common share). For each of the quarter and year ended Dec.31, 2007, the company recorded net realized gains of approximately $4.6 million ($0.18 and $0.19 per diluted common share, respectively). This amount was predominately related to a gain on sale in the fourth quarter 2007 of an affiliated insurance subsidiary, General Agents Insurance Company of America Inc.
Gross premiums written increased approximately 15 percent and decreased approximately 2 percent during the fourth quarter and twelve months ended Dec. 31, 2008, respectively, from gross premiums written in the comparable 2007 periods.
Gainsco continues to adjust and settle claims associated with its runoff lines.
As regards the company’s nonstandard personal auto business during the fourth quarter of 2008, the company recorded favorable development for claims occurring in prior accident years of $0.4 million. During the fourth quarter 2007, the company recorded unfavorable development for claims occurring in prior accident years for nonstandard personal auto of $5.5 million. For the twelve months of 2008 and 2007, the company recorded unfavorable development for claims occurring in prior accident years for nonstandard personal auto of $4.4 million and $16.0 million, respectively.
As of Dec. 31, 2008, Gainsco had $73.1 million in net unpaid claims and claims adjustment expenses, compared to net unpaid claims and claims adjustment expenses at Sept. 30, 2008, of $69.6 million.
Gainsco’s nonstandard personal auto insurance products are distributed through independent retail agents in Florida, South Carolina and, beginning in the second quarter of 2009, Georgia (Southeast Region), Texas (South Central Region) and Arizona, Nevada and New Mexico (Southwest Region), and through an independent managing general agency in California (West Region). Its insurance company subsidiary is MGA Insurance Company Inc.
Source: Gainsco Inc., www.gainsco.com/
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