Alabama-based Infinity Property and Casualty Corporation reported net earnings for the first quarter of $11.5 million or $0.57 per share, on a fully diluted basis, compared to net earnings of $9.0 million or $0.44 per share on a pro forma basis for the first quarter of 2002.
Operating earnings, a non-GAAP measure, were $11.3 million or $0.55 per share for the first quarter of 2003 compared to $9.3 million or $0.45 per share on a pro forma basis for the first quarter of 2002. Operating earnings are defined at the end of this release and reconciled to net earnings, the most comparable GAAP measure.
Underwriting income, a non-GAAP measure, was $9.6 million in the first quarter of 2003. By comparison, no underwriting income was earned in the first quarter of 2002. Infinity produced a GAAP combined ratio in the first quarter of 94.1 percent – a 6.0 point improvement over the first quarter of 2002.
First quarter net written premiums, including $48.0 million of unearned premium related to the Assumed Agency Business transferred on Jan. 1, 2003, were $226.3 million, a 3.5 percent increase over the $218.7 million net written premiums in the first quarter of 2002. Excluding the unearned premium transfer, net written premiums decreased 18.5 percent compared to the first quarter of 2002.
Focus States Results
Gross written premiums in Infinity’s top five focus states, which represent 74 percent of the total business volume, fell 3.8 percent to $189.4 million in the first quarter of 2003 as compared with the same period in 2002.
The company is continuing to focus on these states and is seeking to diminish its writings in states that do not provide ample opportunity for profitable growth. Overall gross premiums written were $255.8 million for the first quarter of 2003, a 17.3 percent decline from gross premiums written in the first quarter of 2002.
Loss ratios for the overall business before reinsurance improved from 63.5 percent to 56.7 percent from the first quarter of 2002 to the same period in 2003, driven substantially from the reduction of business in the non-focus states as well as the improvement in loss ratio in the focus states.
2003 Operating Earnings Per Share
Based on the first quarter results and our expectations for the remainder of the year, Infinity estimates its full year operating earnings per share, on a fully diluted basis, to be in the range of $2.25 and $2.40.
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