California-based 21st Century Insurance Group has reported a 93% increase in net income to $24.6 million, or $0.29 per share, for the quarter ended Sept. 30, 2004, compared to net income of $12.7 million, or $0.15 per share, for the quarter ended Sept. 30, 2003. Current quarter net income was increased by $4.9 million ($0.06 per share) due to the effect of recent California legislation (AB 263) relating to holding company taxes on dividends from insurance subsidiaries.
For the nine months ended Sept. 30, 2004, net income increased by 87% to $65.8 million, or $0.77 per share, compared to $35.1 million, or $0.41 per share, for the same period in 2003. The results for the nine months ended Sept. 30, 2003 include second quarter nonrecurring nonoperational income items of $9.1 million after-tax, or $0.11 per share, and a first quarter after-tax charge of $24.1 million, or $0.28 per share, to strengthen reserves on the 1994 Northridge earthquake claims.
The company also reported solid performance in its personal auto lines:
* Direct premiums written increased 6.8% to $346.1 million in the third quarter ended Sept. 30, 2004, compared to $324.2 million in the third quarter of 2003. For the nine months ended Sept. 30, 2004, direct premiums written increased 10.1% to $1.011 billion compared to $918.7 million for the same period in 2003.
* The combined ratio improved to 95.0% in the third quarter of 2004 compared to 97.1% for the same quarter a year ago. For the nine months ended Sept. 30, 2004, the combined ratio improved to 95.3% from 96.8% in 2003.
— Underwriting profit increased 89.6% for the three months ended Sept. 30, 2004 to $16.7 million from $8.8 million in the third quarter of 2003. For the nine months ended Sept. 30, 2004, underwriting profit was $45.6 million, an increase of 64.3% over underwriting profit of $27.7 million for same period in 2003.
“Company operations were sound in the third quarter. Our entry into new markets is proceeding as planned. An important milestone was reached with the successful implementation of the company’s new claims computer system. The policy component of the system is planned for introduction into California in 2005,” said CEO Bruce Marlow.
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