HOUSTON, Aug. 3, 2010 (GLOBE NEWSWIRE) -- HCC Insurance Holdings, Inc. (NYSE:HCC) today released results for its second quarter ended June 30, 2010.
Net earnings for the second quarter of 2010 were $83.4 million, compared with $91.6 million during the second quarter of 2009. Net earnings per diluted share were $0.72 for the second quarter of 2010, compared to $0.81 for the same quarter of 2009. Net earnings for the first six months of 2010 were $154.7 million, or $1.34 per diluted share, versus $174.8 million, or $1.54 per diluted share, for the first half of the previous year. The Company repurchased 50,150 shares of common stock in the second quarter of 2010 at an average price of $24.38 per share.
The GAAP combined ratio for the second quarter of 2010 was 85.6%, compared to 83.8% for the same quarter of 2009, and 88.0% in the first half of 2010, compared to 85.5% in the corresponding period of 2009.
The accident year combined ratio was 85.6% for the second quarter of 2010 and 87.5% for the first half of 2010. The accident year combined ratio for the first half of 2010 includes 2.0 percentage points for the catastrophes that occurred in the first quarter. Book value per share increased to $27.78 at June 30, 2010, compared to $26.58 at December 31, 2009. The Company's annualized return on average equity for the second quarter of 2010 was 10.6%.
"We continue to exercise underwriting discipline and strategically buy facultative reinsurance. We are very pleased with the performance of our Specialty businesses in the second quarter and year to date, as well as our double digit return on equity," John N. Molbeck, Jr., HCC President and Chief Executive Officer said.
For the second quarter of 2010, the gross written premium of HCC's insurance company subsidiaries increased 1.5% to $691.6 million, compared to $681.3 million for the same quarter of 2009. Net written premium increased to $546.8 million in 2010, compared with net written premium of $543.4 million in 2009. Net earned premium increased to $506.4 million for the second quarter of 2010, compared to $502.0 million for the same quarter of 2009.
During the first half of 2010, gross written premium was $1.3 billion, net written premium was $1.0 billion, and net earned premium was $1.0 billion, representing a slight increase in comparison to the first half of 2009.
HCC had minimal reserve development in the second quarter and the first half of 2010, compared to $16.0 million and $11.3 million of net redundant development in the second quarter and the first half of 2009, respectively.
Investment income increased during the second quarter of 2010 to $50.2 million, compared to $48.4 million a year earlier, reflecting an increased amount of invested assets, offset by lower rates on short-term investments. On a year-to-date basis, investment income increased to $99.5 million in 2010 from $93.6 million in 2009. The Company's fixed income investments increased 11% from June 30, 2009 to $5.1 billion at June 30, 2010. As of June 30, 2010, HCC's fixed income securities portfolio had an average rating of AA+, an average duration of 4.8 years and an average tax equivalent yield of 5.0%. HCC recognized no other-than-temporary impairment losses on the portfolio in the first six months of 2010.
The Company's liquidity position remains strong and its shareholders' equity was a record $3.2 billion at June 30, 2010. The Company held $560.3 million of cash and short-term investments at the end of the quarter. HCC has a $575.0 million revolving loan facility with $553.4 million of available capacity at June 30, 2010. The Company generated $139.3 million of cash flow from operating activities in the first six months of 2010, compared to $262.2 million in the first six months of 2009.
As of June 30, 2010, total investments were $5.6 billion, total assets were $9.0 billion, and the Company's debt to total capital ratio was 8.5%.
For further information about HCC's results, the supplemental financial schedules are accessible on the Company's website at http://www.hcc.com, as well as directly in the Investor Relations section of HCC's website at http://ir.hcc.com.
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HCC will hold an open conference call beginning at 8:00 a.m. Central Daylight Time on Wednesday, August 4. To participate, the number for domestic calls is (800) 374-0290 and the number for international calls is (706) 634-0161. In addition, there will be a live webcast available on a listen-only basis that can be accessed through the HCC website at www.hcc.com. The webcast replay will be archived in the Investor Relations section of the HCC website through Friday, November 5, 2010.
Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. is a leading international specialty insurance group with offices across the United States and in the United Kingdom, Spain and Ireland. As of June 30, 2010, HCC had assets of $9.0 billion and shareholders' equity of $3.2 billion. HCC's major domestic and international insurance companies have a financial strength rating of "AA (Very Strong)" from Standard & Poor's Corporation. HCC's major domestic insurance companies have a financial strength rating of "AA (Very Strong)" from Fitch Ratings, "A1 (Good Security)" from Moody's Investors Service, Inc., and "A+ (Superior)" by A.M. Best Company, Inc.
For more information, visit our website at www.hcc.com.
Forward-looking statements contained in this press release are made under "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The types of risks and uncertainties which may affect the Company are set forth in its periodic reports filed with the Securities and Exchange Commission