ADDISON, Texas, Aug. 14, 2014 (GLOBE NEWSWIRE) -- Affirmative Insurance Holdings, Inc. (OTC:AFFM), a leading provider of non-standard personal automobile insurance policies, reported consolidated financial results for the three and six months ended June 30, 2014.
Three Months Ended June 30, | Six Months Ended June 30, | |||
(In millions, except per share data) | 2014 | 2013 | 2014 | 2013 |
Gross written premium managed | $ 81.6 | $ 78.2 | $ 189.5 | $ 174.1 |
Revenue | 47.0 | 72.8 | 92.5 | 136.6 |
Operating income (loss) | (3.5) | 7.3 | 0.2 | 6.8 |
Net income (loss) | (7.2) | 1.5 | (6.6) | (4.8) |
Net income (loss) per diluted share | (0.47) | 0.10 | (0.43) | (0.31) |
Michael McClure, Chief Executive Officer, stated, "We are disappointed that we continue to have adverse development from prior years. In the second quarter, we booked $5.8 million of additional loss reserves primarily for bodily injury claims in Louisiana and California during 2012 and the first half of 2013. These additional reserves reduced operating income by $7.9 million after consideration of the adjustment to ceding commissions on our quota share reinsurance agreements.
We are seeing improvement in loss cost trends in the second half of 2013 and 2014. We have implemented a number of items to improve the profitability of our insurance operations. These actions have included:
We believe the combination of these actions will provide us with improved results in the future."
Operating Performance
About Affirmative
Affirmative Insurance Holdings, Inc. is a provider of non-standard personal automobile insurance policies for individual consumers in targeted geographic markets. Non-standard personal automobile insurance policies provide coverage to drivers who find it difficult to obtain insurance from standard automobile insurance companies due to their lack of prior insurance, age, driving record, limited financial resources or other factors. Non-standard personal automobile insurance policies generally require higher premiums than standard automobile insurance policies.
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by, among other things, the use of forward-looking terms such as "likely," "typically," "may," "intends," "expects," "believes," "anticipates," "estimates," "projects," "targets," "forecasts," "seeks," "potential," , or "attempts" or the negative of such terms or other variations on such terms or comparable terminology. By their nature, these statements are subject to risks, uncertainties and other factors, which could cause actual future results to differ materially from those results expressed or implied by such forward-looking statements.
Do not unduly rely on forward-looking statements. They give the Company's expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and, except as required by law, the Company does not intend to update them to reflect changes that occur after that date. For a discussion of factors that may cause actual results to differ from expectations, refer to the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2013. Any factor described in this press release or in any document referred to in this press release could, by itself or together with one or more other factors, adversely affect the Company's business, earnings and/or financial condition.
AFFIRMATIVE INSURANCE HOLDINGS, INC. AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Unaudited) | ||||
(in thousands, except per share data) | ||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||
2014 | 2013 | 2014 | 2013 | |
Revenues | ||||
Net premiums earned | $35,188 | $49,658 | $68,552 | $90,990 |
Commission income, fees and managing general agent revenue | 10,971 | 22,179 | 22,301 | 44,033 |
Net investment income | 794 | 803 | 1,624 | 1,423 |
Net realized gains | 14 | 18 | 14 | 29 |
Other income | 1 | 122 | 3 | 123 |
Total revenues | 46,968 | 72,780 | 92,494 | 136,598 |
Expenses | ||||
Net losses and loss adjustment expenses | 34,560 | 38,243 | 62,112 | 69,806 |
Selling, general and administrative expenses | 14,450 | 25,362 | 27,242 | 56,203 |
Depreciation and amortization | 1,484 | 1,854 | 2,980 | 3,786 |
Total expenses | 50,494 | 65,459 | 92,334 | 129,795 |
Operating income (loss) | (3,526) | 7,321 | 160 | 6,803 |
Interest expense | 3,497 | 5,677 | 6,813 | 11,232 |
Income (loss) before income taxes | (7,023) | 1,644 | (6,653) | (4,429) |
Income tax expense (benefit) | 219 | 159 | (75) | 337 |
Net income (loss) | $ (7,242) | $ 1,485 | $ (6,578) | $ (4,766) |
Basic income (loss) per common share: | ||||
Net income (loss) | $ (0.47) | $ 0.10 | $ (0.43) | $ (0.31) |
Diluted income (loss) per common share: | ||||
Net income (loss) | $ (0.47) | $ 0.10 | $ (0.43) | $ (0.31) |
Weighted average common shares outstanding: | ||||
Basic | 15,431 | 15,408 | 15,420 | 15,408 |
Diluted | 15,431 | 15,408 | 15,420 | 15,408 |
See accompanying Notes to Consolidated Financial Statements |
AFFIRMATIVE INSURANCE HOLDINGS, INC. AND SUBSIDIARIES | ||||
GROSS WRITTEN PREMIUMS MANAGED | ||||
(Unaudited) | ||||
(in thousands) | ||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||
2014 | 2013 | 2014 | 2013 | |
Louisiana | $27,951 | $25,746 | $67,514 | $61,683 |
Texas | 23,344 | 22,525 | 52,074 | 47,920 |
California | 19,799 | 19,067 | 42,718 | 34,528 |
Alabama | 4,742 | 4,583 | 13,789 | 14,570 |
Illinois | 3,707 | 4,238 | 8,725 | 9,878 |
Indiana | 1,357 | 1,446 | 2,981 | 3,958 |
Missouri | 637 | 566 | 1,691 | 1,519 |
Other | 13 | 3 | 23 | 20 |
Total written premium managed | 81,550 | 78,174 | 189,515 | 174,076 |
Less: Texas written premium not underwritten | 6,089 | 9,550 | 14,607 | 32,028 |
Gross underwritten premiums | $75,461 | $68,624 | $174,908 | $142,048 |