GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

AMERISAFE Inc. Reports Operating Results (10-Q)

August 06, 2010 | About:
10qk

10qk

18 followers
AMERISAFE Inc. (AMSF) filed Quarterly Report for the period ended 2010-06-30.

Amerisafe Inc. has a market cap of $341.8 million; its shares were traded at around $18.14 with a P/E ratio of 9 and P/S ratio of 1.2. Amerisafe Inc. had an annual average earning growth of 47.5% over the past 5 years.AMSF is in the portfolios of Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Gross Premiums Written. Gross premiums written for the quarter ended June 30, 2010 were $63.0 million, compared to $72.5 million for the same period in 2009, a decrease of 13.2%. The decrease was attributable to a $5.1 million decrease in annual premiums on voluntary policies written during the period, a $3.8 million decrease in premiums resulting from payroll audits and related premium adjustments for policies written in previous quarters, a $0.6 million decrease in assumed premiums from mandatory pooling arrangements and a $0.1 million decrease in direct assigned risk premiums. The decrease from payroll audits and related premium adjustments includes a $1.0 million decrease in earned but unbilled (EBUB) premium.

Underwriting and Certain Other Operating Costs, Commissions and Salaries and Benefits. Underwriting and certain other operating costs, commissions and salaries and benefits for the quarter ended June 30, 2010 were $12.3 million, compared to $14.5 million for the same period in 2009, a decrease of 14.7%. This decrease was primarily due to a $0.7 million decrease in commission expense, a $0.7 million decrease in salaries and benefits, a $0.5 million decrease in premium taxes and a $0.5 million decrease in legal and professional expenses. Offsetting these expense reductions was a $0.4 million decrease in experience-rated commissions from our 2009 reinsurance agreement. Our expense ratio was 23.3% in the second quarter of 2010 compared to 22.0% in the second quarter of 2009.

Gross Premiums Written. Gross premiums written for the first half of 2010 were $124.1 million, compared to $152.0 million for the same period in 2009, a decrease of 18.3%. The decrease was attributable to a $16.6 million decrease in annual premiums on voluntary policies written during the period, a $10.4 million decrease in premiums resulting from payroll audits and related premium adjustments for policies written in previous quarters, a $0.8 million decrease in assumed premiums from mandatory pooling arrangements and a $0.2 million decrease in direct assigned risk premiums. The decrease from payroll audits and related premium adjustments includes a $2.2 million decrease in earned but unbilled (EBUB) premium.

Loss and Loss Adjustment Expenses Incurred. Loss and loss adjustment expenses (LAE) incurred totaled $71.3 million for the six months ended June 30, 2010, compared to $87.3 million for the same period in 2009, a decrease of $16.0 million, or 18.3%. The current accident year losses and LAE incurred were $79.9 million, or 74.0% of net premiums earned, compared to $93.7 million, or 69.0% of net premiums earned, for the same period in 2009. The increase in the current accident year loss ratio was mainly driven by frequency. We recorded favorable prior accident year development of $8.6 million in the first half of 2010, compared to $6.4 million in the same period of 2009, as further discussed below in Prior Year Development. Our net loss ratio was 66.0% in the first half of 2010, compared to 64.3% in the same period of 2009.

Net cash provided by operating activities was $10.4 million for the six months ended June 30, 2010, which represented a $1.7 million decrease from $12.1 million in net cash provided by operating activities for the six months ended June 30, 2009. This decrease in operating cash was attributable to a $10.5 million decrease in premiums collected, a $2.1 million increase in policyholder dividends paid, a $1.2 million decrease in net investment income, a $1.0 million increase in losses paid and a $0.7 million decrease in reinsurance recoveries. Offsetting these decreases in operating cash flow were a $8.0 million decrease in federal income taxes paid and a $5.5 million decrease in expense disbursements.

Net cash used in investing activities was $17.8 million for the first half of 2010, compared to $25.3 million for the same period in 2009. Cash provided by sales and maturities of investments totaled $80.7 million for the six months ended June 30, 2010, compared to $55.3 million for the same period in 2009. A total of $97.3 million in cash was used to purchase investments in the six months ended June 30, 2010, compared to $80.0 million in purchases for the same period in 2009.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.2/5 (5 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK