Eastern Insurance Holdings Inc. (EIHI, Financial) filed Quarterly Report for the period ended 2011-09-30.
Eastern Insurance Holdings Inc. has a market cap of $110 million; its shares were traded at around $13.54 with a P/E ratio of 45.1 and P/S ratio of 0.9. The dividend yield of Eastern Insurance Holdings Inc. stocks is 2%.
Unrealized investment gains or losses on investments carried at fair value, net of applicable income taxes, are reflected directly in shareholders equity as a component of comprehensive income (loss) and, accordingly, have no effect on net income. When, in the opinion of management, a decline in the fair value of an investment below its cost or amortized cost is considered to be other-than-temporary, such investment is written down to its fair value. The amount written down is recorded in earnings as a net realized investment loss. Generally, the determination of other-than-temporary impairment includes, in addition to other relevant factors, a presumption that if the market value is below cost by a significant amount for a period of time, a write down is necessary. Notwithstanding this presumption, the determination of other-than-temporary impairment requires judgment about future prospects for an investment and is therefore a matter of inherent uncertainty. There were no other-than-temporary impairments recognized by the Company for the three and nine months ended September 30, 2011. For the three and nine months ended September 30, 2010, the Company recognized other-than-temporary impairments, excluding impairments in the segregated portfolio cell reinsurance segment, of $0 and $6,000, respectively. As of September 30, 2011, the Company held securities with gross unrealized losses of $1.2 million, excluding those securities in the segregated portfolio cell reinsurance segment, of which none were in an unrealized loss position for more than 12 months. Adverse investment market conditions, poor operating results of underlying investments, or the passage of time with respect to equity securities in an unrealized loss position, could result in impairment charges in the future. The Company generally applies the following standards in determining whether the decline in fair value of an investment is other-than-temporary:
The increase in direct premiums written primarily reflects new business sales $25.5 million, an increase in audit premium, an increase in the renewal retention rate, and renewal rate increases of 0.9%. Audit premium from customers totaled $983,000 and $1.4 million for the three and nine months ended September 30, 2011, respectively, compared to audit premium from customers of $95,000 and audit premium returned to customers of $1.3 million for the same periods in 2010. The Companys traditional book of business recognized audit premium from customers of $727,000 and $1.3 million for the three and nine months ended September 30, 2011, compared to audit premium from customers of $181,000 and audit premium returned to customers of $361,000 for the same periods in 2010, respectively. In addition to audit premium from customers, direct premiums written increased as a result of an adjustment of $350,000 to earned but unbilled premium for the three and nine months ended September 30, 2011, compared to an adjustment of $100,000 and $750,000 to earned but unbilled premium that decreased direct premiums written for the same periods in 2010. The renewal retention rate increased from 86.9% in 2010 to 88.4% in 2011.
The increase in reinsurance premiums assumed primarily reflects new business sales of $4.2 million, an increase in audit premium, and increase in the renewal retention rate, and renewal rate increases of 1.1%. Audit premium from customers totaled $256,000 and $114,000 for the three and nine months ended September 30, 2011, respectively, compared to audit premium returned to customers of $86,000 and $952,000 for the same periods in 2010. The renewal retention rate increased from 86.7% in 2010 to 90.8% in 2011.
The corporate/other segment reported a net loss of $859,000 and $2.5 million for the three and nine months ended September 30, 2011, respectively, compared to a net loss of $832,000 and $2.7 million for the same periods in 2010. The improvement in the corporate/other operating results primarily reflects an increase in the Companys equity interest in certain segregated portfolio cells, an increase in fee revenue generated by the segregated portfolio cell reinsurance segment, and a decrease in intangible asset amortization, partially offset by a decrease in other revenue due to the loss of a third party administration customer and an increase in other expenses.
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Eastern Insurance Holdings Inc. has a market cap of $110 million; its shares were traded at around $13.54 with a P/E ratio of 45.1 and P/S ratio of 0.9. The dividend yield of Eastern Insurance Holdings Inc. stocks is 2%.
Highlight of Business Operations:
Net premiums earned. Net premiums earned are the earned portion of the Companys net premiums written. Premiums are earned over the term of the related policies. At the end of each accounting period, the portion of the premiums that are not yet earned are included in unearned premiums and are realized as revenue in subsequent periods over the remaining term of the policy. The Companys workers compensation policies typically have a term of twelve months. Thus, for example, for a policy that is written on July 1, 2011, one-half of the premiums would be earned in 2011 and the other half would be earned in 2012. Workers compensation premiums are determined based upon the payroll of the insured, the applicable premium rates and, where applicable, an experience based modification factor. An audit of the policyholders records is conducted after policy expiration, to make a final determination of applicable premiums. Included with net premiums earned is an estimate for earned but unbilled final audit premiums. The Company can estimate earned but unbilled premiums because it keeps track, by policy, of how much additional premium is billed (or returned to insureds as a result of payroll reductions) in final audit invoices as a percentage to estimate the probable additional amount that it has earned but not yet billed as of the balance sheet date.Unrealized investment gains or losses on investments carried at fair value, net of applicable income taxes, are reflected directly in shareholders equity as a component of comprehensive income (loss) and, accordingly, have no effect on net income. When, in the opinion of management, a decline in the fair value of an investment below its cost or amortized cost is considered to be other-than-temporary, such investment is written down to its fair value. The amount written down is recorded in earnings as a net realized investment loss. Generally, the determination of other-than-temporary impairment includes, in addition to other relevant factors, a presumption that if the market value is below cost by a significant amount for a period of time, a write down is necessary. Notwithstanding this presumption, the determination of other-than-temporary impairment requires judgment about future prospects for an investment and is therefore a matter of inherent uncertainty. There were no other-than-temporary impairments recognized by the Company for the three and nine months ended September 30, 2011. For the three and nine months ended September 30, 2010, the Company recognized other-than-temporary impairments, excluding impairments in the segregated portfolio cell reinsurance segment, of $0 and $6,000, respectively. As of September 30, 2011, the Company held securities with gross unrealized losses of $1.2 million, excluding those securities in the segregated portfolio cell reinsurance segment, of which none were in an unrealized loss position for more than 12 months. Adverse investment market conditions, poor operating results of underlying investments, or the passage of time with respect to equity securities in an unrealized loss position, could result in impairment charges in the future. The Company generally applies the following standards in determining whether the decline in fair value of an investment is other-than-temporary:
The increase in direct premiums written primarily reflects new business sales $25.5 million, an increase in audit premium, an increase in the renewal retention rate, and renewal rate increases of 0.9%. Audit premium from customers totaled $983,000 and $1.4 million for the three and nine months ended September 30, 2011, respectively, compared to audit premium from customers of $95,000 and audit premium returned to customers of $1.3 million for the same periods in 2010. The Companys traditional book of business recognized audit premium from customers of $727,000 and $1.3 million for the three and nine months ended September 30, 2011, compared to audit premium from customers of $181,000 and audit premium returned to customers of $361,000 for the same periods in 2010, respectively. In addition to audit premium from customers, direct premiums written increased as a result of an adjustment of $350,000 to earned but unbilled premium for the three and nine months ended September 30, 2011, compared to an adjustment of $100,000 and $750,000 to earned but unbilled premium that decreased direct premiums written for the same periods in 2010. The renewal retention rate increased from 86.9% in 2010 to 88.4% in 2011.
The increase in reinsurance premiums assumed primarily reflects new business sales of $4.2 million, an increase in audit premium, and increase in the renewal retention rate, and renewal rate increases of 1.1%. Audit premium from customers totaled $256,000 and $114,000 for the three and nine months ended September 30, 2011, respectively, compared to audit premium returned to customers of $86,000 and $952,000 for the same periods in 2010. The renewal retention rate increased from 86.7% in 2010 to 90.8% in 2011.
The corporate/other segment reported a net loss of $859,000 and $2.5 million for the three and nine months ended September 30, 2011, respectively, compared to a net loss of $832,000 and $2.7 million for the same periods in 2010. The improvement in the corporate/other operating results primarily reflects an increase in the Companys equity interest in certain segregated portfolio cells, an increase in fee revenue generated by the segregated portfolio cell reinsurance segment, and a decrease in intangible asset amortization, partially offset by a decrease in other revenue due to the loss of a third party administration customer and an increase in other expenses.
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