National Security Group Inc. (NSEC, Financial) filed Quarterly Report for the period ended 2009-06-30.
NATIONAL SECURITY GROUP INC. is an insurance holding company. National Security Group Inc. has a market cap of $21 million; its shares were traded at around $8.4999 with a P/E ratio of 7.9 and P/S ratio of 0.3. The dividend yield of National Security Group Inc. stocks is 7.1%. National Security Group Inc. had an annual average earning growth of 11.5% over the past 5 years.
Reinsurance premium ceded in the property and casualty segment was up in 2009 compared to 2008. The ceded premium as of June 2009 was $2,709,000 compared to $2,159,000 for the same period last year; an increase of over 25%. The increase in reinsurance premium ceded was primarily due to increased costs associated with the catastrophe reinsurance contract held by the P&C segment. Rates increased at contract renewal (January 2009), 27.7% from 2008. Reinsurance premium ceded will also increase during the second half of 2009 due to the expansion of the upper limits of coverage under our catastrophe reinsurance program. Effective July 1, 2009 the upper limits of our last layer of reinsurance was increased from $15 million to $30 million providing coverage to an upper limit of $72.5 million. Based on results from our primary catastrophe models, the increased limits provides coverage well in excess of our indicated near term 100 year event estimate of $56 million. We elected to increase the upper limit of our coverage beyond the 100 year event estimate primarily due to the concentration of risk we have in coastal areas of Alabama. The expansion of reinsurance coverage in the second half of 2009 will increase total reinsurance cost for the year by approximately $700,000.
For the six-month period ended June 30, 2009, we incurred net realized investment losses of $230,000 compared to net realized investment gains of $148,000 for the same period last year. The primary reason for the realized investment loss in 2009 relates to the other-than-temporary impairments recognized in both the life and P&C segments during the second quarter of 2009. The life segment recognized losses on other than temporary impairments totaling $195,000 due to the write down in value of a CIT Group bond while the property and casualty segment recognized losses on other-than-temporary impairments totaling $88,000 due to the write down of a General Motors asset backed security.
For the three months ended June 30, 2009, the Company produced net income totaling $92,000 ($0.04 net earnings per common share) compared to a net loss of $36,000 ($0.01 net loss per common share) for the same period in the prior year. Catastrophe related losses were down during the second quarter of 2009, however small storms caused an increase in claims related to wind and hail damage. In addition, the property and casualty segment incurred an increase in the frequency of fire losses during the second quarter of 2009.
Total invested assets increased 5.95% from $90,132,000 at December 31, 2008 to $95,496,000 at June 30, 2009. Much improved market conditions over the second quarter of 2008 was the primary factor contributing to the increase in invested assets. Market value of debt securities increased over $2.5 million in the first six months of 2009 accounting for the most significant increase in invested assets. The Company\'s investment in company owned life insurance increased $2.7 millon as a result of an additional investment of $2.5 millon and a recovery in value of $227,000.
At June 30, 2009, the Company had aggregate equity capital, unrealized investment gains (net of income taxes) and retained earnings of $37,277,000 up $2,629,000 compared to December 31, 2008. The increase reflects net income of $1,573,000, an increase in accumulated unrealized investment gains associated with available-for-sale securities of $1,584,000, a gain on an interest rate swap of $212,000 and dividends paid of $740,000.
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NATIONAL SECURITY GROUP INC. is an insurance holding company. National Security Group Inc. has a market cap of $21 million; its shares were traded at around $8.4999 with a P/E ratio of 7.9 and P/S ratio of 0.3. The dividend yield of National Security Group Inc. stocks is 7.1%. National Security Group Inc. had an annual average earning growth of 11.5% over the past 5 years.
Highlight of Business Operations:
While overall P&C losses were down for the first half of the current year, non-catastrophe related losses for 2009 were up compared to the same period last year. Non-catastrophe related losses through June 2009 totaled $14,558,000 while 2008 non-catastrophe related losses totaled $11,946,000; an increase of 21.9%. The primary cause of the increase in non-catastrophe losses was an increase in losses from smaller storms, both wind and hail, that were not large enough to be classified as catastrophe events. These storms were primarily high frequency isolated thunderstorms that generated wind and hail related losses. Wind and hail claims incurred from storms not widespread enough to be classified as catastrophe events during the first half of 2009 totaled $4,255,000 compared to $3,206,000 for the same period last year; an increase of $1,049,000 or 32.7%. The majority of these claims were incurred in four states with Mississippi, Oklahoma and South Carolina each incurring 13% of the losses and another 41% incurred in Alabama.Reinsurance premium ceded in the property and casualty segment was up in 2009 compared to 2008. The ceded premium as of June 2009 was $2,709,000 compared to $2,159,000 for the same period last year; an increase of over 25%. The increase in reinsurance premium ceded was primarily due to increased costs associated with the catastrophe reinsurance contract held by the P&C segment. Rates increased at contract renewal (January 2009), 27.7% from 2008. Reinsurance premium ceded will also increase during the second half of 2009 due to the expansion of the upper limits of coverage under our catastrophe reinsurance program. Effective July 1, 2009 the upper limits of our last layer of reinsurance was increased from $15 million to $30 million providing coverage to an upper limit of $72.5 million. Based on results from our primary catastrophe models, the increased limits provides coverage well in excess of our indicated near term 100 year event estimate of $56 million. We elected to increase the upper limit of our coverage beyond the 100 year event estimate primarily due to the concentration of risk we have in coastal areas of Alabama. The expansion of reinsurance coverage in the second half of 2009 will increase total reinsurance cost for the year by approximately $700,000.
For the six-month period ended June 30, 2009, we incurred net realized investment losses of $230,000 compared to net realized investment gains of $148,000 for the same period last year. The primary reason for the realized investment loss in 2009 relates to the other-than-temporary impairments recognized in both the life and P&C segments during the second quarter of 2009. The life segment recognized losses on other than temporary impairments totaling $195,000 due to the write down in value of a CIT Group bond while the property and casualty segment recognized losses on other-than-temporary impairments totaling $88,000 due to the write down of a General Motors asset backed security.
For the three months ended June 30, 2009, the Company produced net income totaling $92,000 ($0.04 net earnings per common share) compared to a net loss of $36,000 ($0.01 net loss per common share) for the same period in the prior year. Catastrophe related losses were down during the second quarter of 2009, however small storms caused an increase in claims related to wind and hail damage. In addition, the property and casualty segment incurred an increase in the frequency of fire losses during the second quarter of 2009.
Total invested assets increased 5.95% from $90,132,000 at December 31, 2008 to $95,496,000 at June 30, 2009. Much improved market conditions over the second quarter of 2008 was the primary factor contributing to the increase in invested assets. Market value of debt securities increased over $2.5 million in the first six months of 2009 accounting for the most significant increase in invested assets. The Company\'s investment in company owned life insurance increased $2.7 millon as a result of an additional investment of $2.5 millon and a recovery in value of $227,000.
At June 30, 2009, the Company had aggregate equity capital, unrealized investment gains (net of income taxes) and retained earnings of $37,277,000 up $2,629,000 compared to December 31, 2008. The increase reflects net income of $1,573,000, an increase in accumulated unrealized investment gains associated with available-for-sale securities of $1,584,000, a gain on an interest rate swap of $212,000 and dividends paid of $740,000.
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