SEABRIGHT INSURANCE HOLDINGS INC (SBX, Financial) filed Quarterly Report for the period ended 2009-09-30.
Seabright Insurance Holdings, Inc. is an insurance holding company whose wholly owned subsidiary, SeaBright Insurance Company, operates as a specialty provider of multi-jurisdictional workers' compensation insurance. SeaBright Insurance Company distributes its products through selected independent insurance brokers and through its in-house wholesale broker affiliate, PointSure Insurance Services. Seabright Insurance Holdings Inc has a market cap of $248.37 million; its shares were traded at around $11.46 with a P/E ratio of 9.71 and P/S ratio of 0.93.
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Seabright Insurance Holdings, Inc. is an insurance holding company whose wholly owned subsidiary, SeaBright Insurance Company, operates as a specialty provider of multi-jurisdictional workers' compensation insurance. SeaBright Insurance Company distributes its products through selected independent insurance brokers and through its in-house wholesale broker affiliate, PointSure Insurance Services. Seabright Insurance Holdings Inc has a market cap of $248.37 million; its shares were traded at around $11.46 with a P/E ratio of 9.71 and P/S ratio of 0.93.
Highlight of Business Operations:
As discussed in the previous section, there are a number of variables that can impact, individually or in combination, the adequacy of our loss and loss adjustment expense liabilities. While the actuarial methods employed factor in amounts for these circumstances, the loss reserves may prove to be inadequate despite the actuarial methods used. Several examples are provided below to highlight the potential variability present in our loss reserves. Each of these examples represents scenarios that are reasonably likely to occur over time. For example, there may be a number of claims where the unpaid loss and loss adjustment expense associated with future medical treatment proves to be inadequate because the injured workers do not respond to medical treatment as expected by the claims examiner. If we assume this affects 10% of the open claims and, on average, the unpaid loss and loss adjustment expenses on these claims are 20% inadequate, this would result in our unpaid loss and loss adjustment expense liability being inadequate by approximately $6.7 million, or 2.0%, as of September 30, 2009. Another example is claim inflation. Claim inflation can result from medical cost inflation or wage inflation. As discussed above, the actuarial methods employed include an amount for claim inflation based on historical experience. We assume that the historical effect of this factor, which is embedded in our experience and industry experience, is representative of future effects for claim inflation. To the extent that the historical factors, and the actuarial methods utilized, are inadequate to recognize future inflationary trends, our unpaid loss and loss adjustment expense liabilities may be inadequate. If our estimate of future medical trend is two percentage points inadequate (e.g., if we estimate a 9% annual trend and the actual trend is 11%), our unpaid loss and loss adjustment expense liability could be inadequate. The amount of the inadequacy would depend on the mix of medical and indemnity payments and the length of time until the claims are paid. For example, if we assume that 50% of the unpaid loss and loss adjustment expense is associated with medical payments and an average payout period of 5 years, our unpaid loss and loss adjustment expense liabilities would be inadequate by approximately $16.7 million on a pre-tax basis, or 5.0%, as of September 30, 2009. Under these assumptions, the inadequacy of approximately $16.7 million represents approximately 4.6% of total stockholders equity at September 30, 2009. The impact of any reserve deficiencies, or redundancies, on our reported results and future earnings is discussed below.Read the The complete Report
