Cincinnati-based specialty insurer The Midland Co. reported net income for the third quarter of $4.3 million, or 23 cents per share, including 4 cents in realized capital gains, compared with a net loss of $2.6 million, or 15 cents per share in the third quarter of 2002, which included 21 cents per share in realized capital losses.
Revenue increased 14.8 percent to $184.2 million, compared with $160.5 million in last year’s third quarter. All per-share data is presented on an after-tax, diluted basis.
“The third quarter of 2003 illustrated the value of our business fundamentals,” said John W. Hayden, president and CEO. “We are gratified by the recent profitability trends in our manufactured housing and site-built dwelling programs. The profit trends from these lines of business are evidence of the aggressive rate increases, product design changes and positioning strategies that we’ve undertaken.
“We are pleased to report that actual losses from Hurricane Isabel appear to be less than were previously expected,” he added in a statement. “Gross losses from Hurricane Isabel were approximately $9 million. After the benefit of our normal catastrophe reinsurance program along with a one-time ‘second-event’ coverage, the hurricane had an after-tax earnings impact of 13 cents per share. As we indicated in our press release on Sept. 23, our third quarter was still somewhat negatively impacted by a higher-than-normal level of catastrophe losses.
“Total pre-tax catastrophe losses for the third quarter (net of reinsurance) were $7.9 million, or 29 cents per share, compared with $4.4 million, or 16 cents per share in the third quarter of 2002. We believe that a normalized historical average level of pre-tax catastrophe losses for a third quarter would be approximately $5.9 million, or 21 cents per share,” Hayden said.
“While weather and other unpredictable events can always impact our short-term performance, we believe that our disciplined approach to underwriting and our commitment to rate adequacy positions us to achieve our long-term objective of consistently creating value for our shareholders,” Hayden added.
Midland’s wholly owned insurance subsidiary, American Modern Insurance Group, specializes in insurance products and services such as manufactured housing, site-built homes, motorcycles, watercraft, snowmobiles, recreational vehicles and credit life and related products. American Modern’s products and services are offered through diverse distribution channels.
For the third quarter, American Modern’s property/casualty gross written premiums grew 14.6 percent to $184.3 million, including manufactured housing gross written premium growth of 7.8 percent to $88.6 million.
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