Affirmative Insurance Holdings Sees Gain in Q1 Net Income From a Year Ago

Texas-based Affirmative Insurance Holdings Inc., a producer and provider of personal non-standard automobile insurance, announced financial results for the quarter ended March 31, 2005.

Highlights for the company’s first quarter included:

— Net income for the first quarter of 2005 was $8.0 million, an increase of 9.8% compared to net income of $7.3 million for the first quarter of 2004;

— Earnings per share for the first quarter of 2005 were $0.47 per diluted share with an annualized return on equity of 15.3%; and

— Total revenues for the first quarter of 2005 were $87.1 million, an increase of $14.9 million or 20.7% as compared to total revenue of $72.2 million for the same period of 2004.

“Affirmative produced another quarter of solid profitability as we worked to fully employ the capital raised during 2004,” said Thomas Mangold, CEO of Affirmative Insurance Holdings Inc. “We continue to remain focused on developing and deploying our multiple distribution channel strategy, both through organic and acquisition expansion. We saw competitive pressures accelerate during this quarter, particularly in the independent agency distribution channel. From an underwriting and pricing perspective, we continue to exercise strong discipline and have been unwilling to sacrifice underwriting margins for the sake of top line growth. In the quarter we have continued to see favorable loss experience from prior periods.”

Revenues from agency operations increased 12.1% to $47.7 million with a pre-tax margin of 17.2%, compared to revenues of $42.6 million with a pre-tax margin of 19.0% for the first quarter of 2004. Net income from agency operations increased 3.0% to $5.3 million from $5.1 million in the same quarter of the prior year.

Revenues from insurance company operations for the first quarter of 2005 were $76.1 million, an increase of 39.6% as compared to first quarter 2004 revenues of $54.5 million. The combined ratio for the first quarter of 2005 was 94.7% as compared to 93.2% for the first quarter of 2004. Net income from insurance company operations increased 34.3% to $3.3 million from $2.5 million in the same quarter of the prior year.

Topics Profit Loss