Fort Worth, Texas-based Hallmark Financial Services Inc. has reported third quarter 2010 net earnings of $1.0 million compared to $4.2 million reported for the third quarter of 2009. Year to date, Hallmark reported net earnings of $6.9 million, compared to $15.3 million reported for the same period the prior year.
Total revenues were $76.2 million for the third quarter 2010, up 6 percent from the $71.9 million reported for the third quarter of 2009. Year to date, total revenues were $227.7 million, up 7 percent from the $213.6 million reported for the same period the prior year.
Mark J. Morrison, president and chief executive officer, said the company missed its “targeted combined ratio due to a combination of factors affecting incurred losses in each of our three largest business units.”
Hallmark’s standard commercial segment experienced additional development on large property losses from two hailstorms in Montana. Its specialty commercial segment underwriters experienced increased volatility in the general liability, commercial automobile and aircraft hull lines of business.
Hallmark also increased the expected loss ratio for the current accident year in the company’s personal lines business unit “as continued geographic growth and product expansion drive a higher percentage of less seasoned business in the total mix of policies in force,” Morrison said. “These factors resulted in a 102.3 percent combined ratio for the quarter.”
He noted that that the commercial lines segment continues to face “a difficult underwriting environment.”
“Our strategy of operating in diversified specialty markets provides us the opportunity to continue to seek profitable growth through geographic and product expansion in our Personal Segment, while maintaining underwriting discipline in our Standard and Specialty Commercial segments until soft market conditions in those markets subside. We recognize that this strategy will cause our Personal Segment loss ratio to increase in the near term given the very short-tailed nature of this business. However, we expect this ratio to trend back to the historical levels as these new markets mature. This notwithstanding, underwriting profits, as opposed to premium growth or market share, remains the key component of our strategy,” Morrison said.
Source: Hallmark Financial Services Inc.
Topics Profit Loss
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