DeRidder, La.-based Amerisafe, Inc. a specialty provider of hazardous workers’ compensation insurance, announced that premiums earned during the first quarter ended March 31, 2011, rose 9.1 percent over that of the same period last year.
The company had $60,089,000 in net premiums earned in the first quarter of 2011 versus $55,058,000 in the first quarter of 2010.
Net income, however, fell by 41.2 percent in Q1 2011 compared with the same period in 2010. The company’s combined loss ratio rose from 91.5 percent in first quarter 2010 to 98.3 percent in first quarter 2011.
Allen Bradley, Amerisafe’s chairman and CEO, commented that while demand for workers’ compensation insurance is rising, “loss experience continues at levels higher than historical averages, reflecting the impact of multi-year loss costs and rate reductions coupled with our nation’s difficult economic circumstances.”
Gross written premiums rose to $71,359,000 in the first quarter of 2011 compared with $61,091,000, a 16.8 percent gain.
Gross premiums written increased primarily due to less negative payroll audits and related premium adjustments for policies written in previous periods. These adjustments reduced premiums written by $0.1 million in the first quarter of 2011 compared to a reduction of $8.9 million in the first quarter of 2010. Additionally, voluntary premium for policies written during the quarter increased by 2.5 percent compared to prior year quarter. The company completed its renewal rights and assumption agreement with Cooperative Mutual during the quarter which accounted for $4.0 million of gross premiums written.
Accident years 2006, 2007 and 2008 primarily contributed to the favorable development while accident year 2010 experienced unfavorable development.
The underwriting expense ratio increased mainly as a result of lower experienced rated commission from the company’s 2011 first layer reinsurance program. In the first quarter of 2011, experienced rated commission offset the underwriting expense ratio by 2.2 percentage points compared to 4.3 percentage points in the first quarter of 2010.
“In terms of losses, our experience over the past two accident years has been disappointing; that experience has deteriorated as a result of increasing claims duration and what we believe to be deficient loss costs,” noted Amerisafe President and Chief Operating Officer Geoff Banta. “In the meantime, we remain focused on our underwriting standards, efficient claims handling and aggressive expense management, which this quarter produced a 98.3 percent combined ratio.”
Source: Amerisafe Inc.
Topics Louisiana Pricing Trends
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