Vesta Insurance Group Inc., headquartered in Birmingham, Ala., reported net operating earnings of $3.1 million for the quarter ending September 30, 2002, compared to net operating earnings of $1.3 million for the corresponding period in 2001. Net premiums written for the quarter were $149.9 million compared to $80.2 million in the third quarter of 2001, an 87 percent increase.
For the nine months ended September 30, 2002, Vesta reported net operating earnings of $2.5 million compared to net operating earnings of $8.8 million for the first nine months of 2001.
Including non-operating items such as realized gains and losses on investments and gains from debt extinguishments, the company reported net income from continuing operations of $4.4 million in the third quarter of 2002 compared to a loss of $17.3 million in the corresponding period in 2001. For the nine months ended September 30, Vesta reported net income from continuing operations of $4.2 million compared to a loss of $7.4 million in 2001.
In the third quarter of 2002, the company adopted SFAS 145, which allows Vesta to classify gains or losses from extinguishments of debt as ordinary income and include the gains or losses in continuing operations. Vesta recorded after-tax gains of $1.9 million in the third quarter of 2002 and $2.8 million for the nine months ended September 30, 2002 from the extinguishments of debt.
Vesta’s non-standard automobile businesses produced strong earnings in the third quarter. Net operating earnings from the agency segment were $2.2 million, an increase of 21 percent compared to the previous quarter. The specialty underwriting segment, which includes the underwriting risk on non-standard automobile insurance, added $1.7 million in net operating income.
The company’s standard property-casualty business reported a net operating loss of $1.1 million from net written premium of $97.2 million in the third quarter of 2002 compared to $70.0 million in the same period of 2001. Vesta’s GAAP combined ratio for its residential property business and standard auto business was 103.7 percent and 95.4 percent, respectively, for the third quarter for an overall 102.0 percent combined ratio for the segment.
Michael J. Gough, a consultant with extensive insurance industry experience, was elected to Vesta’s Board of Directors effective November 5. With Gough’s election to the Board, the total number of Directors remains at eight with seven being non-executive Directors.
Gough is replacing James E. Tait, who resigned as a Director to focus his energies full-time on Vesta’s consulting subsidiary, Tait Advisory Services. Ehney A. Camp, III, a Director since 1993, was elected to replace Tait as Chairman of the Board.
Additionally, Vesta announced that its Board of Directors declared a quarterly cash dividend for the period ending September 30, 2002 of $0.025 per share on the company’s common stock at its meeting on November 5, 2002. The dividend is payable on December 3, 2002 to shareholders of record on November 18, 2002.
Topics Profit Loss
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