Specialty insurer National Interstate’s earnings dropped from a year ago while the number of written premiums grew.
The Richfield, Ohio, insurance company said it earned $5.8 million, or 30 cents per share, on $120.9 million in gross premiums written for the third quarter ending Sept. 30. That compares to earnings of $15.8 million, or 81 cents per share, on $116.5 million in gross premiums written for the third quarter in 2010.
Earnings were hurt by an increase in claims related to National Interstate’s recreational vehicle business and what it calls its Alternative Risk Transfer, or ART, programs, the company reported. National Interstate specializes in transportation insurance.“Our top line has performed consistently well throughout the year with growth in existing businesses,” Dave Michelson, president and chief executive officer, said in a statement.
For the first nine months of 2011, National Interstate said it earned $23.8 million, or $1.21 a share, on gross premiums written of $411.7 million. For the same nine-month period in 2010, National Interstate had net income of $23.4 million, or $1.75 a share, on gross premiums written of $333.1 million.
National Interstate said income was helped by the Vanliner Insurance Co. premium, which accounted for much of the 26.6 percent growth the company has seen for the first nine months of the year, Michelson said.
The company acquired Vanliner, the exclusive insurer for United Van Lines and Mayflower moving and storage companies, in 2010 for $128 million in cash.
National Interstate said historically it has higher claims costs in the third quarter mainly because of weather-related events and the driving patterns of customers.
Shares of National Interstate Corp., the Richfield, Ohio-based transportation insurer, climbed Tuesday after first-quarter profit improved on results at the unit covering recreational vehicles and commercial autos.
National Interstate has declined about 25% in the past year. Shares closed up 58 cents, or 3.8%, to $15.87, according to the Akron Beacon Journal.
Shares are down 31.4% from a year ago. For 2009, shares are down 11.2%.
First-quarter net income increased to a record $12.6 million, or 65 cents per share, from $9.6 million, or 49 cents a share, a year earlier. The quarterly earnings reflect a ”favorable” rate of claims per policy, the company said.
”Losses came in lower than expected,” said Robert Paun, an analyst at Sidoti & Co., who has a ”buy” rating for the insurer. ”The initiatives that they’ve implemented in reviewing their book of business late last year in the third and fourth quarters have really come through. We are expecting better underwriting margins going forward.”
Paun increased his full-year earnings-per-share estimate to $1.96 from $1.56. For 2010, he raised his projection 19% to $1.70 a share.