Attached files
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| 8-K - MEADOWBROOK INSURANCE GROUP INC 8-K 10-31-2011 - MEADOWBROOK INSURANCE GROUP INC | form8k.htm |
Exhibit 99.1
| CONTACT: | John P. Shallcross |
| Karen M. Spaun | Director of Investor Relations & Capital Strategies |
| SVP & Chief Financial Officer | (248) 204-8066 |
| (248) 204-8178 |
FOR IMMEDIATE RELEASE
SOUTHFIELD, MICHIGAN
October 31, 2011
MEADOWBROOK INSURANCE GROUP, INC.
REPORTS THIRD QUARTER NET OPERATING INCOME OF $9.5 MILLION
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Net operating income of $9.5 million, or $0.18 per diluted share
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Results include current quarter impact from unusual second quarter 2011 storm losses of $3.7 million after-tax, or $0.07 per diluted share
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Third quarter gross written premium increased 19.1% to $243.3 million
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Book value per share of $11.37, up 10.6% from December 31, 2010
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Quarterly dividend increased from $0.04 to $0.05 per share
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Repurchased 1.8 million shares at an average cost of $9.06 per share during the third quarter; share repurchases increased book value by $0.08 per share
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Full year 2012 guidance on net operating income of $53.5 million to $58.5 million, or $1.05-$1.15 on a per diluted share basis
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Third Quarter 2011 Highlights and Overview
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Net income was $9.8 million, or $0.19 per diluted share, compared to $15.0 million, or $0.28 per diluted share, for the third quarter of 2010.
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Net operating income, a non-GAAP measure the Company defines as net income excluding after-tax realized gains and losses, was $9.5 million, or $0.18 per diluted share, compared to $14.6 million, or $0.27 per diluted share, for the third quarter of 2010.
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Current quarter results include losses of $3.7 million after-tax, or $0.07 per diluted share, due to second quarter 2011 unusual storm losses; these losses added 2.9 percentage points to the third quarter combined ratio.
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The third quarter accident year combined ratio, a non-GAAP measure that excludes the impact of any adverse or favorable development on prior year loss reserves, was 99.0% from 100.2% in the prior year quarter; excluding the impact of unusual second quarter storm losses, the third quarter 2011 accident year combined ratio was 96.1%.
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| PR-1011 |  |
| PRESS RELEASE |
PAGE 2
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Meadowbrook Insurance Group, Inc. (NYSE: MIG) reported third quarter 2011 net operating income, a non-GAAP measure, of $9.5 million, or $0.18 per diluted share, compared to $14.6 million, or $0.27 per diluted share, in the third quarter of 2010.
Net operating income for the three months ended September 30, 2011 includes losses of $3.7 million after-tax, or $0.07 per diluted share, due to second quarter 2011 unusual storm losses.
The 2011 third quarter results also include a change in after-tax development on prior year loss reserves. The current quarter reflects after-tax adverse development of $1.3 million, or $0.02 per diluted share, as compared to 2010 third quarter results, which include after-tax favorable development of $4.7 million, or $0.09 per diluted share.
Excluding the current quarter impact of the second quarter 2011 storm losses and development on prior year loss reserves, third quarter 2011 net operating income increased $4.6 million, or $0.09 per diluted share, to $14.5 million, or $0.28 per diluted share, from $9.9 million, or $0.18 per diluted share, in the third quarter of 2010.
Net income for the third quarter was $9.8 million, or $0.19 per diluted share, compared to $15.0 million, or $0.28 per diluted share in 2010. The 2011 results include $237,000, or less than $0.01 per diluted share, of after-tax realized gains, compared to $431,000, or $0.01 per diluted share, in the prior year quarter.
Third quarter gross written premium increased $39.1 million, or 19.1%, to $243.3 million, compared to $204.2 million in the third quarter of 2010. The increase in premium is primarily due to the conversion of an existing fee-based program into an insured program where we now assume the underwriting risk. The conversion of this business began during the fourth quarter of 2010.
The third quarter 2011 accident year combined ratio, a non-GAAP measure, was 99.0% and includes unusual storm losses of $5.7 million pre-tax, or 2.9 percentage points, related to second quarter 2011 storm losses. The GAAP combined ratio for the current quarter was 100.0%, compared to 95.9% in the prior year quarter.
The third quarter 2011 accident year loss and LAE ratio, a non-GAAP measure that excludes the impact of adverse or favorable development on prior year loss reserves, was 65.6%. As noted above, third quarter 2011 results reflects 2.9 percentage points of unusual storm losses that relate to second quarter 2011 storm losses. Excluding the impact of the unusual storm losses from the second quarter of 2011, the 2011 third quarter accident year loss and LAE ratio was 62.7% compared to 65.9% in the prior year quarter. This improvement reflects the positive impact from continued selective growth coupled with management’s adherence to strict corporate underwriting guidelines, as well as a focus on current accident year price adequacy.
The GAAP loss and LAE ratio for the third quarter was 66.6%, compared to 61.6% for the same period in 2010. Current quarter activity reflects unfavorable development of 1.0 percentage points, whereas 2010 results include 4.2 percentage points of favorable development.
Policy acquisition and other underwriting expenses for the three months ended September 30, 2011 increased $5.7 million to $64.7 million from $59.0 million for the same period in 2010. The Company’s expense ratio improved 0.9 percentage points to 33.4% for the three months ended September 30, 2011, from 34.3% for the same period in 2010. This change reflects the leveraging of fixed costs over a larger premium base and a slight reduction in commission rates due to mix of business.
Net commission and fee revenue for the third quarter of 2011 declined $2.6 million to $7.3 million from $9.9 million in the prior year quarter. The decrease was primarily driven by the conversion of an existing fee-based program into an insured program where the Company earns premium revenue as opposed to net commission and fee revenue. Excluding this conversion, net commission and fee revenue was up slightly in 2011 as compared to 2010.
PR-1011
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General, selling and administrative costs were $5.9 million for the three months ended September 30, 2011, which is comparable to the prior year quarter.
General corporate expenses were $273,000 for the three months ended September 30, 2011, compared to $1.2 million for the same period in 2010. The decrease is due to a slight reduction in the variable compensation accrual in the current quarter, as compared to accruing a provision for variable compensation in 2010.
Commenting on the quarter, Meadowbrook President and Chief Executive Officer Robert S. Cubbin stated: “We are pleased with our third quarter results as we achieved profitable growth despite the impact of unusual second quarter 2011 storm losses and continued competitive market conditions. Our third quarter accident year combined ratio improved 1.2 percentage points as compared to the prior year. This underscores our commitment to pricing adequacy and adherence to disciplined underwriting standards. Looking ahead, we believe our balanced business model positions us well to continue to deliver predictable earnings across the market cycle and we are optimistic about our future prospects.”
Nine Months Ended September 30, 2011
Net operating income, a non-GAAP measure, was $32.5 million, or $0.61 per diluted share, for the nine months ended September 30, 2011, compared to $44.0 million, or $0.81 per diluted share, in 2010.
Net operating income for the nine months ended September 30, 2011 includes losses of $7.8 million, or $0.15 per diluted share, due to second quarter 2011 unusual storm activity.
The 2011 year-to-date results also include a reduction in favorable development on prior year loss reserves. The 2011 results include after-tax favorable development of $238,000, or less than $0.01 per diluted share, whereas 2010 results include after-tax favorable development of $15.4 million, or $0.28 per diluted share.
Excluding the impact of the unusual second quarter storm losses and development on prior year loss reserves, 2011 net operating income increased $11.5 million, or $0.23 per diluted share, to $40.1 million, or $0.76 per diluted share, from $28.6 million, or $0.53 per diluted share, in 2010.
Net income for the nine months ended September 30, 2011 was $34.8 million, or $0.66 per diluted share, compared to $44.3 million, or $0.81 per diluted share in 2010. The 2011 results include $2.3 million, or $0.05 per diluted share, of after-tax realized gains, compared to $283,000, or less than $0.01 per diluted share, in the prior year.
Gross written premium for the nine months ended September 30, 2011 increased $79.7 million, or 13.3%, to $680.9 million, compared to $601.2 million in 2010. The increase in premium is primarily due to the conversion of an existing fee-based program into an insured program where we now assume the underwriting risk. The conversion of this business began during the fourth quarter of 2010. The increase is also attributable to the maturation of existing programs and rate increases that have been achieved during 2011.
The 2011 accident year combined ratio, a non-GAAP measure, was 99.0% and includes unusual second quarter storm losses of $12.0 million pre-tax, or 2.2 percentage points. The GAAP combined ratio for 2011 was 99.0%, compared to 94.8% in the prior year.
PR-1011
| PRESS RELEASE |
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The 2011 accident year loss and LAE ratio, a non-GAAP measure, was 65.2%. As noted above, 2011 results reflect unusual storm losses that occurred during the second quarter and added 2.2 percentage points to the accident year loss and LAE ratio. Excluding the impact of the unusual second quarter 2011 storm losses, the 2011 accident year loss and LAE ratio was 63.0% compared to 65.1% in the prior year. This improvement reflects the positive impact from continued selective growth coupled with management’s adherence to strict corporate underwriting guidelines, as well as a focus on current accident year price adequacy.
The GAAP loss and LAE ratio for the nine months ended September 30, 2011 was 65.2%, compared to 60.2% for the same period in 2010. Current year activity reflects favorable development of 0.1 percentage points, compared to 2010 results that include 4.9 percentage points of favorable development.
Policy acquisition and other underwriting expenses for the nine months ended September 30, 2011 increased $16.3 million to $184.6 million from $168.3 million for the same period in 2010. The Company’s expense ratio improved 0.8 percentage points to 33.8% for the nine months ended September 30, 2011, from 34.6% for the same period in 2010. This change reflects the leveraging of fixed costs over a larger premium base and a slight reduction in commission rates due to mix of business.
Net commission and fee revenue for the 2011 declined $3.3 million to $23.6 million from $26.9 million in the prior year. The decrease was primarily driven by the conversion of an existing fee-based program into an insured program where the Company earns premium revenue as opposed to net commission and fee revenue. Excluding this conversion, net commission and fee revenue was up slightly in 2011 as compared to 2010.
General, selling and administrative costs were $17.8 million for the nine months ended September 30, 2011, compared to $17.1 million for the same period in 2010. The increase relates primarily to investments in selling initiatives to stimulate revenue growth in net commissions and fees.
General corporate expenses were $909,000 for the nine months ended September 30, 2011, compared to $4.4 million for the same period in 2010. The decrease is due to a reduction in the variable compensation accrual in the current quarter, as compared to accruing a provision for variable compensation in 2010.
2011 and 2012 Guidance
Based upon the Company’s results for the first nine months of 2011, management’s expectations for full year 2011 guidance has been revised. Management now expects net operating income to be in a range of $43.9 million to $49.4 million, or $0.83 to $0.93 per diluted share, and a GAAP combined ratio of 98.0% to 99.0%
For 2012, management expects net operating income to improve to a range of $53.5 million to $58.5 million, a GAAP combined ratio of 96.0% to 97.0%, and gross written premium in a range of $890 million to $910 million. Achieving results within these ranges would result in net operating income between $1.05 and $1.15 per diluted share.
Commenting on the 2012 outlook, Mr. Cubbin stated: “We believe that 2012 will be a strong year for the Company. We will continue to focus on price adequacy, disciplined underwriting, efficient claims handling and geographic and product diversification. This strategy has served us well despite a prolonged period of low interest rates, as well as a competitive pricing environment, which we expect will continue into 2012.”
Other Matters
Shareholders’ Equity:
Shareholder’s equity increased 6.1% to $580.3 million at September 30, 2011 from $547.1 million at December 31, 2010; this equates to an increase in book value per share of 10.6% to $11.37 per share at September 30, 2011 compared to $10.28 per share at December 31, 2010, on a lower share count.
PR-1011
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PAGE 5
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Statutory Surplus:
At September 30, 2011, the combined statutory surplus grew to $377.7 million, compared to $370.5 million at December 31, 2010.
Premium Leverage Ratios:
As of September 30, 2010, on a trailing twelve month statutory consolidated basis, the gross and net premium leverage ratios were 2.3 to 1.0 and 2.0 to 1.0, respectively. As a reference point, the Company’s target ratios for gross and net written premium to statutory surplus are 2.75 to 1.0 and 2.25 to 1.0, respectively.
Cash Flows from Operations:
For the three months ended September 30, 2011, operating cash flows were $33.0 million, compared to $55.2 million for the three months ended September 30, 2010. The decrease in cash flow from operations was driven primarily by an increase in paid losses on short tail lines due to the higher level of storm activity in the second quarter of 2011.
For the nine months ended September 30, 2011, operating cash flows were $94.9 million, compared to $128.0 million for the nine months ended September 30, 2010. The decrease in cash flow from operations for the year-to-date period was also driven primarily by an increase in paid losses on short tail lines due to the higher level of storm activity in the second quarter of 2011.
Debt to Equity Ratio:
At September 30, 2011, our debt-to-equity ratio was 18.7%, compared to 21.7% at December 31, 2010. The Company’s debt-to-equity ratio excluding the 30 year interest only senior and junior subordinated debentures was 4.7% at September 30, 2011, compared to 6.9% at December 31, 2010.
Dividend and Share Repurchases:
On October 28, 2011, the Board of Directors declared a quarterly dividend of $0.05 per share payable on November 28, 2011 to shareholders of record as of November 11, 2011, an increase from $0.04 per share in the prior quarter.
The Company repurchased approximately 1.8 million shares during the third quarter of 2011 at an average cost of $9.06 per share. Accretive share repurchase activity during the quarter increased book value per share by $0.08.
The Company repurchased approximately 2.2 million shares during the first nine months of 2011 at an average cost of $9.19 per share. Accretive share repurchase activity during the year increased book value per share by $0.09. The Company had approximately 294,000 remaining shares under the Share Repurchase Plan. On October 28, 2011, the Board of Directors authorized management to repurchase up to 5.0 million of shares in a new Share Repurchase Plan. The new Share Repurchase Plan replaced the existing Share Repurchase Plan authorized in February 2010.
Investment Portfolio:
Cash and invested assets grew $97.6 million, or 7.3%, to $1.4 billion at September 30, 2011 from $1.3 billion at December 31, 2010.
At September 30, 2011, pre-tax book yield was 4.1%, which compares to 4.4% at September 30, 2010. The effective duration of the portfolio was 4.9 years at September 30, 2011, compared to 4.8 years at September 30, 2010 and 5.0 years at December 31, 2010.
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PAGE 6
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Net investment income for the third quarter of 2011 was $13.5 million compared to $13.7 million in the third quarter of 2010. The decrease was driven by a reduction in investment yields and was partially offset by an increase in the Company’s invested asset base due to positive cash flow from operations.
For the nine months ended September 30, 2011, net investment income increased 1.6% to $40.8 million from $40.2 million in the first nine months of 2010. The increase reflects an increase in average invested assets due to positive cash flow from operations and profitable underwriting results.
Conference Call
Meadowbrook’s 2011 third quarter results will be discussed by management in more detail on Tuesday, November 1, 2011 at 9:00 a.m. EDT.
To listen to the call please dial 1-877-407-8035 approximately five minutes prior to the start of the call and ask for the Meadowbrook conference call. Additionally, the conference call will be broadcast live over the internet and can be accessed by all interested parties via the investor relations section of our website at www.meadowbrook.com or www.investorcalendar.com.
For those who cannot listen to the live conference call, a replay of the call will be available through November 16, 2011 by dialing 1-877-660-6853 and referring to account number 286 and conference ID 308604. The webcast will be archived and available for replay through February 1, 2012.
About Meadowbrook Insurance Group
Meadowbrook Insurance Group, Inc., based in Southfield, Michigan, is a leader in the specialty program management market. Meadowbrook includes several agencies, claims and loss prevention facilities, self-insured management organizations and seven property and casualty insurance underwriting companies, including one in Bermuda. Meadowbrook has twenty-six locations in the United States. Meadowbrook is a risk management organization, specializing in specialty risk management solutions for agents, professional and trade associations, and small to medium-sized insureds. Meadowbrook Insurance Group, Inc. common shares are listed on the New York Stock Exchange under the symbol "MIG". For further information, please visit Meadowbrook’s corporate web site at www.meadowbrook.com.
Certain statements made by Meadowbrook Insurance Group, Inc. in this release may constitute forward-looking statements including, but not limited to, those statements that include the words “believes,” “expects,” “anticipates,” “estimates,” or similar expressions. Please refer to the Company's most recent 10-K, 10-Q, and other Securities and Exchange Commission filings for more information on risk factors. Actual results could differ materially. These forward-looking statements involve risks and uncertainties including, but not limited to the following: the frequency and severity of claims; uncertainties inherent in reserve estimates; catastrophic events; a change in the demand for, pricing of, availability or collectability of reinsurance; increased rate pressure on premiums; obtainment of certain rate increases in current market conditions; investment rate of return; changes in and adherence to insurance regulation; actions taken by regulators, rating agencies or lenders; obtainment of certain processing efficiencies; changing rates of inflation; and general economic conditions. Meadowbrook is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
PR-1011
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EARNINGS RELEASE
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PAGE 7
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MEADOWBROOK INSURANCE GROUP, INC.
FINANCIAL INFORMATION
SUPPLEMENT TO THE EARNINGS RELEASE
UNAUDITED BALANCE SHEET INFORMATION
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SEPTEMBER 30,
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DECEMBER 31,
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(In Thousands, Except Per Share Data)
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2011
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2010
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BALANCE SHEET DATA
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ASSETS
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Cash and invested assets
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$ | 1,442,888 | $ | 1,345,257 | ||||
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Premium and agents balances
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193,695 | 169,865 | ||||||
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Reinsurance recoverable
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317,850 | 294,196 | ||||||
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Deferred policy acquisition costs
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88,221 | 78,755 | ||||||
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Prepaid reinsurance premiums
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34,710 | 28,208 | ||||||
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Goodwill
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118,842 | 118,842 | ||||||
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Other assets
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145,793 | 142,518 | ||||||
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Total Assets
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$ | 2,341,999 | $ | 2,177,641 | ||||
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LIABILITIES
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Loss and loss adjustment expense reserves
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$ | 1,157,453 | $ | 1,065,056 | ||||
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Unearned premium reserves
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397,913 | 352,585 | ||||||
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Debt
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27,562 | 37,750 | ||||||
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Debentures
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80,930 | 80,930 | ||||||
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Other liabilities
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97,823 | 94,219 | ||||||
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Total Liabilities
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1,761,681 | 1,630,540 | ||||||
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STOCKHOLDERS' EQUITY
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Common stockholders' equity
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580,318 | 547,101 | ||||||
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Total Liabilities & Stockholders' Equity
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$ | 2,341,999 | $ | 2,177,641 | ||||
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Book value per common share
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$ | 11.37 | $ | 10.28 | ||||
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Book value per common share excluding unrealized gain/loss, net of deferred taxes
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$ | 10.17 | $ | 9.61 | ||||
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EARNINGS RELEASE
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PAGE 8
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MEADOWBROOK INSURANCE GROUP, INC.
FINANCIAL INFORMATION
SUPPLEMENT TO THE EARNINGS RELEASE
UNAUDITED INCOME STATEMENT INFORMATION
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FOR THE THREE MONTHS | FOR THE NINE MONTHS | ||||||||||||||
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(In Thousands, ExceptShare & Per Share Data)
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ENDED SEPTEMBER 30, | ENDED SEPTEMBER 30, | ||||||||||||||
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SUMMARY DATA
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2011
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2010
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2011
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2010
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Gross written premiums
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$ | 243,291 | $ | 204,190 | $ | 680,909 | $ | 601,184 | ||||||||
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Net written premiums
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205,448 | 179,362 | 584,541 | 519,413 | ||||||||||||
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REVENUES
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Net earned premiums
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$ | 193,587 | $ | 171,864 | $ | 545,715 | $ | 486,065 | ||||||||
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Net commissions and fees
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7,293 | 9,869 | 23,628 | 26,872 | ||||||||||||
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Net investment income
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13,502 | 13,715 | 40,839 | 40,198 | ||||||||||||
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Net realized gains
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363 | 283 | 2,269 | 441 | ||||||||||||
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Total Revenues
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214,745 | 195,731 | 612,451 | 553,576 | ||||||||||||
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EXPENSES
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Net losses and loss adjustment expenses
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128,956 | 105,939 | 355,621 | 292,631 | ||||||||||||
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Policy acquisition and other underwriting expenses
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64,665 | 59,013 | 184,553 | 168,262 | ||||||||||||
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General selling and administrative expenses
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5,876 | 5,881 | 17,751 | 17,108 | ||||||||||||
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General corporate expenses
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273 | 1,163 | 909 | 4,409 | ||||||||||||
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Amortization expense
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1,208 | 1,235 | 3,646 | 3,757 | ||||||||||||
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Interest expense
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2,066 | 2,405 | 6,320 | 7,259 | ||||||||||||
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Total Expenses
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203,044 | 175,636 | 568,800 | 493,426 | ||||||||||||
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INCOME BEFORE INCOME TAXES AND EQUITY EARNINGS OF AFFILIATES AND UNCONSOLIDATED SUBSIDIARIES
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11,701 | 20,095 | 43,651 | 60,150 | ||||||||||||
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Income tax expense
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2,590 | 5,500 | 10,709 | 17,896 | ||||||||||||
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Equity earnings of affiliates, net of tax
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649 | 425 | 1,895 | 1,591 | ||||||||||||
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Equity earnings of unconsolidated subsidiaries, net of tax
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(8 | ) | 16 | (30 | ) | 486 | ||||||||||
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NET INCOME
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$ | 9,752 | $ | 15,036 | $ | 34,807 | $ | 44,331 | ||||||||
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Less: Net realized gains, net of tax
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237 | 431 | 2,268 | 283 | ||||||||||||
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NET OPERATING INCOME (1)
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$ | 9,515 | $ | 14,605 | $ | 32,539 | $ | 44,048 | ||||||||
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Diluted earnings per common share
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Net income
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$ | 0.19 | $ | 0.28 | $ | 0.66 | $ | 0.81 | ||||||||
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Net operating income
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$ | 0.18 | $ | 0.27 | $ | 0.61 | $ | 0.81 | ||||||||
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Diluted weighted average common shares outstanding
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52,355,581 | 53,698,954 | 52,974,390 | 54,508,592 | ||||||||||||
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GAAP ratios:
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Loss & LAE ratio
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66.6 | % | 61.6 | % | 65.2 | % | 60.2 | % | ||||||||
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Other underwriting expense ratio
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33.4 | % | 34.3 | % | 33.8 | % | 34.6 | % | ||||||||
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GAAP combined ratio
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100.0 | % | 95.9 | % | 99.0 | % | 94.8 | % | ||||||||
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(1)While net operating income is a non-GAAP disclosure, management believes this information is beneficial to reviewing the financial statements. Net operating income is net income less realized gains net of taxes associated with such gains.
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EARNINGS RELEASE
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PAGE 9
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MEADOWBROOK INSURANCE GROUP, INC.
FINANCIAL INFORMATION
SUPPLEMENT TO THE EARNINGS RELEASE
UNAUDITED INCOME STATEMENT INFORMATION
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(In Thousands)
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FOR THE THREE MONTHS
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FOR THE NINE MONTHS
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| ENDED SEPTEMBER 30, | ENDED SEPTEMBER 30, | |||||||||||||||
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2011
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2010
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2011
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2010
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Net earned premium
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$ | 193,587 | $ | 171,864 | $ | 545,715 | $ | 486,065 | ||||||||
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Net losses & loss adjustment expenses (1)
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128,956 | 105,939 | 355,621 | 292,631 | ||||||||||||
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Policy acquisition and other underwriting expenses
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64,665 | 59,013 | 184,553 | 168,262 | ||||||||||||
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(loss) profit from net earned premium
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(34 | ) | 6,912 | 5,541 | 25,172 | |||||||||||
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Net investment income
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13,502 | 13,715 | 40,839 | 40,198 | ||||||||||||
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Profit from insurance operations
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13,468 | 20,627 | 46,380 | 65,370 | ||||||||||||
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Net commissions and fees
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$ | 7,293 | $ | 9,869 | $ | 23,628 | $ | 26,872 | ||||||||
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General selling & administrative expenses
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5,876 | 5,881 | 17,751 | 17,108 | ||||||||||||
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Profit from net commissions & fees
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1,417 | 3,988 | 5,877 | 9,764 | ||||||||||||
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General corporate expense
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$ | 273 | $ | 1,163 | $ | 909 | $ | 4,409 | ||||||||
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Amortization expense
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1,208 | 1,235 | 3,646 | 3,757 | ||||||||||||
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Interest expense
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2,066 | 2,405 | 6,320 | 7,259 | ||||||||||||
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Other expenses
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3,547 | 4,803 | 10,875 | 15,425 | ||||||||||||
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Profit from insurance operations
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$ | 13,468 | $ | 20,627 | $ | 46,380 | $ | 65,370 | ||||||||
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Profit from net commissions & fees
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1,417 | 3,988 | 5,877 | 9,764 | ||||||||||||
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Other expenses
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(3,547 | ) | (4,803 | ) | (10,875 | ) | (15,425 | ) | ||||||||
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Net capital gains
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363 | 283 | 2,269 | 441 | ||||||||||||
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Pretax income
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$ | 11,701 | $ | 20,095 | $ | 43,651 | $ | 60,150 | ||||||||
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Key ratios:
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GAAP combined ratio
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100.0 | % | 95.9 | % | 99.0 | % | 94.8 | % | ||||||||
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Accident year combined ratio (2)
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99.0 | % | 100.2 | % | 99.0 | % | 99.7 | % | ||||||||
(1) The three months ended September 30, 2011 and 2010 include unfavorable development of $2,001 and favorable development of $7,263, respectively. The nine months ended September 30, 2011 and 2010 include favorable development of $366 and $23,732, respectively.
(2) The accident year combined ratio is the sum of the expense ratio and accident year loss ratio. The accident year loss ratio measures loss and LAE occurring in a particular year, regardless of when they are reported and does not take into consideration changes in estimates in loss reserves from prior accident years.