Financial ‘storm’ dampens United Insurance
United Insurance Holding Corp. said state mandates and reinsurance rate hikes pulled down earnings in the fourth quarter and full year of 2009.
For the fourth quarter, United Insurance reported a net loss of $1.2 million, or 11 cents a share, compared with net income of $6.8 million, or 65 cents a share, during the fourth quarter of 2008. Revenue in the just-ended quarter was $19.5 million, compared with $22.7 million in the year-ago period.
For the full year ended Dec. 31, United Insurance had net income of $4.1 million, or 38 cents a share, compared with net income of $33.4 million, or $3.08 a share, during 2008. Total revenue for 2009 was $88.5 million, down 12.5 percent from revenue of $101.1 million in 2008.
“While the state of Florida did not sustain a hurricane in 2009, we were dealt a perfect storm,” Don Cronin, chief executive, said in a release. He cited a combination of factors that hurt the company, including wind-mitigation credits mandated by the state, a change in the Florida Hurricane Catastrophe Fund that required the purchase of additional private reinsurance, an overall increase in reinsurance rates and lower investment returns no fax cash advance.
To offset the added costs, United Insurance, a homeowners insurance firm, filed for and received two rate hikes. One increase, averaging 12.7 percent, took effect in September and a second rate hike averaging 14 percent took effect March 15.
United Insurance also slowed the writing of new policies in the second half of 2009 to control risk exposures.
As a result of the moves, margins should improve this year, Cronin said in the release.
United Insurance (OTCBB: UIHC), based in St. Petersburg, is the parent company of United Property & Casualty Insurance Co.
Filed under: money by Forest