EIHI » Topics » RESULTS OF OPERATIONS

This excerpt taken from the EIHI 10-Q filed May 7, 2009.

RESULTS OF OPERATIONS

The major components of consolidated revenue were as follows for the three months ended March 31, 2009 and 2008 (unaudited, in thousands):

 

     2009     2008  

Net premiums written

   $ 42,918     $ 43,821  
                

Net premiums earned

   $ 33,738     $ 33,003  

Net investment income

     1,945       2,565  

Change in equity interest in other long-term investments

     (167 )     49  

Net realized investment losses

     (1,599 )     (293 )

Other revenue

     239       216  
                

Consolidated revenue

   $ 34,156     $ 35,540  
                

The decrease in consolidated revenue primarily reflects a decrease in net investment income and an increase in net realized investment losses, partially offset by an increase in net premiums earned. The decrease in net investment income primarily reflects a lower invested asset base and a decline in short-term interest rates. Net realized investment losses include other-than-temporary impairments of $2.4 million for the three months ended March 31, 2009, compared to no impairments for the same period in 2008. The increase in net premiums earned primarily reflects the acquisition of ESHC, partially offset by a decline in net premiums earned in the group benefits insurance and run-off specialty reinsurance segments.

 

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The components of consolidated net (loss) income, by segment, for the three months ended March 31, 2009 and 2008 were as follows (unaudited, in thousands):

 

     2009     2008  

Workers’ compensation insurance

   $ 1,764     $ 2,994  

Segregated portfolio cell reinsurance

     —         —    

Group benefits insurance

     169       312  

Run-off specialty reinsurance

     (957 )     258  

Corporate/other

     (1,531 )     (990 )
                

Consolidated net (loss) income

   $ (555 )   $ 2,574  
                

The consolidated net loss for the three months ended March 31, 2009 primarily reflects the aforementioned investment impairments and the deferred tax asset valuation allowance of $678,000, as well as an increase in the consolidated combined ratio, from 93.8% in 2008 to 101.7% in 2009. The increase in the combined ratio primarily reflects a higher loss and LAE ratio in the workers’ compensation insurance and segregated portfolio cell reinsurance segments reflecting management’s expectation of the impact of the current economic environment on the Company’s book of business, and an increase in the group benefits insurance loss ratio due to the aforementioned competitive rate environment and claim severity in the life line of business. The decline in net investment income from 2008 to 2009 also contributed to the decrease in the Company’s consolidated results of operations.

These excerpts taken from the EIHI 10-K filed Mar 13, 2009.

RESULTS OF OPERATIONS

The major components of consolidated revenue were as follows for the years ended December 31, 2008 and 2007 (in thousands):

 

     2008     2007

Net premiums written

   $ 134,712     $ 131,889
              

Net premiums earned

   $ 135,807     $ 129,495

Net investment income

     9,631       11,669

Change in equity interest of other long-term investments

     (3,970 )     759

Net realized investment (losses) gains

     (11,117 )     2,888

Other revenue

     853       683
              

Consolidated revenue

   $ 131,204     $ 145,494
              

The decrease in consolidated revenue reflects the impact of net realized investment losses, primarily related to other-than-temporary impairments, a decline in the fair value of limited partnership investments and a reduction in net investment income due to a decline in the Company’s invested asset base. These declines in revenue were partially offset by an increase in net premiums earned, primarily in the workers’ compensation insurance segment.

The components of consolidated net (loss) income, by segment, for the years ended December 31, 2008 and 2007 were as follows (in thousands):

 

     2008     2007  

Workers’ compensation insurance

   $ 6,829     $ 17,118  

Segregated portfolio cell reinsurance

     —         —    

Group benefits insurance

     (1,156 )     4,777  

Run-off specialty reinsurance

     (18,673 )     (286 )

Corporate/other

     (4,383 )     (2,926 )
                

Consolidated net (loss) income

   $ (17,383 )   $ 18,683  
                

The consolidated net loss for the year ended December 31, 2008 primarily reflects the unfavorable loss reserve development and the unrecognized federal income tax benefits in the run-off specialty reinsurance segment, other-than-temporary investment impairments, and a decline in the fair value of limited partnership investments.

 

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RESULTS OF OPERATIONS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The major components of consolidated revenue were as follows for the years ended December 31, 2008 and 2007 (in thousands):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 














































































































   2008  2007

Net premiums written

  $134,712  $131,889
        

Net premiums earned

  $135,807  $129,495

Net investment income

   9,631   11,669

Change in equity interest of other long-term investments

   (3,970)  759

Net realized investment (losses) gains

   (11,117)  2,888

Other revenue

   853   683
        

Consolidated revenue

  $131,204  $145,494
        

The decrease in consolidated revenue reflects the impact of net realized investment losses,
primarily related to other-than-temporary impairments, a decline in the fair value of limited partnership investments and a reduction in net investment income due to a decline in the Company’s invested asset base. These declines in revenue were
partially offset by an increase in net premiums earned, primarily in the workers’ compensation insurance segment.

The components of
consolidated net (loss) income, by segment, for the years ended December 31, 2008 and 2007 were as follows (in thousands):

 






































































































   2008  2007 

Workers’ compensation insurance

  $6,829  $17,118 

Segregated portfolio cell reinsurance

   —     —   

Group benefits insurance

   (1,156)  4,777 

Run-off specialty reinsurance

   (18,673)  (286)

Corporate/other

   (4,383)  (2,926)
         

Consolidated net (loss) income

  $(17,383) $18,683 
         

The consolidated net loss for the year ended December 31, 2008 primarily reflects the
unfavorable loss reserve development and the unrecognized federal income tax benefits in the run-off specialty reinsurance segment, other-than-temporary investment impairments, and a decline in the fair value of limited partnership investments.

 


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RESULTS OF OPERATIONS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The major components of consolidated revenue were as follows for the years ended December 31, 2008 and 2007 (in thousands):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 














































































































   2008  2007

Net premiums written

  $134,712  $131,889
        

Net premiums earned

  $135,807  $129,495

Net investment income

   9,631   11,669

Change in equity interest of other long-term investments

   (3,970)  759

Net realized investment (losses) gains

   (11,117)  2,888

Other revenue

   853   683
        

Consolidated revenue

  $131,204  $145,494
        

The decrease in consolidated revenue reflects the impact of net realized investment losses,
primarily related to other-than-temporary impairments, a decline in the fair value of limited partnership investments and a reduction in net investment income due to a decline in the Company’s invested asset base. These declines in revenue were
partially offset by an increase in net premiums earned, primarily in the workers’ compensation insurance segment.

The components of
consolidated net (loss) income, by segment, for the years ended December 31, 2008 and 2007 were as follows (in thousands):

 






































































































   2008  2007 

Workers’ compensation insurance

  $6,829  $17,118 

Segregated portfolio cell reinsurance

   —     —   

Group benefits insurance

   (1,156)  4,777 

Run-off specialty reinsurance

   (18,673)  (286)

Corporate/other

   (4,383)  (2,926)
         

Consolidated net (loss) income

  $(17,383) $18,683 
         

The consolidated net loss for the year ended December 31, 2008 primarily reflects the
unfavorable loss reserve development and the unrecognized federal income tax benefits in the run-off specialty reinsurance segment, other-than-temporary investment impairments, and a decline in the fair value of limited partnership investments.

 


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RESULTS OF OPERATIONS

The major components of consolidated revenue were as follows for the years ended December 31, 2007 and 2006 (in thousands):

 

     2007    2006

Net premiums written

   $ 131,889    $ 67,529
             

Net premiums earned

   $ 129,495    $ 74,919

Net investment income

     11,669      8,678

Change in equity interest in other long-term investments

     759      314

Net realized investment gains

     2,888      2,757

Other revenue

     683      313
             

Consolidated revenue

   $ 145,494    $ 86,981
             

The increase in consolidated revenue primarily reflects the acquisition of EHC on June 16, 2006. The increase in net premiums earned also reflects the impact of new business, improved renewal retention, and renewal rate increases in the workers’ compensation insurance and group benefits insurance segments.

The components of consolidated net income, by segment, for the years ended December 31, 2007 and 2006 were as follows (in thousands):

 

     2007     2006  

Workers’ compensation insurance

   $ 17,118     $ 5,318  

Segregated portfolio cell reinsurance

     —         —    

Group benefits insurance

     4,777       4,587  

Run-off specialty reinsurance

     (286 )     (489 )

Corporate/other

     (2,926 )     (1,138 )
                

Consolidated net income

   $ 18,683     $ 8,278  
                

The increase in consolidated net income primarily reflects the acquisition of EHC on June 16, 2006. The increase in the net loss in the corporate/other segment primarily reflects stock compensation expense related to the Company’s stock compensation plan and ESOP of $2.4 million, and intangible asset amortization of $1.8 million for the year ended December 31, 2007, compared to stock compensation expense and intangible asset amortization of $525,000 and $1.1 million, respectively, for the year ended December 31, 2006.

 

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RESULTS OF OPERATIONS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The major components of consolidated revenue were as follows for the years ended December 31, 2007 and 2006 (in thousands):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


































































































   2007  2006

Net premiums written

  $131,889  $67,529
        

Net premiums earned

  $129,495  $74,919

Net investment income

   11,669   8,678

Change in equity interest in other long-term investments

   759   314

Net realized investment gains

   2,888   2,757

Other revenue

   683   313
        

Consolidated revenue

  $145,494  $86,981
        

The increase in consolidated revenue primarily reflects the acquisition of EHC on June 16,
2006. The increase in net premiums earned also reflects the impact of new business, improved renewal retention, and renewal rate increases in the workers’ compensation insurance and group benefits insurance segments.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The components of consolidated net income, by segment, for the years ended December 31, 2007 and 2006 were as follows (in thousands):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






































































































   2007  2006 

Workers’ compensation insurance

  $17,118  $5,318 

Segregated portfolio cell reinsurance

   —     —   

Group benefits insurance

   4,777   4,587 

Run-off specialty reinsurance

   (286)  (489)

Corporate/other

   (2,926)  (1,138)
         

Consolidated net income

  $18,683  $8,278 
         

The increase in consolidated net income primarily reflects the acquisition of EHC on June 16,
2006. The increase in the net loss in the corporate/other segment primarily reflects stock compensation expense related to the Company’s stock compensation plan and ESOP of $2.4 million, and intangible asset amortization of $1.8 million for the
year ended December 31, 2007, compared to stock compensation expense and intangible asset amortization of $525,000 and $1.1 million, respectively, for the year ended December 31, 2006.

STYLE="margin-top:0px;margin-bottom:0px"> 


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RESULTS OF OPERATIONS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The major components of consolidated revenue were as follows for the years ended December 31, 2007 and 2006 (in thousands):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


































































































   2007  2006

Net premiums written

  $131,889  $67,529
        

Net premiums earned

  $129,495  $74,919

Net investment income

   11,669   8,678

Change in equity interest in other long-term investments

   759   314

Net realized investment gains

   2,888   2,757

Other revenue

   683   313
        

Consolidated revenue

  $145,494  $86,981
        

The increase in consolidated revenue primarily reflects the acquisition of EHC on June 16,
2006. The increase in net premiums earned also reflects the impact of new business, improved renewal retention, and renewal rate increases in the workers’ compensation insurance and group benefits insurance segments.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The components of consolidated net income, by segment, for the years ended December 31, 2007 and 2006 were as follows (in thousands):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






































































































   2007  2006 

Workers’ compensation insurance

  $17,118  $5,318 

Segregated portfolio cell reinsurance

   —     —   

Group benefits insurance

   4,777   4,587 

Run-off specialty reinsurance

   (286)  (489)

Corporate/other

   (2,926)  (1,138)
         

Consolidated net income

  $18,683  $8,278 
         

The increase in consolidated net income primarily reflects the acquisition of EHC on June 16,
2006. The increase in the net loss in the corporate/other segment primarily reflects stock compensation expense related to the Company’s stock compensation plan and ESOP of $2.4 million, and intangible asset amortization of $1.8 million for the
year ended December 31, 2007, compared to stock compensation expense and intangible asset amortization of $525,000 and $1.1 million, respectively, for the year ended December 31, 2006.

STYLE="margin-top:0px;margin-bottom:0px"> 


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