Specialty Underwriters’ Alliance Unveils Q2 Report
Specialty Underwriters’ Alliance Inc. has reported a net loss of $4.0 million for the quarter ended June 30, 2005.
Total revenues were $4.0 million, comprised of earned insurance premiums of $3.0 million and investment income of $1.0 million. The company had no comparable revenues in the second quarter of
2004. Gross written premiums were $25.0 million. During the second quarter, the company breakdown of premium by Partner Agent was the following: Risk Transfer Holdings Inc. – $17.7 million from 18 professional employer organization accounts; AEON Insurance Group Inc. – $1.9 million from 90 policies; American Team Managers – $5.4 million from 541 policies.
Total expenses were $8.1 million, $2.3 million related to insured losses and loss adjustment expenses and $5.8 million of acquisition costs and general administrative and operating expenses. During the second quarter, general administrative expenses totaled $5.1 million, of which $2.2 million was service company fees with Syndicated Services Company Inc. Other major categories of expense included $1.6 million of salaries and benefit costs, $0.5 million of professional and consulting fees, $0.3 million of depreciation and amortization and $0.5 million of other expenses.
Courtney Smith, president and chief executive officer stated, “Since we effectively began booking business in March, this was our first full quarter of generating insurance premiums in our business lines. We expected to write a higher premium volume. However, our lower than expected writings were the result of various issues. The flow of business from our Partner Agents did not achieve the anticipated levels. Additionally, in some cases, we rejected business that did not meet our highly disciplined and selective approach in underwriting. We will only accept business that provides an opportunity to be
profitable.
“We expect that premium volume from our existing agents will continue to increase each subsequent quarter. While our business written through the second quarter was approximately 75 percent workers’ compensation, our longer term goal is to have a better balance between workers’ compensation, general liability and commercial auto. To that end, we have signed letters of intent with two additional Partner Agents specializing in general liability and
commercial auto for general and specialty contractors. We continue to seek new Partner Agents to increase our volume and further balance our book of business.”