DALLAS, June 29, 2020 (GLOBE NEWSWIRE) -- Hallmark Financial Services, Inc. ("Hallmark Financial") HALL today announced financial results for the fourth quarter and fiscal year ended December 31, 2019.
| Fourth Quarter | Fiscal Year | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| $ in millions: | (unaudited) | (unaudited) | ||||||||||
| Net Income | $ | (34.0 | ) | $ | (5.1 | ) | $ | (0.6 | ) | $ | 10.3 | |
| Operating (Loss) Earnings (1) | $ | (36.5 | ) | $ | 5.1 | $ | (16.9 | ) | $ | 18.4 | ||
| $ per diluted share: | ||||||||||||
| Net Income | $ | (1.87 | ) | $ | (0.28 | ) | $ | (0.03 | ) | $ | 0.57 | |
| Operating (Loss) Earnings (1) | $ | (2.01 | ) | $ | 0.28 | $ | (0.93 | ) | $ | 1.01 | ||
(1) See "Non-GAAP Financial Measures" below
Fourth Quarter 2019 Highlights (all comparisons to same prior year period):
- Gross premiums written increased 28% to $214.1 million
- Net premiums written increased 35% to $127.5 million
- Net combined ratio of 141.4% compared to 96.3%. Net unfavorable prior year loss reserve development of $53.1 million added 44.7 percentage points to the net combined ratio compared to $0.1 million of net favorable prior year loss reserve development having a negligible impact on the net combined ratio.
- Net loss of $34.0 million, or $1.87 per diluted share, compared to a net loss of $5.1 million, or $0.28 per diluted share
- Operating loss of $36.5 million, or $2.01 per diluted share, compared to operating earnings of $5.1 million, or $0.28 per diluted share (see "Non-GAAP Financial Measures" below)
- Net investment gains of $3.2 million compared to net investment losses of $12.9 million
Fiscal 2019 Highlights (all comparisons to same prior year period):
- Gross premiums written increased 27% to $843.8 million
- Net premiums written increased 36% to $496.6 million
- Net combined ratio of 108.0% compared to 97.1%. Net unfavorable prior year loss reserve development of $60.9 million added 13.9 percentage points to the net combined ratio compared to $6.0 million adding 1.6 percentage points to the net combined ratio.
- Net loss of $0.6 million, or $0.03 per diluted share, compared to net income of $10.3 million, or $0.57 per diluted share
- Operating loss of $16.9 million, or $0.93 per diluted share, compared to operating earnings of $18.4 million, or $1.01 per diluted share (see "Non-GAAP Financial Measures" below)
- Net investment gains of $20.6 million, including $4.5 million in net realized gains and a $16.1 million increase in net unrealized gains, compared to net investment losses of $10.2 million, which included $1.8 million in net realized gains and $12.0 million in net unrealized losses
- Operating cash inflow of $27.7 million compared to operating cash outflow of $32.9 million
- Book value per share grew 2% to $14.53
| Fourth Quarter | Fiscal Year | ||||||||||||||||
| 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||
| ($ in thousands) | (unaudited) | (unaudited) | |||||||||||||||
| Gross premiums written | 214,101 | 167,179 | 28 | % | 843,831 | 663,015 | 27 | % | |||||||||
| Net premiums written | 127,533 | 94,507 | 35 | % | 496,552 | 363,798 | 36 | % | |||||||||
| Net premiums earned | 118,849 | 91,300 | 30 | % | 436,877 | 363,087 | 20 | % | |||||||||
| Investment income, net of expenses | 5,031 | 4,526 | 11 | % | 20,604 | 18,232 | 13 | % | |||||||||
| Investment gains (losses), net | 3,206 | (12,873 | ) | 125 | % | 20,618 | (10,195 | ) | 302 | % | |||||||
| Net (loss) income | (33,966 | ) | (5,075 | ) | -569 | % | (625 | ) | 10,347 | -106 | % | ||||||
| Operating (loss) earnings (1) | (36,499 | ) | 5,095 | -816 | % | (16,913 | ) | 18,401 | -192 | % | |||||||
| Net (loss) income per share - basic | $ | (1.87 | ) | $ | (0.28 | ) | -568 | % | $ | (0.03 | ) | $ | 0.57 | -105 | % | ||
| Net (loss) income per share - diluted | $ | (1.87 | ) | $ | (0.28 | ) | -568 | % | $ | (0.03 | ) | $ | 0.57 | -105 | % | ||
| Operating (loss) earnings per share - diluted (1) | $ | (2.01 | ) | $ | 0.28 | -818 | % | $ | (0.93 | ) | $ | 1.01 | -192 | % | |||
| Operating cash flow | 4,770 | (13,952 | ) | 134 | % | 27,670 | (32,935 | ) | 184 | % | |||||||
| Book value per share | $ | 14.53 | $ | 14.17 | 2 | % | |||||||||||
| Tangible book value per share (1) | $ | 11.82 | $ | 11.35 | 4 | % | |||||||||||
(1) See "Non-GAAP Financial Measures" below
Fourth Quarter and Fiscal 2019 Financial Review
Gross Premiums Written
During the three months and fiscal year ended December 31, 2019, Hallmark Financial's gross premiums written were $214.1 million and $843.8 million, respectively, representing an increase of 28% and 27%, respectively, from the $167.2 million and $663.0 million in gross premiums written for the same periods in 2018.
Net Premiums Written
During the three months and fiscal year ended December 31, 2019, Hallmark Financial's net premiums written were $127.5 million and $496.6 million, respectively, representing an increase of 35% and 36%, respectively, from the $94.5 million and $363.8 million in net premiums written for the same periods of 2018. The increase in net premiums written for the three months and fiscal year ended December 31, 2019 was due to premium growth in each of its Segments, as well as overall increased net retention of business.
Net Premiums Earned
Hallmark Financial's net premiums earned were $118.8 million and $436.9 million for the three months and fiscal year ended December 31, 2019, respectively, as compared to $91.3 million and $363.1 million for the same periods in 2018.
Investments
Hallmark Financial's fiscal year 2019 total investment income and gains on investments were $50.4 million, comprised of $20.6 million net investment income, $20.6 million net investment gains, and $9.2 million net unrealized holding gains reported in comprehensive income. The 2019 total portfolio return was 8.0%.
During the three months and fiscal year ended December 31, 2019, net investment income was $5.0 million and $20.6 million, respectively, representing an increase of 11% and 13% for the same periods of 2018.
At December 31, 2019 fixed-income securities were $574.3 million, with a tax equivalent book yield of 3.2% compared to 3.4% as of December 31, 2018. As of December 31, 2019, our fixed-income portfolio had an average modified duration of 1.5 years and 79% of the securities had remaining time to maturity of five years or less. As of December 31, 2019, 15% of our investment portfolio was invested in equity securities.
At December 31, 2019, total investments were $675.7 million, including net unrealized gains of $30.5 million. Cash and cash equivalents, including restricted cash were $54.9 million. Total investments, cash and cash equivalents, and restricted cash were $730.6 million or $40.31 per share.
Pre-Tax Income
Hallmark Financial had pre-tax loss of $43.1 million and $1.0 million for the three months and fiscal year ended December 31, 2019, respectively, as compared to a pre-tax loss of $6.5 million and pre-tax income of $12.8 million reported during the same periods in 2018.
The decline in pre-tax results for the three months and fiscal year ended December 31, 2019 was predominately driven by adverse prior year loss reserve development, partially offset by increased revenue from higher net premiums earned, net investment income and finance charges, as well as investment gains compared to investment losses reported for the same periods in 2018.
Loss and Loss Adjustment Expenses ("LAE") and Net Combined Ratios
Increases in revenue were offset by increased losses and LAE for the three months and fiscal year ended December 31, 2019 of $75.8 million and $106.1 million, respectively, as compared to the prior year periods due primarily to unfavorable net prior year reserve development, as well as increased net premiums earned. Hallmark Financial reported $53.1 million and $60.9 million, respectively, of unfavorable net prior year loss reserve development during the three months and fiscal year ended December 31, 2019 as compared to favorable prior year loss reserve development of $0.1 million during the three months ended December 31, 2018 and unfavorable prior year loss reserve development of $6.0 million during the fiscal year ended December 31, 2018. The unfavorable net prior year loss reserve development for fiscal 2019 was primarily related to commercial auto claims incurred in the years 2016 and 2017.
Hallmark Financial had a net loss ratio of 118.1% and 82.9% for the three months and fiscal year ended December 31, 2019, respectively, as compared to 70.6% and 70.5% reported during the same periods in 2018. Catastrophe losses contributed 0.6% and 1.2% to the net loss ratios for the three months and fiscal year ended December 31, 2019, as compared to 5.1% and 2.6% for the same periods of the prior year.
The expense ratio was 23.3% and 25.1% for the three months and fiscal year ended December 31, 2019, respectively, as compared to 25.7% and 26.6% reported during the same periods in 2018. The Company reported a net combined ratio of 141.4% and 108.0% for the three months and fiscal year ended December 31, 2019, compared to 96.3% and 97.1% during the same periods in 2018.
Net Income
Hallmark Financial reported a net loss of $34.0 million and $0.6 million for the three months and fiscal year ended December 31, 2019 as compared to a net loss of $5.1 million and net income of $10.3 million for the three months and fiscal year ended December 31, 2018.
On a diluted basis per share, the Company reported a net loss of $1.87 per share and $0.03 per share for the three months and fiscal year ended December 31, 2019 as compared to a net loss of $0.28 per share and net income of $0.57 per share for the three months and fiscal year ended December 31, 2018.
Hallmark Financial expects to file its first quarter 2020 Form 10-Q within the next few weeks and to timely file its second quarter 2020 Form 10-Q.
Non-GAAP Financial Measures
The Company's financial statements are prepared in accordance with United States generally accepted accounting principles ("GAAP"). However, the Company also presents and discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for planning and budgeting purposes. However, these non-GAAP financial measures should not be viewed as an alternative or substitute for the results reflected in the Company's GAAP financial statements. In addition, the Company's definitions of these items may not be comparable to the definitions used by other companies.
Operating earnings and operating earnings per share are calculated by excluding net investment gains and losses from GAAP net income. Management believes that operating earnings and operating earnings per share provide useful information to investors about the performance of and underlying trends in the Company's core insurance operations. Net income and net income per share are the GAAP measures that are most directly comparable to operating earnings and operating earnings per share. A reconciliation of operating earnings and operating earnings per share to the most comparable GAAP financial measures is presented below.
| Weighted | |||||||||||||
| Income | Less Tax | Net | Average | Diluted | |||||||||
| ($ in thousands) | Before Tax | Effect | After Tax | Shares Diluted | Per Share | ||||||||
| Fourth Quarter 2019 | |||||||||||||
| Reported GAAP measures (unaudited) | $ | (43,094 | ) | $ | (9,128 | ) | $ | (33,966 | ) | 18,123 | $ | (1.87 | ) |
| Excluded investment (gains)/losses | $ | (3,206 | ) | $ | (673 | ) | $ | (2,533 | ) | 18,123 | $ | (0.14 | ) |
| Operating earnings | $ | (46,300 | ) | $ | (9,801 | ) | $ | (36,499 | ) | 18,123 | $ | (2.01 | ) |
| Fourth Quarter 2018 | |||||||||||||
| Reported GAAP measures (unaudited) | $ | (6,453 | ) | $ | (1,378 | ) | $ | (5,075 | ) | 18,055 | $ | (0.28 | ) |
| Excluded investment (gains)/losses | $ | 12,873 | $ | 2,703 | $ | 10,170 | 18,198 | $ | 0.56 | ||||
| Operating earnings | $ | 6,420 | $ | 1,325 | $ | 5,095 | 18,198 | $ | 0.28 | ||||
| Fiscal 2019 | |||||||||||||
| Reported GAAP measures | $ | (1,032 | ) | $ | (407 | ) | $ | (625 | ) | 18,107 | $ | (0.03 | ) |
| Excluded investment (gains)/losses | $ | (20,618 | ) | $ | (4,330 | ) | $ | (16,288 | ) | 18,107 | $ | (0.90 | ) |
| Operating earnings | $ | (21,650 | ) | $ | (4,737 | ) | $ | (16,913 | ) | 18,107 | $ | (0.93 | ) |
| Fiscal 2018 | |||||||||||||
| Reported GAAP measures | $ | 12,803 | $ | 2,456 | $ | 10,347 | 18,201 | $ | 0.57 | ||||
| Excluded investment (gains)/losses | $ | 10,195 | $ | 2,141 | $ | 8,054 | 18,201 | $ | 0.44 | ||||
| Operating earnings | $ | 22,998 | $ | 4,597 | $ | 18,401 | 18,201 | $ | 1.01 | ||||
Tangible book value per share is calculated by dividing tangible stockholders' equity by common shares outstanding. Tangible stockholders' equity is calculated by excluding goodwill, net intangible assets and related deferred tax liabilities from GAAP stockholders' equity. Management believes that tangible book value per share provides useful information to investors about the Company's per share equity value exclusive of goodwill and net intangible assets from prior acquisitions. Stockholders' equity is the GAAP measure that is most directly comparable to tangible stockholder's equity. A reconciliation of tangible stockholders' equity and tangible book value per share to the most comparable GAAP financial measures is presented below.
| As of December 31, | ||||||
| (amounts in thousands, except per share) | 2019 | 2018 | ||||
| Reported GAAP stockholders' equity | $ | 263,282 | $ | 255,532 | ||
| Excluded: | ||||||
| Goodwill | (44,695 | ) | (44,695 | ) | ||
| Intangible assets, net | (5,087 | ) | (7,555 | ) | ||
| Deferred tax liability related to | ||||||
| intangible assets, net | 795 | 1,314 | ||||
| Tangible stockholders' equity | 214,295 | 204,596 | ||||
| Common shares outstanding | 18,123 | 18,027 | ||||
| Tangible book value per share | $ | 11.82 | $ | 11.35 | ||
About Hallmark Financial
Hallmark Financial is a specialty property and casualty insurance holding company with a diversified portfolio of insurance products written on a national platform. With six insurance subsidiaries and offices in Dallas/Fort Worth, San Antonio, Chicago, Jersey City and Atlanta, Hallmark Financial markets, underwrites and services approximately $800 million annually in commercial and personal insurance premiums in select markets. Hallmark Financial is headquartered in Dallas, Texas and its common stock is listed on NASDAQ under the symbol "HALL."
Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, interest rate trends, general economic conditions, the availability of financing, underwriting loss experience and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
For further information, please contact:
Mr. David Webb, Senior Vice President of Corporate Development at 817.348.1600
www.hallmarkgrp.com
| Hallmark Financial Services, Inc. and Subsidiaries | ||||||
| Consolidated Balance Sheets | ||||||
| ($ in thousands, except par value) | Dec. 31 | Dec. 31 | ||||
| ASSETS | 2019 | 2018 | ||||
| Investments: | ||||||
| Debt securities, available-for-sale, at fair value (amortized cost: $569,498 in 2019 and $550,268 in 2018) | $ | 574,279 | $ | 545,870 | ||
| Equity securities (cost: $71,895 in 2019 and $68,709 in 2018) | 99,215 | 80,896 | ||||
| Other investment (cost: $3,763 in 2019 and $3,763 in 2018) | 2,169 | 1,148 | ||||
| Total investments | 675,663 | 627,914 | ||||
| Cash and cash equivalents | 53,336 | 35,594 | ||||
| Restricted cash | 1,612 | 4,877 | ||||
| Ceded unearned premiums | 164,221 | 133,031 | ||||
| Premiums receivable | 148,288 | 119,778 | ||||
| Accounts receivable | 4,286 | 1,619 | ||||
| Receivable for securities | 12,581 | 3,369 | ||||
| Reinsurance recoverable | 315,466 | 252,029 | ||||
| Deferred policy acquisition costs | 22,994 | 14,291 | ||||
| Goodwill | 44,695 | 44,695 | ||||
| Intangible assets, net | 5,087 | 7,555 | ||||
| Federal income tax recoverable | 8,995 | - | ||||
| Deferred federal income taxes, net | 2,185 | 4,983 | ||||
| Prepaid expenses | 2,603 | 2,588 | ||||
| Other assets | 33,262 | 12,571 | ||||
| Total Assets | $ | 1,495,274 | $ | 1,264,894 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Liabilities: | ||||||
| Senior unsecured notes due 2029 (less unamortized debt issuance cost of $942 in 2019) | $ | 49,058 | $ | - | ||
| Revolving credit facility payable | - | 30,000 | ||||
| Subordinated debt securities (less unamortized debt issuance cost of $846 in 2019 and $898 in 2018) | 55,856 | 55,804 | ||||
| Reserves for unpaid losses and loss adjustment expenses | 620,355 | 527,247 | ||||
| Unearned premiums | 388,926 | 298,061 | ||||
| Reinsurance balances payable | 59,274 | 67,328 | ||||
| Current federal income tax payable | - | 4 | ||||
| Pension liability | 1,388 | 2,018 | ||||
| Payable for securities | 1,648 | 698 | ||||
| Accounts payable and other accrued expenses | 55,487 | 28,202 | ||||
| Total Liabilities | 1,231,992 | 1,009,362 | ||||
| Commitments and contingencies | ||||||
| Stockholders' equity: | ||||||
| Common stock, $.18 par value, authorized 33,333,333 shares; issued 20,872,831 shares in 2019 and 2018 | 3,757 | 3,757 | ||||
| Additional paid-in capital | 123,468 | 123,168 | ||||
| Retained earnings | 160,570 | 161,195 | ||||
| Accumulated other comprehensive income (loss) | 688 | (6,660 | ) | |||
| Treasury stock (2,749,738 shares in 2019 and 2,846,131 shares in 2018), at cost | (25,201 | ) | (25,928 | ) | ||
| Total Stockholders' Equity | 263,282 | 255,532 | ||||
| Total Liabilities & Stockholders' Equity | $ | 1,495,274 | $ | 1,264,894 | ||
| Hallmark Financial Services, Inc. and Subsidiaries | |||||||||||||
| Consolidated Statements of Operations | Three Months Ended | Fiscal Year Ended | |||||||||||
| ($ in thousands, except per share amounts) | December 31, | December 31, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||
| (unaudited) | (unaudited) | ||||||||||||
| Gross premiums written | $ | 214,101 | $ | 167,179 | $ | 843,831 | $ | 663,015 | |||||
| Ceded premiums written | (86,568 | ) | (72,672 | ) | (347,279 | ) | (299,217 | ) | |||||
| Net premiums written | 127,533 | 94,507 | 496,552 | 363,798 | |||||||||
| Change in unearned premiums | (8,684 | ) | (3,207 | ) | (59,675 | ) | (711 | ) | |||||
| Net premiums earned | 118,849 | 91,300 | 436,877 | 363,087 | |||||||||
| Investment income, net of expenses | 5,031 | 4,526 | 20,604 | 18,232 | |||||||||
| Investment gains (losses), net | 3,206 | (12,873 | ) | 20,618 | (10,195 | ) | |||||||
| Finance charges | 1,717 | 1,567 | 7,026 | 5,115 | |||||||||
| Commission and fees | 246 | 324 | 1,190 | 2,928 | |||||||||
| Other income | 13 | 12 | 56 | 101 | |||||||||
| Total revenues | 129,062 | 84,856 | 486,371 | 379,268 | |||||||||
| Losses and loss adjustment expenses | 140,304 | 64,460 | 362,165 | 256,028 | |||||||||
| Operating expenses | 29,704 | 25,022 | 117,360 | 103,424 | |||||||||
| Interest expense | 1,531 | 1,210 | 5,410 | 4,545 | |||||||||
| Amortization of intangible assets | 617 | 617 | 2,468 | 2,468 | |||||||||
| Total expenses | 172,156 | 91,309 | 487,403 | 366,465 | |||||||||
| Income before tax | (43,094 | ) | (6,453 | ) | (1,032 | ) | 12,803 | ||||||
| Income tax expense | (9,128 | ) | (1,378 | ) | (407 | ) | 2,456 | ||||||
| Net income | $ | (33,966 | ) | $ | (5,075 | ) | $ | (625 | ) | $ | 10,347 | ||
| Net income per share: | |||||||||||||
| Basic | $ | (1.87 | ) | $ | (0.28 | ) | $ | (0.03 | ) | $ | 0.57 | ||
| Diluted | $ | (1.87 | ) | $ | (0.28 | ) | $ | (0.03 | ) | $ | 0.57 | ||
| Hallmark Financial Services, Inc. and Subsidiaries | ||||||||||||||||||||||||||||||
| Consolidated Segment Data | ||||||||||||||||||||||||||||||
| Three Months Ended Dec. 31 | ||||||||||||||||||||||||||||||
| Specialty Commercial Segment | Standard Commercial Segment | Personal Segment | Corporate | Consolidated | ||||||||||||||||||||||||||
| ($ in thousands, unaudited) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
| Gross premiums written | $ | 169,879 | $ | 125,315 | $ | 21,719 | $ | 20,190 | $ | 22,503 | $ | 21,674 | $ | - | $ | - | $ | 214,101 | $ | 167,179 | ||||||||||
| Ceded premiums written | (76,766 | ) | (60,930 | ) | (6,666 | ) | (9,301 | ) | (3,136 | ) | (2,441 | ) | - | - | (86,568 | ) | (72,672 | ) | ||||||||||||
| Net premiums written | 93,113 | 64,385 | 15,053 | 10,889 | 19,367 | 19,233 | - | - | 127,533 | 94,507 | ||||||||||||||||||||
| Change in unearned premiums | (10,350 | ) | (2,616 | ) | 108 | 6,747 | 1,558 | (7,338 | ) | - | - | (8,684 | ) | (3,207 | ) | |||||||||||||||
| Net premiums earned | 82,763 | 61,769 | 15,161 | 17,636 | 20,925 | 11,895 | - | - | 118,849 | 91,300 | ||||||||||||||||||||
| Total revenues | 86,719 | 66,776 | 16,152 | 18,569 | 22,683 | 13,732 | 3,508 | (14,221 | ) | 129,062 | 84,856 | |||||||||||||||||||
| Losses and loss adjustment expenses | 104,351 | 46,267 | 16,339 | 10,834 | 19,614 | 7,359 | - | - | 140,304 | 64,460 | ||||||||||||||||||||
| Pre-tax income (loss) | (34,532 | ) | 7,800 | (4,467 | ) | 1,851 | (2,847 | ) | 2,400 | (1,248 | ) | (18,504 | ) | (43,094 | ) | (6,453 | ) | |||||||||||||
| Net loss ratio (1) | 126.1 | % | 74.9 | % | 107.8 | % | 61.4 | % | 93.7 | % | 61.9 | % | 118.1 | % | 70.6 | % | ||||||||||||||
| Net expense ratio (1) | 21.1 | % | 21.9 | % | 28.5 | % | 33.7 | % | 21.2 | % | 21.3 | % | 23.3 | % | 25.7 | % | ||||||||||||||
| Net combined ratio (1) | 147.2 | % | 96.8 | % | 136.3 | % | 95.1 | % | 114.9 | % | 83.2 | % | 141.4 | % | 96.3 | % | ||||||||||||||
| Favorable (Unfavorable) Prior Year Development | (48,906 | ) | (727 | ) | (4,234 | ) | 164 | 21 | 672 | - | - | (53,119 | ) | 109 | ||||||||||||||||
(1) The net loss ratio is calculated as incurred losses and loss adjustment expenses divided by net premiums earned, each determined in accordance with GAAP. The net expense ratio is calculated as total underwriting expenses offset by agency fee income divided by net premiums earned, each determined in accordance with GAAP. The net combined ratio is calculated as the sum of the net loss ratio and the net expense ratio.
| Hallmark Financial Services, Inc. and Subsidiaries | |||||||||||||||||||||||||||||
| Consolidated Segment Data | |||||||||||||||||||||||||||||
| Fiscal Year Ended Dec. 31 | |||||||||||||||||||||||||||||
| Specialty Commercial Segment | Standard Commercial Segment | Personal Segment | Corporate | Consolidated | |||||||||||||||||||||||||
| ($ in thousands) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
| Gross premiums written | $ | 651,913 | $ | 501,806 | $ | 92,645 | $ | 86,121 | $ | 99,273 | $ | 75,088 | $ | - | $ | - | $ | 843,831 | $ | 663,015 | |||||||||
| Ceded premiums written | (301,866 | ) | (250,075 | ) | (29,753 | ) | (16,899 | ) | (15,660 | ) | (32,243 | ) | - | - | (347,279 | ) | (299,217 | ) | |||||||||||
| Net premiums written | 350,047 | 251,731 | 62,892 | 69,222 | 83,613 | 42,845 | - | - | 496,552 | 363,798 | |||||||||||||||||||
| Change in unearned premiums | (57,459 | ) | 6,455 | 1,078 | 3,099 | (3,294 | ) | (10,265 | ) | - | - | (59,675 | ) | (711 | ) | ||||||||||||||
| Net premiums earned | 292,588 | 258,186 | 63,970 | 72,321 | 80,319 | 32,580 | - | - | 436,877 | 363,087 | |||||||||||||||||||
| Total revenues | 309,619 | 280,283 | 68,179 | 76,548 | 88,225 | 38,623 | 20,348 | (16,186 | ) | 486,371 | 379,268 | ||||||||||||||||||
| Losses and loss adjustment expenses | 248,781 | 194,268 | 50,036 | 39,396 | 63,348 | 22,364 | - | - | 362,165 | 256,028 | |||||||||||||||||||
| Pre-tax income (loss) | (1,371 | ) | 28,780 | (841 | ) | 13,090 | 427 | 3,061 | 753 | (32,128 | ) | (1,032 | ) | 12,803 | |||||||||||||||
| Net loss ratio (1) | 85.0 | % | 75.2 | % | 78.2 | % | 54.5 | % | 78.9 | % | 68.6 | % | 82.9 | % | 70.5 | % | |||||||||||||
| Net expense ratio (1) | 21.8 | % | 22.6 | % | 30.0 | % | 33.5 | % | 22.7 | % | 26.3 | % | 25.1 | % | 26.6 | % | |||||||||||||
| Net combined ratio (1) | 106.8 | % | 97.8 | % | 108.2 | % | 88.0 | % | 101.6 | % | 94.9 | % | 108.0 | % | 97.1 | % | |||||||||||||
| Net Favorable (Unfavorable) Prior Year Development | (60,138 | ) | (16,457 | ) | (726 | ) | 8,993 | (36 | ) | 1,511 | - | - | (60,900 | ) | (5,953 | ) | |||||||||||||
(1) The net loss ratio is calculated as incurred losses and loss adjustment expenses divided by net premiums earned, each determined in accordance with GAAP. The net expense ratio is calculated as total underwriting expenses offset by agency fee income divided by net premiums earned, each determined in accordance with GAAP. The net combined ratio is calculated as the sum of the net loss ratio and the net expense ratio.
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