CRM Holdings, Ltd. Announces Third Quarter Results

http://www.businesswire.com/news/home/20091105005455/en

HAMILTON, Bermuda--(Business Wire)--
CRM Holdings, Ltd. ("CRM" or "the Company") (Nasdaq: CRMH), a provider of a full
range of products and services for the workers' compensation insurance industry,
today announced results for the third quarter ended September 30, 2009.

Three Months Ended September 30, 2009

In the third quarter of 2009, the Company incurred a net loss from continuing
operations of $15.7 million, or $(0.93) per diluted share. In the same quarter
of the prior year, the Company incurred a net loss from continuing operations of
$2.9 million, or $(0.18) per diluted share. Unless otherwise stated, all further
results discussed in this release refer to continuing operations for 2009 and
results on a comparable basis for 2008.

The net loss includes a non-cash valuation allowance of $11.3 million, or
($0.72) per diluted share, with respect to the Company`s net deferred tax
assets, representing an allowance of the full amount of that asset. This relates
future tax deductions in the Company's domestic operations (including tax loss
carry-forwards) and arises because the Company re-evaluated the realizability of
the asset in light of the decline in the Company`s domestic taxable income. The
tax loss carry-forward remains available to offset taxes over the next 20 years.

Total revenues in the third quarter of 2009 were $21.8 million, compared to
$29.2 million in the same quarter of the prior year. The Company enjoyed higher
rates on policy renewals and growth in the number of policies written in its
major market of California. However, three principal items more than offset
these gains, resulting in an overall decline in revenue. First, underwriting
actions taken on business written by the company`s primary insurance subsidiary,
Majestic Insurance Company ("Majestic"), reduced business in New York by $2.8
million. Second, the execution of quota share treaties between Majestic and
third party reinsurers resulted in Majestic ceding 47% of earned premiums
effective July 1, 2009, as compared to Majestic ceding 40% under a quota share
treaty that was in place in the third quarter of 2008. The increase in ceded
premiums accounted for approximately $2.3 million of reduced net premiums earned
by Majestic. Finally, prior year loss sensitive reinsurance treaties required
the accrual of additional premiums payable ("reinstatement premiums") of $3.1
million.

Investment income during the quarter increased to $3.5 million from $2.9 million
in the third quarter of 2008. Excluding the benefits of realized capital gains,
interest income earned was relatively unchanged from 2008.

Total underwriting expenses for the third quarter declined to $20.9 million from
$23.8 million a year ago. Loss and loss adjustment expenses were reduced due to
the 47%ceded quota share treaties that commenced on July 1, 2009, as compared to
the 40% ceded party quota share treaty that was in place in third quarter of
2008. For the third quarter of 2009, the Company`s overall loss ratio was 99.2%
and the overall combined ratio was 142.1%, as compared to an overall loss ratio
of 81.0% and an overall combined ratio of 124.2% for the third quarter of 2008.

Book value per share on a diluted basis decreased by $1.56 to $5.04 at September
30, 2009, from $6.60 per diluted share at December 31, 2008.

"Our results for the third quarter were below our expectations, mainly due to
the impact of adjustments originating in prior periods. Even as the market
continues to be competitive, we are seeing a strong flow of business
opportunities in California where our reputation for outstanding levels of
service in loss control and claims continues to provide a distinct competitive
advantage. We are focusing on other territories where improvement is needed, and
we remain confident our results will return to acceptable levels as we move
forward," said James J. Scardino, Chief Executive Officer.

Primary Insurance

During the quarter, Majestic experienced a decline in revenues compared to the
same quarter of 2008. Net earned premiums for the quarter ended September 30,
2009, were $14.1 million, compared to $20.5 million in the same quarter a year
ago, largely as a result of underwriting actions taken on the Company`s New York
primary insurance business, the 47% ceded quota share treaties, and the
reinstatement premiums discussed previously. These effects were partly offset by
higher rates on renewing business and growth in the number of policies written
in California.

The loss ratio for the 2009 third quarter of 112.4% was increased due to the
effects of reinstatement premiums and $1.4 million of prior year development.
Excluding those items, the loss ratio for third quarter of 2009 was 80.6%.

Majestic`s underwriting loss was $8.2 million for the quarter ended September
30, 2009, compared to an underwriting loss of $6.9 million a year ago. This
increase was principally due to the reinstatement premiums and unfavorable loss
reserve development, somewhat offset by reduced underwriting expenses.

Despite declining payroll and deliberate underwriting actions in New York,
Majestic`s submissions and premium written remained robust. As of September 30,
2009, in-force premiums from primary insurance policies at Majestic were $152.0
million, compared with $154.3 million at the same time last year.

Reinsurance

The Company`s reinsurance segment, Twin Bridges, generated $3.2 million of net
earned premiums in the third quarter of 2009, down from $4.0 million in the
third quarter of the prior year. The reduction was principally due to a decrease
in the volume of reinsurance premiums earned on excess insurance policies issued
to the self-insured groups managed by the Company`s fee-based business segment.
The underwriting profit of $0.9 million for the quarter was essentially
unchanged from the same quarter of 2008. Losses and loss adjustment expenses
were 41.3% of net premiums earned for the three months ended September 30, 2009,
compared to 46.9% of net premiums earned for the same three months in 2008. Twin
Bridges` combined ratio for the quarter was 70.9%, compared to 76.5% a year ago.

Fee-based Business

Fee-based management services revenues were $1.1 million for the third quarter
of 2009, compared to $2.0 million in the third quarter of 2008. The reduction
reflected a decline in insured payroll in the self-insured groups managed by the
Company and a reduction of the number of groups from 5 in the third quarter of
2008 to 2 in the third quarter of 2009. Effective January 1, 2010, the
Contractors Access Program self-insured group will terminate active operations
and the Company will have one self-insured group under management going forward.
The continuing fee-based management services operations, which are now focused
solely on the California market, produced a pre-tax operating loss of $15
thousand, compared to pre-tax operating income of $0.5 million in the same
quarter of 2008.

Nine Months Ended September 30, 2009

For the first nine months of 2009, the Company`s net loss from continuing
operations was $25.9 million, or ($1.55) per diluted share, compared to net
income from continuing operations of $8.3 million, or $0.50 per diluted share,
in 2008. The major factors contributing to the swing in profits were the
establishment of a tax valuation allowance, a decrease in net earned premiums,
which includes the reinstatement premiums incurred in the third quarter of 2009,
favorable loss reserve development in 2008 as compared to unfavorable
development in 2009 and severance expense related to the former co-CEOs incurred
in the first quarter of 2009. As a result of these changes, during the first
nine months of 2009, the combined ratio for the primary insurance segment was
130.9%, compared to 99.7% in 2008. The combined ratio for the reinsurance
segment was 104.0%, compared to 76.6% a year ago.

Investment Portfolio

At September 30, 2009, the Company had no exposure to equities, collateralized
debt obligations or collateralized mortgage obligations. The overall credit
rating of Majestic`s fixed income portfolio was AA+. The following tables
illustrate Majestic`s investment portfolio distribution by sector and average
credit rating.

Portfolio Distribution by Sector Portfolio Distribution by Credit Rating

9/30/2009 12/31/2008 9/30/2009 12/31/2008
Average Average
% of Credit % of Credit
Portfolio Rating Portfolio Rating
Credit Quality
Government 22.1% AAA 17.1% AAA
Agency 5.2% AAA 7.4% AAA AAA 50.8% 58.7%
Corporate 25.3% A+ 16.5% A+ AA 26.2% 23.3%
Mortgage backed securities 16.6% AAA 20.4% A A 20.9% 14.7%
Asset backed securities 3.0% AA+ 2.8% AAA BBB 1.9% 3.3%
Municipal 27.8% AA 35.8% AA Below BBB 0.2% 0.0%
Total 100.0% AA+ 100.0% AA+ Average credit rating AA+ AA+

The effective portfolio duration was 3.4 years, and the average portfolio yield
was 3.7%. Net unrealized gains in the portfolio increased by $4.4 million from
$5.0 million at December 31, 2008 to $9.4 million at September, 30, 2009.

Conference Call

The Company will host a conference call at 9:00 a.m. ET on Thursday, November 5,
2009, to discuss earnings for the third quarter ended September 30, 2009. To
participate in the event by telephone, please dial 877-795-3610 five to 10
minutes prior to the start time (to allow time for registration) and reference
passcode 3485848. International callers should dial 719-325-4833. The conference
call will be broadcast live over the Internet and can be accessed by all
interested parties at CRM`s Web site at http://www.CRMHoldingsLtd.bm/events.cfm.
To listen to the call please go to this Web site at least 15 minutes prior to
the start of the call to register, download, and install any necessary audio
software. For those unable to participate during the live webcast, an audio
replay of the conference call will be archived for 90 days on CRM`s Web site at
http://www.CRMHoldingsLtd.bm/events.cfm. A digital replay of the call will also
be available on Thursday, November 5, at approximately 11:00 a.m. ET through
Wednesday, November 11, at midnight ET. Dial 888-203-1112 and enter the
conference ID number 3485848. International callers should dial 719-457-0820 and
enter the same conference ID number.

About CRM Holdings, Ltd.

CRM Holdings, Ltd. is a provider of workers` compensation insurance products.
Its main business activities include underwriting primary workers` compensation
insurance policies, underwriting workers` compensation reinsurance and excess
insurance policies, and providing fee-based management and other services to
self-insured entities. The Company provides primary workers` compensation
insurance to employers in California, Arizona, Florida, Nevada, New Jersey, New
York, and other states. The Company reinsures some of the primary business
underwritten and provides excess workers` compensation coverage for self-insured
organizations. CRM is also a provider of fee-based management services to
self-insured groups in California. Further information can be found on the CRM
Web site at www.CRMHoldingsLtd.bm.

CRMH-E

Forward-Looking statements

This press release contains forward-looking statements within the meaning of
federal securities law, including statements concerning plans, objectives,
goals, strategies, projections of future events or performance and underlying
assumptions (many of which are based, in turn, upon further assumptions). These
statements are based on our current expectations and projections about future
events and are identified by terminology such as "may," "will," "should,"
"expect," "scheduled," "plan," "seek," "intend," "anticipate," "believe,"
"estimate," "aim," "potential," or "continue" or the negative of those terms or
other comparable terminology.

All forward-looking statements involve risks and uncertainties. Although the
Company believes that its plans, intentions and expectations are reasonable, the
Company may not achieve such plans, intentions or expectations. There are or may
be important factors that could cause actual results to differ materially from
the forward-looking statements the Company makes in this document.Such risks and
uncertainties are discussed in the Company's Form 10-K for the year ended
December 31, 2008 and in other documents filed by the Company with the
Securities and Exchange Commission. The Company believes that these factors
include, but are not limited to the following:

* The cyclical nature of the insurance and reinsurance industry;
* Premium rates;
* Investment results;
* Legislative and regulatory changes;
* The estimation of loss reserves and loss reserve development;
* Reinsurance may be unavailable on acceptable terms, and we may be unable to
collect reinsurance;
* The occurrence and effects of wars and acts of terrorism;
* The effects of competition;
* The possibility that the outcome of any litigation, arbitration or regulatory
proceeding is unfavorable;
* Failure to retain key personnel;
* Economic downturns; and
* Natural disasters.

These risks and others could cause actual results to differ materially from
those expressed in any forward-looking statements made.The Company undertakes no
obligation to update publicly or revise any forward-looking statements made.

Table 1 CRM Holdings, Ltd.
Consolidated Balance Sheets

Unaudited
September December
30, 2009 31, 2008
(Dollars in thousands)
Assets
Investments:
Fixed-maturity securities, available-for-sale (amortized cost $300,020 and $308,607) $ 309,454 $ 313,622
Short-term investments 9,261 113
Investment in unconsolidated subsidiary 1,083 1,083
Total investments 319,798 314,818
Cash and cash equivalents 35,734 28,044
Cash and cash equivalents, restricted 874 2,000
Total cash and cash equivalents 36,608 30,044
Accrued interest receivable 2,491 3,184
Premiums receivable, net 7,876 11,935
Reinsurance recoverable and prepaid reinsurance 97,416 63,801
Accounts receivable, net 5,098 3,099
Deferred policy acquisition costs 894 1,084
Current income taxes, net 6,622 3,208
Deferred income taxes, net - 7,809
Goodwill and other intangible assets 3,135 3,252
Prepaid expenses 1,863 1,836
Other assets 2,922 3,330
Total assets $ 484,723 $ 447,400

Liabilities and shareholders' equity
Reserve for losses and loss adjustment expenses $ 281,380 $ 245,618
Reinsurance payable 12,892 9,424
Unearned premiums 12,648 13,090
Unearned management fees 77 26
Long-term debt and other secured borrowings 44,083 44,083
Payable for investments purchased 18,861 -
Other liabilities 29,777 26,299
Total liabilities 399,718 338,540

Common shares
Authorized 50 billion shares; $.01 par value; 16.5 and 16.2 million common shares issued and outstanding 165 162
0.4 million Class B shares issued and outstanding 4 4
Additional paid-in capital 70,852 69,743
Retained earnings 7,852 35,619
Accumulated other comprehensive gain, net of tax 6,132 3,332
Total shareholders' equity 85,005 108,860
Total liabilities and shareholders' equity $ 484,723 $ 447,400

Table 2
CRM Holdings, Ltd.
Unaudited Consolidated Statements of Income

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
(Dollars in thousands, except per share amounts)
Revenues
Net premiums earned $ 17,324 $ 24,504 $ 61,033 $ 98,040
Fee-based management services 902 1,806 3,636 5,598
Investment income 3,529 2,922 9,561 9,272
Total revenues 21,755 29,232 74,230 112,910

Expenses
Losses and loss adjustment expenses 17,193 19,841 52,081 61,230
Policy acquisition costs 3,663 3,935 11,638 15,203
Fees paid to general agents and brokers 412 534 1,598 3,473
Selling, general and administrative expenses 6,880 9,275 28,500 22,189
Interest expense 952 922 2,739 2,799
Total expenses 29,100 34,507 96,556 104,894

(Loss) income from continuing operations before income taxes (7,345 ) (5,275 ) (22,326 ) 8,016
Tax benefit from continuing operations (3,029 ) (2,352 ) (7,728 ) (254 )
Valuation allowance for deferred taxes from continuing operations 11,342 - 11,342 -
(Loss) income from continuing operations (15,658 ) (2,923 ) (25,940 ) 8,270

Discontinued operations
Loss from discontinued operations before income taxes (749 ) (1,307 ) (1,478 ) (6,008 )
Tax benefit from discontinued operations (117 ) (464 ) (362 ) (1,997 )
Valuation allowance for deferred taxes from discontinued operations 711 - 711 -
Loss on discontinued operations (1,343 ) (843 ) (1,827 ) (4,011 )

Net (Loss) Income $ (17,001 ) $ (3,766 ) $ (27,767 ) $ 4,259

(Loss) earnings per share from continuing operations
Basic ($0.93 ) ($0.18 ) ($1.55 ) $ 0.50
Diluted ($0.93 ) ($0.18 ) ($1.55 ) $ 0.50
Loss per share from discontinued operations
Basic ($0.08 ) ($0.05 ) ($0.11 ) ($0.24 )
Diluted ($0.08 ) ($0.05 ) ($0.11 ) ($0.24 )
Net (loss) earnings per share
Basic ($1.01 ) ($0.23 ) ($1.66 ) $ 0.26
Diluted ($1.01 ) ($0.23 ) ($1.66 ) $ 0.26
Weighted average shares outstanding:
Basic 16,853 16,466 16,749 16,425
Diluted 16,853 16,466 16,749 16,425

Table 3
CRM Holdings, Ltd.
Unaudited Consolidated Statements of Cash Flow
Nine Months Ended September 30,

2009 2008
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $ (27,767 ) $ 4,259
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 586 1,380
Amortization of unearned compensation, restricted stock 1,052 1,021
Amortization of premiums and discounts on available-for-sale investments 1,191 412
Net realized gains on sale and impairment of available-for-sale investments (1,801 ) (1,320 )
Change in deferred taxes 6,190 56
Changes in:
Accrued interest receivable 693 (402 )
Premiums receivable, net 4,058 (2,338 )
Reinsurance recoverable and prepaid reinsurance (33,615 ) (18,268 )
Accounts receivable, net 15 2,142
Deferred policy acquisition costs 190 (1,496 )
Goodwill and other intangible assets - 196
Current income taxes, net (3,413 ) (3,506 )
Prepaid expenses (58 ) 510
Other assets 63 (126 )
Reserve for losses and loss adjustment expenses 35,762 38,891
Reinsurance payable 3,468 12,356
Unearned premiums (442 ) 4,101
Unearned management fees 51 (95 )
Other liabilities 3,479 2,493
Net cash provided by operating activities (10,298 ) 40,266

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale investments (294,544 ) (313,706 )
Proceeds from sales of available-for-sale investments 87,346 127,292
Proceeds from maturities of available-for-sale investments 216,395 138,134
Net purchases, sales and maturities of short-term investments (9,148 ) 694
(Increase) decrease in receivable for securities sold (2,014 ) 94
Increase in payable for investments purchased 18,861 10,862
Acquisition of intangible assets - (82 )
Purchases of fixed assets (134 ) (674 )
Disposals of fixed assets 39 237
Payments on loans receivable, net - 3
Net cash used in investing activities 16,801 (37,146 )

CASH FLOWS FROM FINANCING ACTIVITIES
Change in restricted cash and cash equivalents 1,126 -
Repayments under long-term debt and other secured borrowings - (1 )
Issuance of common shares - employee stock purchase plan 73 160
Retirement of common shares - share-based compensation (12 ) (47 )
Net cash provided by financing activities 1,187 112
Net increase in cash 7,690 3,232
Cash and cash equivalents
Beginning 28,044 34,286
Ending $ 35,734 $ 37,518

Table 4
CRM Holdings, Ltd.
Quarter to Date
Income by Segments

For the three months ended September 30, 2009
Primary Reinsurance Fee-Based Management Corporate and Elimina- Total

Insurance
Services
Other tions
(Dollars in thousands)
Revenues:
Net premiums earned $ 14,112 $ 3,212 $ - $ - $ - $ 17,324
Management fees - - 1,090 - (188 ) 902
Net investment income 2,435 307 (4 ) 22 (289 ) 2,471
Net realized gains 1,058 - - - - 1,058
Total revenues 17,605 3,519 1,086 22 (477 ) 21,755
Expenses:
Underwriting expenses 18,892 2,152 - - (188 ) 20,856
Operating expenses 3,449 126 1,101 2,616 - 7,292
Interest expense 364 - - 877 (289 ) 952
Total expenses 22,705 2,278 1,101 3,493 (477 ) 29,100

(Loss) income from continuing operations before taxes $ (5,100 ) $ 1,241 $ (15 ) $ (3,471 ) $ - $ (7,345 )

Total assets $ 490,285 $ 57,731 $ 4,467 $ 298,111 $ (357,731 ) $ 492,863

For the three months ended September 30, 2008
Primary Reinsurance Fee-Based Management Corporate and Elimina- Total

Insurance
Services
Other tions
(Dollars in thousands)
Revenues:
Net premiums earned $ 20,477 $ 4,027 $ - $ - $ - $ 24,504
Management fees - - 2,010 - (204 ) 1,806
Net investment income 2,582 491 (2 ) 38 (384 ) 2,725
Net realized gains 197 - - - - 197
Total revenues 23,256 4,518 2,008 38 (588 ) 29,232
Expenses:
Underwriting expenses 21,096 2,884 - - (204 ) 23,776
Operating expenses 6,239 197 1,502 1,871 - 9,809
Interest expense 384 - - 922 (384 ) 922
Total expenses 27,719 3,081 1,502 2,793 (588 ) 34,507

(Loss) income from continuing operations before taxes $ (4,463 ) $ 1,437 $ 506 $ (2,755 ) $ - $ (5,275 )

Total assets $ 430,567 $ 60,192 $ 5,079 $ 307,504 $ (357,024 ) $ 446,318

Table 4
CRM Holdings, Ltd.
Year to Date
Income by Segments

For the nine months ended September 30, 2009
Primary Reinsurance Fee-Based Management Corporate and Elimina- Total

Insurance
Services
Other tions
(Dollars in thousands)
Revenues:
Net premiums earned $ 53,243 $ 7,790 $ - $ - $ - $ 61,033
Management fees - - 3,988 - (352 ) 3,636
Net investment income 7,486 1,103 (13 ) 67 (883 ) 7,760
Net realized gains 1,771 30 - - - 1,801
Total revenues 62,500 8,923 3,975 67 (1,235 ) 74,230
Expenses:
Underwriting expenses 56,678 7,393 - - (352 ) 63,719
Operating expenses 13,007 707 4,043 12,341 - 30,098
Interest expense 959 - - 2,663 (883 ) 2,739
Total expenses 70,644 8,100 4,043 15,004 (1,235 ) 96,556

(Loss) income from continuing operations before taxes $ (8,144 ) $ 823 $ (68 ) $ (14,937 ) $ - $ (22,326 )

Total assets $ 490,285 $ 57,731 $ 4,467 $ 298,111 $ (357,731 ) $ 492,863

For the nine months ended September 30, 2008
Primary Reinsurance Fee-Based Management Corporate and Elimina- Total

Insurance
Services
Other tions
(Dollars in thousands)
Revenues:
Net premiums earned $ 72,904 $ 25,136 $ - $ - $ - $ 98,040
Management fees - - 6,307 - (709 ) 5,598
Net investment income 6,908 1,563 (5 ) 183 (697 ) 7,952
Net realized gains 1,296 24 - - - 1,320
Total revenues 81,108 26,723 6,302 183 (1,406 ) 112,910
Expenses:
Underwriting expenses 58,626 18,516 - - (709 ) 76,433
Operating expenses 14,061 733 6,175 4,693 - 25,662
Interest expense 697 - - 2,799 (697 ) 2,799
Total expenses 73,384 19,249 6,175 7,492 (1,406 ) 104,894

Income (loss) from continuing operations before taxes $ 7,724 $ 7,474 $ 127 $ (7,309 ) $ - $ 8,016

Total assets $ 430,567 $ 60,192 $ 5,079 $ 307,504 $ (357,024 ) $ 446,318

Table 5
CRM Holdings, Ltd.
Revenues by Segment

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
(Dollars in thousands)

Revenues from Fee-Based Management Services
California $ 1,090 $ 2,010 $ 3,988 $ 6,307
1,090 2,010 3,988 6,307

Revenues from Primary Insurance
California 9,177 11,332 32,899 43,926
New York/New Jersey 4,454 8,054 17,906 26,138
Other (1) 481 1,091 2,438 2,840
14,112 20,477 53,243 72,904
Revenues from Reinsurance
California 2,581 2,614 6,054 15,830
New York/New Jersey 563 650 1,382 7,291
Other (2) 68 763 354 2,015
3,212 4,027 7,790 25,136

Investment income (3) 3,529 2,922 9,561 9,272

Eliminations (4) (188 ) (204 ) (352 ) (709 )

Total revenues from continuing operations $ 21,755 $ 29,232 $ 74,230 $ 112,910

(1) Includes primary insurance premiums for policies written in Washington, Alaska, Arizona, Nevada, Florida, Oregon & Hawaii.

(2) Includes reinsurance premiums for policies written in Washington, Alaska, Arizona, Nevada, Florida, Oregon & Hawaii.

(3) Includes the elimination of $289 thousand and $384 thousand of Twin Bridges intercompany interest income on funds withheld by Majestic for the three months ended September 30, 2009 and 2008, respectively, and the elimination of $883 thousand and $697 thousand of Twin Bridges intercompany interest income on funds withheld by Majestic for the nine months ended September 30, 2009 and 2008, respectively.

(4) Elimination of fee-based management intercompany commissions against primary insurance policy acquisition costs for the three months ended September 30, 2009 and 2008, respectively. Elimination of fee-based management intercompany commissions against primary insurance policy acquisition costs for the nine months ended September 30, 2009 and 2008, respectively.

Table 6
CRM Holdings, Ltd.
Fee-Based Management Services Segment Data (1)

September 30,
2009 2008
Number of Groups
California 2 5

Number of Group Members
California 225 408

Aggregate Annualized Premiums (2)
California ($000's) $ 29,686 $ 52,332

(1) Excludes the fee-based management services segment data for CRM NY, which has been reclassified as discontinued operations for all periods presented.

(2) Aggregate annualized premiums are the annualized total of the actual premiums payable to our groups by their members as in effect at the dates specified.

Table 7
CRM Holdings, Ltd.
Primary Insurance Segment Data

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
(Dollars in thousands) (Dollars in thousands)

Net primary insurance premiums earned $ 14,112 $ 20,477 $ 53,243 $ 72,904
Loss and loss adjustments expenses 15,864 17,952 46,843 49,181
Underwriting, acquisition and insurance expenses (1) 6,477 9,383 22,842 23,506
Underwriting loss $ (8,229 ) $ (6,858 ) $ (16,442 ) $ 217

Loss Ratio (2) 112.4 % 87.7 % 88.0 % 67.5 %
Expense Ratio (3) 45.9 % 45.8 % 42.9 % 32.2 %
Combined Ratio (4) 158.3 % 133.5 % 130.9 % 99.7 %

(1) Does not include the elimination of $188 thousand and $204 thousand of Majestic policy acquisition costs against fee-based management commissions for the three months ended September 30, 2009 and 2008, respectively. Does not include the elimination of $352 thousand and $709 thousand of Majestic policy acquisition costs against fee-based management commission for the nine months ended September 30, 2009 and 2008, respectively.

(2) The loss ratio is calculated by dividing loss and loss adjustment expense by net primary insurance premiums earned.

(3) The expense ratio is calculated by dividing underwriting, acquisition and insurance expenses for the period by net primary insurance premiums earned.

(4) The combined ratio is the sum of the loss ratio and the expense ratio.

Table 8

CRM Holdings, Ltd.
Reinsurance Segment Data

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
(Dollars in thousands) (Dollars in thousands)

Net reinsurance premiums earned $ 3,212 $ 4,027 $ 7,790 $ 25,136
Loss and loss adjustments expenses 1,328 1,889 5,238 12,046
Underwriting, acquisition and insurance expenses 950 1,192 2,862 7,203
Underwriting (loss) profit $ 934 $ 946 $ (310 ) $ 5,887

Loss Ratio (1) 41.3 % 46.9 % 67.2 % 47.9 %
Expense Ratio (2) 29.6 % 29.6 % 36.7 % 28.7 %
Combined Ratio (3) 70.9 % 76.5 % 104.0 % 76.6 %

(1) The loss ratio is calculated by dividing loss and loss adjustment expense by net reinsurance premiums earned.

(2) The expense ratio is calculated by dividing underwriting, acquisition and insurance expenses for the period by net reinsurance premiums earned.

(3) The combined ratio is the sum of the loss ratio and the expense ratio.

CCG Investor Relations
Mark Collinson, 310-954-1343

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