NEW YORK, Nov. 2 /PRNewswire-FirstCall/ -- NYMAGIC, INC. (NYSE: NYM) reported
today the results of consolidated operations for the third quarter ended
September 30, 2009. The Company reported net income of $14.6 million, or $1.68
per diluted share for the three months ended September 30, 2009, compared with
net losses of $(50.1) million, or $(5.96) per diluted share, for the third
quarter of 2008. Net income for the nine months ended September 30, 2009
totaled $32.3 million, or $3.74 per diluted share, compared with net losses of
$(84.6) million, or $(9.85) per diluted share, for the nine months ended
September 30, 2008.
Book value per share, calculated on a fully diluted basis, increased from
$19.11 at December 31, 2008 to $23.85 at September 30, 2009. This was an
increase of 25%.
INSURANCE OPERATIONS
Gross premiums written totaled $49.5 million and net premiums written totaled
$37.7 million for the third quarter of 2009, compared with gross premiums
written of $55.5 million and net premiums written of $39.8 million during the
third quarter of 2008. This represented decreases of 11% and 5%,
respectively.
Gross premiums written totaled $167.4 million and net premiums written totaled
$126.0 million for the nine months ended September 30, 2009, compared with
gross premiums written of $174.7 million and net premiums written of $134.0
million during the first nine months of 2008. This represented decreases of
4% and 6% respectively.
The Company's decision to terminate a cargo program at the end of 2007 caused
reductions in both gross and net premiums written totaling approximately $3.0
million and $7.9 million for the three months and nine months ended September
30, 2009, respectively.
Net premiums earned totaled $38.5 million for the third quarter of 2009,
compared with net premiums earned of $40.5 million during the third quarter of
2008. This represented a decrease of 5%. Substantially all of this decrease
occurred within the Ocean Marine segment and in large part due to the
termination of the cargo program referred to above.
Net premiums earned totaled $117.7 million for the nine months ended September
30, 2009, compared with net premiums earned of $128.5 million during the first
nine months of 2008. This represented a decrease of 8%. Most of this decline
occurred within the Ocean Marine segment and a substantial portion of this was
attributable to termination of the cargo program referred to above.
The Company's combined ratio was 102.1% for the three months ended September
30, 2009 as compared with 118.2% for the same period of 2008. The Company's
combined ratio was 98.3% for the nine months ended September 30, 2009 as
compared with 115.6% for the same period of 2008. Hurricanes Gustav and Ike
contributed 17.7% and 5.7% to the third quarter and nine months ended 2008
combined ratio, respectively. In addition, a settlement of certain disputed
reinsurance receivables contributed 9.6% to the combined ratio for the nine
months ended September 30, 2008.
Favorable loss reserve development amounted to $3.9 million and $13.2 million
for the third quarter and nine months ended September 30, 2009. Favorable
loss development in 2009 occurred in each business segment primarily as a
result of favorable loss reporting trends.
Favorable loss reserve development amounted to $1.9 million during the third
quarter of 2008. For the nine months ended September 30, 2008, adverse loss
reserve development amounted to $(7.2) million. Adverse development included
$12.4 million attributable to reinsurance receivables write-offs that was
partially offset by favorable development in the ocean and inland marine lines
of business.
INVESTMENTS
Net investment income amounted to $14.6 million for the third quarter of 2009
compared with net investment loss of $(39.4) million for the same period of
2008. For the nine months ended September 30, 2009, net investment income was
$34.3 million as compared with a net investment loss of $(47.5) million for
the same period of 2008.
Net investment income for the nine months ended September 30, 2009 includes
$6.6 million from increases in the market value of investments categorized as
trading securities, which are primarily tax-exempt securities, and commercial
loans. In addition, $20.5 million of income was recorded from limited
partnerships.
Net investment loss for the nine months ended September 30, 2008 included
losses of $(37.9) million due to declines in the market value of trading
securities and commercial loans as well as losses of $(14.0) million from
limited partnerships. During 2008, trading securities included municipal
bonds, preferred stocks, hedged positions and exchange-traded funds.
Net realized investment gains after impairment were $0.5 million for the third
quarter of 2009, as compared with net realized investment losses of $(15.0)
million for the same period of 2008. Net realized investment gains for the
nine months ended September 30, 2009 were $1.8 million compared with net
realized investment losses of $(46.3) million for the same period in 2008. The
net realized investment gains in 2009 resulted primarily from the sale of
selected municipal securities and US Treasury securities undertaken to further
reposition the Company's holdings. Net realized investment losses for the nine
months ended September 30, 2008 were almost entirely attributable to the
decline in the market value of the Company's investments in residential
mortgage backed securities that was recorded at that time.
Net income for the third quarter and nine months ended September 30, 2009
included tax benefits of $2.7 million, or $.31 per diluted share, and $5.9
million, or $.69 per diluted share, respectively, as a result of the partial
reversal of the deferred tax valuation allowance previously provided for
capital losses. This resulted from capital gains achieved within the
investment portfolio during the first nine months of 2009.
At September 30, 2009 the Company's total cash and investments amounted to
$667.2 million, compared with $572.4 million at December 31, 2008. The
investment portfolio at September 30, 2009 consisted of cash and short-term
investments of $128.9 million, or 19.3%; fixed maturities and other debt
investments of $379.5 million, or 56.9%; and limited partnership hedge funds
of $158.8 million, or 23.8%.
In the third quarter of 2009, the Company reported an after tax gain of $3.2
million resulting from its receipt as beneficiary of proceeds of a life
insurance policy on a former director.
MANAGEMENT COMMENT
George Kallop, President and Chief Executive Officer, in commenting on the
quarter said, "We are very pleased with the Company's Net Income for the third
quarter and first nine months of 2009, as well as the 25% increase in book
value per share so far this year. Insurance markets continue to be
challenging, but we are maintaining underwriting discipline as evidenced by
our excellent loss ratio. We remain focused on increasing premium volumes
where we believe underwriting profits can be achieved, and declining
underpriced business. Our investment results have been excellent this year,
and our investment balances have risen by almost $95 million since the
beginning of the year. Our expense ratio continues to be a challenge, but we
are hopeful that we will be able to increase premium volumes in coming
quarters and moderate growth in expenses to reduce our combined ratio. The
company's financial strength continued to grow in the third quarter."
NYMAGIC, INC. will hold a conference call on its third quarter 2009 financial
results live on Tuesday, November 3, 2009 at 9:00 A.M. The call will last for
up to one hour.
Investors and interested parties will have the opportunity to listen to and
join in the call by calling 800-374-0763 entering ID# 38644855 and registering
with the operator. Please call no later than 10 minutes prior to the start of
the call to register. A replay of the conference call will be available for 30
days by dialing 800-642-1687 and entering ID 38644855.
NYMAGIC, INC. is an insurance holding company whose property and casualty
insurance subsidiaries specialize in writing ocean marine, inland marine and
non-marine liability insurance, and whose agency subsidiaries specialize in
establishing markets for such business. The Company maintains offices in New
York and Chicago.
This report contains certain forward-looking statements concerning the
Company's operations, economic performance and financial condition, including,
in particular, the likelihood of the Company's success in developing and
expanding its business. Any forward-looking statements concerning the
Company's operations, economic performance and financial condition contained
herein, including statements related to the outlook for the Company's
performance in 2009 and beyond, are made under the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. These statements are
based upon a number of assumptions and estimates which inherently are subject
to uncertainties and contingencies, many of which are beyond the control of
the Company. Some of these assumptions may not materialize and unanticipated
events may occur which could cause actual results to differ materially from
such statements. These include, but are not limited to, the cyclical nature of
the insurance and reinsurance industry, premium rates, investment results and
risk assessments, the estimation of loss reserves and loss reserve
development, uncertainties associated with asbestos and environmental claims,
including difficulties with assessing latent injuries and the impact of
litigation settlements, bankruptcies and potential legislation, the
uncertainty surrounding losses related to the attacks of September 11, 2001,
as well as those associated with catastrophic hurricanes, the occurrence and
effects of wars and acts of terrorism, net loss retention, the effect of
competition, the ability to collect reinsurance receivables and the timing of
such collections, the availability and cost of reinsurance, the possibility
that the outcome of any litigation or arbitration proceeding is unfavorable,
the ability to pay dividends, regulatory changes, changes in the ratings
assigned to the Company by rating agencies, failure to retain key personnel,
the possibility that our relationship with Mariner Partners, Inc. could
terminate or change, and the fact that ownership of our common stock is
concentrated among a few major stockholders and is subject to the voting
agreement, as well as assumptions underlying any of the foregoing and are
generally expressed with words such as "intends," "intend," "intended,"
"believes," "estimates," "expects," "anticipates," "plans," "projects,"
"forecasts," "goals," "could have," "may have" and similar expressions. These
and other risks could cause actual results for the 2009 year and beyond to
differ materially from those expressed in any forward-looking statements made.
Investors are referred to the full discussion of risks and uncertainties
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2008, including those specified under the caption "I. A. Risk
Factors" and in other documents filed by the Company with the U.S. Securities
and Exchange Commission. The Company undertakes no obligation to update
publicly or revise any forward-looking statements made.
(Comparative Table Attached)
NYMAGIC, INC.
TABLE OF RESULTS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Net premiums earned $38,506 $40,477 $117,677 $128,473
Net investment income
(loss) 14,578 (39,435) 34,321 (47,540)
Net realized investment
gains (losses) after
impairment 546 (14,963) 1,842 (46,314)
Commission and other income 3,312 (32) 3,439 108
----- --- ----- ---
Total revenues 56,942 (13,953) 157,279 34,727
Expenses:
Net losses & loss
adjustment exp. 19,832 28,081 57,843 90,972
Policy acquisition expenses 9,073 10,053 26,900 29,398
General & administrative
expenses 10,399 9,703 30,877 28,141
Interest expense 1,683 1,680 5,047 5,036
----- ----- ----- -----
Total expenses 40,987 49,517 120,667 153,547
Income (loss) before
income taxes 15,955 (63,470) 36,612 (118,820)
Total income tax expense
(benefit) 1,380 (13,396) 4,355 (34,252)
----- ------- ----- -------
Net income (loss) $14,575 $(50,074) $32,257 $(84,568)
Earnings per share:
Basic $1.73 $(5.96) $3.83 $(9.85)
----- ------ ----- ------
Diluted $1.68 $(5.96) $3.74 $(9.85)
----- ------ ----- ------
Weighted average shares
outstanding:
Basic 8,432 8,406 8,422 8,583
Diluted 8,657 8,406 8,624 8,583
Balance sheet data: September 30, December 31,
2009 2008
---- ----
Shareholders' equity $206,700 $164,073
Book value per share (1) $23.85 $19.11
(1) Calculated on a fully diluted basis.
Supplementary information:
NYMAGIC Gross Premiums Written
-----------------------------------------------
By Segment Three months ended Nine months ended
September 30, September 30,
-------------------- ----------------------
2009 2008 Change 2009 2008 Change
---- ---- ------ ---- ---- ------
(Dollars in thousands)
$16,814 $23,375 (28%) $61,414 $68,933 (11%)
Ocean marine
Inland marine/fire 4,458 4,146 8% 15,750 12,685 24%
Other liability 28,121 27,993 0% 90,161 93,035 (3%)
------ ------ --- ------ ------ ---
Subtotal 49,393 55,514 (11%) 167,325 174,653 (4%)
Runoff lines
(Aircraft) 69 (30) NM 78 27 NM
------------ --- --- --- --- --- ---
Total $49,462 $55,484 (11%) $167,403 $174,680 (4%)
----- ------- ------- --- -------- -------- ---
NYMAGIC Net Premiums Written
----------------------------------------------
By Segment Three months ended Nine months ended
September 30, September 30,
-------------------- ----------------------
2009 2008 Change 2009 2008 Change
---- ---- ------ ---- ---- ------
(Dollars in thousands)
Ocean marine $11,727 $15,594 (25%) $41,664 $49,338 (16%)
Inland marine/fire 1,405 1,170 20% 5,181 3,825 35%
Other liability 24,470 23,080 6% 79,210 80,790 (2%)
------ ------ --- ------ ------ ---
Subtotal 37,602 39,844 (6%) 126,055 133,953 (6%)
Runoff lines
(Aircraft) 86 (77) NM (63) 18 NM
------------ --- --- --- --- --- ---
Total $37,688 $39,767 (5%) $125,992 $133,971 (6%)
----- ------- ------- --- -------- -------- ---
NYMAGIC Net Premiums Earned
----------------------------------------------
By Segment Three months ended Nine months ended
September 30, September 30,
-------------------- ----------------------
2009 2008 Change 2009 2008 Change
---- ---- ------ ---- ---- ------
(Dollars in thousands)
Ocean marine $12,264 $15,300 (20%) $39,689 $51,433 (23%)
Inland marine/fire 1,329 1,390 (4%) 4,078 4,590 (11%)
Other liability 24,827 23,864 4% 73,973 72,431 2%
------ ------ --- ------ ------ ---
Subtotal 38,420 40,554 (5%) 117,740 128,454 (8%)
Runoff lines
(Aircraft) 86 (77) NM (63) 19 NM
------------ --- --- --- --- --- ---
Total $38,506 $40,477 (5%) $117,677 $128,473 (8%)
----- ------- ------- --- -------- -------- ---
Investment income results:
Three months ended Nine months ended
September 30, September 30,
-------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(in millions)
Fixed maturities, held to
maturity $0.4 $- $1.5 $-
Fixed maturities, available
for sale 2.4 1.9 7.1 5.6
Trading securities 0.8 (25.8) 4.5 (37.2)
Short-term investments 0.2 0.7 0.3 2.2
Equity in earnings of
limited partnerships 11.3 (14.6) 20.5 (14.0)
Commercial loans 0.1 (0.4) 2.1 (0.7)
--- ---- --- ----
Total investment income 15.2 (38.2) 36.0 (44.1)
Investment expenses (0.6) (1.2) (1.7) (3.4)
---- ---- ---- ----
Net investment income $14.6 $(39.4) $34.3 $(47.5)
===== ====== ===== ======
CONTACT:
NYMAGIC, INC.
A. George Kallop, 212-551-0744
or
Tiberend Strategic Advisors
Gregory Tiberend, 212-827-0020
SOURCE NYMAGIC, INC.
NYMAGIC, INC., A. George Kallop, +1-212-551-0744, or Tiberend Strategic
Advisors, Gregory Tiberend, +1-212-827-0020
