Profile: Eastern Insurance Holdings Inc (EIHI.OQ)

EIHI.OQ on NASDAQ Stock Exchange Global Select Market

20.31USD
1 Aug 2013
Price Change (% chg)

$0.78 (+3.99%)
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$19.53
Open
$19.73
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Volume
9,037
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52-wk High
$21.30
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Eastern Insurance Holdings, Inc. (EIHI) is an insurance holding company. The Company offers workers’ compensation insurance and reinsurance products through its direct and indirect wholly owned subsidiaries, including Global Alliance Holdings, Ltd. (Global Alliance), Eastern Alliance Insurance Company (Eastern Alliance), Allied Eastern Indemnity Company (Allied Eastern), Eastern Advantage Assurance Company (Eastern Advantage), Employers Security Insurance Company (Employers Security), Employers Alliance, Inc. (Employers Alliance), Eastern Re Ltd., SPC (Eastern Re) and Eastern Services Corporation (Eastern Services). The Company operates in three segments: Workers’ Compensation Insurance, Segregated Portfolio Cell Reinsuranc and Corporate/Other.

The Company offers workers’ compensation insurance coverage to employers, generally with 1,000 employees or less, primarily in the Mid-Atlantic, Southeast and Midwest regions of the continental United States. The Company’s workers’ compensation products include guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies and alternative market programs. The EIHI offers alternative market workers compensation solutions to individual companies, groups and associations through the creation of segregated portfolio cells. Workers compensation insurance coverage is underwritten through Eastern Alliance Insurance Group (EAIG’s) alternative markets business unit and ceded 100% to the segregated portfolio cell reinsurance segment.

The corporate/other segment primarily includes the expenses of the holding company, the third party administration activities of the Company and the results of operations of Eastern Re, as well as certain eliminations necessary to reconcile the segment information to the consolidated statements of operations and income (loss). The corporate/other segment also includes the Company’s 10% interest in a segregated portfolio cell with an unaffiliated primary carrier that writes insurance coverage for sprinkler contractors, known as SprinklerPro.

The Company’s guaranteed cost policies charge a fixed premium, which does not increase or decrease based upon loss experience during the policy period. Its policyholder dividend policies charge a fixed premium, but the customer may receive a dividend in the event of favorable loss experience during the policy period. Its retrospectively-rated policies charge an initial premium that is subject to adjustment after the policy period expires, based upon the insured’s actual loss experience incurred during the policy period, subject to a minimum and maximum premium. These policies are typically subject to annual adjustment until all claims related to the policy year are closed. Its deductible policies generally result in a lower premium; however, the insured retains a greater share of the underwriting risk than under guaranteed cost or dividend paying policies, which reduces the risk to the Company and further encourages loss control practices by the insured. The insured is contractually obligated to pay its own losses up to the amount of the deductible for each occurrence, subject to an aggregate retention. Its alternative market products are offered to individual companies, groups, and trade associations.

Segregated portfolio cells, or segregated cells or rent-a-captives, are all referred to as alternative market programs or products. The EIHI provides a variety of products to this marketplace, including program design, fronting, claims administration, risk management, segregated portfolio cell rental, asset management and segregated portfolio management services. The Company outsources the asset management and segregated portfolio cell management services to a third party.

The Company’s insurance subsidiaries reinsure a portion of their loss exposure and pay to the reinsurers a portion of the premiums received on all policies reinsured. The EIHI determines the amount and scope of reinsurance coverage to purchase each year based on a number of factors, including the evaluation of the risks accepted, consultations with reinsurance representatives and a review of market conditions, including the availability and pricing of reinsurance. The Company monitors the solvency of its reinsurers on an annual basis, at a minimum, through review of their financial statements and, if available, their A.M. Best financial strength ratings.

The Company competes with Old Republic Insurance Company, Travelers Insurance, Liberty Mutual Insurance Company, Erie Insurance Group, Guard Insurance Group, Penn National Insurance Company, Selective Insurance Group, Cincinnati Insurance Company, Lackawanna Insurance Group, Accident Fund Insurance Company of America and the Highmark Casualty Insurance Company.

Company Address

Eastern Insurance Holdings Inc

25 Race Avenue
LANCASTER   PA   17603-3179
P: +1717.3967095

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