February, 2007
ARI Reports Record Year End Results
Lawrenceville, NJ - February 12, 2007 – ARI Insurance Companies today reported record net income for the year of 2006 of $5,489,000 as compared to $4,723,000 in 2005. Reduced reliance on reinsurance made possible by the Companies’ strong capital position enabled the companies to retain more of their profitable business. The 2006 loss ratio was 54.4% and 50.5% in 2005. In 2005, a $3,384,000 net subrogation recovery on a run-off Hurricane Andrew file reduced the loss and loss expense ratio by 12.5 points. The reduced reliance on reinsurance and the 8.1 point improvement in the combined ratio exclusive of this recovery were the sources of the year to year improvement.
The 2006 results were also favorably impacted by higher net investment income. Net investment income was $2,370,000 in 2006 compared with $1,545,000 in 2005. The increase in investment income is due to the increase in average invested assets and higher short term interest rates over the periods. Invested assets totaled $66,810,000 and total assets were $81,985,000 at year end 2006.
ARI President and Chief Executive Officer Karen S. Fulton said, “Our strong focus on underwriting and pricing integrity produced another strong quarter with a combined ratio below 100% and our second year with a combined ratio below 90%. While competition increased in 2006, ARI was able to exceed industry growth levels, post a 9% increase in direct premiums and post record net income.”
Net income was $1,711,000 for the quarter. The quarter was positively impacted by positive loss trends on prior years, the reduction in the reliance on reinsurance and improvements in the investment income over the prior periods.
Thank you for your contribution to these outstanding results.
