Fremont InsuraCorp Income Slips
FREMONT — Fremont Michigan InsuraCorp Inc. reported net income of $2.4 million or $1.36 per diluted share for the fourth quarter of 2007, down from $3.4 million or $1.90 per diluted share in the fourth quarter of 2006.
Net income for the full year was also down from the year before to $4.9 million, or $2.77 per diluted share, compared with net income of $7.2 million, or $4.10 per diluted share, for fiscal 2006.
President and CEO Richard E. Dunning, said the company produced a solid underwriting profit supported by exceptional top line growth in 2007 despite the soft market and sluggish Michigan economy.
“Our 2007 net income represents a return on beginning shareholders’ equity of 14.2 percent, which exceeds the company’s ROE goal of 12 to 14 percent,” Dunning said. “The strong relationship and support of our 175 agencies across the state of Michigan is very evident and is further enhanced by the talent of service of company personnel.”
The underwriting expense ratio was 38.4 percent for the just passed quarter, versus 34.3 percent in fourth quarter 2006. The 2007 year-end underwriting expense ratio was 37.2 percent, compared with 34.6 percent for 2006. According to Freemont InsuraCorp, the 2007 expense ratio was impacted by the following: a non-recurring increase in assessments from state mandated pools and associations; non-recurring state tax refunds received during 2006; increased agent incentives; and increased depreciation associated with the company’s investment in its technology infrastructure.
Direct premiums written increased 8 percent and 10.4 percent, respectively, during the last quarter, while net premiums earned increased 9.1 percent and 9 percent for the same respective periods. The bulk of premium growth came from personal auto and homeowner policies, the company reported.