Darwin Professional Underwriters, Inc. Reports Record Net Income of $7.8 Million for the Second Quarter
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Net income increases 130% and net premiums written increase 35% over the comparable year-earlier quarterly resultsDarwin Professional Underwriters, Inc. (“Darwin,” the “Company,” or “Our”) today announced its financial results for the second quarter ended June 30, 2007. Highlights include:
— Gross premiums written for the second quarter are $65.9 million. Second
quarter gross premiums written are 13.5% ahead of our gross premiums
for the same period a year ago. Net premiums written for the quarter of
$49.0 million are up 34.6% over the second quarter of 2006.
— Net income of $7.8 million for the quarter ended June 30, 2007
represent a 129.6% increase over the $3.4 million for the quarter ended
June 30, 2006.
— Overall, the combined ratio is 82.7% for the second quarter 2007, which
compares favorably to the second quarter 2006 combined ratio of 96.3%.
The combined ratio improvement is primarily driven by a decrease in the
loss ratio (13.6% improvement to 54.5%). The second quarter combined
ratio improvement includes approximately $4.3 million ($2.8 million,
net of tax) in favorable loss reserve development and the corresponding
ceded premiums, offset by additional incentive compensation and profit
sharing expenses stemming from the favorable development of the 2003
through 2006 accident years.
— Earnings per diluted share for the three months ended June 30, 2007 are
$0.45 compared to $0.10 per share for the same period in 2006.
— Annualized return on average equity is 11.7% for the six months ended
June 30, 2007 compared to 7.7% for all of 2006. Shareholders’ equity
grew $9.6 million during the first six months of 2007, to $227.4
million at June 30, 2007 from $217.9 million at December 31, 2006.
Book value per share grew 4.5% to $13.36 at June 30, 2007 from $12.78
at December 31, 2006.
Stephen Sills, Darwin’s president and chief executive officer, commented, “We had an excellent quarter, and are very pleased with our book of business. This quarter’s net income of $7.8 million represents our best operating result in our four-+ year history. Our loss emergence remains favorable and we were able to grow our book by writing new business as well as retaining our best accounts in the face of stiffening competition. Darwin recorded a strong increase in gross premiums written over the second quarter of 2006 of 13.5% and demonstrated our continued commitment to underwriting profitability with a second quarter combined ratio of 82.7 percent. With significant expertise across all of our lines, we believe we’re well positioned to take advantage of the continued opportunities we see in specialty insurance.”
Darwin executives will hold a conference call to discuss this press release tomorrow morning, August 8, 2007, at 10:00 a.m. Eastern time. The live webcast of Darwin’s earnings conference call, as well as our financial supplement, can be accessed through Darwin’s website at http://investor.darwinpro.com. Analysts and investors interested in participating in the live conference call may dial in to 866-510-0707 (International callers may dial 617-597-5376) and enter passcode 53204705.
The webcast version of the conference call will be archived on Darwin’s website following the date of the event. A telephonic replay of the earnings conference call will be available shortly after the conclusion of the call on August 8, 2007. To access the telephonic replay, domestic callers may dial 888-286-8010 (International callers may dial 617-801-6888) and enter passcode 47368177. The telephonic replay will be available until August 14, 2007.
Important Information
Certain matters discussed in this release are forward-looking statements. Such statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include the accuracy of assumptions underlying the Company’s outlook and other risks described in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K for 2006 and Form 10-Q for second quarter 2007. These forward-looking statements represent the Company’s judgment as of the date of this release. The Company disclaims any intent or obligation to update these forward-looking statements.
About Darwin Professional Underwriters, Inc.
Darwin is a specialty insurance group based in Farmington, Connecticut. The Company is focused on the specialty liability insurance market and underwrites D&O liability insurance for public and private companies, E&O liability insurance, medical malpractice liability insurance, and other specialty coverages. Darwin member companies include Darwin Professional Underwriters, Inc., Darwin National Assurance Company (“DNA”), and Darwin Select Insurance Company (“Darwin Select”). DNA and Darwin Select have earned a financial strength rating of “A- (Excellent)” from A.M. Best Company. Darwin is traded on the New York Stock Exchange under the ticker symbol, “DR.” For more information about Darwin, visit www.darwinpro.com.
Additional information concerning Darwin, its finances, and business operations can be found in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 which will be filed with the SEC and at www.darwinpro.com.
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