Eastern Insurance Reports Improved Workers’ Comp Results

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Eastern Insurance Holdings, Inc., based in Lancaster, Pa., reported net income of $2.6 million for the first quarter of 2008, compared to net income of $3.2 million for the same period in 2007.

The company said highlights for the first quarter included:

Consolidated revenue for the first quarter of 2008 was $35.5 million, compared to $33.0 million for the same period in 2007.

Net premiums earned increased to $33.0 million in the first quarter of 2008 from $29.1 million during the same period in 2007.

Favorable loss reserve development on prior accident years of $1.5
million was recorded in the workers’ compensation insurance segment for the quarter

EIHI’s workers’ compensation insurance segment reported net income of $3.0 million for the first quarter of 2008 compared to $2.6 million for the first quarter of 2007. Highlights for the first quarter for workers’ compensation included:

Net premiums earned increased 13.8 percent to $14.8 million for the first quarter.

The calendar year loss expense ratio was 50.9 percent for the three
months compared to 56.8 percent for the same period in 2007.

Favorable loss reserve development on prior accident years of $1.5 million decreased the 2008 loss ratio by 10.1 percentage points.

The expense ratio was 25.6 percent for the three months compared to 22.3 percent for the same period in 2007. The increase in the expense ratio was primarily attributed to start-up costs associated with EIHI’s expansion into the Southeast;

The combined ratio was 76.1 percent for the first quarter of 2008, compared to 79.9 percent for the same period last year;

Eastern Holdings includes workers’ compensation, specialty reinsurance and group benefits divisions.

Business in the specialty reinsurance segment is assumed through participation in a reinsurance treaty with an unaffiliated ceding company related to an underground storage tank insurance program, referred to as EnviroGuard, and a non-hazardous waste transportation product, referred to as EIA Liability. Effective Jan. 1, 2008, EIHI’s participation percentage in the reinsurance treaty was decreased from 25 percent to 15 percent, the company said.

Reinsurance premiums earned were $3.5 million for the first quarter of
2008 compared to $3.1 million for the same period in 2007. The calendar year loss on this business was 75.7 percent while the combined ratio was 109.9 percent.

Source: Eastern Insurance Holdings
www.easterninsuranceholdings.com

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