National Interstate Corp.’s net income improved from a year ago on stronger underwriting.
The Richfield specialty insurer, which in July agreed to be purchased by its majority shareholder, on Wednesday reported net income of $9.05 million, or 45 cents per share, on gross premiums written of $185.2 million, for the second quarter ending June 30. That compares to net income of $6.6 million, or 33 cents per share, on gross premiums written of $185.7 million for the second quarter of 2015.
National Interstate reported results before the stock market opened.
“Our underwriting results continued to move in the right direction and we have had no impact from development of prior year claims reserves during the first six months of 2016,” Tony Mercurio, president and chief executive officer, said in a statement. “The actions we have taken over the past several years, including our focus on rate adequacy and risk selection, are having the desired impact.”
Improved underwriting results in the second quarter contributed to a strong first half of the year, he said.
“We are certainly pleased and encouraged by these first-half results, but also recognize that we have more work ahead of us to further improve our underwriting results,” he said.
The higher net income for the quarter and first six months was partially offset by transaction expenses related to American Financial Group Inc.’s offer to acquire all of the shares of National Interstate it does not already own.
Cincinnati-based AFG owns more than 51 percent of National Interstate through its Great American Insurance Co. subsidiary.
AFG will pay $32 per share for all remaining National Interstate stock. National Interstate also will pay a special dividend of 50 cents per share once the merger closes. The deal closes later this year.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ.