TORONTO, June 20, 2011 /CNW/ - (TSX.V: AFH) Atlas Financial Holdings,
Inc. ("Atlas" or the "Company") today announced its financial results
for the first quarter 2011. All amounts are in U.S. dollars unless
As at March 31, 2011, shareholder's equity was $55.7 million.
Factoring in the Company's convertible preferred shares, common
shareholder's equity was $40.2 million or $2.19 per outstanding share.
The Company carries a provision for deferred tax assets currently
deemed unrealizable in the amount of $0.54 per share at March 31, 2011,
primarily related to loss carry-forwards assumed through the
acquisition of its operating insurance subsidiaries. These deferred
tax assets could be realized in the future based on profitability
during the next twenty year period.
Including approximately $627,000 of non-recurring costs related to the
closing of the qualifying transaction forming Atlas and the transition
to the Company's "go forward" infrastructure, the Company reported a
net loss of $889,000 or a loss of $0.05 per share diluted as compared
to a loss of $0.62 per share diluted for the fourth quarter 2010.
Excluding non-recurring charges, the first quarter 2011 net loss per
share would have been $0.01 diluted.
Commercial automobile gross premium written in the first quarter 2011
was $6.6 million, representing an increase of 113% over the prior
quarter. These core lines of business represented 53% of net premium
written in the quarter.
The Company's loss and loss adjustment expense ratio was 78.2% in the
first quarter 2011 as compared with 87.0% in the prior quarter. This
improvement was due to core lines of business becoming an increasingly
larger percentage of total premiums earned coupled with the positive
impact of the Company's more efficient infrastructure.
Other underwriting expense in the first quarter 2011 was $2.4 million,
representing a 45.8% reduction from $4.4 million in the prior quarter
despite the $627,000 impact of non-recurring costs. Expense reductions
were the result of strategic activities and contract renegotiations
undertaken to align the Company's infrastructure with its business
Excluding non-recurring costs, the Company's combined operating ratio
was 116% for the first quarter 2011. The combined operating ratio was
140.7% in the prior quarter.
"We are very pleased with this result for the first quarter," said Scott
D. Wollney, Atlas President & CEO. "Our loss ratio is moving towards
expected levels reflecting the results of core specialty lines of
commercial auto business. Expenses are in-line with our plan and the
Company is on track to return to profitability in 2011 as expected.
Renewal retention rates in core lines continue to improve and new
business application volumes are also increasing."
Premiums were written in twelve states in the first quarter 2011. The
Company expects to actively write its core lines of business in more
than twenty states by the end of 2011.
Additional information about Atlas, including a copy of the Company's
first quarter 2011 financial statements and MD&A, can be accessed on
the Canadian Securities Administrators' website at www.sedar.com or through the Company's website at www.atlas-fin.com.
The Company was formed on December 31, 2010 through a reverse triangular
merger and the consolidated financial statements for 2010 are those of
Atlas and two operating insurance subsidiaries, American Country
Insurance Company and American Service Insurance Company, Inc., which
have been prepared in accordance with continuation accounting concepts
included in IFRS 3 - Business Combinations and IAS 27 Consolidated and
Separate Financial Statements. Accordingly, and as a result of the
merger date, shareholder's equity and earnings per share information
provided herein for 2010 reflect the ordinary voting shares outstanding
at the date of the merger as well as the ordinary voting shares,
restricted voting shares and preferred shares that were issued in
connection with the merger, as if such capitalization structure were in
place during all 2010 periods for which financial information is being
Financial Statement Presentation
As noted above, Atlas' financial statements reflect the Company's
consolidated results including prior periods based on historical
financial statements of the Company's subsidiaries American Insurance
Acquisition Inc., American Country Insurance Company and American
Service Insurance Company, Inc. while under the management of its
previous owners. The 2010 financial statements and the historic results
reflected therein contain certain expenses and fees that supported the
infrastructure of the previous parent of these subsidiaries. The
Company does not expect to incur similar expenses, which included
management fees, allocated overhead cost, and shared infrastructure
expenses, after the December 31, 2010 date of the reverse triangular
The primary business of Atlas is commercial automobile insurance in the
United States, with a niche market orientation and focus on insurance
for the "light" commercial automobile sector including taxi cabs,
non-emergency paratransit, limousine/livery and business auto. The
business of Atlas is carried on through its operating insurance
subsidiaries American Country Insurance Company and American Service
Insurance Company, Inc. Atlas' operating insurance subsidiaries have
decades of experience with a commitment to always be an industry leader
in these specialized areas of insurance.
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding the Company
and its subsidiaries and businesses. Such statements are based on the
current expectations of the management of each entity. The words
"anticipate", "expect", "believe", "may", "should", "estimate",
"project", "outlook", "forecast" or similar words are used to identify
such forward looking information. The forward-looking events and
circumstances discussed in this release may not occur and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting the companies, including risks regarding the
insurance industry, economic factors and the equity markets generally
and the risk factors discussed in the "Risk Factors" section of our
Management Discussion and Analysis and Annual Report for the year ended
December 31, 2010. No forward-looking statement can be guaranteed.
Except as required by applicable securities laws, forward-looking
statements speak only as of the date on which they are made and the
Company and its subsidiaries undertake no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events, or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Atlas Financial Holdings, Inc.
For further information:
Scott Wollney, Chief Executive Officer of Atlas Financial Holdings, Inc. at 847-700-8600