Please note that this release replaces c9575 disseminated today at
06:30ET. Corrected copy follows.
Atlas Announces Financial Results for Third Quarter 2011
CHICAGO, Nov. 28, 2011 /CNW/ - (TSX.V:AFH) Atlas Financial Holdings,
Inc. ("Atlas" or the "Company") today announced its financial results
for the third quarter 2011. All amounts are in U.S. dollars.
Q3 2011 net income was $984,000 or $0.05 per common share diluted
Core commercial auto lines gross premium written for Q3 2011 increased
57.7% over Q3 2010 reflecting a continuing positive market reaction to
the transaction which formed Atlas
Quarter over quarter expenses in 2011 have remained flat, and are
consistent with Atlas' expected ability to grow core business without
materially increasing infrastructure costs
Atlas expanded its underwriting into five additional states during Q3
Book value per common share diluted at September 30, 2011 was $2.18
Atlas carries a provision, in the amount of $0.64 per common share
diluted at September 30, 2011, against its deferred tax asset.
Total gross premium written for the third quarter 2011 was $10.9 million
reflecting a 7.5% increase from the third quarter 2010 and a 39.1%
increase from the second quarter 2011. In Atlas' core lines of
business, commercial automobile insurance, gross premium written in the
third quarter 2011 was $5.4 million, an increase of 57.7% over third
quarter 2010 and an increase of 115.1% as compared to the second
quarter 2011. The increased volume in the third quarter as compared to
the second is the result of growth in Atlas' core business activity
coupled with seasonality in these lines of business.
Net premium earned was $8.8 million in the third quarter 2011, a 13.7%
decrease compared with the third quarter of 2010 and a 2.9% decrease
compared to the second quarter 2011. Premiums are earned ratably over
the term of underlying policies; therefore, changes in earned premiums
follow any changes in written premium during the trailing twelve month
period based on Atlas' typical policy term.
Atlas' loss and loss adjustment expense ratio was 79.4% in the third
quarter 2011 as compared with 76.1% in the third quarter 2010 and 74.2%
in the second quarter 2011. The increase was primarily due to higher
ULAE in the third quarter 2011. Atlas reduced claim inventories
substantially in 2011 and is committed to retaining its claim handling
expertise as a core competency, expecting ULAE as a percentage of
earned premium to return to scale levels as the volume of business
continues to increase. The Company's loss ratio is also expected to
improve as premium earnings related to terminated non-core and
non-profitable lines wind down.
Other underwriting expense in the third quarter 2011 was $1.9 million,
representing a 32.8% reduction from the third quarter of 2010 and a
4.4% reduction from the second quarter 2011. These expense levels
reflect the strategic activities and contract renegotiations undertaken
to align Atlas' infrastructure with its business plans.
Atlas' combined ratio, which measures underwriting performance, was
120.0% for the third quarter 2011 as compared with 123.4% in the third
quarter 2010 and 114.4% in the second quarter 2011. As net earned
premium begins to grow following increased premiums written in core
lines, Atlas' expense ratios will move towards scale levels, improving
the Company's combined ratio.
In the third quarter 2011 Atlas achieved net income of $0.05 per common
share (fully diluted), compared to a loss of $0.04 per common share
(fully diluted) in the third quarter 2010 and earnings of $0.01 per
common share (fully diluted) in the second quarter 2011.
Atlas assumed substantial loss carryforwards upon becoming the owner of
its insurance subsidiaries. The $0.64 per common share (fully diluted)
provision carried by the Company is against both capital loss and net
operating loss carryforwards at September 30, 2011 and may be utilized
over the next twenty-year period based on profitability.
"The continued improvement in our earnings per share in the third
quarter is consistent with business plans," said Scott D. Wollney,
Atlas President & CEO. "Although we did not generate an underwriting
profit in the third quarter 2011, on a year to date basis we did make
substantial improvement over the results from 2010. Our current
infrastructure is appropriately scaled for expected volume in the
coming year. The continued execution of our strategic plans is
expected to deliver increasingly positive results in 2012."
Atlas expanded into five additional states subsequent to the end of the
second quarter and is currently writing business in twenty four
states. Atlas' active states can be found on the Company's website.
Continued expansion where Atlas' research supports a strong comparative
value proposition utilizing existing licenses will continue into 2012.
Additional information about Atlas, including a copy of Atlas' third
quarter 2011 condensed interim consolidated financial statements and
Management Discussion & Analysis, can be accessed on the Canadian
Securities Administrators' website at www.sedar.com or through Atlas' website at www.atlas-fin.com.
Atlas will hold a conference call at 8:30 a.m. (Eastern Time) on
November 28, 2011 to review third quarter 2011 results. To access the
call, approximately five minutes before the start time please dial
800-593-0693 and, when asked, provide the operator with passcode
"Atlas". Questions will be taken at the end of the call.
Following the call, an audio webcast will be available and can be
Atlas was formed on December 31, 2010 through a reverse triangular
merger and the consolidated financial statements for 2010 are those of
Atlas and its two 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 provided.
Financial Statement Presentation
As noted above, Atlas' financial statements reflect consolidated results
including prior periods based on historical financial statements of
Atlas' 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. Atlas 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 merger which created Atlas.
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 insurance subsidiaries
American Country Insurance Company and American Service Insurance
Company, Inc. Atlas' insurance subsidiaries have decades of experience
with a commitment to always being an industry leader in these
specialized areas of insurance.
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding Atlas and its
insurance 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 the
Company's Management Discussion & 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 Atlas 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.