Property and casualty insurance holding company Protective Insurance Corporation (PIC) has announced its results for Q3 2020, revealing that it narrowed its underwriting loss to $364,000 compared with a loss of $7.8 million for the same period last year.
This meant that Protective’s underwriting operations produced a combined ratio of 100% during the period.
Excluding prior period development, the Q3 2020 accident year loss ratio was 71.6% which was a 5.2 point reduction from the Q3 2019 loss ratio.
The reduction in the loss ratio and combined ratio reflects actions taken to improve underwriting results, including non-renewal of unprofitable business as well as significant rate increases in commercial automobile.
Due to ongoing profitability challenges, PIC has discontinued writing new public transportation business effective the fourth quarter of 2020.
However on a positive note, the company’s net income of $3.3 million meant that it had gone from a loss of $0.7 million for Q3 2019 to a profit.
Jeremy Johnson, PIC’s Chief Executive Officer, said: “I am pleased with the sustained year over year improvement in our core business. Our trucking clients continue to see strong demand, driving our top line premium growth, and the team at Protective has executed well to balance necessary margin improvement with client retention and acquisition. We are well positioned to create value for all our stakeholders.”
Net premiums earned for Q3 increased to $117.9 million, up 6.9% compared to the prior year period. Net premiums earned for the first nine months of 2020 decreased to $325.2 million, down 3.2% compared to the same period last year.
The higher premiums in Q3 were primarily the result of increased premiums related to rate increases, existing business exposure growth and new business policies sold primarily in our independent contractor commercial automobile products.
The lower premiums for the first nine months of 2020 were primarily the result of declines in premiums within its commercial automobile products, specifically public transportation, as a result of COVID-19 due to a reduction in miles driven.
Due to the decline in public transportation was partially offset by increased premiums related to rate increases, existing business growth and new business policies sold primarily in our independent contractor commercial automobile products.
