Insurance management and reinsurance consulting company Trean Insurance Group, Inc. has posted net income of $6.79 million for the first quarter of 2021, representing a decrease of 29.3% on the same period last year.
The result was mainly attributable to a 51.3% decrease in investment income, which totalled $1.59 million versus $3.27 million last year, as well as a 99.6% decrease in net realized capital gains, which came to just $13,000 for the Q1 period compared to $3.23 million previously.
In contrast, underwriting income actually grew from $1.4 million to $4.4 million, resulting in a combined ratio of 89.4% for the first quarter of 2021, compared to 93.9% for the prior-year period.
Similarly, gross written premiums increased 36.0% to $146.7 million in Q1 due to the addition of new program partners brought on board beginning in the second quarter of 2020, growth in Trean’s existing program partner business and the acquisition of 7710 Insurance Company in the fourth quarter of 2020.
Net earned premiums of $41.1 million grew 83.2% compared to the prior year’s first quarter, driven by the increase in gross written and gross earned premiums, partially offset by an increase in ceded earned premiums compared to the prior-year period.
Losses and loss adjustment expenses for the first quarter of 2021 were $24.9 million, which resulted in a 60.5% loss ratio, compared to 57.6% in the prior-year period. The increase in the loss ratio during the first quarter of 2021 versus the prior-year period was primarily attributable to property losses incurred in the first quarter of 2021.
“Our momentum from 2020 carried straight through into the first quarter of 2021, as we generated another quarter of record gross written premiums and solid bottom-line results, driven both by our new program partners and organic growth,” stated Andrew M. O’Brien, President and Chief Executive Officer of Trean.”
“We also delivered significant net earned and unearned premium growth – the latter of which we view as a potential source of additional future profit and further evidence of the success we are having in growing profitably. Notably, our non-workers compensation liability business continues to rapidly expand and encompass a larger portion of our overall gross written premiums, increasing our diversification efforts and further mitigating concentration risk.”
O’Brien continued: “We also maintained our prudent underwriting approach and continued to invest in our business to enhance support for our program partners and their ongoing efforts. Looking ahead, with our proven and resilient business model, our numerous growth opportunities and a robust balance sheet, we believe we are well positioned to generate sustainable and profitable growth.”
