The Richfield, Ohio-based insurance company earned $6.5 million, or 34 cents a share in the quarter, compared with $8.2 million, or 43 cents a share, a year ago. Analysts surveyed by Thomson First Call were expecting earnings of 50 cents a share in the most recent quarter.
Third-quarter revenue rose 9.1% from a year ago to $61.9 million.
Premium earnings increased 7.1% to $56.6 million and net investment income jumped 42.5% to $4.5 million.Losses and loss adjustment expenses rose 14.5% to $38.1 million and losses and loss adjustment expense ratio increased 440 basis points to 67.3%. Underwriting expense ratio increased 420 basis points to 23.8% and combined ratio stood at 91.1%. "Our top-line growth rate improved during the third quarter as we anticipated and we expect this trend to continue for the remainder of the year in spite of current market conditions. The third quarter of 2006 was our first quarter as a public company in which net income was below the same quarter in the prior year. We remain optimistic that 2006 will finish as another record-setting year for both sales and profits with an annual return on average shareholders equity over 20%, beating our stated objective of 15% plus the rate of inflation," the company said.