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Fortegra Financial Corporation Reports First Quarter Results

Stocks in this article: FRF

Adjusted EBITDA for the first quarter of 2011 increased 2.9% to $9.1 million compared to $8.8 million for the first quarter of 2010.

Net earned premium revenues decreased 0.2% to $28.4 million from $28.5 million for the comparable quarter last year, as growth in direct and assumed earned premium from new customers distributing Fortegra's credit insurance and warranty products was offset by a corresponding increase in ceded earned premiums.

Brokerage commission and fee revenues increased 16.9% to $7.9 million compared to $6.7 million for the first quarter of 2010 due to higher fee revenue from the acquisition of eReinsure, which was completed on March 3, 2011, as well as growth in contingent commissions.

Ceding commission revenues earned under coinsurance agreements increased 23.2% to $8.2 million from $6.6 million for the comparable quarter last year, driven principally by increased service and administrative fees and favorable underwriting performance.

Net investment income was $0.9 million for the first quarter of 2011, consistent with the first quarter of 2010.

Service and administrative fee revenues increased 14.3% to $9.1 million for the quarter ended March 31, 2011 from $8.0 million for the comparable quarter last year, primarily due to the contribution of revenues from the acquisition of Auto Knight, which was completed on January 1, 2011, as well as the contribution from acquisitions completed in 2010.

Segment Results

Payment Protection

Revenues for the Payment Protection segment increased 44.8% to $14.3 million in the first quarter of 2011 compared to $9.9 million for the first quarter of 2010. The increase was driven by the three car club acquisitions completed over the past year, which contributed $2.4 million in revenues during the first quarter, as well as an increase in ceding commission. Income before taxes for the Payment Protection segment increased 25.9% to $3.4 million for the first quarter of 2011 compared to $2.7 million for the first quarter of 2010.

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