Now at this time, I’d like to turn the conference over to Mr. Michael Braun, Chief Executive Officer and President of 21st Century Holding Company. Please go ahead, sir.Michael Braun Good afternoon, and thank you for joining us to discuss 21st Century Holding Company’s second quarter 2011 financial results. I’m joined on the call by Pete Prygelski, our Chief Financial Officer. I’d like to start off with the highlights from our second quarter and then we will be happy to answer your questions. We are highly encouraged with our performance in the second quarter. Core operating results improved substantially. We had built solid momentum in our underwriting as we continue write and renew more profitable business and removed non-profitable policies from our book of business. Continued discipline and underwriting and exposure management is paying off both in terms of improving underwriting profits and lower reinsurance costs. Our loss ratio dropped to 63% this quarter from 93.6% a year-ago and 75.8% in the first quarter. We recently put in place a new reinsurance program at a significantly lower cost based on the quality of our book of business and our exposure management. We estimate a 16% reduction in reinsurance costs for our 2011, 2012 program which was effective June and July of 2011. In tandem with improving underwriting results, we realized a 14% reduction in operating expenses in part from the recent merger of our two insurance subsidiaries. In the second quarter, we continued to see the beneficial effect of our prior rate increases on our operations as rates returned to a more adequate and normalized level. We also recently received a 13.9% rate increase from the Florida to Office of Insurance Regulation and our homeowner policies assumed from Citizens Property Insurance Corporation in 2009, to be effectively August 21st. As the year progresses, we will see an increase in benefit from our multiple rate increases as they continue to foreclose through our book of business. And now an overview of our financial results for the quarter. Full financial details are in the press release that we issued earlier today.
In the three months ended June 30, 2011, the company reported a net loss of $800,000 million or $0.10 per share, compared with a net loss of $2.3 million or $0.30 per share in the same three-month period in last year. Second quarter 2011 results included $500,000 of net realized investment gains compared to $1.6 million in the second quarter of last year. Excluding these gains from both quarters would further show the strength and improvement of our underwriting results as evident by the year-over-year and sequential quarterly improvement in the loss ratio.As previously stated, the loss ratio this quarter was 63%. We are pleased and encouraged by this performance. The reduction in the net loss this quarter reflects discipline in underwriting and exposure management. Significant operating expense reductions and the continued flow through of approved rate increases. For the six months ended June 30, 2011 the company reported a net loss of $2.8 million or $0.35 per share compared with a net loss of $3.3 million or $0.42 per share in the same period last year. Gross premiums written increased $400,000 or 1.5% to $28 million for the second quarter, compared with $27.6 million for the same period last year reflecting continued improvements in writing and renewing a higher quality and more profitable policies in our book of business. Homeowners gross written premium increased $400,000 or 1.6% to $2264 million for the quarter, compared with $22.2 million last year. Gross premiums written increased $500,000 or 1% to $55.1 million for the six months ended June 30, 2011, compared with $54.6 million for the same period last year. Homeowners gross written premium increased $1.7 million or 3.7% to $45 million for the six months ended June 30, 2011, compared with $43.3 million last year. Read the rest of this transcript for free on seekingalpha.com