Hallmark Financial ( HALL Quick Quote HALL - Free Report) reported second-quarter 2020 operating income of 28 cents per share, beating the Zacks Consensus Estimate of 10 cents per share. The bottom line dropped 33.3% year over year. The quarter witnessed lower premiums and adverse impact of the COVID-19 pandemic. Total revenues improved 15.2% year over year to $129 million in the quarter under review. The top line beat the Zacks Consensus Estimate by 1.4%. Quarterly Operational Update
Gross premiums decreased 16% year over year to $183.6 million.
Net premiums written declined 12% year over year to $109 million. Investment income dropped 41% year over year to $3.2 billion in the quarter, attributable to lower interest rates and an increase in the proportion of short-term investments held relative to longer maturity investments. Net catastrophe losses of $6.6 million includes $3.7 million net losses for COVID-19 claims, which deteriorated net combined ratio by 520 basis points (bps). Net combined ratio deteriorated 390 bps to 98.4%. The exit of the Binding Primary Auto business had a 260 bps negative impact on net combined ratio. Expense ratio of 22.9% improved 280 bps year over year. Total expenses increased 21.7% year over year to $127.1 million due to higher losses and loss adjustment costs, operating expenses and interest expense. Segmental Update Specialty Commercial Segment: Net premiums written declined 17.4% year over year to $74 million. Combined ratio deteriorated 510 bps to 96.9%. Standard Commercial Segment: Net premiums written were up 14.6% year over year to $16.8 million. Combined ratio deteriorated 590 bps to 100.1%. Personal Segment: Net premiums decreased 7.2% year over year to $20.9 million. Combined ratio deteriorated 60 bps to 92.1%. Corporate Segment: Total revenues was $2 million, down from $6.9 million in the year-ago quarter. Pretax loss was $3 million against year-ago income $1.6 million. Financial Position
As on Jun 30, 2020 end, cash and cash equivalents were $126.6 million, up 137.4% from 2019 end level.
Total assets decreased 4.1% year over year to $1.4 billion at Jun 30, 2020. Book value per share dropped 30% year over year to $11.14 as on Jun 30, 2020. Zacks Rank
Hallmark Financial currently carries a Zacks Rank #4 (Sell).
You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation ( PGR Quick Quote PGR - Free Report) , Cincinnati Financial ( CINF Quick Quote CINF - Free Report) , and RLI Corp. ( RLI Quick Quote RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings. Zacks Top 10 Stocks for 2020
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