Carmel-based Protective Insurance Corp. reported its largest annual loss in more than 25 years late Tuesday, as the insurer’s financial toll from accidents continued to grow.
The company formerly known as Baldwin & Lyons Inc., which specializes in insurance for the transportation industry, also cut its quarterly dividend from 28 cents per share to 10 cents per share.
The news sent the company’s Class B shares down 10 percent, to $20.70 each shortly before noon Wednesday.
In its earnings report posted late Tuesday, the company reported a full-year loss of $34.1 million, or $2.28 per share, in 2018, as compared with a profit of $18.3 million, or $1.21 per share, in the previous year.
For the fourth quarter, the company posted a loss of $24.6 million, or $1.65 per share, as compared with a profit of $16.5 million or $1.10 per share, during the same period a year earlier.
“Our singular focus is to set the company on a path toward improvement,” Board Chairman and Interim CEO John “Jay” Nichols told analysts during a conference call Wednesday morning.
Until the last decade, the company had enjoyed a long stretch of continuous annual profitability.
Its last annual loss was in 2011, when it suffered a $28.2 million loss. It also posted a $7.7 million loss in 2008. But, other than that, the company had posted annual profits stretching back to at least 1992.
In recent years, the company has been writing more premiums, but also seeing its losses from accidents increase.
Gross premiums written for the full year totaled $582.5 million, up 15.4 percent over 2017. Gross premiums written for the quarter totaled $152.7 million, up 5.9 percent from the same period a year earlier.
Net premiums earned for the full year totaled $432.9 million, up 31.9 percent. Net premiums earned for the quarter totaled $118.7 million, up 22.2 percent from the year-ago period.
Full-year losses and loss expenses totaled $345.9 million, up from $247.5 million in 2017.
Losses and loss expenses for the quarter totaled $101.5 million, up from $66.5 million during the same period in 2017.
Nichols said the company is working to raise its rates where needed and settle litigation sooner when appropriate to reduce litigation costs.
Last fall, following a rash of executive and board departures and a $12.3 million third-quarter loss, the company announced its board had formed a committee to “explore opportunities to maximize long-term shareholder value” that could include “potential strategic partnerships or transactions.”
Nichols declined to provide an update on these efforts other than to say that the company “continues to explore opportunities to maximize long-term shareholder value.”
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