Darwin Professional Underwriters, Inc. (NYSE: DR) today announced its financial results for the fourth quarter ended December 31, 2007. Highlights include:
-- Gross premiums written for the fourth quarter are $70.8 million. Fourth quarter gross premiums written are 12.6% ahead of our gross premiums for the same period a year ago. Net premiums written for the quarter of $51.2 million are up 22.2% over the fourth quarter of 2006.
-- Net income of $10.9 million for the quarter ended December 31, 2007 represents an 88.3% increase over the $5.8 million for the quarter ended December 31, 2006 and our highest net income in our approximately five-year operating history.
-- Overall, the combined ratio is 77.2% for the fourth quarter 2007, which compares favorably to the fourth quarter 2006 combined ratio of 89.2%. The combined ratio improvement is primarily driven by a decrease in the loss ratio (11.2% improvement to 50.1%). The fourth quarter combined ratio improvement includes approximately $6.8 million ($4.4 million, net of tax) in favorable loss reserve development and the corresponding ceded premiums, offset by additional incentive compensation and profit sharing expenses stemming from the favorable development of the 2003 through 2006 accident years.
-- Earnings per diluted share for the three months ended December 31, 2007 are $0.64 compared to $0.34 per share for the same period in 2006. For the full year, earnings per diluted share are $1.89 compared to $0.95 per diluted share for the full year 2006.
For the year ended December 31, 2007, net income return on average equity was 13.7%, compared to 7.7% for all of 2006. Shareholders' equity grew $36.3 million during the twelve months of 2007, to $254.2 million at December 31, 2007 from $217.9 million at December 31, 2006. Book value per share grew 16.8% to $14.93 at December 31, 2007 from $12.78 at December 31, 2006.
Stephen Sills, Darwin's president and chief executive officer, commented, "We had another excellent quarter and remain pleased with our performance. This quarter's net income of $10.9 million represents our best operating result in our history. Our loss experience for each of our accident years continues to emerge favorably, and we were able to continue to find profitable niches to grow our book of business as well as retain our best accounts in the face of tough competition. Darwin recorded an increase in gross premiums written over the fourth quarter of 2006 of 12.6% and demonstrated our continued commitment to underwriting profitability with a fourth quarter combined ratio of 77.2 percent. We believe we're well positioned to take advantage of the continued opportunities we see in specialty insurance." -- Darwin Professional Underwriters, Inc.
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