FINANCIAL HIGHLIGHTS

For the year ended December 31, 2019, combined statutory net income was $48.4 million, accompanied by a combined ratio of 99.3 for the year. This was an increase of $12.0 million over last year’s net income of $36.4 million, and an improvement of 3.2 points from the 2018 combined ratio of 102.5.

Total net premiums written and earned were higher than the prior year by $15.5 million or 2.1% and $25.7 million or 3.6%, respectively. Commercial lines direct premiums written increased over the prior year by 2.7 percent, to a total of $438.8 million, with the greatest growth achieved in the commercial automobile line of business by way of its renewal premium rate strengthening. In our personal lines of business, an overall direct written premium increase of 0.8 percent was driven by renewal business growth in the homeowners line compared to 2018.

Our net loss and loss adjustment expense ratio decreased by 4.9 points, from the 2018 ratio of 70.4 to 65.5 for 2019. With improvements in both catastrophe and non-catastrophe losses, this year’s incurred losses and loss adjustment expenses of $485.8 million were $18.6 million lower than last year. The year was impacted by a total of $25.1 million or 3.4 points of weather-related catastrophes compared to $40.9 million or 5.7 points experienced last year. Losses and loss adjustment expenses incurred during 2019 were also favorably impacted by $16.6 million or 2.2 points of favorable development, $11.1 million of which is attributed to favorable development in our workers’ compensation line of business.

Underwriting expenses for the current year grew by $17.2 million from last year. This was largely due to increased employee compensation and benefit costs, and amortization on internal software initiatives that were implemented. The overall rise in expenses resulted in a 1.7 point increase in the underwriting expense ratio, from 31.2 for 2018 to 32.9 in 2019.

Our company’s total admitted assets exceeded $1.8 billion as of year-end 2019. Policyholders' surplus increased $72.4 million during the year, to reach a total of $663.7 million at December 31, 2019.