LINCOLN – Amica Mutual Insurance Co. saw net income decline more than 16 percent in 2010 to $101.4 million on higher incurred losses, even though the insurer cut expenses and saw “impressive premium growth.”
Robert A. DiMuccio, chairman, president and CEO, reported at the company’s annual meeting Thursday that Amica’s total auto, home and umbrella policy count stood at 1.3 million, an increase of 4.8 percent from 2009. The insurer’s premiums grew to $1.4 billion in 2010 from $1.3 billion in 2009 – despite what DiMuccio called “a slow, choppy economic recovery.”
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But, Amica’s combined ratio – a performance measurement that compares the company’s incurred losses and expenses against earned premiums – climbed to 105.2 percent in 2010 from 101.5 percent a year earlier. A ratio above 100 percent means a company is paying out more money in claims than it is receiving from premiums.
DiMuccio said the increased ratio was primarily due to higher losses, especially on the bodily injury line of business. The higher ratio came despite Amica cutting expenses to $509.1 million in 2010 from $532.3 million in 2009.
The company said its investment portfolio performed well in 2010, with investment income jumping by $7.6 million to $119.2 million. The excess market value over book value of the portfolio jumped by $128.5 million to $771 million. “Our investments continue to provide consistent contributions from a well-balanced portfolio,” DiMuccio said.
Meanwhile, the company’s surplus increased by $106.2 million to $2.3 billion at the end of 2010, fueled by net income and increases in unrealized capital gains. “Obviously, a strong balance sheet is important to any insurance company, and we have one of the best,” said DiMuccio.
