CRMH Crm Holdings, Ltd. - Common Shares (MM)

CRM Holdings, Ltd. ("CRM" or “the Company”) (Nasdaq: CRMH), a specialty provider of workers' compensation insurance products, announced results for the fourth quarter and year ended December 31, 2009.

Three Months Ended December 31, 2009

In the fourth quarter of 2009, the Company incurred a net loss from continuing operations of $19.0 million, or $(1.13) per diluted share. In the same quarter of the prior year, the Company incurred a net loss from continuing operations of $6.2 million, or $(0.38) per diluted share. Unless otherwise stated, all further results discussed in this release refer to continuing operations for 2009 and results on a comparable basis for 2008.

Total revenues in the fourth quarter of 2009 were $27.2 million, compared to $30.3 million in the same quarter of the prior year. Underwriting actions taken on business written by Majestic Insurance Company (“Majestic”), the Company’s primary insurance provider, in the states of New York and New Jersey, reduced net earned premiums by $3.0 million. Decreases in the Company’s net earned premiums and fee-based management services were offset by increases in investment income. Investment income during the quarter increased to $6.7 million from $4.6 million in the fourth quarter of 2008, as the Company realized gains on its portfolio of fixed income securities. Excluding the benefits of realized capital gains in both periods, interest income earned was $2.3 million in the fourth quarter of 2009, compared to $3.0 million in the same quarter a year ago, a reflection of lower prevailing interest rates in 2009.

Total underwriting expenses for the fourth quarter increased to $33.2 million from $28.2 million a year ago. This increase primarily resulted from higher current year loss and loss adjustment expenses at Majestic on policies underwritten in California, where paid and incurred losses recorded in the first three quarters of 2009 developed worse than expected. For the fourth quarter of 2009, the Company’s overall loss ratio was 151.7%, compared to 101.6% for the fourth quarter of 2008.

Operating expenses of $11.5 million compared to $9.0 million in the same quarter last year. This increase was due to a goodwill impairment charge of $2.7 million related to the full write down of goodwill resulting from the Company’s acquisition of Majestic in November 2006. For the fourth quarter of 2009, the Company’s overall combined ratio was 206.7%, compared to an overall combined ratio of 141.0% for the fourth quarter of 2008.

Primary Insurance

During the quarter, Majestic experienced a decline in revenues compared to the same quarter of 2008. Net earned premiums for the quarter ended December 31, 2009, were $17.2 million, compared to $20.4 million in the same quarter a year ago, largely as a result of underwriting actions taken on Majestic business underwritten in New York and New Jersey. While Majestic experienced lower volumes in the number of policies written in its major market of California during the fourth quarter of 2009, this decrease was offset by slightly higher pricing of policies underwritten. Despite declining payroll and deliberate underwriting actions, Majestic’s submissions and premium written remained strong through the end of 2009. In-force premiums from primary insurance policies at Majestic were $146.9 million at December 31, 2009, compared with $157.2 million at the same time last year.

Majestic’s loss ratio for the 2009 fourth quarter was 156.8%, compared to 93.7% for the fourth quarter of 2008. This increase resulted from a higher current accident year loss ratio as described above and $1.6 million of prior year unfavorable loss reserve development.

Majestic’s underwriting loss was $19.6 million for the fourth quarter of 2009, compared to an underwriting loss of $7.0 million in the same quarter in the prior year. This increase was principally due to the current year loss and loss adjustment expenses and the write off of goodwill. Majestic’s combined ratio for the quarter was 214.6%, compared to 134.1% a year ago.

Reinsurance

The Company’s reinsurance segment, Twin Bridges, generated $2.3 million of net earned premiums in the fourth quarter of 2009, down from $3.5 million in the fourth quarter of the prior year. The reduction was principally due to a decrease in the volume of reinsurance premiums assumed from Majestic. Twin Bridges’ loss ratio was 114.6% for the fourth quarter of 2009, compared to 148.0% in the fourth quarter of 2008. This decrease resulted from Twin Bridges recognizing less unfavorable development in 2009 as compared to 2008. The underwriting loss of $1.2 million for the quarter was an improvement over the underwriting loss of $2.8 million in the fourth quarter of 2008. Twin Bridges’ combined ratio for the quarter was 149.2%, compared to 182.0% a year ago.

Fee-based Business

Fee-based management services revenues were $1.1 million for the fourth quarter of 2009, compared to $1.9 million in the fourth quarter of 2008. The reduction reflected a decline in insured payroll in the self-insured groups under management and a reduction of the number of groups from 4 in the fourth quarter of 2008 to 2 in the fourth quarter of 2009. Effective January 1, 2010, the Contractors Access Program self-insured group terminated active operations and the Company has one self-insured group under management. The fee-based management services operations produced operating income of $161 thousand, compared to operating income of $241 thousand in the same quarter of 2008.

Twelve Months Ended December 31, 2009

For the year ended December 31, 2009, the Company’s net loss from continuing operations was $45.0 million, or $(2.68) per diluted share, compared to net income from continuing operations of $2.0 million, or $0.12 per diluted share in 2008. Total revenues for the year declined to $101.5 million from $143.2 million in 2008.

The major factors contributing to the swing in profits were the establishment of a tax valuation allowance, a decrease in net earned premiums, which includes the reinstatement premiums incurred in the third quarter of 2009, an increased current accident year loss ratio, favorable loss reserve development in 2008 as compared to unfavorable development in 2009, the write-off of the goodwill, and severance expense related to the former co-CEOs incurred in the first quarter of 2009.

Investment Portfolio

At December 31, 2009, the Company had no exposure to equities, collateralized debt obligations or collateralized mortgage obligations. The overall credit rating of Majestic’s fixed income portfolio was AA+. The following tables illustrate Majestic’s investment portfolio distribution by sector and average credit rating.

                          Portfolio Distribution by Sector Portfolio Distribution by Credit Rating   12/31/2009 12/31/2008         Average Average % of Credit % of Credit Quality 12/31/2009 12/31/2008 Portfolio Rating Portfolio Rating AAA 46.9 % 58.7 % Government 21.1 % AAA 17.1 % AAA AA 25.3 % 23.3 % Agency 5.1 % AAA 7.4 % AAA A 26.1 % 14.7 % Corporate 30.0 % A 16.5 % A BBB 1.4 % 3.3 % Mortgage backed securities 17.4 % AAA 20.4 % AAA Below BBB 0.3 % 0.0 % Asset backed securities 3.4 % AA+ 2.8 % AAA 100.0 % 100.0 % Municipal       23.0 %     AA 35.8 %     AA           Total       100.0 %     AA+ 100.0 %     AA+ Average credit rating     AA+ AA+  

The effective portfolio duration was 3.5 years, and the average portfolio yield was 3.3%.

Conference Call

The Company will host a conference call at 9:00 a.m. ET on Thursday, March 4, 2010, to discuss earnings for the fourth quarter ended December 31, 2009. To participate in the event by telephone, please dial 877-303-2905 five to 10 minutes prior to the start time (to allow time for registration) and reference passcode 58681153. International callers should dial 408-427-3868. The conference call will be broadcast live over the Internet and can be accessed by all interested parties at CRM’s Web site at http://www.CRMHoldingsLtd.bm/events.cfm. To listen to the call please go to this Web site at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live webcast, an audio replay of the conference call will be archived for 90 days on CRM’s Web site at http://www.CRMHoldingsLtd.bm/events.cfm. A digital replay of the call will also be available on Thursday, March 4, at approximately 11:00 a.m. ET through Wednesday, March 10 at midnight ET. Dial 800-642-1687 and enter the conference ID number 58681153. International callers should dial 706-645-9291 and enter the same conference ID number.

About CRM Holdings, Ltd.

CRM Holdings, Ltd. is a specialty provider of workers’ compensation insurance products. Through its subsidiaries, CRM Holdings offers workers’ compensation insurance coverage, reinsurance, and fee-based management services for self-insured entities. The Company seeks to provide quality products and services that fit the needs of its insureds and clients and is dedicated to developing and maintaining a mutually beneficial, long-term relationship with them. The Company’s workers’ compensation insurance coverage is offered to employers in California, New York, New Jersey, Arizona, Nevada, and other states. The Company's reinsurance is underwritten from Bermuda, and the fee-based management services are provided to self-insured entities in California. Further information can be found on the Company’s website at http://www.CRMHoldingsLtd.bm.

CRMH-E

Forward-Looking statements

This press release contains forward-looking statements within the meaning of federal securities law, including statements concerning plans, objectives, goals, strategies, projections of future events or performance and underlying assumptions (many of which are based, in turn, upon further assumptions). These statements are based on our current expectations and projections about future events and are identified by terminology such as “may,” “will,” “should,” “expect,” “scheduled,” “plan,” “seek,” “intend,” “anticipate,” “believe,” “estimate,” “aim,” “potential,” or “continue” or the negative of those terms or other comparable terminology.

All forward-looking statements involve risks and uncertainties. Although the Company believes that its plans, intentions and expectations are reasonable, the Company may not achieve such plans, intentions or expectations. There are or may be important factors that could cause actual results to differ materially from the forward-looking statements the Company makes in this document. Such risks and uncertainties are discussed in the Company's Form 10-K for the year ended December 31, 2008 and in other documents filed by the Company with the Securities and Exchange Commission. The Company believes that these factors include, but are not limited to the following:

• The cyclical nature of the insurance and reinsurance industry;
• Premium rates;
• Investment results;
• Legislative and regulatory changes;
• The estimation of loss reserves and loss reserve development;
• Reinsurance may be unavailable on acceptable terms, and we may be unable to collect reinsurance;
• The occurrence and effects of wars and acts of terrorism;
• The effects of competition;
• The possibility that the outcome of any litigation, arbitration or regulatory proceeding is unfavorable;
• Failure to retain key personnel;
• Economic downturns; and
• Natural disasters.

These risks and others could cause actual results to differ materially from those expressed in any forward-looking statements made. The Company undertakes no obligation to update publicly or revise any forward-looking statements made.

      Table 1 CRM Holdings, Ltd. Consolidated Balance Sheets      

December 31,

December 31,

       

2009

     

2008

(Dollars in thousands) Assets Investments Fixed-maturity securities, available-for-sale (amortized cost $275,480 and $308,607) $ 276,593 $ 313,622 Short-term investments 4,893 113 Investment in unconsolidated subsidiary   1,083           1,083 Total investments 282,569 314,818 Cash and cash equivalents 44,087 28,044 Restricted cash and cash equivalents   5,922           2,000 Total cash and cash equivalents 50,009 30,044 Accrued interest receivable 2,542 3,184 Premiums receivable, net 6,246 11,935 Reinsurance recoverable and prepaid reinsurance 123,767 63,801 Accounts receivable, net 3,178 3,099 Deferred policy acquisition costs 758 1,084 Current income taxes, net 6,979 3,208 Deferred income taxes, net - 7,809 Goodwill and other intangible assets, net 436 3,252 Prepaid expenses 3,675 1,836 Other assets         2,788           3,330 Total assets       $ 482,947         $ 447,400     Liabilities and shareholders' equity Reserve for losses and loss adjustment expenses $ 317,497 $ 245,618 Reinsurance payable 20,357 9,424 Unearned premiums 10,599 13,090 Long-term debt 44,083 44,083 Other liabilities         29,677           26,325

Total liabilities

        422,213           338,540   Common shares

Authorized 50 billion shares; $0.01 par value per share; 16.5 and 16.2 million common shares issued and outstanding

165 162 0.4 million Class B shares issued and outstanding 4 4 Additional paid-in capital 71,057 69,743 Retained (deficit) earnings (11,215 ) 35,619 Accumulated other comprehensive income         723           3,332 Total shareholders' equity         60,734           108,860 Total liabilities and shareholders' equity       $ 482,947         $ 447,400                         Table 2 CRM Holdings, Ltd. Consolidated Statements of Operations                                

Three Months EndedDecember 31,

     

Years EndedDecember 31,

        2009     2008       2009     2008 (Dollars in thousands, except per share amounts) Revenues Net premiums earned $ 19,491 $ 23,902 $ 80,524

$

121,942

Fee-based management services 1,014 1,732 4,651 7,329 Investment income         6,724         4,628           16,286         13,900   Total revenues         27,229         30,262           101,461         143,171     Expenses Losses and loss adjustment expenses 29,572 24,277 81,654 85,506 Policy acquisition costs 3,601 3,950 15,240 19,153 Fees paid to general agents and brokers 342 510 1,939 3,983 Selling, general and administrative expenses 11,126 8,536 39,628 30,725 Interest expense         1,060         920           3,798         3,718   Total expenses         45,701         38,193           142,259         143,085     (Loss) income from continuing operations before income taxes (18,472 ) (7,931 ) (40,798 ) 86 Tax provision (benefit) from continuing operations         572         (1,684 )         4,186         (1,937 ) (Loss) income from continuing operations         (19,044 )       (6,247 )         (44,984 )       2,023     Discontinued operations (Loss) income from discontinued operations before income taxes (330 ) 648 (1,807 ) (5,360 ) Tax (benefit) provision from discontinued operations         (306 )       156           43         (1,841 ) (Loss) income from discontinued operations         (24 )       492           (1,850 )       (3,519 )   Net Loss       $ (19,068 )     $ (5,755 )       $ (46,834 )     $ (1,496 )   (Loss) earnings per share from continuing operations Basic

$

(1.13

)

$

(0.38

)

$

(2.68

)

$ 0.12 Diluted

$

(1.13

)

$

(0.38

)

$

(2.68

)

$ 0.12 Earnings (loss) per share from discontinued operations Basic $ 0.00 $ 0.03

$

(0.11

)

$

(0.21

)

Diluted $ 0.00 $ 0.03

$

(0.11

)

$

(0.21

)

Net loss per share Basic

$

(1.13

)

$

(0.35

)

$

(2.79

)

$

(0.09

)

Diluted

$

(1.13

)

$

(0.35

)

$

(2.79

)

$

(0.09

)

Weighted average shares outstanding Basic 16,868 16,491 16,780 16,441 Diluted 16,868 16,491 16,780 16,441                 Table 3 CRM Holdings, Ltd. Unaudited Consolidated Statements of Cash Flow           Years Ended December 31,         2009       2008 (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (46,834 ) $ (1,496 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization 778 1,635 Amortization of unearned compensation, restricted stock 1,260 1,420 Amortization of premiums and discounts on available-for-sale investments 1,604 686 Net realized gains on sale of available-for-sale investments (6,254 ) (3,687 ) Other-than-temporary impairment losses on available-for-sale investments 30 762 Impairment of goodwill and other intangible assets 2,661 196 Write off of uncollectible premiums receivable 1,625 1,346 Deferred income taxes 9,103 (913 ) Changes in: Accrued interest receivable 642 (418 ) Premiums receivable, net 4,064 611 Reinsurance recoverable and prepaid reinsurance (59,966 ) (25,217 ) Accounts receivable, net (41 ) 1,842 Deferred policy acquisition costs 326 (461 ) Current income taxes, net (3,771 ) (3,483 ) Prepaid expenses (1,880 ) 324 Other assets 49 117 Reserve for losses and loss adjustment expenses 71,879 56,770 Reinsurance payable 10,933 3,683 Unearned premiums (2,491 ) 4,237 Other liabilities         3,355           1,650   Net cash (used in) provided by operating activities         (12,928 )         39,604     CASH FLOWS FROM INVESTING ACTIVITIES Purchases of available-for-sale investments (473,901 ) (297,371 ) Proceeds from sales of available-for-sale investments 209,831 183,144 Proceeds from maturities of available-for-sale investments 301,815 70,030 Net purchases, sales and maturities of short-term investments (4,780 ) 673 (Increase) decrease in receivable for securities sold (38 ) 60 Increase in payable for investments purchased - (123 ) Acquisition of intangible assets - (102 ) Purchases of fixed assets (142 ) (908 ) Disposals of fixed assets         51           619   Net cash provided by (used in) investing activities         32,836           (43,978 )   CASH FLOWS FROM FINANCING ACTIVITIES Change in restricted cash and cash equivalents (3,922 ) (2,000 ) Repayments under long-term debt - (1 ) Issuance of common shares - shared-based compensation 75 190 Retirement of common shares - share-based compensation         (18 )         (57 ) Net cash used in financing activities         (3,865 )         (1,868 ) Net increase (decrease) in cash 16,043 (6,242 ) Cash and cash equivalents Beginning         28,044           34,286   Ending       $ 44,087         $ 28,044                                 Table 4 CRM Holdings, Ltd. Quarter to Date Income by Segments   For the three months ended December 31, 2009

PrimaryInsurance

Reinsurance

Fee-BasedManagementServices

CorporateandOther

Elimina-tions

Total

(Dollars in thousands) Revenues: Net premiums earned $ 17,153 $ 2,338 $ - $ - $ - $ 19,491 Fee-based management services - - 1,140 - (126 ) 1,014 Net investment income 2,280 341 (3 ) 19 (335 ) 2,302 Net realized gains         4,422         -         -         -         -         4,422   Total revenues         23,855         2,679         1,137         19         (461 )       27,229   Expenses: Underwriting expenses 29,980 3,319 - - (126 ) 33,173 Operating expenses 6,822 169 976 3,501 - 11,468 Interest expense         519         -         -         876         (335 )       1,060   Total expenses         37,321         3,488         976         4,377         (461 )       45,701    

(Loss) income from continuing operations before taxes

      $ (13,466 )     $ (809 )     $ 161       $ (4,358 )     $ -       $ (18,472 )                                         Total assets       $ 486,790       $ 56,566       $ 4,086       $ 271,259       $ (339,302 )     $ 479,399       For the three months ended December 31, 2008

Primary

Insurance

Reinsurance

Fee-BasedManagementServices

CorporateandOther

Elimina-tions

Total

(Dollars in thousands) Revenues: Net premiums earned $ 20,433 $ 3,469 $ - $ - $ - $ 23,902 Fee-based management services - - 1,910 - (178 ) 1,732 Net investment income 2,829 517 (2 ) 28 (350 ) 3,022 Net realized gains         1,606         -         -         -         -         1,606   Total revenues         24,868         3,986         1,908         28         (528 )       30,262   Expenses: Underwriting expenses 22,381 6,024 - - (178 ) 28,227 Operating expenses 5,013 290 1,667 2,078 - 9,048 Interest expense         350         -         -         918         (350 )       918   Total expenses         27,744         6,314         1,667         2,996         (528 )       38,193    

(Loss) income from continuing operations before taxes

      $ (2,876 )     $ (2,328 )     $ 241       $ (2,968 )     $ -       $ (7,931 )                                         Total assets       $ 434,473       $ 60,962       $ 4,807       $ 305,461       $ (362,289 )     $ 443,414                                 Table 4 CRM Holdings, Ltd. Year to Date Income by Segments   For the year ended December 31, 2009

PrimaryInsurance

Reinsurance

Fee-BasedManagementServices

CorporateandOther

Elimina-tions

Total

(Dollars in thousands) Revenues: Net premiums earned $ 70,396 $ 10,128 $ - $ - $ - $ 80,524 Fee-based management services - - 5,128 - (477 ) 4,651 Net investment income 9,765 1,445 (17 ) 85 (1,216 ) 10,062 Net realized gains         6,194         30       -         -         -         6,224   Total revenues         86,355         11,603       5,111         85         (1,693 )       101,461   Expenses: Underwriting expenses 86,659 10,712 - - (477 ) 96,894 Operating expenses 19,831 876 5,018 15,842 - 41,567 Interest expense         1,474         -       -         3,540         (1,216 )       3,798   Total expenses         107,964         11,588       5,018         19,382         (1,693 )       142,259    

(Loss) income from continuing operations before taxes

      $ (21,609 )     $ 15     $ 93       $ (19,297 )     $ -       $ (40,798 )                                         Total assets       $ 486,790       $ 56,566     $ 4,086       $ 271,259       $ (339,302 )     $ 479,399       For the year ended December 31, 2008

PrimaryInsurance

Reinsurance

Fee-BasedManagementServices

CorporateandOther

Elimina-tions

Total

(Dollars in thousands) Revenues: Net premiums earned $ 93,337 $ 28,605 $ - $ - $ - $ 121,942 Fee-based management services - - 8,216 - (887 ) 7,329 Net investment income 9,738 2,080 (6 ) 211 (1,047 ) 10,976 Net realized gains         2,900         24       -         -         -         2,924   Total revenues         105,975         30,709       8,210         211         (1,934 )       143,171   Expenses: Underwriting expenses 81,006 24,540 - - (887 ) 104,659 Operating expenses 19,074 1,023 7,842 6,769 - 34,708 Interest expense         1,047         -       -         3,718         (1,047 )       3,718   Total expenses         101,127         25,563       7,842         10,487         (1,934 )       143,085    

Income (loss) from continuing operations before taxes

      $ 4,848       $ 5,146     $ 368       $ (10,276 )     $ -       $ 86                                           Total assets       $ 434,473       $ 60,962     $ 4,807       $ 305,461       $ (362,289 )     $ 443,414         Table 5   CRM Holdings, Ltd. Revenues by Segment                           Three months ended Years ended December 31, December 31, 2009 2008 2009 2008 (Dollars in thousands)   Revenues from Fee-Based Management Services California $ 1,140         $ 1,910   $ 5,128         $ 8,216     1,140           1,910     5,128           8,216     Revenues from Primary Insurance California 12,062 11,997 44,960 55,946 New York/New Jersey 4,434 7,469 22,340 33,607 Other (1)   657           967     3,096           3,784     17,153           20,433     70,396           93,337   Revenues from Reinsurance California 2,245 3,012 8,299 18,842 New York/New Jersey 363 543 1,745 7,835 Other (2)   (270 )         (86 )   84           1,928     2,338           3,469     10,128           28,605     Investment income (3) 6,724 4,628 16,286 13,900   Eliminations (4) (126 ) (178 ) (477 ) (887 )                     Total revenues from continuing operations $ 27,229         $ 30,262   $ 101,461         $ 143,171    

(1)

   

Includes primary insurance premiums for policies written in Washington, Alaska, Arizona, Nevada, Florida, Oregon & Hawaii.

 

(2)

Includes reinsurance premiums for policies written in Washington, Alaska, Arizona, Nevada, Florida, Oregon & Hawaii.

 

(3)

Includes the elimination of $335 thousand and $350 thousand of Twin Bridges intercompany interest income on funds withheld by Majestic for the three months ended December 31, 2009 and 2008, respectively, and the elimination of $1,216 thousand and $1,047 thousand of Twin Bridges intercompany interest income on funds withheld by Majestic for the twelve months ended December 31, 2009 and 2008, respectively.

 

(4)

Elimination of fee-based management intercompany commissions against primary insurance policy acquisition costs for the three months ended December 31, 2009 and 2008, respectively. Elimination of fee-based management intercompany commissions against primary insurance policy acquisition costs for the twelve months ended December 31, 2009 and 2008, respectively.

 

 

                    Table 6   CRM Holdings, Ltd. Fee-Based Management Services Segment Data (1)   December 31, 2009 2008     Number of Groups California 2 4   Number of Group Members California 197 376   Aggregate Annualized Premiums (2) California ($000's) $ 27,663 $ 49,035  

(1)

   

Excludes the fee-based management services segment data for CRM NY, which has been reclassified as discontinued operations for all periods presented.

   

(2)

Aggregate annualized premiums are the annualized total of the actual premiums payable to our groups by their members as in effect at the dates specified.

 

                        Table 7   CRM Holdings, Ltd. Primary Insurance Segment Data   Three months ended Years ended December 31, December 31, 2009 2008 2009 2008 (Dollars in thousands) (Dollars in thousands)   Net primary insurance premiums earned $ 17,153 $ 20,433 $ 70,396 $ 93,337 Loss and loss adjustments expenses 26,894 19,143 73,737 68,326 Underwriting, acquisition and insurance expenses (1)   9,908         8,251     32,753         31,754   Underwriting loss $ (19,649 )     $ (6,961 ) $ (36,094 )     $ (6,743 )   Loss Ratio (2) 156.8 % 93.7 % 104.7 % 73.2 % Expense Ratio (3) 57.8 % 40.4 % 46.5 % 34.0 % Combined Ratio (4) 214.6 % 134.1 % 151.2 % 107.2 %  

(1)

   

Does not include the elimination of $126 thousand and $178 thousand of Majestic policy acquisition costs against fee-based management commissions for the three months ended December 31, 2009 and 2008, respectively. Does not include the elimination of $477 thousand and $887 thousand of Majestic policy acquisition costs against fee-based management commission for the nine months ended December 31, 2009 and 2008, respectively.

 

(2)

The loss ratio is calculated by dividing loss and loss adjustment expense by net primary insurance premiums earned.

 

(3)

The expense ratio is calculated by dividing underwriting, acquisition and insurance expenses for the period by net primary insurance premiums earned.

 

(4)

The combined ratio is the sum of the loss ratio and the expense ratio.

                        Table 8   CRM Holdings, Ltd. Reinsurance Segment Data   Three months ended Years ended December 31, December 31, 2009 2008 2009 2008 (Dollars in thousands) (Dollars in thousands)   Net reinsurance premiums earned $ 2,338 $ 3,469 $ 10,128 $ 28,605 Loss and loss adjustments expenses 2,679 5,133 7,916 17,180 Underwriting, acquisition and insurance expenses   809         1,181           3,672         8,383   Underwriting (loss) income $ (1,150 )     $ (2,845 )       $ (1,460 )     $ 3,042     Loss Ratio (1) 114.6 % 148.0 % 78.2 % 60.1 % Expense Ratio (2) 34.6 % 34.0 % 36.3 % 29.3 % Combined Ratio (3) 149.2 % 182.0 % 114.5 % 89.4 %  

(1)

   

The loss ratio is calculated by dividing loss and loss adjustment expense by net reinsurance premiums earned.

 

(2)

The expense ratio is calculated by dividing underwriting, acquisition and insurance expenses for the period by net reinsurance premiums earned.

 

(3)

The combined ratio is the sum of the loss ratio and the expense ratio.