Investors Title Announces Fourth Quarter and 2011 Full-Year Results
February 28, 2012
North Carolina-based Investors Title Co. reported lower premium volumes led to a 21 percent decrease in net income during the fourth quarter of 2011, while expense reduction and a favorable claims experience led to an 8.8 percent increase in net income for 2011 compared to the prior year.
For the quarter, net income was $1,879,459 compared with $2,368,550 for the same period in 2010. Meanwhile, net income was $6,933,936 for 2011, compared with $6,372,626 for the prior year.
"We are pleased to report a substantial improvement in operating results for 2011,” said J. Allen Fine, chairman of Investors Title. “Although we did experience a slowdown in the fourth quarter, premiums written for the year increased 32.6 percent versus last year largely due to our expansion into Texas.”
Net premiums written increased 32.6 percent to $81,529,333 versus the prior year, mainly as a result of the company's expansion into Texas in late 2010. Operating expenses increased 29.5 percent to $81,186,220 versus the prior year period, primarily due to an increase in commissions to agents and other expenses which fluctuate with revenues. Commissions to agents increased 59 percent, commensurate with the growth in agency premiums and reflective of an increase in agent business from markets with higher premium rates, primarily Texas.
The provision for claims as a percentage of net premiums written was lower compared with the prior year due to an adjustment for favorable loss development in prior policy years, as well as a decline in the relative share of North Carolina business as a percentage of the total versus the prior year period. Since North Carolina's premium rates are less than half the national average, the resulting loss ratio for North Carolina business is higher than for Investor Title’s other markets.
“Our balance sheet and financial condition remain very strong, and in the coming year we plan to continue to enhance our competitive strengths and market position by emphasizing the expansion of our agency base and operational efficiency,” Fine said.