Atlas Financial Holdings, Inc.AFH reported first-quarter 2016 operating income of 34 cents per share, which missed the Zacks Consensus Estimate of 37 cents. However, earnings improved 26% year over year on higher revenues.
Including non-recurring items, net income came in at 38 cents per share, more than double year over year.
Behind the Headlines
Atlas Financial's revenues surged 52.3% year over year to $43 million on higher net premiums earned (up 38.4%), net investment income (up 25.6%) and a significant rise in other income (up 219%). However, revenues missed the Zacks Consensus Estimate of $47 million.
Gross premiums written soared 42.4% year over year to $64 million. Core commercial auto business premiums increased 42.9% and in-force premiums as of Mar 31, 2016 were $220.6 million.
The company's total expenses increased 31% year over year to $35.5 million due to a rise in net claims incurred, acquisition costs, interest costs and other underwriting expenses.
Atlas Financial's underwriting income was $6.5 million, reflecting an over twofold increase from the year-ago quarter. Combined ratio improved 540 basis points (bps) year over year to 84.4% driven by a 900 bps improvement in underwriting ratio.
Atlas Financial exited the quarter with cash and cash equivalents of $17.3 million, down 22.8% from the 2015-end level.
Total assets of Atlas Financial increased 2.9% from year-end 2015 to $423.3 million as of Mar 31, 2016.
Total shareholders' equity increased 5.2% from year-end 2015 to $136.6 million.
Book value was $10.73 per share as of Mar 31, 2016, up 16.3% year over year.
Atlas Financial's return on average common equity was 15% in the quarter, higher than 7.7% in the year-ago quarter.
Atlas Financial expects a favorable pricing environment in the specialty light commercial auto market.
Zacks Rank and Performance of Other Insurers
Currently, Atlas Financial carries a Zacks Rank #3 (Hold). The bottom line at RLI Corp RLI , The Allstate Corporation ALL and Aflac Inc. AFL outperformed their Zacks Consensus Estimate in the first quarter.