MIG - Meadowbrook Insurance Group

[bookie71]

Have any of you insurance gurus looked at this company?  I stumbled across its annual report and it seem to be growing, selling at near or below book and sounds pretty conservative.  I have only scanned the report, but this one looks like a second look would be worthwhile.

[bookie71]

Third quarter earnings

http://finance.yahoo.com/news/Meadowbrook-Insurance-Group-prnews-804621709.html?x=0&.v=1

[PlanMaestro]

0.54 price to book

 

http://finance.yahoo.com/news/meadowbrook-insurance-group-inc-announces-200100444.html

 

(MIG) announced today that it expects to record a pre-tax expense of $31.4 million, or 14.0 combined ratio points in the third quarter of 2012, related to an increase in net ultimate loss estimates for 2011 and prior accident years and $7.9 million, or 3.5 combined ratio points of higher than expected storm losses in the quarter. The increase in the estimate for prior year reserves primarily reflects continued higher than expected incurred loss activity in accident years 2009, 2010 and 2011. As mentioned in previous quarters, the prolonged soft market conditions and rising loss cost trends have significantly reduced underwriting profitability in the commercial automobile line. An unusually high level of storm activity has caused the property line to be unprofitable for the quarter. Our niche focus in workers' compensation, excluding residual markets, and commercial-multi peril/general liability, which includes main street excess and surplus lines, admitted programs and specialty market products, represent about 70% of our business on average and remains profitable. Those lines of business have generated an average accident year combined ratio of 98.2% over the past three years and 97.5% over the past two years.

…

 

Mr. Cubbin commented: "With respect to workers' compensation, our largest line of business, we continue to see favorable overall underwriting trends. The average accident year combined ratio since 2010 was 101.5%. In California workers' compensation, the average combined ratio since 2010 is 98.9%.  Our overall current accident year combined ratio for workers' compensation is 97.7%.  This improvement reflects the impact of cumulative rate increases of 17.2% since 2009.  While we continue to experience acceleration in the case reserving process and case reserve strengthening, the amount of acceleration and case reserve strengthening identified is less in this quarter than our previous estimates contemplated.  Accordingly, we have increased our estimates for prior year losses. Paid loss severities remain more stable and claim frequencies have decreased due to earned rate increases. We view the paid loss severity and frequency trends, along with the rate increases that we have achieved as positive indicators for this business. In most states underwriting actions and rate increases have been effective and ultimate loss estimates on prior accident years have been stable."

 

[Kraven]

0.54 price to book

 

Sell off seems to be overdone to me.  It's generally a pretty well run insurance company with a nice niche workers comp business. 

[twacowfca]

0.54 price to book

 

Sell off seems to be overdone to me.  It's generally a pretty well run insurance company with a nice niche workers comp business.

 

The news isn't good.  AM Best has put all their ratings under review with negative implications, meaning that they will likely get downgraded if they don't raise more capital.

[PlanMaestro]

The news isn't good.  AM Best has put all their ratings under review with negative implications, meaning that they will likely get downgraded if they don't raise more capital.

 

http://www3.ambest.com/frames/frameserver.asp?site=press&tab=1&altsrc=14&altnum=&refnum=65494657774846556654