PMI Group Quarterly Profit Slips 8 Pct.
NU Online News Service, Jan. 27, 2:07 p.m. EST?The PMI Group Inc.'s 2003 fourth-quarter net income dropped about 8.4 percent on a year-over-year basis, to $77.2 million from $84.3 million reported one year ago, hurt by an increase in claims paid by its U.S. mortgage insurance operations, management said.[@@]
The Walnut Creek, Calif.-based insurer's yearly net profit also fell–down 14 percent to $296.4 million from $346.2 million in income reported in 2002.
The company reported, however, that its consolidated net premiums written have been rising, totaling $350.9 million for the fourth quarter and $876 million for overall 2003, compared with $168.3 million for the quarter and $691.6 million for full-year 2002. PMI attributed this increase to the rise in net premiums written from its U.S. mortgage insurance business and international mortgage insurance operations.
PMI's consolidated premiums earned grew as well, totaling $182.4 million for the fourth quarter and $696.9 million for 2003, compared to $177.2 million and $676.9 million for the corresponding periods in 2002.
However, consolidated losses and loss-adjustment expenses also jumped, totaling $59.4 million for the quarter and $209.1 million for full-year 2003, versus $41.2 million and $157.6 million for the same periods in 2002. The insurer said the rise in losses and loss-adjustment expenses was largely caused by an increase in claims paid by its U.S. mortgage insurance business.
PMI's other underwriting and operating expenses came in at $46.3 million for the fourth quarter and $175.7 million for 2003, versus $41.1 million and $144.9 million for the same periods one year ago.
PMI's U.S. mortgage insurance operations reported $59.4 million for its fourth-quarter net income, lower than the $63.6 million posted for the same quarter in 2002.
The mortgage unit's net income for full-year 2003 was $245.5 million, compared to $280.8 million in 2002. Additionally, the company's international mortgage insurance operations posted net income of $24.2 million for the fourth quarter of 2003 and $78.6 million for 2003, both lower than the $12.9 million and the $48.4 million recorded for the corresponding periods one year ago.
Meanwhile, PMI's financial guarantee unit reported net income of $5.6 million for the quarter and $7.4 million for 2003, improving from the $0.7 million and the $2.8 million posted for the same periods during 2002.
The PMI Group, by underwriting private mortgage insurance, protects lenders in case of borrower default. The company also offers pool insurance, helping to protect secondary mortgage market investors.
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