Ohio Casualty First-Quarter Profit Up 37%

Ohio Casualty Corp. said today that first-quarter net earnings rose nearly 37 percent from the comparable year ago period.

The Fairfield, Ohio-based home, auto and business insurer posted net income of $51.9 million, compared with $37.7 million for the same 2005 period.

The 94.9 combined ratio represented a 0.7 point improvement.

President and Chief Executive Officer Dan Carmichael said the results reflected strong underlying profitability.

"The numbers demonstrate that our underwriting discipline continues to be an effective tool for producing steady earnings growth, even in a competitive market environment," he said.

First-quarter results also benefited from favorable loss frequency trends and positive reserve development. "While we still face challenges in growing our top line, our independent agents continue to reward us with higher renewal retention and are being very responsive to our premium growth initiatives while maintaining underwriting profitability," he said.

Strong competition contributed to an overall decline in premiums for the quarter, the company said. However, net premiums written for the commercial lines segment experienced modest growth in the quarter due in part to a double-digit increase in new business.

Results for the first quarter included $12.9 million of favorable development in loss and loss adjustment expense reserves for prior accident years, compared with favorable development of $3.8 million in the first quarter of 2005.

Reserve development was favorable for most product lines during first-quarter 2006 with the exception of workers' compensation and general liability, which had adverse development.

Consolidated pretax net investment income increased $2.5 million in the quarter as a result of the impact of continued growth in our investment portfolio resulting from positive operating cash flows and a modest improvement in reinvestment yields resulting from the recent upward movement in interest rates.