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Catastrophes deliver more losses to Baldwin & Lyons

J.K. Wall
November 3, 2011
Keywords
Financial Results, Health Care & Insurance, Insurance, Insurance Claims, Insurers, Public Companies
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Baldwin & Lyons Inc. blamed “unprecedented” catastrophies and a bad investment climate Thursday morning after the company badly missed Wall Street expectations.

The Indianapolis-based auto and trucking fleet insurer lost $13 million, or 87 cents per share, in the three months ended Sept. 30, compared with profit of $9.2 million, or 62 cents per share, in the same period a year earlier.

Excluding investment losses, Baldwin would have lost only $1.6 million, or 11 cents per share, in the quarter. An analyst who follows Baldwin expected the company to earn 38 cents per share on that basis.

Baldwin paid for significant damage its policyholders sustained from Hurricane Irene, which ravaged the East Coast in August, and other storms in the United States, as well as continuing claims from the March earthquake in Japan. In October, Baldwin estimated these losses totaled $9.5 million in the third quarter.

For the year, catastrophes have cost Baldwin $37 million, after taxes credits, compared with after-tax catastrophic losses of $13 million during the first nine months of 2010.

The company’s common stock plunged to a low of $20.55 per share after Hurrican Irene, but it has since recovered 14 percent, to close Wednesday at $23.48 per share.

Revenue for Baldwin’s third quarter plummeted 30 percent, to $47.2 million, reflecting investment losses of more than $17 million. One silver lining in the quarter was that Baldwin wrote 14 percent more in insurance premiums than it did in the same quarter last year.


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  1. The lack of street-level retail in this part of the Block 400 development is a huge oversight and somewhat perplexing given the high quality of recent city-backed developments downtown. This portion of an otherwise stellar development is going to have an extremely negative impact on the aesthetics, urban environment, walkability, and livability of the NW quad.

    I'm not sure why One America would oppose including retail. And I find it very hard to believe that the thousands of office workers literally footsteps away wouldn't be able to support new lunchtime destinations and other businesses along Illinois and Vermont. We've got to reconnect the disjointed segments of our blossoming downtown, not create yet another lifeless dead zone that no one wants to walk through. Sadly, that is exactly what this massive ugly single-use structure will accomplish.

    Why not follow the precedent set by the proposed garage in Broad Ripple and create an attractive mixed-use structure? Why does the city get it there but not downtown?

  2. Bear mind that DS is just not another lazy, rich kid. He attended Columbia grad school and was in investment banking for 4 or 5 years before joining his dad's company. An annual grant of stock options at market price would be the correct pay-for-performance program then no one could argue with it.

  3. This comes from an executive who gave his wife a Bentley as a wedding present. He is heir to billions of dollars. He should be working for a dollar a year and stock options only. Seems like a conflict of interest, time to bring in a non-relative as CEO. Haven't met him, but have heard his arrogance is legendary.

  4. If the property is improved, property taxes increase - more revenue. If AUL's employment grows, more income taxes - more revenue. If more people move and/or work downtown, it means more demand for goods and services, more employment, more taxes - more revenue, etc., etc. It's not just the city throwing money at big companies. There's much, much more. Yes, the project has private backing, but apparently not enough to make the deal work and therefore they don't have it covered. And while Marsh is a nice anchor, they are no credit tenant like a Kroger or somebody. And if the police department has a major shortfall, they need to reduce the force. This city has way too many policemen.

  5. It's hard to defend billionaires, but David Simon has created a tremendous amount of value for shareholders since joining the company. He is widely regarded as one of the best CEOs in America. The company is growing and making good strategic decisions. And Indy is fortunate to have SPG HQ'd here. Now, does that merit $120 million (about 15 mil over 8 years or so)? Maybe. But this family and David have truly built a business. Should Zuckerberg be worth $20 bil? Who knows. Hopefully David will be supportive of Hoosier charities like his family has.

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