Carmel-based insurer Baldwin & Lyons Inc. on Wednesday reported a second-quarter loss of $12.3 million—the company's first quarterly loss in almost six years.
The company said it lost $12.3 million, or 82 cents per share, in the period, compared with a gain of $6 million, or 40 cents per share, in the second quarter of 2016. Losses adjusted for investment gains came to 96 cents per share.
The company, which specializes in insurance for the trucking industry, said it experienced “infrequent, but severe loss events,” which reduced its profit for the quarter even as its gross premiums increased.
Baldwin & Lyons hadn't suffered a quarterly loss since it lost $13 million in the third quarter of 2011. The insurer experienced three straight quarterly losses in 2011 due to catastrophic events. The year 2011 was the costliest year on record for insured natural catastrophe losses, mostly from a tsunami in Japan, earthquakes in New Zealand, flooding in Thailand and several destructive tornadoes in the United States.
Baldwin & Lyons terminated many of its international partnerships after 2011 due to those losses.
In the most recent quarter, the company posted revenue of $77.4 million, up from $74 million during the second quarter of 2016.
Gross premiums rose 17 percent, to $229 million, mostly because of growth in commercial automobile and worker’s compensation products.
CEO Randall Birchfield attributed the quarterly loss to reserve strengthening.
"Due to the challenging commercial auto market, we are not unique in strengthening reserves," he said in a conference call. "The commercial auto industry has strengthened prior reserves over the past 5 years. As we have identified the need for reserve strengthening, we are decisively addressing it in one quarter. Our reserve strengthening in the second quarter focused on commercial auto-related products and discontinued lines such as professional liability reinsurance and Florida commercial multi-peril policy."
Birchfield became CEO in May 2016 after a major shakeup in Baldwin & Lyons' executive ranks.
Baldwin & Lyons shares fell 2.4 percent Thursday morning. Prior to Thursday, shares had fallen 7 percent since the beginning of the year and 12 percent in the last 12 months.