Increased claims hit profits at National Security Group

Net profits at The National Security Group, which offers property and casualty (P&C) and life insurance through its subsidiaries, decreased in the third quarter of the year.

The company reported a net income of $1.62 million for the three months ending September 30, 2015, compared to $1.79 million in the same time period the previous year.

National Security Group said the main reason for the profit decline was an increase in policyholder benefit and settlement expenses (claims). In the third quarter of 2015 claims were 54.1 percent of net premium earned compared with 49.9 percent of net premium earned in the third quarter of last year.

The primary factor contributing to the increase in claims was a moderate increase in both fire and wind related losses in the P&C segment in the third quarter of 2015 compared to third quarter of 2014.

However, the company’s gross written premiums (GWP) for Q3 2015 increased to $17.25 million, compared with $16.79 million in the third quarter of 2014.

Net income for the first nine months of the year also decreased to $3.58 million compared with $4.73 million for the first nine months of last year.