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Atlas Financial Holdings, Inc. (AFH) delivered operating net income of 16 cents per share in second quarter of 2013, surpassing the Zacks Consensus Estimate by 2 cents. Earnings rebounded from a loss of 1 cent incurred in the prior-year quarter. The upside was driven by substantial improvement in premiums earned.

Behind the Headlines

Total revenue for Atlas Financial grew more than double on a year over year basis to $17.9 million. Robust growth in net premiums earned aided the increase. Total revenue surpassed the Zacks Consensus Estimate of $15 million as well.

Including an increase of 90.6% in the core commercial auto business, gross premium written improved 79.2% year over year. Net earned premiums were $16.9 million, surging from $8.6 million in the year-ago quarter.

Net investment income of Atlas Financial slumped 16.7% year over year to $547 million in the reported quarter.

Total expenses of Atlas Financial escalated to $16.1 million from $8.4 million in the prior-year quarter. The increase was attributable to higher net claims, higher acquisition costs as well as higher other underwriting expenses.

Atlas Financial delivered underwriting profit of $0.828 million in the second quarter, rebounding from a loss of $0.868 million in year-ago quarter.

Loss ratio was 64.6% in the reported quarter, better than 71.6% in year-ago quarter. Combined ratio improved 1650 basis points year over year to 95% in the quarter under review.

Financial Details

Atlas Financial exited the quarter with $25.3 million in cash and cash equivalents, up from $19.9 million at 2012-end.

Claims liabilities of Atlas Financial increased to $105.2 million at the end of the quarter from $70.1 million at 2012 end.

Book value as on Jun 30, 2013 was $6.07 per share, down from $6.15 as on Jun 30, 2012.

Performance of other property and casualty insurers

Berkshire Hathaway Inc. (BRK.A) (BRK.B) reported second quarter 2013 operating earnings of $1.53 per share, surpassing the Zack Consensus Estimate of $1.45 per share. Earnings also compared favorably with $1.50 per share reported in the year-ago quarter.

Everest Re Group Ltd. (RE) reported second quarter 2013 operating earnings of $5.10 per share, substantially beating the Zacks Consensus Estimate of $4.26 per share. Earnings were also up 20% year over year.

The Chubb Corporation (CB) reported earnings of $1.77 per share in the second quarter of 2013. The results beat the Zacks Consensus of Estimate of $1.38 per share and were ahead of the year-ago figure of $1.37.

Zacks Rank

Atlas Financial carries a Zacks Rank #3 (Hold).