Tower Group Inc. (TWGP, Financial) filed Quarterly Report for the period ended 2010-09-30.
Tower Group Inc. has a market cap of $1.11 billion; its shares were traded at around $25.62 with a P/E ratio of 10.5 and P/S ratio of 1.1. The dividend yield of Tower Group Inc. stocks is 1.9%. Tower Group Inc. had an annual average earning growth of 31.4% over the past 5 years.TWGP is in the portfolios of NWQ Managers of NWQ Investment Management Co, Columbia Wanger of Columbia Wanger Asset Management, RS Investment Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Commission and fee income. Commission and fee income increased by $5.9 million in the three month period ended September 30, 2010. This increase is partially attributed to our decision to cede commercial liability premiums on an in-force and renewal basis, effective October 1, 2009. Additionally, the Company recognized additional policy billing fees in connection with the OBPL business. Commission and fee income increased by $1.0 million in the nine month period ended September 30, 2010 due to the increase in ceded premium revenue and policy billing fees. This was offset by a reduction caused by Tower Risk Management Corp. ceasing to produce business on behalf of CPIC subsequent to the CastlePoint acquisition in the first quarter of 2009.
resulted from an increase in average cash and invested assets for the three and nine months ended September 30, 2010 as compared to the same periods of 2009. The increase in cash and invested assets resulted primarily from invested assets acquired from the aforementioned acquisitions (reduced by cash used to finance such acquisitions) and to operating cash flows of $214.7 million generated during 2009 and $131.6 million generated during the first nine months of 2010. The positive cash flow from operations was the result of the aforementioned acquisitions and an increase in premiums collected from a growing book of business. The tax equivalent investment yield at amortized cost was 5.1% at September 30, 2010 compared to 5.6% at September 30, 2009. Operating cash invested in 2009 and in 2010 has been affected by a low yield environment, as asset classes other than US Treasuries have experienced tightening spreads, the result of investors reaching for yield in a low interest rate environment. We have increased our investment in high yield securities to reduce the impact of this low rate environment.
Net realized investment gains were $7.6 million for the nine months ended September 30, 2010 compared to gains of $2.3 million in the same period last year. Credit related OTTI losses in the three and nine months ended September 30, 2010 of $0.6 million and $3.5 million respectively were considerably lower than the $11.7 million and $19.0 million, respectively, which were recorded for the comparable periods of 2009.
Acquisition-related transaction costs. Acquisition-related transaction costs for the three and nine months ended September 30, 2010 were $0.1 million and $1.4 million, respectively, and relate to the acquisition of OBPL. In the comparable periods of the prior year, we recorded acquisition related transaction costs of $2.0 million an
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Tower Group Inc. has a market cap of $1.11 billion; its shares were traded at around $25.62 with a P/E ratio of 10.5 and P/S ratio of 1.1. The dividend yield of Tower Group Inc. stocks is 1.9%. Tower Group Inc. had an annual average earning growth of 31.4% over the past 5 years.TWGP is in the portfolios of NWQ Managers of NWQ Investment Management Co, Columbia Wanger of Columbia Wanger Asset Management, RS Investment Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Premiums earned. Gross premiums earned in the three and nine months ended September 30, 2010 increased 58.3% and 42.9%, respectively, compared to the same periods in 2009, primarily as a result of the aforementioned acquisitions. Ceded premiums earned increased by a lower percentage than the gross growth percentage as we retained a larger percentage of our gross premiums because of our increased capital base. Accordingly, net premiums earned in the three and nine months ended September 30, 2010 increased by $154.8 million and $298.3 million, respectively, as compared to the same periods in 2009.Commission and fee income. Commission and fee income increased by $5.9 million in the three month period ended September 30, 2010. This increase is partially attributed to our decision to cede commercial liability premiums on an in-force and renewal basis, effective October 1, 2009. Additionally, the Company recognized additional policy billing fees in connection with the OBPL business. Commission and fee income increased by $1.0 million in the nine month period ended September 30, 2010 due to the increase in ceded premium revenue and policy billing fees. This was offset by a reduction caused by Tower Risk Management Corp. ceasing to produce business on behalf of CPIC subsequent to the CastlePoint acquisition in the first quarter of 2009.
resulted from an increase in average cash and invested assets for the three and nine months ended September 30, 2010 as compared to the same periods of 2009. The increase in cash and invested assets resulted primarily from invested assets acquired from the aforementioned acquisitions (reduced by cash used to finance such acquisitions) and to operating cash flows of $214.7 million generated during 2009 and $131.6 million generated during the first nine months of 2010. The positive cash flow from operations was the result of the aforementioned acquisitions and an increase in premiums collected from a growing book of business. The tax equivalent investment yield at amortized cost was 5.1% at September 30, 2010 compared to 5.6% at September 30, 2009. Operating cash invested in 2009 and in 2010 has been affected by a low yield environment, as asset classes other than US Treasuries have experienced tightening spreads, the result of investors reaching for yield in a low interest rate environment. We have increased our investment in high yield securities to reduce the impact of this low rate environment.
Net realized investment gains were $7.6 million for the nine months ended September 30, 2010 compared to gains of $2.3 million in the same period last year. Credit related OTTI losses in the three and nine months ended September 30, 2010 of $0.6 million and $3.5 million respectively were considerably lower than the $11.7 million and $19.0 million, respectively, which were recorded for the comparable periods of 2009.
Acquisition-related transaction costs. Acquisition-related transaction costs for the three and nine months ended September 30, 2010 were $0.1 million and $1.4 million, respectively, and relate to the acquisition of OBPL. In the comparable periods of the prior year, we recorded acquisition related transaction costs of $2.0 million an
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