By Rob Potter
ROCK HILL — May 1, 2001 – The once mighty Frontier Insurance Group received another blow last week when fourth quarter numbers for the year 2000 were released.
Frontier lost a staggering $150.7 million for the three months of October, November and December. Those figures brought Frontier’s reported losses for the year 2000 to $297.2 million.
The fourth quarter numbers represent a net loss of $3.61 per diluted share of common stock, and the year-long loss represents $8.18 per diluted share.
The Rock Hill-based company posted a loss of $90.2 million for the fourth quarter of 1999 and a net loss of $233.3 million that year.
The fall in the company’s stock – which as of yesterday morning was valued at 4.5 cents a share – and a series of layoffs have left Frontier with fewer options for the future and a shadow of its former self. Currently, around 300 people are employed by the company, less than half of the 700 working two years ago.
As noted in figures released by Frontier, losses can be attributed to “the sale of certain subsidiaries and renewal rights” during the past year. In addition, rating agency downgrades have limited Frontier’s ability to write new and renewal policies – although Frontier recently struck a deal with the state that would keep it operating as long as it did not write new insurance policies.
Net premiums earned by the company in the year 2000 declined 13.4 percent from 1999. Premiums earned in the fourth quarter of 2000 were off 32 percent as compared to the same three months in the previous year.
However, thanks to a reinsurance deal with National Indemnity, Frontier is hoping to recover approximately $80 million of reserve funds over the coming months.
Frontier is reportedly looking for potential financial partners for an investment infusion. Frontier Managers, a managing general agency, may also serve as a possible source of future income for the parent company.