Investment gains mask slowdown for insurer

The bull market boosted first-quarter profit at Baldwin & Lyons Inc. to a record even though the property-and-casualty insurer’s core business lost ground.

The Indianapolis-based insurer of trucking and auto fleets on Thursday reported $14.9 million, or $1 per share, in earnings—30 percent higher than in the same quarter a year earlier.

But excluding investment gains, Baldwin profit actually declined 30 percent to just $5.6 million, or 38 cents per share. Profit was trimmed through paying out benefits at a higher rate than a year ago.

On that basis, Morgan Keegan, the one investment bank with an analyst covering Baldwin, expected 40 cents per share.

Still, investors reacted favorably to the news, boosting Baldwin stock more than 3 percent Thursday morning. The shares traded at $23.80 apiece a few minutes before 10 a.m.

Baldwin & Lyons wrote fewer insurance premiums in the quarter because of a planned pullback from Florida for “multi-peril” insurance, which can cover businesses for issues including crime, equipment accidents and automobile accidents. Baldwin offset some of those declines by selling more of its core trucking fleet insurance and professional liability products.

Revenue for the quarter, excluding investment gains, totaled $64.9 million, a decrease of 0.9 percent from a year earlier.

In March, Baldwin announced that it would move its headquarters from downtown Indianapolis to Carmel and add 133 jobs over five years.

Baldwin, which employs about 350 in Indiana, intends to spend $20 million to $30 million to purchase and improve a 184,000-square-foot office building at 111 Congressional Blvd. in Carmel.

Baldwin will vacate its headquarters at 1099 N. Meridian St., where it leases 81,000 square feet. That lease was set to expire in August, although Baldwin had an option to renew it for another five years.

Indiana Economic Development Corp. has offered Baldwin & Lyons up to $3.5 million in tax credits if it hires all the people it has promised. Also, Baldwin will get $200,000 in training grants from the state. The city of Carmel is considering additional tax incentives.

Baldwin & Lyons posted $253 million in revenue and strong profit in 2012 after suffering losses due to global disasters in 2011.

The company’s operations produced profit of $26.1 million last year, compared to losses in 2011 of $16.6 million.

Including investment gains and losses, overall profit last year totaled $31.9 million, or $2.15 per share, compared with a loss the previous year of $28.2 million, or $1.90 per share.