Commercial Auto Carrier, ACCEL, Posts Quarterly Results

ACCEL International Corporation says it had a first quarter loss of $508,000 from operations. General and administrative expenses in continuing operations increased in the first quarter of 1998, due to the absorption of certain salaries and other expenses that were previously allocated to the Auto Aftermarket Group, prior to its sale at year-end 1997. The Company's primary product line, its commercial automobile insurance programs, produced a positive contribution in the quarter.

The company says its net loss, which equals six cents a share, compares with net income of $225,000 or three cents a share for the first quarter of 1997.

Income (Loss) before Income Taxes and Discontinued Operations amounted to ($508,000) and ($344,000) for the first quarters of 1998 and 1997, respectively. Income from the operation of the discontinued business segment for 1997 contributed $569,000, resulting in the net income for 1997 of $225,000. For the first quarter of 1998, realized pre-tax gains (losses) on the sale of investments amounted to ($53,000), compared to $64,000 for the same period in 1997.

Gross premiums written totaled $13,791,000 for the first quarter of 1998, compared with $7,416,000 for the first quarter of 1997.

Thomas H. Friedberg, chairman of the board, president and CEO of ACCEL observes promising factors, despite the reported loss. "The continued growth in our premiums written will soon reach a level which will support the overhead we have created in organizing Acceleration National Insurance Company to attract and write a larger volume of property/casualty business," he says. "The fact we wrote almost $11 million of commercial auto premium in the first quarter, a more than 50% increase over the first quarter of 1997, lends credence to our expectations of writing $45 million of premium this year.

"The Company's commercial auto business produced a positive underwriting margin of approximately $300,000 while net investment income contributed over $600,000. These positive contributions were offset primarily by expenses and fees of $1.4 million.

"We continue to pursue what we believe to be realistic strategies to achieve selective premium growth. We have the organizational structure, personnel and outreach network in place to attain the level of business writings we want without significant further expenditures. I believe time is also working in our favor."

ACCEL International Corporation is a Dublin, OH-based holding company with executive offices in Stafford, TX, that provides specialty property and casualty products and services through its insurance subsidiary operating throughout the United States.