AssuranceAmerica Corporation Reports Net Loss for the Three-Months and Six- Months Periods Ended June 30, 2011

ATLANTA--(BUSINESS WIRE)-- Atlanta-based ASSURANCEAMERICA CORPORATION (OTC BB: ASAM) today announced its unaudited financial results for the three-months and six-months periods ended June 30, 2011.

Revenues for the three-months and six-months periods ending June 30, 2011 increased by $0.5 million to $14.9 million and decreased by $0.1 million to $30.5, compared to $14.3 million and $30.6 for the same periods in 2010. The pre-tax loss on continuing operations was $3.3 million and $3.0 million for the three-months and six-months period ended June 30, 2011 compared to pre-tax earnings of $0.6 million and $2.0 million for 2010, respectively. The Company reported a net after-tax loss on continuing operations of $2.1 million and $1.9 million for the three-months and six-months ended June 30, 2011, compared to earnings of $0.3 million and $1.1 million for the three-months and six-months ended June 30, 2010.

The pre-tax loss on discontinued operations was $1.8 million and $2.1 million for the three-months and six-months period ended June 30, 2011 compared to $0.8 and $0.7 million for the same periods in 2010, respectively. The Company reported a net after-tax loss on discontinued operations of $1.7 million and $1.9 million for the three-months and six-months ended June 30, 2011. The discontinued loss relates to a loss on disposal of the Company’s Georgia retail agencies and a goodwill impairment on discontinued agency operations.

The decline in earnings from continuing operations for the three and six month period ended June 30, 2011 resulted from higher loss and loss adjustment expense of $4.4 million and $5.4 million, respectively, of which $2.9 million and $4.1 million was related to development on claims from prior years. Premiums earned improved year-over-year earnings for such periods by $0.8 million and $1.4 million, respectively, partially offset by lower ceding commission income of $0.2 million and $1.3 million.

Joseph Skruck, President and COO, stated, “Increased losses from adverse claims trends in the Florida no-fault market along with high spring storm activity in several Southeastern states were the prime unfavorable contributors to our calendar year performance. We are beginning to see the positive results from our actions to strengthen rates, impose more restrictive underwriting requirements, and limiting the writing of business where fraudulent activity persists. Excluding prior year loss development, pretax earnings from continuing operations, were $(0.4) million and $1.1 million for the three and six months ended June 30, 2011.

“Recently, we also divested our Georgia and Alabama agencies in order to focus on our core MGA/Carrier business.”

AssuranceAmerica focuses on the non-standard automobile insurance marketplace, primarily in Alabama, Arizona, Florida, Georgia, Indiana, Louisiana, Mississippi, South Carolina, Texas and Virginia. Its principal operating subsidiaries are TrustWay Insurance Agencies, LLC ("Agency"), which sells personal automobile insurance policies, AssuranceAmerica Managing General Agency, LLC ("MGA"), and AssuranceAmerica Insurance Company ("Carrier").

Forward-Looking Statements

This press release contains certain statements that may be deemed to be "forward-looking statements". All statements in this press release not dealing with historical results or current facts are forward-looking and are based on estimates, assumptions, and projections. Statements that include the words "assumes", "believes," "seeks," "expects," "may," "should," "intends," "likely," "targets," "plans," "anticipates," "estimates" or the negative version of those words and similar statements of a future or forward-looking nature identify forward-looking statements.

The primary events or circumstances that could cause actual results to differ materially from those expected by AssuranceAmerica Corporation include determinations with respect to reserve adequacy, realized gains or losses on the investment portfolio including other-than-temporary impairments for credit losses, rising loss cost trends, actions of competitors and natural disasters. AssuranceAmerica Corporation undertakes no obligation to publicly update or revise any of the forward-looking statements. For a more detailed discussion of some of the foregoing risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see AssuranceAmerican Corporation filings with the Securities and Exchange Commission.

AssuranceAmerica Corporation also makes available an investor supplement on our website. To access the supplemental financial information, go to www.assuranceamerica.com.

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AssuranceAmerica Corporation, AtlantaSheree S. Williams, 770-952-0200 Ext. 6212
Senior Vice President and Chief Financial Officer
orMark Hain, 770-952-0200 Ext. 6259General Counsel, Secretary, Executive Vice President

Source: AssuranceAmerica