Amwest Insurance Profit More Than Triples in 1990

Amwest Insurance Group Inc., a Woodland Hills marketer of bail bonds and other surety bonds, said it had net income for the fourth quarter ended Dec. 31 of $1.75 million, compared to a year-earlier loss of $856,000. For the full year, Amwest’s net income more than tripled to $5.16 million from $1.45 million in 1989.

Amwest’s fourth-quarter and full-year profits were both bolstered by a change in insurance law and a tax benefit. Without those changes, Amwest said it would have reported net income of $751,000 for the fourth quarter, compared to a year-earlier loss of $708,000. For all of 1990, Amwest would have reported a 68% increase in net income, to $3.53 million from $2.09 million in 1989.

Amwest had previously set aside a reserve in case the company had to pay rebates under Proposition 103, the state insurance reform initiative. After legislators exempted surety companies such as Amwest from Proposition 103 last year, Amwest closed the reserve account, which contributed $639,000 to net income for the year 1990.

In addition, a tax benefit contained in the federal budget act of 1990 bolstered Amwest’s net income for the year by an additional $994,000.

After accounting for both changes, Amwest’s net premiums earned--a measure of an insurance company’s revenues--grew 18% in the fourth quarter to $12.4 million from $10.5 million, and rose 26% for the year to $46.9 million from $37.3 million.