National Interstate Corporation: discipline and new products will power growth

During a Friday morning conference call, executives of the insurance company National Interstate Corporation (Nasdaq: NATL) said discipline and new products will power growth going forward.

“We are well positioned as we enter the last half of the year,” COO Dave Michelson said during the call.

To further growth, Michelson said National Interstate is introducing an insurance program for taxis in Hawaii, adding greater general liability coverage for the marine sector, expanding its offerings in Texas and California and introducing a new program for insurance brokers. The new program for insurance brokers, which was introduced in June, has brought the company $1.5 million in public transportation business, Michelson said.
 
“Our product diversification continues to benefit us by providing multiple growth opportunities and flexibility in most insurance cycles,” Michelson said.

Despite a soft commercial market cycle, National Interstate has maintained relatively flat pricing levels and remained disciplined, Michelson said.

Before the opening bell, the company announced second-quarter profits soared 31.7%. For the period ended June 30, the Richfield, Ohio-based company recorded net income of $11.9 million, or $0.61 per share, handily topping the average analyst estimate of $0.51. In the year-earlier period, National Interstate earned $9 million, or $0.47 per share.

National Interstate’s quarterly revenue increased to $81.8 million, from $72.7 million a year earlier. Wall Street was expecting revenue of $68.4 million.

“Profitability is ahead of our expectations for the first six months of 2007 and we remain optimistic about our prospects for the future,” CEO Alan Spachman said.

The company’s alternative risk transfer segment experienced the most significant growth during the quarter, Spachman said. Also, all of the company’s offerings have experienced year-over-year growth, he said.

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