HCC Insurance Holdings 3Q10 EPS Surprises Wunderlich Securities

HCC Insurance Holdings Inc. HCC reported a surprisingly good 3Q10 with EPS of $0.81 versus $0.83 a year ago, Wunderlich Securities reports. “We had expected $0.74 and consensus was $0.72,” Wunderlich Securities writes. “Comparisons to a year ago were difficult due to the fact that 3Q09 included $0.15 in favorable reserve development. Excluding reserve development, HCC would have reported a 17.8% increase in EPS to $0.80 compared to $0.68 in 3Q09.” Wunderlich Securities said that HCC maintained earned premiums at $516.2 million in 3Q10 and a combined ratio of 82.1% even as pricing pressure continued in the property/casualty market. In addition, investment income rose 6% during 3Q10 despite record low interest rates and a conservative investment approach. “We reiterate our Buy rating,” Wunderlich Securities adds. HCC Insurance Holdings currently trades at $27.34.