Meadowbrook Insurance has reported that its net operating income plunged by 86% to $7.5m, or $0.15 per diluted share during the first quarter of 2012, against $14m, or $0.26 per diluted share, in 2011.

The decline in net operating income during the current quarter of 2012 includes rise in net ultimate loss estimates for accident years 2011 and prior of $6.6m, or $0.13 per diluted share.

For the quarter ended on 31 March 2012, the underwriter net income stood at $8.1m, or $0.16 per diluted share, versus $14.6m, or $0.27 per diluted share, during the corresponding period a year ago while its gross written premium grew 14.7% to $258m, compared to $224.9m in 2011.

Meadowbrook president and chief executive officer Robert Cubbin said during the first quarter, the firm continued to achieve moderate rate increases across their book of business and significant rate increases in certain lines of business and states where underwriting profitability was not meeting their targets.

"These rate increases, which are estimated to exceed loss cost trends, will earn out throughout 2012 and 2013. We also continue to see the positive impact of the underwriting actions taken in 2011 and the first part of 2012," Cubbin added.