Baldwin & Lyons Announces Results for Quarter and Twelve Months

Baldwin & Lyons Announces Results for Quarter and Twelve Months

INDIANAPOLIS, Jan. 31, 2013 (GLOBE NEWSWIRE) -- Baldwin & Lyons, Inc.
(Nasdaq:BWINA) (Nasdaq:BWINB) today announced after tax operating income,
defined as net gain before investment gains and losses, of $4.5 million, or
$.30 per share, for the fourth quarter of 2012. This compares to after tax
operating income of $3.5 million, or $.24 per share, during the fourth quarter
of 2011, which was negatively impacted by the ongoing series of weather
related events which occurred throughout the year. Net investment gains for
the fourth quarter of 2012, which include both realized and unrealized gains
in the Company's limited partnership investments, were $0.2 million after tax,
or $.01 per share, compared to $2.0 million, or $.13 per share, in the same
quarter of 2011. In total, after tax net income for the quarter of $4.7
million, or $.31 per share, compares to $5.5 million, or $.37 per share, for
the prior year fourth quarter.

For the full year, after tax operating income totaled $26.1 million, or $1.75
per share, compared to an after tax operating loss of $16.6 million, $1.12 per
share, during the same period last year. After tax operating losses during
2011 included approximately $43 million of catastrophe losses resulting from
an unprecedented number of significant global events. Net investment gains for
the year to date were $5.9 million after tax, or $.40 per share, compared to
investment losses of $11.6 million after tax, or $.78 per share, in the 2011
period. In total, after tax net income for 2012 was $31.9 million, or $2.15
per share, compared to an after tax net loss of $28.2 million, or $1.90 per
share, for the prior year period.

Premiums written and assumed by the Company's insurance subsidiaries for the
current quarter totaled a record $91.1 million, an increase of 6% when
compared to the prior year fourth quarter. The property and casualty insurance
segment produced an overall 10% increase as premium volume from fleet
transportation products increased 19% and professional liability premium
increased nearly 50%. These gains were partially offset by decreased volume in
private passenger automobile, resulting from rate increases, and the Company's
planned phased withdrawal from its Florida commercial multi-peril risk book of
business. The reinsurance segment experienced a 10% decline in premium
written, compared to the 2011 fourth quarter, as the result of strategic
reductions in property reinsurance exposures, partially offset by a 9%
increase in casualty reinsurance volume.

Premiums written and assumed for the twelve months of 2012 totaled a record
$341.3 million, as the planned reductions in volume from private passenger
automobile, commercial multi-peril and property reinsurance businesses were
more than offset with higher premium from fleet transportation, primary
professional liability and casualty reinsurance products.

Net premium earned of $61.4 million for the fourth quarter of 2012 was 4%
lower than the record premium earned in the fourth quarter of 2011. The
majority of this decline was related to the planned reductions in the products
lines mentioned above, most notably the property products within the
reinsurance segment. For the twelve months, earned premium decreased 3% to
$237.5 million, as planned product reductions and reinsurance treaty changes
were largely offset by increased premium written in fleet transportation and
other product groups.

The Company's consolidated combined ratio for the fourth quarter was 93.8%,
before consideration of fee income. Including fee income, underwriting income
was $4.3 million, producing a combined ratio of 93.0%. All major product
groups were profitable for the quarter including property reinsurance. With
the property reinsurance program changes instituted in the past year and
purchased reinsurance protection, superstorm Sandy was essentially a non-event
for the Company. Reinsurance recoveries and reinstatement premium offset
expected Sandy losses to produce a nearly zero effect on the Company's
results. For the twelve months, the consolidated combined ratio was 88.9%,
producing twelve month record underwriting income of $26.3 million before
consideration of fee income, and $28.6 million, also a record of 88.0%, after
consideration of fees. Profitability from all major product groups, combined
with the lack of any major catastrophic losses to the Company, contributed to
the favorable annual results. Pre-tax operating income for the twelve months,
before investment income, totaled a record $27.7 million.

While investment income for the fourth quarter rallied 3% over the prior year
primarily due to the acceleration of dividends paid on many equity security
holdings, investment income continues to suffer from historically low
available yields. Pre-tax investment income for the full year was 7% lower
than 2011 and after-tax investment income was 9% lower despite the fact that
cash flow from operations remained positive at $58.9 million for the year.
Realized gains in the fourth quarter were modest but $9 million in pre-tax
realized gains were produced for the year.

Book value per share increased $.13 per share during the fourth quarter, after
the payment of $.25 per share in regular cash dividends. For the year, book
value per share increased $1.76, after the payment of cash dividends to
shareholders of $1.00 per share, with the combination of the increase in book
value and dividends representing a 12.9% total return on beginning book value.

Conference Call Information:

Baldwin & Lyons, Inc. has scheduled a conference call for Thursday, January
31, 2013, at 11:00 AM ET (New York time) to discuss results for the fourth
quarter ended December 31, 2012.

To participate via teleconference, investors may dial 1-888-417-8533
(U.S./Canada) or 1-719-457-2083 (International or local) at least five minutes
prior to the beginning of the call. A replay of the call will be available
through February 7, 2013 by calling 1-877-870-5176 or 1-858-384-5517 and
referencing passcode 2143826. Investors and interested parties may also listen
to the call via a live webcast, accessible on the company's web site via a
link at the top of the main Investor Relations page. To participate in the
webcast, please register at least fifteen minutes prior to the start of the
call. The webcast will be archived on this site until January 31, 2014. The
webcast may be accessed directly at:
http://public.viavid.com/index.php?id=102928

Also available on the investor relations section of our web site are complete
interim financial statements and copies of our filings with the Securities and
Exchange Commission.

                                                                
Financial Highlights (unaudited)                                 
Baldwin & Lyons, Inc. and Subsidiaries                           
(In thousands, except per share data)  Three Months Ended Twelve Months Ended
                                      December 31        December 31
                                      2012      2011     2012      2011
                                                                
Operating revenue                      $65,468  $68,354 $253,113 $261,397
Net investment gains (losses)          302       3,088    9,011     (17,803)
                                                                
Total revenue                          $65,770  $71,442 $262,124 $243,594
                                                                
Operating income (loss)                $4,480   $3,491  $26,062  $(16,603)
Net investment gains (losses), net of  196       2,007    5,857     (11,572)
federal income taxes
                                                                
Net income (loss)                      $4,676   $5,498  $31,919  $(28,175)
                                                                
Per share data - diluted:                                        
Average number of shares               14,886    14,845   14,868    14,818
                                                                
Operating income (loss)                $.30     $.24    $1.75    $(1.12)
Net investment gains (losses)          .01       .13      .40       (.78)
                                                                
Net income (loss)                      $.31     $.37    $2.15    $(1.90)
                                                                
Dividends paid to shareholders         $.25     $.25    $1.00    $1.00
                                                                
Annualized return on average                                     
shareholders' equity:
Operating income (loss)                5.8%      4.8%     8.6%      -5.3%
                                                                
Net income (loss)                      6.0%      7.5%     10.6%     -9.0%
                                                                
Consolidated combined ratio of                                   
insurance subsidiaries (GAAP basis):
Without fee income                     93.8%     99.5%    88.9%     118.3%
Including fee income                   93.0%     98.6%    88.0%     117.1%
                                                                

Forward-looking statements in this report are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.Investors
are cautioned that such forward-looking statements involve inherent risks and
uncertainties.Readers are encouraged to review the Company's annual report
for its full statement regarding forward-looking information.

CONTACT: Press Contact:
         G. Patrick Corydon
         (317) 636-9800
         corydon@baldwinandlyons.com
 
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