Fremont General to Take Quarterly Charges

Fremont General Corp., a Santa Monica-based property and casualty insurer, said it will take $50 million in third-quarter charges to cover workers’ compensation and asbestos-related claims. The charges are expected to cut the company’s third-quarter per-share earnings by $1.07 a share. Analysts in a First Call Corp. survey expected the company to post third-quarter earnings per share of 50 cents. The company said $25 million of the charge stemmed from higher-than-expected asbestos-related claims on reinsurance contracts it sold between 1976 and 1984. Reinsurers take on risk from insurance companies in exchange for part of the premiums. Another $25-million charge was related to unexpectedly high losses at its workers’ compensation insurance business. While workers’ compensation claims were within expectations, the company said its reinsurers didn’t cover as much of the claims as it had forecast, meaning it had to assume more losses on its own. It didn’t explain the reason for the reinsurance shortfall. Fremont General shares are down 33% this year. They rose 6 cents to close at $16.81 on the NYSE. The charges were announced after the close of trading.