"These trends should suggest profitability for the personal segment should continue to drift lower through 2006," Mr. Small wrote.

On the other hand, Mr. Small observed that underlying profitability in February was strong with the accident-year loss ratio figure of 69.8 staying flat from January. "We suspect the benign weather across the country positively impacted results," he said.

The commercial side showed price improvement with premium per policy rising 3 percent. "It appears the company continues to make progress penetrating this market, as policies in force were up 11 percent," Mr. Small wrote.

The combined ratio of 86.3 for February represented a rise of 1.1 points from the same period in 2005.

But while profitability may be drifting lower, Mr. Small said that other factors have prompted the company to review its model for the company.

"The company has posted $83.5 million in favorable prior-year development, which is more than we expected for the entire quarter," he wrote.

In his monthly commentary, Mr. King noted that the company had approved a new variable dividend policy.

Mr. Small said that such a policy would have resulted in a $1.66 per share dividend last year instead of the actual $.12 per share. He said the new dividend was a "step in the right direction" in addressing what he termed the company's substantial excess cash position.