RICHFIELD, Ohio, -- Losses resulting from two major crashes sent earnings sharply lower during the second quarter and first half of this year at National Interstate Corporation, parent company of the bus industrys No. 2 insurer, National Interstate Insurance Co.

National Interstate Corp. reported net income of $4.4 million, or 23 cents per fully diluted share, for the three months ended June 30, compared to second-quarter 2007 net income of $11.9 million, or 61 cents per diluted share.

For the first half of this year, National Interstate earned $13.9 million, or 72 cents per share diluted, compared to $22.3 million, or $1.15 per share diluted, for six months ended June 30, 2007.

The earnings decline came despite a big rise in premium income.

Gross premiums written during the second quarter of this year totaled $101.5 million, an increase of nearly 24 percent compared to the $81.9 million in premiums written during the second quarter of last year.

For the first six months of this year, gross premiums written amounted to $234.8 million, or 15.8 percent above the $202.8 million reported for the first six months of 2007.

The premium growth during this years second quarter was the strongest at National Interstate since the fourth quarter of 2006. The company said all segments of its business, except the Hawaiian and Alaskan units, grew during the most recent quarter and first half of this year.

The company's revenue rise was primarily attributed to new programs and favorable renewal rates in its alternative risk-transfer business; the addition of new customers in its transportation sector, and growth of new products in its specialty personal lines business.

But it was the big losses resulting from crashes that took a huge chink out of 08 earnings.

"We have experienced an unusual financial impact from large claims during the first six months of 2008," said company President and CEO Dave Michelson.

"Claims that reach policy limits on our higher liability exposures do not occur often, and we have had two in the first half of the year. Our disciplined risk selection criteria and underwriting approach have not changed. Most of the large claims we have experienced in 2008 involved customers that we have insured for many years and we have no reason to expect this pattern to continue," Michelson noted.

Net investment income also declined during the second quarter but was up 6.5 percent for the first half of 08. Total assets at National Interstate climbed above $1 billion for the first time during this years second quarter.

National Interstate said its directors declared a 6-cents-per-share dividend, payable Sept. 12 to stockholders of record Aug. 29.