RICHFIELD, Ohio - National Interstate Corporation has reported sharply higher earnings for the third quarter of 2007, thanks to a variety of factors, including reduced losses, strong investment results, higher premiums, and growth in all segments of its business.

National Interstate, a leading insurer of motorcoaches, said it earned $10.1 million, or 52 cents per diluted share, during the three months ended Sept. 30, a 55 percent increase from third-quarter 2006 net income of $6.5 million, or 34 cents per diluted share.

Last year, National Interstate experienced an unusually large number of major losses during the third quarter, cutting into earnings. This year, the loss rate in the third quarter returned to historical levels. Reflective of that, the '07 third-quarter loss and loss-adjustment-expense ratio was 60.2 percent, versus 67.3 percent a year ago.

Net income for the first nine months of this year was $32.5 million, or $1.67 per diluted share, up nearly 34 percent from last years $24.3 million, or $1.26 per share diluted.

Dave Michelson, president and COO of National Interstate, said the company was pleased with the results and the fact it was continuing to experience growth in all of its business units, plus maintaining double-digit top-line growth overall.

For this year's third quarter, gross premiums written totaled $72.1 million, up 16.7 percent from year-ago premiums of $61.7 million. For the first nine months of this year, gross premiums written totaled $274.9 million, an increase of 12.7 percent compared to the $244 million reported for same period last year.

The company's "alternative risk transfer component" (i.e., captive insurance programs) posted revenue increases of 27.8 percent and 17.7 percent for the 2007 third quarter and year to date, respectively, compared to the same periods in 2006.

Alan Spachman, chairman and CEO of National Interstate, pointed out that the company return on average shareholder equity was 22.9 percent, "ahead of our stated objective of 15 percent, plus the rate of inflation."

During the third quarter, Spachman sold 600,000 shares of his National Interstate stock to KeyBanc Capital Markets Inc., the investment banking and commercial finance unit of Cleveland-based Key Bank. The purchase price was $30 per share.

That transaction, and a smaller one, reduced Spachman's National Interstate holdings on Sept. 12 to 2.4 million shares, or 12.5 percent of the company stock outstanding.

National Interstate shares moved above $32 just before the third-quarter earnings were announced early this month.