RICHFIELD, Ohio -- National Interstate Corp. has reported a sharp turn around in net income for the third quarter and substantially higher net income for the first nine months of this year.

The insurance holding company earned $8.2 million, or 42 cents per diluted share, during this years third quarter, compared to a loss of $4.23 million, or 22 cents a share, during the third quarter of 2008.

For the first nine months of this year, National Interstate earned $32.9 million, or $1.70 per diluted share, versus net income of $9.7 million, or 50 cents per share, for the same period in 2008.

Net earnings from operations improved for both the third quarter and first nine months, compared to the same periods in 2008, reflecting fewer large claims.

In addition, a reduction of the deferred income tax valuation allowance and net realized gains from investments contributed to the higher 2009 net income. In other words, National Interstate did not experience the large investment losses it incurred a year ago.

About the only negative National Interstate experienced during the third quarter and first nine months of this year was a drop in gross premiums written, reflecting the weak economy and lots of competition among companies writing insurance.

Gross premiums at National Interstate totaled $69.6 million during the third quarter and $279.7 million for the first nine months of 2009. That was roughly 10 percent below the same periods in 2008.

National Interstate also announced its board had increased the number of directors from eight to nine, and elected company President and CEO Dave Michelson to fill the newly created board seat.

Michelson joined the company in 1992 and has served as president and CEO since January 2008.

The board also approved a seven cents per share quarterly dividend, payable Dec. 11, to shareholders of record Nov. 27.