Exhibit 99.1


Hallmark Financial Services, Inc.

777 Main Street, Suite 1000,

Fort Worth, TX 76102











FORT WORTH, Texas, (March 12, 2018) - Hallmark Financial Services, Inc. (NASDAQ: HALL) today announced results for its fourth quarter and fiscal year ended December 31, 2017, including the following highlights:


·4th quarter 2017 net loss of $10.6 million, or $0.59 per diluted share
·Fiscal 2017 net loss of $11.6 million, or $0.63 per diluted share
·Net combined ratio of 118.7% for 4th quarter 2017 and 107.9% for fiscal 2017
·4th quarter 2017 unfavorable prior year reserve development of $19.9 million versus $8.4 million unfavorable development for 4th quarter 2016
·Fiscal 2017 unfavorable prior year reserve development of $40.1 million versus $7.6 million unfavorable development for prior year
·Catastrophe losses, net of reinsurance, of $1.4 million for the 4th quarter 2017 and $7.8 million for fiscal 2017, which included $3.1 million from Hurricane Harvey, compared to $0.6 million and $11.0 million for the same periods of the prior year
·4th quarter results include a deferred tax revaluation charge of $1.3 million, or $0.07 per share, related to the passage of the Tax Cuts and Jobs Act of 2017
·4th quarter 2017 total revenues of $97.4 million, increased slightly over 4th quarter 2016
·Fiscal 2017 total revenues of $385.5 million increased 3% over the prior year


“Our results have been adversely impacted by reserve development from prior years on our commercial and personal auto lines. The impact of the prior year development contributed 21.5 points and 11.1 points to the combined ratio for the fourth quarter and fiscal year, and has masked the underlying progress made in diversifying and developing a best in class specialty insurer. We have seen rising frequency and severity trends, as well as significantly more litigation, in the commercial and personal auto lines,” said Naveen Anand, President and Chief Executive Officer.


“In commercial auto, we are seeing significantly more adverse verdicts hitting policy limits making this line of business a target for litigation and large claim settlements. We changed our underwriting approach and underwriting leadership as well as adjusted our claim operations to address the new reality in this line. We have exited two states due to price inadequacy and increased rates on all segments of commercial auto over the last two years. Additionally, we have culled underperforming accounts and developed and launched our package binding authority business to further diversify this segment of our business,” continued Mr. Anand.


“We’ve conducted comprehensive reviews of open claims and conservatively adjusted case reserves to reflect our current outlook. Over the course of the last two years, we have effectively transitioned Hallmark from a decentralized claims operation to a centralized one for every product and line of business and made appropriate leadership and management investments throughout the claim organization. The claims processes have been completely revamped as well,” continued Mr. Anand.


“This is beginning to have the expected impact on more current accident year loss ratios for 2016 and 2017. We are seeing positive rate momentum across most lines of business which we believe will ultimately offset the claims frequency and severity trends,” continued Mr. Anand.


“In personal auto, underwriting actions taken have improved the loss ratios by 31.5 points for the fourth quarter and 14.7 points for 2017 compared to the same periods of the previous year. Our actions have resulted in a reduction in gross premiums and the expense ratio has increased in the near term. We expect the expense ratio to normalize over the course of 2018,” continued Mr. Anand.


“Early in my tenure at Hallmark, we identified the need to diversify the book from primarily an auto writer into other specialty product segments. That process is well underway. Our specialty brokerage business is now our largest segment within Hallmark. Additionally, we’ve re-balanced the book on a geographic standpoint and adjusted our catastrophe underwriting approach. The improved 2017 catastrophe results reflect these actions despite a record setting year for the industry for natural disasters. An updated investor presentation will be posted on our website (www.hallmarkgrp.com) today that provides a summary of the significant strategic actions undertaken to develop Hallmark into a best in class specialty insurance group,” concluded Mr. Anand.


The following information was filed by Hallmark Financial Services Inc (HALL) on Monday, March 12, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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