A number of insurers have begun to release their financial results for Q4 2010. The following is a compilation of their announcements:
The Allstate Corp. reported financial results for Q4 and full year 2010:
According to a release, Allstate’s net income for the 2010 year was $928 million, or $1.71 per diluted share, compared to $854 million in 2009. The increase was due to improved investment results and higher operating income from Allstate Financial, partially offset by lower property-liability operating income. Total operating income was $1.5 billion, or $2.84 per diluted share, in 2010 compared to $1.9 billion, or $3.48 per diluted share, in 2009.
Allstate's Q4 2010 net income was $296 million, or $0.55 per diluted share, compared to $518 million, or $0.96 per diluted share, in Q4 2009. Total operating income was $271 million, or $0.50 per diluted share, in Q4 2010 compared to $592 million, or $1.09 per diluted share, in the same period of 2009.
Allstate's property-liability business produced an underlying combined ratio of 89.6 for 2010, within the company's full-year outlook range of 88 to 90 announced at the beginning of 2010. The recorded combined ratio for the year was 98.1, 1.9 points higher than 2009. Management's priority is to maintain the profitability of the auto business and improve homeowners profitability, which results in an outlook for the 2011 underlying combined ratio of 88 to 91.
The property-liability underlying combined ratio was 92.0 in Q4 2010 compared to 88.1 in the same period of 2009, primarily due to increased claim frequencies and a higher expense ratio. The recorded combined ratio was 100.8 for Q4 2010, compared to 93.2 for Q4 2009.
Catastrophe losses remained high, reinforcing the importance of Allstate's strategy to improve the profitability of the homeowners business. Catastrophe losses were $537 million during Q4 2010, reflecting 20 events, including an Arizona hailstorm with estimated losses of $355 million. This compares to catastrophe losses of $328 million for Q4 2009. Catastrophe losses added 8.3 points to the combined ratio during Q4 2010.
"Allstate made continued progress on our business strategies in 2010 to position the company for long-term growth," Thomas Wilson, chairman, president and CEO said in a statement. "Allstate Protection's profitability was within our annual outlook for the year but continued to be negatively impacted by high catastrophe losses and increased frequency of auto insurance claims. While we were able to increase auto insurance new business levels at the end of the year, this was not enough to offset lower customer renewals reflecting actions to maintain auto profitability in several large states. Allstate Financial successfully completed the 'Focus to Win' restructuring and is shifting its focus to underwritten products sold through Allstate agencies and the workplace. We also recently announced our intentions to wind down Allstate Bank. Our investment strategies were well timed and executed as we continued to stay long corporate credit while reducing our municipal bond and real estate portfolios. As a result, total investment returns were good although investment income was down for the year reflecting lower interest rates.
Aon Corp. released a statement reporting the results for the fourth quarter and full year ended Dec. 31, 2010.
Net income attributable to Aon stockholders increased 17% to $231 million or $0.67 per share, compared to $198 million or $0.69 per share for the prior year quarter. Net income attributable to Aon stockholders from continuing operations increased 63% to $232 million or $0.67 per share, compared to $142 million or $0.49 per share for the prior year quarter. Net income per share attributable to Aon stockholders from continuing operations, excluding certain items, decreased 13% to $0.84 compared to $0.96 for the prior year quarter reflecting the merger with Hewitt, including $37 million in additional intangible asset amortization and a higher effective tax rate.
"In Risk Solutions, we posted our strongest rate of organic revenue growth in three years and expanded operating margin 70 basis points," Greg Case, president and CEO, said in a statement. "We begin 2011 in a position of strength, as the leading global professional services firm focused on risk and people. The integration of Aon Hewitt is well underway and client reaction has been exceptional. Cost savings related to our restructuring programs and operational initiatives are expected to drive significant margin improvement, and our strong cash flow generation provides financial flexibility as demonstrated by the repurchase of $150 million of Aon stock in the quarter.”
Total revenue increased 40% to $2.9 billion from the prior year quarter due to a 41% increase in commissions and fees resulting from acquisitions, primarily Hewitt, net of dispositions and a 2% increase in organic revenue, partially offset by a 1% decrease from foreign currency translation.
Additionally, Aon’s total operating expenses increased 36% or $655 million to $2.5 billion due primarily to the inclusion of operating expenses related to the merger with Hewitt, partially offset by benefits related to the restructuring programs and an estimated $28 million favorable impact from foreign currency translation.
Restructuring expenses were $57 million in Q4 compared to $175 million in the prior year quarter. In Q4, Aon incurred $52 million of costs under the Aon Hewitt restructuring program and $5 million of total costs under the Aon Benfield and 2007 restructuring programs. The total expected cost of the Aon Hewitt restructuring plan is $325 million. Aon has completed all restructuring activities and incurred 100% of the total costs for the 2007 program and has incurred approximately 88% of the total costs necessary to deliver the remaining savings under the Aon Benfield program.
Aspen Insurance Holdings Ltd. released a statement reporting the results for the fourth quarter of 2010. According to the release, Aspen’s net income after tax for Q4 2010 was $92.7 million and had operating earnings of $1.02 per diluted ordinary share. Aspen’s book value per share on a diluted basis of $38.90 increased by 13.9% when compared to December 31, 2009 and by 1.8% since September 30, 2010.
"I am very pleased to report that we grew BVPS by 13.9% in 2010 and 1.8% in Q4 against a backdrop of continued low interest rates and a challenging underwriting environment,” Chris O'Kane, CEO said in a statement. “The performance of our reinsurance business was particularly strong and, in a year which saw a significant impact from natural catastrophes, the combined ratio of 88.2% reflects the benefits of our diversified approach. We made good progress in furthering our key strategic objectives in 2010 such as developing our insurance franchise in the U.S. and parts of Europe and will continue selectively to seek out opportunities to further our aims in 2011 as market conditions allow."
Reinsurance segment underwriting income for the quarter was $53.7 million compared with $81.3 million last year. This underwriting result reflects a combined ratio of 81.6% compared with 71.9% for the fourth quarter in 2009. The combined ratio for the quarter includes 11.2 percentage points of losses from the earthquake in New Zealand bringing total pre-tax losses for this event to $52.8 million, an increase of $32.8 million over losses included in the third quarter of 2010 results. Net favorable reserve development was $36.1 million compared with $22.7 million for Q4 2009 with the increase attributable to the property and specialty reinsurance lines of business. Gross written premiums in the reinsurance segment for the quarter were $152.8 million compared to $169.7 million in 2009 with decreases in property and casualty reinsurance.
Insurance segment underwriting loss for the quarter was $18.3 million compared with an underwriting profit of $12.0 million in Q4 2009. The combined ratio was 108.8% for the fourth quarter compared with 93.5% in 2009. There has been net reserve strengthening in the insurance segment of $23.5 million for the quarter compared with $9.3 million of strengthening in the fourth quarter last year arising mainly in casualty insurance. Gross written premium was $260.0 million compared with $236.0 million in 2009 with the increase attributable to the marine, energy and transportation lines and financial and professional lines.
Beazley Group recently reported its financial results for Q4 and full year 2010. According to their release, Beazley maintained its track record of unbroken profitability with a pre-tax profit of $250.8m (2009: $158.1m) on gross premiums that fell 1% from 2009 to $1,741.6m. Excluding a one-off foreign exchange gain of $33.7m, the pretax profit was $217.1m, and despite competition increasing across most of our lines of business, Beazley achieved an improved combined ratio of 88% (2009: 90%).
Premium rates on renewal business fell by 2% (2009: 3% increase), placing increased emphasis on the Beazley’s underwriting skills in identifying profitable opportunities.
Beazley’s investments returned $37.5m or 1.0% (2009: $88.1m, 2.7%) in an environment characterized by continuing macro-economic uncertainty, weak global demand and very low interest rates. The firm’s investment returns increased in the course of the year, but our focus remains on capital preservation given the continuing risk of severe market downturns.
Accordingly, the majority of the company’s invested assets (63.8% at year end) are cash, cash equivalents and sovereign or supranational bonds and the duration of our overall fixed income portfolio is just over one year.
“Our 25th year in business was distinguished by excellent profits and an enhanced underwriting result in the teeth of worsening market conditions," Andrew Horton, CEO, said in a statement. "The expertise of our underwriters helped us achieve a combined ratio of 88%, an improvement of two percentage points over 2009. Since we began underwriting in 1986, we have achieved an unbroken track record of profitability through often turbulent market conditions. Our underwriting teams have shown they possess the skills needed to perform strongly in the current challenging environment.”
CNA Financial Corp. announced its Q4 2010 results, which included net operating income of $326 million, or $1.18 per common share, and net income of $302 million, or $1.09 per common share. According to a release, CNA’s full year 2010 results included net operating income of $660 million, or $2.17 per common share, and net income of $690 million, or $2.28 per common share. Full year 2010 results included an after-tax net loss of $365 million related to the previously announced loss portfolio transfer (LPT) transaction with National Indemnity Co. that closed on Aug. 31, 2010, of which $344 million was recognized in continuing operations and $21 million in discontinued operations.
The company’s property/casualty operations’ combined ratios for Q4 and full year 2010 were 89.6% and 94.8%. Book value per common share was $40.70 at Dec. 31, 2010, as compared to $35.91 at Dec. 31, 2009.
Net operating income for the three months ended Dec. 31, 2010 improved $129 million as compared with the same period in 2009. Net operating income for CNA’s core P&C operations improved $50 million, primarily due to increased net investment income. The P&C operations produced Q4 combined ratios of 89.6% and 92.1% in 2010 and 2009. Net operating results for our non-core segments improved $79 million, primarily due to decreased unfavorable net prior year development.
“We are encouraged by our fourth quarter and full year results,” said Thomas Motamed, chairman and CEO in a statement. “Our specialty segment continues to deliver superior results in an extremely competitive environment. We continue to be optimistic about the long term prospects of our commercial segment, which has delivered five consecutive quarters of rate increases, as well as an improving production trend, risk selection and price differentiation.”
“We are also proud to have finished the year with a very strong balance sheet and capital position,” Motamed added. “Our book value per common share increased 13% to $40.70 from year-end 2009. The loss portfolio transfer in the third quarter enhanced CNA’s financial stability by substantially eliminating our exposures to legacy asbestos and pollution liabilities. In addition, during the fourth quarter we redeemed the remaining $500 million of the $1.25 billion of senior preferred stock we sold to Loews Corp. in 2008.”
CNA Surety Corp. reported net income for Q4 2010 of $54.5 million, or $1.21 per diluted share, compared to $49.3 million, or $1.11 per diluted share, for the same period in 2009. For the year ended Dec. 31, 2010, net income was $134.4 million, or $3.02 per diluted share, compared to $117.9 million, or $2.65 per diluted share in 2009.
"With these very strong fourth quarter results, we cap off our fifth consecutive year of record earnings," said John Welch, president and CEO in a statement. "While we recognize that economic challenges still exist, particularly for construction firms, our commitment to conservative and consistent underwriting, which helped us navigate through difficult times, positions the company well for continued success."
For the quarter ended Dec. 31, 2010, gross written premiums increased 2.0% as compared to the quarter ended Dec. 31, 2009. For the year ended Dec. 31, 2010, gross written premiums increased 0.4% compared to 2009.
Contract surety gross written premiums increased 3.1% in Q4 2010 compared to the same period in 2009, despite continued challenges in the construction industry. For the year ended 2010, gross written premiums for contract surety increased 1.3% compared to 2009.
Commercial surety gross written premiums decreased 0.4% in Q4 2010 compared to the same period in 2009. For the year ended December 31, 2010, gross written premiums for commercial surety decreased 1.7% compared to 2009. These decreases reflect a modest decline in the small commercial market, partially offset by selective growth in the corporate commercial market.
The Hanover Insurance Group, Inc. reported its Q4 and full year 2010 results.
According to a release, the company’s net income for Q4 2010 was $58.4 million, or $1.27 per share, compared to $57.3 million, or $1.14 per share, in Q4 2009.
The Hanover’s total property/casualty segment income before interest expense and taxes was $76.2 million in Q4 2010, compared to $70.3 million in Q4 the prior year. The total property/casualty GAAP combined ratio was 97.8% in the current quarter, compared to 97.7% in the prior-year quarter. The pre-tax net impact of catastrophes was $16.8 million, or 2.2 points of the fourth quarter 2010 combined ratio, compared to $6.6 million, or 1.0 point, in the prior-year quarter. Excluding the pre-tax net impact of catastrophes, property/casualty pre-tax segment income was $93.0 million in Q4 2010, compared to $76.9 million in Q4 2009.
"Our fourth quarter results reflect a continuation of the positive trends we saw during 2010," said Frederick Eppinger, CEO, in a statement. "Our ex-catastrophe accident year loss ratio improved by 3 points compared to the prior-year quarter, and we grew ex-catastrophe P&C earnings by 20%, all while achieving significant net written premium growth. We closed the year with a book value per share of $54.74, an increase of 10% from December 2009, as we continue to build value for our shareholders.
"Our strong results for the quarter and the year provide further confirmation that our strategy is succeeding and that we are well positioned to capitalize on continuing market opportunities," he added.
Humana Inc. reported diluted earnings per common share (EPS) for the quarter ended Dec. 31, 2010 (4Q10) of $0.63, compared to $1.48 per share for the quarter ended Dec. 31, 2009 (4Q09). The year-over-year decline in EPS resulted primarily from $1.02 per share of incremental Q4 2010 expenses, including reserves strengthening for the company’s closed block of long-term care business, incremental spending associated with the change in Medicare Advantage enrollment periods, the launch of the Humana Walmart-Preferred Rx Plan (the Humana-Walmart Plan), a contribution to The Humana Foundation and transaction costs associated with the company’s acquisition of Concentra Inc. These incremental Q4 2010 expenses were partially offset primarily by improved year-over-year performance in the company’s operations.
For the year ended Dec. 31, 2010 (FY10) the company reported $6.47 in EPS compared to $6.15 for the year ended Dec. 31, 2009 (FY09). The FY10 results reflected higher average Medicare Advantage membership, lower-than-normal commercial medical costs trends, improved performance in the company’s operations and the beneficial effect of $0.86 per share in higher-than-expected favorable medical claims development related to prior years, partially offset by the $1.02 per share of incremental Q4 2010 expenses described above and $0.55 per share in expenses from the write-down of certain deferred acquisition costs in Q2 2010.
“Our fourth-quarter and full-year results showed operating strength in key areas of strategic focus,” Michael McCallister, chairman of the board and CEO of Humana, said in a statement. “Looking forward, better-than-expected sales at the end of 2010 increased our Medicare Advantage and PDP membership growth estimates for 2011 and, together with continued improvements in our operations, enable us to raise 2011 EPS guidance this morning.”
Mercury General Corp. recently reported its Q4 2010 results in a statement.
The net loss in Q4 2010 was $23.6 million ($0.43 per diluted share) compared with net income of $34.2 million ($0.62 per diluted share) for the same period in 2009. For the year, net income was $152.2 million ($2.78 per diluted share) compared with net income of $403.1 million ($7.32 per diluted share) for the same period in 2009. Included in net loss are net realized investment losses, net of tax, of $15.4 million ($0.28 per diluted share) in Q4 2010 compared with net realized investment losses, net of tax, of $4.0 million ($0.07 per diluted share) for the same period in 2009, and net realized investment gains, net of tax, of $37.1 million ($0.68 per diluted share) for the year compared with net realized investment gains, net of tax, of $225.2 million ($4.09 per diluted share) for the same period in 2009.
Mercury General’s operating loss was $8.3 million ($0.15 per diluted share) for Q4 2010 compared with operating income of $38.2 million ($0.69 per diluted share) for the same period in 2009. For the year, operating income was $115.1 million ($2.10 per diluted share) compared with operating income of $177.9 million ($3.23 per diluted share) for the same period in 2009.
Net premiums written were $617.2 million in Q4 2010, a 0.3% decrease compared to the fourth quarter 2009 net premiums written of $618.9 million, and were approximately $2.6 billion for the year, a 1.3% decrease compared to the same period in 2009.
The company’s combined ratio (GAAP basis) was 109.9% in Q4 2010 and
100.7% for the year compared with 98.1% and 96.9% for the same periods in 2009. The
Platinum Underwriters Holdings Ltd. reported a net loss of $17.7 million and a loss per common share of $0.46 for the quarter ended December 31, 2010 and net income of $215.5 million and diluted earnings per common share of $4.78 for the year ended Dec. 31, 2010.
According to a statement, the results for the quarter include net premiums earned of $185.0 million, net favorable development of $27.7 million, net investment income and net realized gains on investments of $38.9 million and net catastrophe losses of $68.2 million relating to the New Zealand earthquake and $9.9 million relating to the Australian floods.
"2010 was a difficult year for underwriting and investing with heavy catastrophe losses and volatile interest rates,” Michael Price, president and CEO said in a statement. “Despite these challenges, Platinum had an acceptable year, producing double-digit returns and growth in book value per share for the year. Our book value per common share was $50.20 as of December 31, 2010, an increase of 11.0% for the full year."
Net premiums written for Platinum's property and marine, casualty and finite risk segments for the quarter ended Dec. 31, 2010 were $76.9 million, $82.6 million and $2.5 million, respectively, representing 47.5%, 51.0% and 1.5%, respectively, of total net premiums written. Combined ratios for these segments were 143.6%, 71.2% and 112.8%, respectively. Compared with the quarter ended Dec. 31, 2009, net premiums written decreased $37.5 million (or 32.8%), increased $0.1 million (or 0.1%) and decreased $1.4 million (or 36.6%) in the property and marine, casualty and finite risk segments, respectively.
"Despite the prevailing soft market conditions, we expect to participate selectively in a variety of reinsurance classes while maintaining our strategy of underwriting for profitability, not market share, and continuing to align our capital base with business opportunities," Price added.
Torchmark Corp. reported that for the quarter ended Dec. 31, 2010, net income was $1.91 per share, compared with $1.36 per share for the year-ago quarter. Net operating income for the quarter was $1.68 per share, compared with $1.47 per share for the year-ago quarter.
According to a statement, the net income for the year ended Dec. 31, 2010, was $6.30 per share, compared with $4.88 per share for the year-ago period. Net operating income for the year ended Dec. 31, 2010, was $6.41 per share, compared with $5.97 per share for the year-ago period.
Life insurance accounted for 72% of the company's insurance underwriting margin for the quarter and 63% of total premium revenue.
Health insurance, excluding Medicare Part D, accounted for 22% of Torchmark's insurance underwriting margin for the quarter and 29% of total premium revenue. Medicare Part D accounted for 5% of insurance underwriting margin and 8% of total premium revenue.
Net sales of life insurance fell 5%, while health sales, excluding Medicare Part D, fell 49%.
