11 Insurers Report Q2 Results

A number of insurers have released their financial results for Q2 2011. The following is a compilation of their announcements:

 

American International Group Inc.

American International Group (AIG) reports a net income attributable to AIG of $1.8 billion and after-tax operating income of $1.3 billion for the quarter ended June 30, 2011, compared with a net loss of $2.7 billion and after-tax operating income of $793 million for the second quarter of 2010. The diluted earnings per share were $1.00 for the second quarter of 2011, representing a return on equity of 8.3 percent, compared with a loss per share of $19.57 for the second quarter of 2010. The 2011 second-quarter after-tax operating income per share was $0.69, a 6.3 percent return on equity, compared with after-tax operating income per share of $1.18 for the second quarter last year. Earnings per share for the current period reflect the 1.655 billion shares issued to the United States Treasury Department on Jan. 14, 2011.

“We also achieved a significant recapitalization milestone during the quarter with an $8.7 billion common stock offering, consisting of the issuance and sale of 100 million shares by AIG and the sale of 200 million shares at a profit by the U.S. Treasury,” said Robert Benmosche, AIG president and CEO.

 

American Safety Insurance Holdings

American Safety Insurance Holdings Ltd. reported net earnings of $4.1 million for the three months ended June 30, 2011, or $0.38 per diluted share, as compared to $6.2 million, or $0.58 per diluted share, for the same period of 2010.

Total revenues in the quarter increased to $68.2 million from $56.8 million in 2010 primarily due to increases in net earned premiums across all insurance divisions. Investment income increased to $8.1 million while net realized gains and fee income decreased slightly.

The combined ratio of 105.8 percent consists of a loss ratio of 67.4 percent and an expense ratio of 38.4 percent, compared to 61.9 percent and 37.5 percent, respectively, for the same quarter of 2010. The loss ratio includes the impact from U.S. storm losses of $5.1 million, composed of $4.1 million in the ART division and $1.0 million in the E&S division.

For the three months ended June 30, 2011, net operating earnings of $3.9 million compares to $5.7 million for the same quarter 2010. The decrease in net operating earnings is primarily due to the U.S. storm losses. Net earnings for the six months ended June 30, 2011 were $12.0 million, or $1.11 per diluted share, compared to $12.7 million, or $1.19 per diluted share for the same period in 2010.

 

Argo Group

For the three months ended June 30, 2011, Argo Group’s net income was $22.8 million or $0.82 per diluted share. Net operating income after tax was $3.7 million or $0.14 per diluted share. These results were impacted by second quarter pre-tax catastrophe losses of $31.9 million net of estimated reinstatement premiums. By comparison, the second quarter of 2010 produced net income of $26.1 million or $0.86 per diluted share. The three months ended June 30, 2010, produced net operating income of $14.9 million or $0.49 per diluted share. Second quarter 2010 results included $15.1 million of pre-tax catastrophe losses net of estimated reinstatement premiums. Total revenue in the second quarter of 2011 was $336.0 million versus $362.4 million in the same period in 2010. Combined ratio for the second quarter of 2011 was 108.6 percent versus 102.7 percent for the same period in 2010.

The differences between net income and net operating income for the three months ended June 30, 2011, include 1) realized gains of $31.5 million pre-tax associated with the Company’s investment portfolio; and 2) foreign currency exchange losses of $3.4 million pre-tax. Included in the results for the three months ended June 30, 2011 and 2010, are favorable prior year loss development of $1.1 million and $9.3 million, respectively.

 

CIGNA

Adjusted income from CIGNA operations for second quarter 2011 was $418 million, or $1.53 per share, representing an increase of 11 percent per share compared with the second quarter of 2010, when they recorded $384 million, or $1.38 per share. Shareholders’ net income for second quarter 2011 was $408 million, or $1.50 per share, compared with shareholders’ net income of $294 million, or $1.06 per share, for the second quarter of 2010. Shareholders’ net income included a loss of $0.07 per share in the second quarter of 2011 and a loss of $0.37 per share for the same period last year related to the guaranteed minimum income benefits (GMIB) business. The company now estimates full year 2011 earnings, on an adjusted income from operations basis, to be in the range of $1.355 billion to $1.435 billion, or $4.95 to $5.25 per share.

Consolidated revenues in the quarter increased to $5.5 billion, representing growth of 7 percent over the same period last year, excluding the effect from exiting the Medicare advantage individual private fee for service business (Medicare IPFFS). Revenues reflect premium and fee increases of 8 percent in Health Care. On a reported basis, consolidated revenues increased 3 percent.

 

CNA Financial Corp.

CNA announced second-quarter 2011 results, which included a net operating income of $116 million, or $0.43 per common share, and net income of $126 million, or $0.47 per common share. Property/casualty operations combined ratio for the second quarter was 105.7 percent. Book value per common share was $43.09 at June 30, 2011, as compared to $41.75 at March 31, 2011 and $40.70 at Dec. 31, 2010.

Net operating income for the three months ended June 30, 2011 decreased $153 million as compared with the same period in 2010. Net operating income for core property/casualty operations decreased $140 million, primarily due to a lower level of favorable net prior year development and higher catastrophe losses. For the three months ended June 30, 2011, catastrophe losses were $65 million after-tax as compared to $31 million after-tax for the same period in 2010. The property/casualty operations produced second-quarter combined ratios of 105.7 percent in 2011 and 89.5 percent in 2010. Excluding the impacts of favorable reserve development and catastrophe losses, combined ratios were 103.6 percent and 104.6 percent for the same comparable periods. Net operating results decreased $13 million for non-core segments.

 

Employers Holdings Inc.

Employers Holdings Inc. reported second-quarter 2011 net income of $8.3 million or $0.21 per diluted share compared with $16.5 million or $0.39 per diluted share in the second quarter of 2010, a decrease of $8.2 million or $0.18 per share.

Net income includes amortization of the deferred reinsurance gain related to the Loss Portfolio Transfer (LPT) Agreement. Consolidated net income before the impact of the LPT was $4.0 million or $0.10 per diluted share in the second quarter of 2011 compared with $12.1 million or $0.29 per diluted share in the second quarter of 2010.

In the second quarter of 2011, the Company had a calendar year combined ratio of 116.2 percent (121.0 percent before the LPT), an increase of 14.3 percentage points from the second quarter of 2010 combined ratio of 101.9 percent (107.4 percent before the LPT).

“Positives in the quarter include substantive year-over-year increases of 43.2 percent in written premium and 12.6 percent in earned premium, both resulting from the implementation of our strategies to grow agents and policies,” said Douglas Dirks, president and CEO. “We added 8,705 policies since June 30, 2010 for a twelve-month policy count increase of 20.1 percent. We have also added over 730 producers in the last year.”

 

FBL Financial Group

FBL Financial Group Inc. reported net income attributable to FBL for the second quarter of 2011 of $37.5 million, or $1.20 per diluted common share, compared to net income attributable to FBL of $22.3 million, or $0.73 per diluted common share, for the second quarter of 2010. Operating income totaled $37.3 million, or $1.19 per common share, for the second quarter of 2011, compared to $24.5 million, or $0.80 per common share, for the second quarter of 2010.

Premiums collected in the second quarter of 2011 totaled $376.1 million compared to $256.2 million in the second quarter of 2010. The Farm Bureau Life distribution channel had second quarter 2011 premiums collected of $183.5 million compared to second quarter 2010 premiums collected of $162.4 million. This reflects a 28 percent increase in traditional annuity sales, a nine percent increase in traditional and universal life insurance sales and a 26 percent decrease in variable sales, reflecting FBL's decision to discontinue variable sales. The EquiTrust Life independent channel had $190.0 million of premiums collected in the second quarter of 2011, compared to $87.6 million in the second quarter of 2010, reflecting the company's strategy of measured increases in business volume while maintaining a self-sustaining capital position.

 

The Hartford

The Hartford reported second quarter 2011 net income of $24 million, or $0.03 per diluted share. In the second quarter of 2010, the company reported net income of $76 million, or $0.14 per diluted share. Core earnings for the second quarter of 2011 were $12 million, or $0.00 per diluted share. In the second quarter of 2010, core earnings were $193 million, or $0.38 per diluted share. Weighted average diluted shares outstanding were 482.4 million in the second quarter of 2011 compared with 480.2 million in the second quarter of 2010.

Total P&C current accident year catastrophe losses of 18.2 points, or $290 million after tax, the highest level of second quarter catastrophe losses in The Hartford’s history. The Hartford’s Board of Directors recently authorized a $500 million repurchase program.

“The Hartford’s fundamental business results demonstrated solid performance in the second quarter, although catastrophe losses and an asbestos reserve increase affected results,” said Liam McGee, chairman, president and CEO. “We continue to execute our strategy and delivered 8 percent written premium growth in P&C commercial markets; an improved combined ratio, excluding catastrophes, in consumer markets; and core earnings growth in wealth management. Today’s $500 million share repurchase announcement is a prudent next capital management step, reflecting The Hartford’s strengthened balance sheet, reduced risk profile, and confidence in the business moving forward.”

 

Phoenix Companies

The Phoenix Companies Inc. reported net income of $4.4 million, or $0.04 per share, and an operating loss of $2.9 million, or $0.02 per share, for the second quarter of 2011. These results compare with net income of $10.3 million, or $0.09 per share, and an operating loss of $20.0 million, or $0.17 per share, for the second quarter of 2010. Second-quarter 2011 revenues decreased 5 percent from the second quarter of 2010, due primarily to lower premiums.

Net investment income was $211.2 million for the second quarter of 2011, compared with $216.1 million for the second quarter of 2010. It is up from $201.3 million for the first quarter of 2011. The changes from the prior year period and prior quarter were both driven by fluctuations in alternative asset results.

Net unrealized gains on fixed income securities increased to $415.9 million at June 30, 2011 from net unrealized gains of $313.9 million at March 31, 2011. The improvement was due primarily to lower treasury rates. Net realized gains for the second quarter of 2011 were $3.1 million, compared with net realized gains of $30.5 million for the second quarter of 2010.

 

Prudential Financial Inc.

Prudential Financial Inc. reported net income of its Financial Services Businesses attributable to Prudential Financial Inc. of $831 million ($1.68 per common share) for the second quarter of 2011, compared to $798 million ($1.70 per common share) for the year-ago quarter. After-tax adjusted operating income for the financial services businesses was $843 million ($1.71 per common share) for the second quarter of 2011, compared to $409 million (88 cents per common share) for the year-ago quarter.

For the first half of 2011, net income for the Financial Services Businesses attributed to Prudential Financial Inc. amounted to $1.420 billion ($2.89 per common share) compared to $1.334 billion ($2.85 per common share) for the first half of 2010. First half 2011 after-tax adjusted operating income for the financial services businesses amounted to $1.678 billion ($3.40 per common share) compared to $1.085 billion ($2.33 per common share) for the first half of 2010.

“Differentiation in talent and businesses is evident in our quarterly results. We are continuing to build our franchise by providing innovative solutions for protection and retirement income security needs, and our sustained commitment to our selected markets has enhanced our value proposition to clients and distribution partners. Our organic business growth in U.S. and international markets is bolstered by the expanded distribution opportunities and client base from the Star and Edison businesses we acquired in Japan earlier this year, with business integration on track,” said John Strangfeld, chairman and CEO.

 

 

 

Unitrin Inc.

Unitrin Inc. reported today a net loss of $0.5 million ($0.01 per share) for the second quarter of 2011, compared to net income of $37.8 million ($0.61 per share) for the second quarter of 2010. Net income was $53.6 million ($0.88 per share) for the six months ended June 30, 2011, compared to $86.0 million ($1.38 per share) for the six months ended June 30, 2010. Loss from continuing operations was $1.5 million ($0.03 per share) for the second quarter of 2011, compared to income from continuing operations of $39.1 million ($0.63 per share) for the second quarter of 2010.

Unitrin further diversified its investment portfolio with the sale of 1.1 million shares of Intermec Inc. and as of June 30, 2011 its remaining Intermec investment was $97.1 million, or 1.6 percent of the total investment portfolio. Book value per share at June 30, 2011 was $35.33; an increase of 6 percent, compared to June 30, 2010.

“It was truly an unprecedented quarter for catastrophe losses, particularly those related to tornadoes, hail and high winds,” said Don Southwell, chairman, president and CEO. “Collectively these events had an after-tax impact of approximately $65 million. Overall, we were pleased to see that the diversity of Unitrin's operating businesses and the strong performance of our investment portfolio collectively offset the impact of these catastrophes."

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