A number of insurers have begun to release their financial results for Q4 2010. The following is a compilation of their announcements:
Aflac announced its financial results for Q4 2010. According to a company release, the insurer’s total revenues, benefiting from the 8.6% strengthening of the yen to the dollar in Q4, rose 15.2% to $5.3 billion, compared with $4.6 billion in Q4 2009. Net earnings were $437 million, or $.92 per diluted share, compared with $251 million, or $.53 per share, a year ago.
Net earnings in Q4 2010 included after-tax realized investment losses of $191 million, or $.41 per diluted share, compared with realized investment losses of $307 million, or $.65 per share, a year ago. Securities transactions produced realized investment gains of $27 million, or $.05 per diluted share, in Q4, the company says. Impairments of Allied Irish Banks, Irish Life and Permanent, and Aiful Corp., combined with several other small security transactions and impairments, totaled $263 million, or $.56 per diluted share. Subsequent to year-end 2010, Aflac sold its holdings of Allied Irish Banks at the impaired price. In addition, the company realized a gain of $45 million, or $.10 per diluted share, from valuing foreign currency, interest rate and credit default swaps on certain variable interest entities that were required to be consolidated following adoption of Accounting Standards Codification (ASC) 810, effective Jan. 1, 2010. The bonds associated with these swaps were in an unrealized gain position at Dec. 31, 2010, and changes in the fair value of the bonds are reflected in shareholders' equity.
"Aflac had a very solid year from a financial perspective, despite ongoing challenges in the economic landscape,” Chairman and CEO Daniel Amos said in a statement. “Our results were consistent with our guidance for the Q4 and the full year. Growth of operating earnings per diluted share was in line with our goal of a 9% to 12% increase before the impact of foreign currency.
Operating earnings in Q4 were $628 million, compared with $558 million in Q4 2009. Operating earnings per diluted share rose 12.7% to $1.33, compared with $1.18 a year ago. The stronger yen/dollar exchange rate increased operating earnings per diluted share by $.06 during the quarter.
Also in Q4, Aflac repurchased 2.0 million shares of its common stock. At the end of December, the company had 30.4 million shares available for purchase under its share repurchase authorization.
Results for the full year also benefited from the stronger yen. Total revenues rose 13.6% to $20.7 billion, compared with $18.3 billion a year ago. Net earnings were $2.3 billion, or $4.95 per diluted share, compared with $1.5 billion, or $3.19 per share, in 2009. Operating earnings for the full year of 2010 were $2.6 billion, or $5.53 per diluted share, compared with $2.3 billion, or $4.85 per share, in 2009. Excluding the benefit of $.19 per share from the stronger yen, operating earnings per diluted share rose 10.1% for the year.
Arthur J. Gallagher & Co. (AJG) reported its financial results for the quarter and year ended Dec. 31, 2010.
"We ended 2010 with strong momentum and believe we are well positioned for 2011," said J. Patrick Gallagher Jr., Chairman, President and CEO in a statement. "Fourth quarter adjusted EBITDAC was up nearly 17% in our brokerage segment and up over 18% in our risk management segment. For the year, we continued to grow and hold our margins during a period that was marked by soft rates and poor economic conditions. Despite these headwinds, the Gallagher team accomplished a lot.”
AJG announced the following Q4 highlights in a release:
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Specialty insurance provider Assurant Inc. reported results for Q4 and twelve months ended Dec. 31, 2010.
According to a release, Assurant’s net operating income for Q4 2010 increased 14% to $115.8 million, or $1.08 per diluted share, compared to Q4 2009 net operating income of $101.6 million, or $0.86 per diluted share, due to improvements at Assurant Health and Assurant Employee Benefits. The quarter included a $30.9 million after-tax intangible asset impairment at Assurant Solutions.
The net loss for Q4 2010 was $184.4 million, or $(1.74) per diluted share, compared to Q4 2009 net income of $11.9 million, or $0.10 per diluted share. The Q4s of 2010 and 2009 include goodwill impairment charges of $306.4 million and $83.0 million, respectively. The goodwill impairment charges are not tax-deductible. Q4 2010 and 2009 include changes in the tax valuation allowance.
Net earned premiums in the Q4 2010 decreased 6% to $1.8 billion from $1.9 billion in Q4 2009, primarily reflecting a decline in premiums at Assurant Solutions. Additionally, net investment income in the Q4 2010 increased 3% to $177.8 million, compared to $172.5 million in Q4 2009, as total invested assets remained stable and yields improved slightly.
As for Assurant’s 12-month results, net operating income for 2010 increased 20% to $560.1 million, or $5.02 per diluted share, compared to $464.9 million, or $3.92 per diluted share, in 2009. Results at Assurant Specialty Property, Assurant Health and Assurant Employee Benefits produced year-over-year improvement.
"During 2010, we demonstrated our ability to adapt to changes affecting our business while delivering solid results to our shareholders," Robert Pollock, president and CEO of Assurant said in the release. "We continued to improve operational efficiency and to demonstrate prudent management of our capital. At the same time, we were able to develop revenue opportunities that we can build upon in 2011."
The Chubb Corp. reported that net income in Q4 2010 was $620 million or $2.02 per share, compared to $695 million or $2.03 per share in Q4 2009. According to a release, average diluted shares outstanding for Q4 were 307.4 million in 2010 and 343.1 million in 2009.
Operating income, which Chubb defines as net income excluding after-tax realized investment gains and losses, was $519 million, compared to $569 million in Q4 2009. Operating income per share increased 2% to $1.69 from $1.66. Net written premiums for Q4 were $2.9 billion, an increase of 3%. Premiums were up 2% in the United States and up 5% outside the United States (up 4% in local currencies).
The Q4 combined loss and expense ratio was 87.0% in 2010 and 84.7% in 2009. The impact of catastrophes on the combined ratio was 1.4 percentage points in 2010 and negligible in 2009. Excluding the impact of catastrophes, the combined ratio was 85.6% in 2010 and 84.7% in 2009. The expense ratio for the Q4 was 30.9% in 2010 and 30.1% in 2009.
Property/casualty investment income after taxes for Q4 increased 1% to $320 million in 2010 from $317 million in 2009.
Net income for the Q4 of 2010 included net realized investment gains of $155 million before tax ($0.33 per share after-tax). Net income for the Q4 of 2009 reflected net realized investment gains of $193 million before tax ($0.37 per share after-tax). Gains in both periods were largely related to the company's alternative investments.
For the year ended Dec. 31, 2010, net income was $2.2 billion or $6.76 per share, compared to $2.2 billion or $6.18 per share for the year ended Dec. 31, 2009. Operating income totaled $1.9 billion in 2010 and $2.2 billion in 2009. Operating income per share was $5.90 in 2010 and $6.14 in 2009.
Total net written premiums in 2010 increased 1% to $11.2 billion from $11.1 billion in 2009; excluding the effect of currency fluctuation, premiums were flat. Premiums were down 1% in the United States and up 9% outside the United States (up 3% in local currencies).
The combined ratio in 2010 was 89.3%, compared to 86.0% in 2009. The impact of catastrophes accounted for 5.7 percentage points of the combined ratio in 2010 and 0.8 points in 2009. Excluding the impact of catastrophes, the combined ratio was 83.6% in 2010 and 85.2% in 2009. The expense ratio for the year was 31.2% in 2010 and 30.6% in 2009.
"Chubb's excellent results in both the Q4 of 2010 and the full year continue to demonstrate our ability to generate superior financial results, even in a challenging economic and industry environment," John Finnegan, Chairman, President and CEO said in a statement. "Particularly noteworthy were combined ratios that were below 90% in both periods and $1.9 billion of operating income in 2010.
Cincinnati Financial Corp. reported its financial results for the quarter and year ended Dec. 31, 2010.
According to a release, the company’s Q4 2010 net income was $126 million, or 77 cents per share, compared with $245 million, or $1.50 per share, in Q4 2009. The operating income of $113 million, or 70 cents per share, was up 32% compared with $86 million, or 53 cents per share. For the full year, 2010 net income was $377 million, or $2.31 per share, compared with $432 million, or $2.65, in 2009. The operating income of $274 million, or $1.68 per share, was up 27% compared with $215 million, or $1.32.
Cincinnati highlighted a 93.1% fourth-quarter 2010 property/casualty combined ratio and 6% increase in net written premiums, including personal lines segment growth of 10%. The full-year 2010 property/casualty combined ratio was 101.7%, with a 2% increase in net written premiums, including personal lines segment growth of 9%.
Additionally, the company reported $107 million Q4 and $414 million full-year 2010 property/casualty new business written by agencies, up $13 million and $9 million, respectively. The full-year increase included $15 million from personal lines.
There also was 8 cents per share contribution from life insurance operating income to Q4 results, up 2 cents from 2009. Full-year contribution to operating income from life insurance was 23 cents per share, up 1 cent.
"Results from our property casualty insurance business trended positively in the fourth quarter, significantly improving our full-year 2010 performance,” Kenneth Stecher, president and CEO said in the statement. “We achieved our best quarterly results of the year, with the highest written premium growth, lowest catastrophe losses and best combined ratio. Healthy underwriting gains for the fourth quarter surpassed the gain in 2009's final quarter and partially offset underwriting losses in earlier 2010 quarters. Underwriting results continued to benefit in the fourth quarter and full year 2010 from our commitment to maintain consistent, careful reserving practices and from our initiatives to grow and to improve price precision.”
CIGNA Corp. issued a statement reporting that shareholders’ net income of $461 million, or $1.69 per share, for Q4 2010 compared with shareholders’ net income of $330 million, or $1.19 per share, for Q4 2009. Shareholders’ net income included income of $0.31 per share in Q4 2010 and $0.22 per share for Q4 2009 related to the Guaranteed Minimum Income Benefits (GIMB) business, primarily due to favorable interest rate movements. Shareholders’ net income also included special items with income of $0.15 per share in 2010, compared to a loss of $0.05 per share in 2009.
CIGNA's adjusted income from operations for Q4 2010 was $313 million, or $1.15 per share, compared to adjusted income from operations of $285 million, or $1.03 per share, for Q4 2009. Adjusted income from operations in the quarter included favorable claim development in the health care business related to lower-than-expected medical utilization, which benefits our customers as well as our shareholders.
For full year 2010, shareholders’ net income was $1.35 billion, or $4.89 per share, compared to $1.30 billion, or $4.73 per share, for 2009. Shareholders’ net income for 2010 included losses of $24 million, or $0.09 per share, compared to income of $209 million, or $0.76 per share, in 2009 related to the GMIB business.
For full year 2010, adjusted income from operations was $1.28 billion, or $4.64 per share, compared to $1.10 billion, or $3.98 per share, for full year 2009.
"In 2010, we effectively executed on our growth strategy, which drove solid revenue and earnings growth in each of our ongoing businesses,” David Cordani, President and CEO said in a statement. “In 2011, we will continue to focus on meeting the needs of our customers and partnering with health care professionals to improve the health, well being and sense of security of the individuals we serve around the globe.”
The Hartford Financial Services Group Inc. reported its Q4 2010 net income of $619 million, or $1.24 per diluted share. In Q4 2009, the company reported net income of $557 million, or $1.19 per diluted share. Core earnings for Q4 2010 were $526 million, or $1.06 per diluted share.
In addition, the company's Board of Directors declared a quarterly dividend of $0.10 per share of Common Stock, a 100% increase over the prior amount, payable on April 1, 2011, to shareholders of record at the close of business on March 1, 2011.
For full year 2010, The Hartford reported net income of $1.7 billion, or $2.49 per diluted share, compared with a net loss of $887 million, or ($2.93) per diluted share for full year 2009. Core earnings for full year 2010 were $1.9 billion, compared with $796 million for full year 2009. Core earnings per diluted share were $2.89, an increase of 56% from $1.85 per diluted share for full year 2009.
"The fourth quarter was a strong finish to a year of significant accomplishments for The Hartford, demonstrating the fundamental strengths of the company's businesses, strategy, brand and people," Liam E. McGee, The Hartford's chairman, president and CEO said in a statement. "The Hartford is a more focused and energized organization today. We executed on our 2010 commitments to produce more consistent operating and financial performance and to build capital strength. In 2011, we will build on this momentum to deliver sustained profitable growth. Based on the company's improved capital position and our confidence in The Hartford's earnings power, the Board of Directors approved a doubling of the company's quarterly dividend. This is an important first step and, over time, we will prudently evaluate additional capital management actions."
Markel Corp. reported diluted net income per share of $27.27 for the year ended Dec. 31, 2010 compared to $20.52 in 2009. The 2010 combined ratio was 97% compared to 95% in 2009. Book value per common share outstanding increased 16% to $326.36 at Dec. 31, 2010 from $282.55 at Dec. 31, 2009. Over the five-year period ended December 31, 2010, compound annual growth in book value per common share outstanding was 13%.
Markel says the increase in the consolidated combined ratio was due to a higher current accident year loss ratio and a higher expense ratio, partially offset by more favorable development of prior years' loss reserves compared to 2009. The 2010 combined ratio included $33.0 million, or two points, of underwriting loss on the Chilean earthquake and the Deepwater Horizon drilling rig explosion. The 2010 combined ratio also included $74.7 million, or four points, of underwriting loss for two programs previously underwritten in the excess and surplus lines segment that were exposed to losses associated with the adverse conditions in the residential mortgage market in recent years. The 2010 combined ratio included $278.0 million of favorable development on prior years' loss reserves compared to $235.3 million in 2009.
Gross written premiums for the year ended Dec. 31, 2010 increased 4% compared to 2009. The increase in 2010 was due to higher gross premium volume in the specialty admitted and London insurance market segments. For the year ended Dec. 31, 2010, the specialty admitted segment included $40.7 million of gross written premiums from FirstComp. The increase in gross written premiums in the London insurance market segment was due in part to our acquisition of Elliott Special Risks in late 2009. The Excess and Surplus Lines segment included $18.8 million of gross written premiums related to our previously announced settlement with Guaranty Bank in Q3 2010.
"2010 has been a very busy and productive year for Markel,” Alan Kirshner, Chairman and CEO said in the statement. “On the underwriting side, we have produced solid profits while maintaining our underwriting discipline. Our investment results were strong, and we continue to grow our non-insurance operations through acquisitions by Markel Ventures. During the fourth quarter of 2010, we added the FirstComp workers' compensation insurance operations through our acquisition of Aspen Holdings Inc. Thanks to the hard work of all of our associates and the support of our shareholders, we close the year with double-digit growth in book value over the past one-year and five-year periods."
Old Republic International Corp. reported the following results for Q4 and full year 2010. According to a release, Old Republic's consolidated operating results, which exclude net realized investment gains or losses, produced a net operating loss in the quarter and year ended Dec. 31, 2010. The losses for these periods, however, were much lower than those sustained in the same periods of 2009. Throughout 2010 general insurance operations remained solidly profitable, and title insurance earnings improved steadily as the year progressed. Old Republic's Mortgage Guaranty segment experienced relatively lower claim costs in each quarterly period of 2010, and its net operating loss for the year was approximately 46% less severe than the comparative amount in 2009.
Old Republic's acquisition of PMA Capital Corp. took effect on Oct. 1, 2010. Accordingly, operating results, acquired assets and assumed liabilities associated with PMA's business are included in Old Republic's financial statements for, and as of the end of Q4 2010. The inclusion of PMA's overall accounts resulted in approximate increases in this period's consolidated operating revenues and pretax operating loss of $129 and $10, respectively, while consolidated year-end assets and shareholders' equity were enhanced by $2.3 billion and $231, respectively. PMA's pretax operating loss of $10 is stated after deduction of its interest costs, general corporate expenses, and merger-related costs aggregating $9.7.
Selective Insurance Group Inc. reported its financial results for Q4 and year ended Dec. 31, 2010. For the quarter, net income per diluted share was $0.43 and operating income was $0.48. Net income for the year was $1.20 per diluted share and operating income was $1.35 per diluted share.
According to a release, Selective’s net income was $23.8 million, or $0.43 per diluted share, while its operating income was $26.3 million, or $0.48 per diluted share. The company’s combined ratio was GAAP: 100.1% compared to 100.2% in 2009; Statutory: 102.8% compared to 103.7% in 2009. The total net premiums written (NPW) were: $301.8 million—commercial lines $238.1 million, personal lines $63.7 million.
"We ended the year with a solid performance. Our GAAP and statutory combined ratios were 101.6%, in line with our 2010 guidance," said Chairman, President and CEO Gregory Murphy in a statement. "The industry rhetoric in 2010 did not reflect the front-line reality as many carriers spoke of commercial lines pricing discipline, but never actually increased rate levels. In this highly competitive part of the cycle, we were one of the only carriers to drive and achieve commercial lines renewal rate increases that amounted to 3.1%. The extremely competitive market cycle, coupled with difficult economic conditions, has put pressure on writing adequately priced new business. We have maintained our underwriting discipline, which resulted in new business declining from $266 million in 2009 to $211 million in 2010.
"Personal Lines renewal pure price remained strong at 6.4% in the quarter and 5.4% for the year. There has been more pricing flexibility in personal lines and we will continue to drive rate in 2011," Murphy added.
Travelers Cos. Inc. announced it posted a higher-than-expected quarterly profit and said there were early signs businesses were finally willing to spend more on insurance.
According to a release, Travelers reported a Q4 net profit of $894 million, or $1.95 per share, compared with a year-earlier profit of $1.29 billion, or $2.36 per share. In Q4 2009, Travelers benefited from reserve releases and lower catastrophe losses, making the comparison with the most recent quarter more difficult. Net investment income also fell slightly year-on-year, as low interest rates hurt the company’s fixed income portfolio.
On an operating basis, Travelers said it grew policies in force in both homeowners and auto insurance, and premiums to renew policies rose. The company also wrote more business insurance and continued to retain existing customers.
Additionally, Travelers said combined ratios crept higher in Q4 and the full year. Travelers GAAP combined ration was 90.6 in Q4 and 93.2 for the full year. Both were slightly worse than the 83.4 combined ratio Travelers posted in Q4 of 2009, and the 89.2 it had for 2009.
The quarterly rise in the combined ratio was fueled by a decrease in reserve development and a hail and wind storm in Arizona that added about $70 million in pre-tax catastrophe losses, Travelers said.
“Given some of the trends we saw in the Q4 we are somewhat more optimistic than we were a few months ago,” CEO Jay Fishman said on a conference call.
WellPoint Inc. announced in a release that Q4 2010 net income was $548.8 million, or $1.40 per share, including net investment gains of $24.1 million after-tax, or approximately $0.07 per share. Net income in Q4 of 2009 was $2.7 billion, or $5.95 per share, which included net after-tax income of $2.2 billion, or $4.79 per share, resulting from a gain on the sale of the NextRx pharmacy benefit management subsidiaries, partially offset by costs for restructuring activities and intangible asset impairments.
Excluding the items noted above for each period, adjusted net income was $1.33 per share in Q4 of 2010, compared with adjusted net income of $1.16 per share in the prior-year quarter. For the full year of 2010, net income totaled $2.9 billion, or $6.94 per share, and included net investment gains of $100.2 million after-tax, or approximately $0.23 per share, partially offset by an intangible asset impairment charge of $13.7 million after-tax, or $0.03 per share. Excluding these items, full year 2010 adjusted net income was $2.8 billion, or $6.74 per share (refer to GAAP Reconciliation table).
For the full year of 2009, net income totaled $4.7 billion, or $9.88 per share, which included net after-tax income of approximately $1.8 billion, or $3.79 per share, resulting from the gain on the sale of NextRx, partially offset by net investment losses, intangible asset impairments and costs for restructuring activities. Excluding these items, full year 2009 adjusted net income was $2.9 billion, or $6.09 per share (refer to GAAP Reconciliation table).
"We are pleased with our Q4 and 2010 results,” Angela Braly, chair, president and CEO said in a statement. “We exceeded our goals in many areas of the company this year and provided a significant return of capital to our shareholders following the sale of NextRx. We also created a new strategy and implemented organizational changes that enhance our ability to provide affordable and valuable products to our customers and position us to be a long-run winner in the changing health care marketplace. We expect to build on our successes from 2010 and are optimistic about the future for our customers and our company."
