A number of insurers have begun to release their financial results for Q1 2011. The following is a compilation of their announcements:
According to a statement, Aflac Inc.'s total revenues, reflecting a stronger yen and realized investment losses, rose 1.0% to $5.12 billion, compared with $5.07 billion in the first quarter of 2010. Net earnings were $395 million, or $.84 per diluted share, compared with $636 million, or $1.35 per share, a year ago.
As a result of significant investment derisking activities, Aflac's net earnings in the first quarter included after-tax realized investment losses of $376 million, or $.79 per diluted share, compared with losses of $30 million, or $.06 per diluted share in the first quarter of 2010. During the first quarter, the company sold its holdings of Alpha Bank at a realized after-tax loss of $115 million. In addition, impairments of the company's two other investments in Greek financial institutions, National Bank of Greece and EFG Eurobank Ergasias, totaled $258 million after taxes.
Operating earnings in the first quarter were $771 million, compared with $666 million in the first quarter of 2010. Operating earnings per diluted share rose 15.6% to $1.63, compared with $1.41 a year ago. The stronger yen/dollar exchange rate increased operating earnings per diluted share by $.10 during the quarter.
Total investments and cash at the end of March 2011 were $88.4 billion, compared with $88.2 billion at Dec. 31, 2010.
In the first quarter, Aflac repurchased 3.1 million shares of its common stock. At the end of March, the company had 27.3 million shares available for purchase under its share repurchase authorization.
"We are pleased with our overall results in the first quarter of 2011," Chairman and CEO Daniel Amos said. "As we expected, we saw strong sales in our largest operating segment, Aflac Japan, particularly through the bank channel as well as our more recent growth products.
"Additionally, we were especially encouraged that Aflac U.S. generated positive sales growth, despite lingering economic weakness and following nine consecutive quarters of sales declines," he continued. "Aflac U.S. has also shown significant recruiting gains largely because of successful, targeted activities, including advertising. As a result of our positive performance in both Japan and the U.S., we posted strong consolidated financial results."
Allstate Corp.'s combined ratio for the first quarter of 2011 was 94.9, compared to 98.9 in the first quarter of 2010, primarily due to lower catastrophe losses. Catastrophe losses totaled $333 million in the first quarter of 2011, adding 5.2 points to the combined ratio, which was significantly lower than first quarter 2010 catastrophe losses of $648 million. The property-liability business produced an underlying combined ratio of 89.9 during the first quarter of 2011 compared to 89.1 in the first quarter of 2010. The first-quarter ratio was within the full-year 2011 outlook range for the underlying combined ratio of 88 to 91.
The Allstate brand standard auto business continued to generate high returns, but has not grown as the company balanced profitability with growth. Standard auto premiums written declined 1.0% for the first quarter of 2011 compared to the prior year first quarter, reflecting lower average premiums and declining policies in force. Average premiums decreased 0.9% in the first quarter of 2011 compared to the first quarter of 2010, reflecting rate decreases taken during 2010 and customers electing lower coverage. Policies in force declined by 0.7% as lower customer renewals more than offset an 11.9% increase in applications issued. Allstate brand standard auto combined ratio was 95.1, which generates an attractive return on capital. The combined ratio increased 0.7 points from the first quarter of 2010 as Allstate continued to address adverse loss cost trends during the first quarter, particularly in the states of New York and Florida.
Continued progress was made on improving returns in the homeowners line. Allstate brand homeowners premiums written increased 3.0% in the first quarter of 2011 compared to the same period a year ago, as a 5.9% increase in average premium was partly offset by a 3.7% decline in policies in force. Rate increases averaging 9.9% were approved in 12 states during the quarter, as Allstate continued to take actions to improve homeowners profitability. Lower catastrophe losses resulted in an Allstate brand homeowners combined ratio of 91.4 in the first quarter of 2011 compared to 111.3 in the first quarter a year ago.
"Allstate made continued progress on improving returns and also benefited from lower catastrophe losses in the first quarter," said Thomas Wilson, chairman, president and CEO. "Operating income improved by 32.5% to $497 million and the underlying combined ratio for property-liability of 89.9 was within our 88 to 91 outlook range for the year. Our marketing programs continue to be successful with an 11.9% increase in standard auto new business, although policies in force declined by 0.7% when compared to the prior year first quarter as we took actions to improve profitability in several large states.
"Allstate Financial continued to improve returns and build a strategic base for profitable growth," Wilson continued. "Investment results were strong as we execute a strategy to optimize operating income while managing interest rate exposure from the fixed income portfolio. Net income increased to $519 million from $120 million, due to net capital gains in the first quarter versus net capital losses in the first quarter of last year. As a result, book value per share was 13.2% higher than March 31, 2010."
Arthur J. Gallagher & Co. (AJC) issued a statement regarding its financial results for the quarter ended March 31, 2011.
"While our results for first quarter 2011 are difficult to compare to last year primarily because of the timing of the supplemental commission revenues and GAB Robins integration costs, our business posted strong results," said J. Patrick Gallagher Jr., chairman, president and CEO.
AJC's brokerage segment saw adjusted total revenues rise 10%, with organic revenues up 1.6%, adjusted EBITDAC up 14%, adjusted EBITDAC margins up 70 bps and adjusted EPS up 14%. In addition, AJC completed four acquisitions totaling $27 million of annualized revenues.
The company's risk management segment reported total adjusted revenues were up 18%, organic revenues up 5.8%, adjusted EBITDAC up 10% and adjusted EBITDAC margins were well over our target of 15%. In addition, AJC made progress on integrating the GAB Robins business.
In AJC's corporate segment, three of its clean-energy plants completed the permanent permitting process and have resumed production. AJC anticipates receiving our remaining three permits in second quarter 2011. In addition, the company completed a $125 million debt private placement in February 2011.
Centene Corp. recently announced its financial results for the quarter ended March 31, 2011, in a statement. The discussions below, with the exception of cash flow information, are in the context of continuing operations and all financial ratios exclude premium taxes.
First quarter highlights:
• Quarter-end managed care at-risk membership of 1,542,500, an increase of 71,200 members, or 4.8% year over year
• Premium and service revenues of $1.2 billion, representing 15.4% year over year growth
• Health benefits ratio of 83.0%, compared to 84.0% in the prior year.
• General and administrative expense ratio of 13.8%, compared to 13.3% in the prior year
• Cash flow from operations of $94.0 million, or 4.1 times net earnings.
• Diluted earnings per share from continuing operations of $0.46 (which does not include earnings of $0.07 per diluted share as a result of the delay in the recognition of our Mississippi contract discussed below), compared to $0.41 in the prior year.
"Our continued focus on fundamentals and enhanced systems capabilities drove solid first quarter performance and a favorable start in a year of opportunity," said Michael Neidorff, Centene's chairman and CEO.
The Chubb Corp.’s net income in the first quarter of 2011 was $509 million compared to $464 million in the first quarter of 2010. Net income per share increased 22% to $1.70 from $1.39 per share.
Operating income, which the company defines as net income excluding after-tax realized investment gains and losses, was $405 million in the first quarter of 2011 and $381 million in the first quarter of 2010. First quarter operating income per share increased 18% to $1.35 in 2011 from $1.14 in 2010.
Chubb says the impact of catastrophes in the first quarter of 2011 was $270 million before tax, including winter storms in the United States, flooding in Australia, and earthquakes in New Zealand and Japan. In the first quarter of 2010, the impact of catastrophes was $344 million before tax. The impact of catastrophes on first quarter net income and operating income per share was $0.59 in 2011 and $0.67 in 2010. The impact of catastrophes includes losses and loss expenses net of reinsurance recoverable and also includes reinsurance reinstatement premiums.
The first-quarter combined loss and expense ratio was 93.7% in 2011 compared to 93.6% in 2010. The impact of catastrophes accounted for 9.5 percentage points of the combined ratio in the first quarter of 2011, compared to 12.3 percentage points in the first quarter of 2010. Excluding the impact of catastrophes, the first-quarter combined ratio was 84.2% in 2011 and 81.3% in 2010.
The expense ratio for the first quarter was 31.7% in 2011 and 31.3% in 2010.
Net written premiums for the first quarter increased 3% to $2.9 billion. Premiums increased 1% in the U.S. and 10% outside the U.S. (9% in local currencies).
Property/casualty investment income after taxes for the first quarter declined 1% to $310 million in 2011 from $313 million in 2010.
Net income for the first quarter of 2011 reflected net realized investment gains of $160 million pre-tax ($0.35 per share after-tax). Net income for the first quarter of 2010 reflected net realized investment gains of $127 million pre-tax ($0.25 per share after-tax). The gains in both quarters related mostly to the company's alternative investments.
"The big story for the property and casualty insurance industry in the first quarter was the high level of natural catastrophes around the globe," said John Finnegan, chairman, president and CEO. "Although these catastrophes had a negative impact of $0.59 per share on Chubb's first quarter results, we still produced strong operating income per share of $1.35 and net income per share of $1.70. Our combined ratio of 84.2% excluding catastrophes reflected continued outstanding underwriting performance across all of our business units.
"While the property and casualty market environment remained competitive," Finnegan added, "net written premiums increased 3% for the second consecutive quarter, an encouraging sign. This is a positive change from the flat to negative premium growth, excluding the effect of currency fluctuation, that we experienced during each of the past five calendar years."
Patriot National Insurance Group announced in a statement that its insurance company subsidiary, Guarantee Insurance Co., reported total net written premium of $29.6 million for the first quarter ended March 31, 2011, an increase of 70.4% from $17.4 million reported in the same quarter of 2010. Direct premiums written in the first quarter of 2011 were $40.8 million, an increase of 36.9% from $29.8M reported in the same quarter of 2010.
Guarantee's 2011 first-quarter combined ratio was 69.7%, compared to 78.7% in the first quarter of 2010, a decrease of 11.4%. Loss and loss adjustment expense was 54.1%, down 9.3% from 59.7% in the first quarter of 2010. Net underwriting and other operating expenses declined 18.0% from 19.0% in Q1 2010 to 15.6% in Q1 2011.
"We are pleased with our results in the first quarter as we continue to achieve profitable growth in a competitive environment," said Steven Mariano, chairman & CEO of Patriot National Insurance Group and Guarantee Insurance Co. "Guarantee has almost achieved scale in its business model and the net underwriting and other operating expenses are beginning to settle into a targeted 15% expense ratio range. The improvement in loss and loss adjustment expense is attributable to our growing portfolio of large deductible programs."
The Hanover Insurance Group Inc. issued a statement on the estimated impact of weather-related activity on first quarter results.
The Hanover currently estimates its pre-tax loss resulting from catastrophe events in the first quarter of 2011 to be in the range of $48 to $51 million, or $0.69 to $0.73 after-tax per share. Additionally, earnings will be impacted by non-catastrophe winter weather and related loss activity. The increased level of weather-related claims has predominantly come from Northeastern states.
Taking into account this weather-related claim activity and other currently available information, The Hanover expects first-quarter segment income after tax per share to be in the range of $0.48 to $0.53.
The Hanover believes that measures of segment income after tax provide investors with valuable measures of the performance of the company's ongoing business because they highlight income from continuing operations attributable to the core operations of the business. Income from continuing operations is the most directly comparable GAAP measure for segment income after tax per share. Non-GAAP measures should not be construed as substitutes for income from continuing operations, net income or other GAAP measures.
Horace Mann Educators Corp. issued a statement to report a net income of $25.9 million (62 cents per share) for the three months ended March 31, 2011, compared to $22.6 million (55 cents per share) for the same period in 2010. Included in net income were net realized gains on securities of $5.8 million ($3.7 million after tax, or 9 cents per share) for the first quarter of 2011 and $4.9 million ($3.1 million after tax, or 7 cents per share) for the first quarter of 2010. All per-share amounts are stated on a diluted basis.
“The strong underlying operating results in our auto, annuity and life lines of business over the past twelve months, coupled with an increased net unrealized investment gain position compared to a year ago, resulted in a quarter-end reported book value per share of $22.63, an increase of 14% year-over-year,” said Peter Heckman, president and CEO.
The property/casualty segment recorded a net income of $12.3 million for the quarter, an increase of $1.3 million compared to the same period in 2010. “Favorable results in our auto line accompanied by improved current accident year property results excluding catastrophes, the increasing favorable impact on earned premium of the rate actions taken in 2010 and growth in investment income more than offset this quarter’s increase in catastrophe losses and reduced level of favorable prior years’ reserve development,” stated Heckman. Pretax catastrophe costs in the current quarter of $8.0 million increased $1.2 million compared to the first quarter of 2010. The first quarter 2011 property/casualty combined ratio was 95.0%, including 5.8 percentage points due to catastrophe costs, compared to 96.4%, including 5.0 percentage points due to catastrophe costs, in the prior year period.
Horace Mann's annuity segment's net income was $8.7 million for the three months ended March 31, 2011, increasing $1.4 million compared to the same period in 2010. The interest margin earned on fixed annuity assets increased 15% compared to the first quarter of 2010, with net interest spreads reaching 2.02% for the current period, improving 12 basis points compared to the first quarter of 2010.
The company's life segment's net income of $4.1 million for the first quarter decreased $0.5 million compared to the same period in 2010, primarily due to higher mortality costs in the current period, which more than offset the growth in investment income. Life persistency remained strong at 95%.
MGIC Investment Corp. reported a net loss for the quarter ended March 31, 2011, of $33.7 million, compared with a net loss of $150.1 million for the same quarter a year ago. According to a statement, diluted loss per share was $0.17 for the quarter ending March 31, 2011, compared to diluted loss per share of $1.20 for the same quarter a year ago.
Total revenues for the first quarter were $353.1 million, compared with $370.8 million in the first quarter last year. Net premiums written for the quarter were $274.5 million, compared with $256.1 million for the same period last year
New insurance written in the first quarter was $3.0 billion, compared to $1.8 billion in the first quarter of 2010. In addition, the Home Affordable Refinance program accounted for $894.2 million of insurance that is not included in the new insurance written total due to these transactions being treated as a modification of the coverage on existing insurance in force. Persistency, or the percentage of insurance remaining in force from one year prior, was 83.7% at March 31, 2011, compared with 84.4% at Dec. 31, 2010, and 85.6% at March 31, 2010.
As of March 31, 2011, MGIC's primary insurance in force was $186.9 billion, compared with $191.3 billion at Dec. 31, 2010, and $207.1 billion at March 31, 2010. The fair value of MGIC Investment Corp.'s investment portfolio, cash and cash equivalents was $8.3 billion at March 31, 2011, compared with $8.8 billion at Dec. 31, 2010, and $8.3 billion at March 31, 2010.
Losses incurred in the first quarter were $310.4 million down from $454.5 million reported for the same period last year primarily due to a decrease in the default inventory. Net underwriting and other expenses were $57.6 million in the first quarter as compared to $59.9 million reported for the same period last year.
Platinum Underwriters Holdings Ltd., in a statement, reported a net loss of $157.2 million and a loss per common share of $4.20 for the quarter ended March 31, 2011.
The results for the quarter include net premiums earned of $182.9 million, net favorable development of $33.1 million, net investment income and net realized gains on investments of $32.8 million and catastrophe losses of $248.1 million, net of retrocession and reinstatement premiums. Net catastrophe losses include $136.9 million relating to New Zealand's 2011 earthquake, $86.6 million relating to Japan's Tohoku earthquake and $24.6 million relating to Australia's 2011 floods and Cyclone Yasi.
Total assets were $4.62 billion as of March 31, 2011, an increase of $2.5 million (or 0.1%) from $4.61 billion as of Dec. 31, 2010. Fixed maturity investments and cash and cash equivalents were $4.14 billion as of March 31, 2011, a decrease of $72.2 million (or 1.7%) from $4.21 billion as of Dec. 31, 2010.
"There were numerous natural catastrophes in the first quarter of 2011 that gave rise to significant insured losses," said CEO Michael Price. "Our book value per common share was $44.68 as of March 31, 2011, a decrease of 11.0% from Dec. 31, 2010, reflecting strong non-catastrophe performance, the negative impact of catastrophe losses and the repurchase of options on the company's common shares."
"Due to the accumulation of international catastrophe losses in the past 15 months in combination with changes to vendors' catastrophe models, we generally expect property catastrophe reinsurance rates to improve for the balance of the year and the upcoming renewal period will allow us to benefit from a rising rate environment," Price added. "While it has been a challenging start to 2011, we are well positioned to take advantage of quality reinsurance underwriting opportunities as they may arise."
Torchmark Corp. issued a statement noting that, for the quarter ended March 31, 2011, net income was $1.33 per share, compared with $1.46 per share for the year-ago quarter. Net operating income for the quarter was $1.62 per share, a 7% increase compared with $1.52 per share for the year-ago quarter.
Life insurance accounted for 74% of the company's insurance underwriting margin for the quarter and 64% of total premium revenue.
Health insurance, excluding Medicare Part D, accounted for 23% of Torchmark's insurance underwriting margin for the quarter and 29% of total premium revenue. Medicare Part D accounted for 3% of insurance underwriting margin and 7% of total premium revenue.
Net sales of life insurance fell 5%, while health sales, excluding Medicare Part D, fell 16%.
The Travelers Cos. Inc. recently issued a statement reporting its results for the first quarter 2011.
Operating income of $826 million after-tax in the current quarter increased $195 million from the prior year quarter primarily due to a $169 million after-tax increase in the underwriting gain which included a $100 million benefit from favorable resolution of prior year tax matters primarily related to 2007 and 2008.
The improvement in the underwriting gain in the current quarter reflected a GAAP combined ratio of 94.7%, as compared to 96.4% in the prior year quarter. This improvement of 1.7 points in the combined ratio was primarily driven by a $285 million pre-tax decrease in catastrophe losses (improvement of 5.6 points), partially offset by a $57 million pre-tax decrease in net favorable prior year reserve development (increase of 1.2 points). Catastrophe losses in the current quarter were primarily due to winter storms throughout the United States. Net favorable prior year reserve development in the current quarter occurred in all three segments, but particularly in business insurance as a result of better-than-expected loss experience in the general liability and property product lines.
The current quarter underwriting gain excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 95.7%, as compared to 93.0% in the prior year quarter. This increase of 2.7 points was primarily due to the impact of reduced underwriting margins related to earned pricing and loss cost trends in business insurance and higher non-catastrophe weather-related losses in personal insurance.
Total revenues of $6.278 billion in the current quarter increased $159 million, or 3%, from the prior year quarter due to a $141 million increase in earned premiums and a $26 million increase in pre-tax net investment income. After-tax net investment income in the current quarter increased 2% from the prior year quarter due to strong results in the non-fixed income portfolio. Net investment income from the fixed income portfolio decreased modestly from the prior year quarter due to lower average invested assets that reflected the impact of the company's common share repurchases, as well as lower reinvestment rates.
Net written premiums of $5.437 billion in the current quarter increased 4% from the prior year quarter due to strong results in business insurance and personal insurance. Retention rates remained high and new business volumes were generally stable across all three business segments. Renewal rate change was positive in business insurance and personal insurance but was slightly negative in financial, professional and international insurance. Net written premiums in business insurance also benefited from modestly positive audit premiums, compared to significant negative audit premiums in the prior year quarter.
"We are very pleased to be starting the year with strong earnings," commented Jay Fishman, chairman and CEO. "Underwriting results and net investment income reflected solid performance. In addition, we were pleased to see the favorable impact of pricing and improved economic conditions on net written premiums.
"Across our diversified commercial insurance businesses, pricing continued to improve with renewal rate change turning positive early in the quarter and trending upward from there," Fishman added. "We also continued to see growth in the number of accounts. In addition, exposure change at renewal increased, and we were very pleased that audit premiums turned positive for the first time since second quarter 2009. In personal insurance, the environment remained generally stable, and renewal premium change was once again positive. Importantly, retention levels remained high across all of our business segments, demonstrating the significant value we provide to our customers, agents and brokers.
"Looking forward, we feel very good about our position in the marketplace and are cautiously but increasingly optimistic about the operating environment," concluded Fishman.
UnitedHealth Group reported first quarter results in a statement, highlighted by accelerated revenue growth from both its UnitedHealthcare and Optum businesses.
“Demand is increasing for greater connectivity, transparency and sustainable cost structures across the health system, as consumers, payers and care providers call for quality care at affordable prices," Stephen Hemsley, president and CEO said. "UnitedHealth Group is well-positioned for sustained growth as we address these expanding market needs with consistent performance, solid fundamental execution and practical innovation that helps customers achieve their goals.”
The company updated its full year financial outlook based on first quarter results and business trends, and now forecasts 2011 revenues approaching $101 billion, net earnings in the range of $3.95 to $4.05 per share and cash flows from operations in a range of $5.8 billion to $6.2 billion.
WellPoint Inc. recently announced that its first quarter 2011 net income was $926.6 million, or $2.44 per share, including net investment gains of $35.6 million after-tax, or $0.09 per share. Net income in the first quarter of 2010 was $876.8 million, or $1.96 per share, including net investment gains of $18.6 million after-tax, or $0.04 per share, partially offset by an intangible asset impairment charge totaling $13.7 million after-tax, or $0.03 per share.
Excluding the items noted above for each period, adjusted net income was $2.35 per share in the first quarter of 2011, an increase of 20.5% compared with adjusted net income of $1.95 per share in the prior-year quarter (refer to GAAP Reconciliation table for a reconciliation to the most directly comparable measures calculated in accordance with U.S. generally accepted accounting principles, or "GAAP").
"We are pleased with our positive start to 2011," said Angela Braly, chairman, president and CEO. "Our membership and earnings results are higher than we originally anticipated and we are continuing to become a more efficient and effective company, as evidenced by our 4.5% reduction in SG&A expenses while serving 363,000 more medical members than we did in the first quarter of 2010. While we are becoming more efficient, we are continuing to invest in our future and executing on our strategy to improve the lives and health of our members. As we deliver health care value for our members, we enhance value for our shareholders."
Operating revenue was approximately $14.7 billion in the first quarter of 2011, a decrease of $188.3 million, or 1.3%, from the first quarter of 2010. This decline reflected lower commercial operating revenue resulting primarily from the conversion of two large groups to self-funding arrangements during 2010, partially offset by revenue growth driven by increases in senior, FEP and state sponsored membership.
"Our first quarter results are a testament to the strong value proposition we create in our efforts to hold down the rate of rising health care costs while improving quality, and our commitment to continuously improve by building a better WellPoint," said Wayne DeVeydt, EVP and CFO. "Based on these results, we are raising our year-end 2011 membership expectation to 33.9 million and increasing our full year earnings guidance. We are also managing our capital to enhance value for our customers and shareholders. During the first quarter, we paid the first cash dividend in WellPoint's history and also utilized $742 million to repurchase 11.4 million shares on the open market."
