A number of insurers have begun to release their financial results for Q2 2011. The following is a compilation of their announcements:
ACE Ltd. reported net income for the quarter ended June 30, 2011, of $1.77 per share, compared with $1.98 per share for the same quarter last year; income excluding net realized gains (losses) was $2.01 per share for both periods. Book value increased $737 million during the quarter, up 3 percent from March 31, 2011. Book value per share stands at $71.36. Annualized operating return on average equity for the quarter was 12.3 percent. The property/casualty combined ratio for the quarter was 92.6 percent.
Net income for the six months ended June 30, 2011, was $2.54 per share, compared with $4.21 per share for the same period in 2010. For the six months ended June 30, 2011, income excluding net realized gains (losses) was $2.80 per share, compared with $3.72 per share for 2010. Book value increased $1.1 billion, or 5 percent, from Dec. 31, 2010. The P&C combined ratio for the six months ended June 30, 2011, was 98.4 percent.
“ACE had an excellent second quarter,” said Evan G. Greenberg, chairman and CEO. “Operating income was $686 million, and our ROE was approximately 12.5 percent. Book value and book value per share grew 3 percent in the quarter and are up 5 percent and 4 percent, respectively, for the year.”
Aetna announced second-quarter 2011 operating earnings of $522.8 million, or $1.35 per share, a per share increase of 29 percent over 2010. The increase in the second quarter operating earnings was largely the result of higher commercial underwriting margins from improved underlying performance, partially offset by the effect of lower commercial Insured membership in 2011. Second-quarter results included favorable prior-period reserve development of $.31 per share, primarily from first quarter 2011 incurred health care costs. Second-quarter net income per share was $1.39.
For the first half of 2011, operating earnings per share were $2.78, including $.32 per share of favorable prior-years reserve development primarily from 2010 incurred health care costs. Net income per share was $2.88 for the first half of 2011.
“Aetna's second-quarter financial results reflect strong operating fundamentals across the enterprise,” said Mark T. Bertolini, chairman, CEO and president. "Three main factors account for our success: disciplined pricing and medical cost management; lower than anticipated utilization of health care services by our members; and strong cash flow generation. The result has been better-than-projected financial results in the first half of 2011.”
Reflecting the benefit from a stronger yen/dollar exchange rate but higher realized investment losses, total revenues for Aflac Inc. rose 2.2 percent to $5.1 billion in the second quarter of 2011, compared with $5.0 billion in the second quarter of 2010. Net earnings were $280 million, or $.60 per diluted share, compared with $581 million, or $1.23 per share, a year ago.
Consistent with the company's previously stated proactive investment derisking objectives, net earnings in the second quarter included pretax realized investment losses of $668 million ($453 million after-tax), or $.96 per diluted share, compared with pretax losses of $89 million ($58 million after-tax), or $.12 per diluted share in the second quarter of 2010. During the second quarter of 2011, the company sold investment securities (amortized cost of $1.5 billion; $2.3 billion par value), and realized a pretax loss of $182 million ($118 million after-tax).
Aflac U.S. total revenues rose 4.0 percent to $1.3 billion in the second quarter. Premium income increased 3.4 percent to $1.2 billion, and net investment income was up 9.7 percent to $148 million. Pretax operating earnings were $246 million, an increase of 8.3 percent. For the first six months, total revenues were up 3.6 percent to $2.7 billion and premium income rose 2.9 percent to $2.4 billion. Net investment income increased 9.2 percent to $291 million. Pretax operating earnings were $499 million, or 5.9 percent higher than a year ago.
Ameriprise Financial Inc. reported second quarter 2011 operating earnings of $328 million, or $1.31 per diluted share, up 21 percent from $272 million, or $1.03 per diluted share, compared to a year ago. Net income from continuing operations attributable to Ameriprise Financial was $313 million, or $1.25 per diluted share, compared to $257 million, or $0.97 per diluted share, a year ago.
Operating net revenues were $2.6 billion, up 14 percent from $2.3 billion a year ago driven by growth in asset-based fees from retail client net inflows, market appreciation and the Columbia Management acquisition. Operating earnings growth reflected higher revenues from business growth, partially offset by a higher tax rate.
"Ameriprise Financial continued to generate strong revenue growth as well as higher earnings and returns in the second quarter," said Jim Cracchiolo, chairman and CEO. "In fact, our operating return on equity reached an all-time high of 14.5 percent. Our advisory and asset management businesses are generating strong results. Advisor productivity reached another record high, and we're driving good asset flows and client activity. Our asset management results in the quarter demonstrate the benefits of our increased scale and geographic reach, with strong earnings growth and improved retail and institutional flows."
Assurant Inc.’s net operating income for the second quarter 2011, ending June 30, 2011, decreased 50 percent to $75.4 million, or $0.76 per diluted share, compared to second quarter 2010 net operating income of $152.2 million, or $1.35 per diluted share. Catastrophe losses and increases in loss frequency due to other weather-related activity at Assurant Specialty Property and reduced earnings at Assurant Health drove the decline.
Net income for the second quarter 2011 increased to $165.9 million, or $1.68 per diluted share, compared to second quarter 2010 net income of $164.7 million, or $1.46 per diluted share. Net income benefited from an $80.0 million reduction in a valuation allowance associated with deferred tax assets. After-tax net realized gains on investments were $10.5 million in the quarter, compared to $12.5 million in second quarter 2010.
"Second quarter operating results reflect our continuing efforts to deliver on our customer commitments and achieve long-term value for our shareholders," said Robert B. Pollock, president and CEO. "Improved results at Assurant Solutions, ongoing operating improvements at Assurant Health and increased sales at Assurant Employee Benefits were consistent with our priorities for the year. At the same time, results reflect the impact of storm-related claims as we quickly responded to help our customers recover and rebuild."
Cincinnati Financial Corp. reported $49 million, or 30 cents per share, of net loss for the second quarter of 2011 compared with $27 million, or 17 cents net income per share, in the second quarter of 2010. The insurer also saw an operating loss of $93 million, or 57 cents per share, compared with operating income of $42 million, or 26 cents, and a $76 million decrease in second-quarter 2011 net income driven by a $137 million after-tax decrease in the contribution from property casualty underwriting operations. The after-tax effect of second-quarter 2011 property casualty losses from natural catastrophes totaled $189 million, up $124 million compared with the same period of 2010. The contribution to income from investments, including net realized investment gains, rose $60 million for the quarter.
Its $31.01 book value per share at June 30, 2011 was down approximately 1 percent from March 31, 2011, and up less than 1 percent from Dec. 31, 2010.
"The Cincinnati Insurance Companies were prepared—operationally and financially— for the pounding our own policyholders and the property casualty insurance industry took from this spring's powerful storms,” said Steven J. Johnston, FCAS, MAAA, CFA, president and CEO. “While the previously announced, record-breaking catastrophe losses depleted our operating earnings for the second quarter and first half of 2011, our capital and book value per share rose above 2010 year-end levels. Confident in our very strong balance sheet and risk management decisions, we were able to focus on what was important: outstanding claims service and our ongoing initiatives to grow our business and improve its profitability.”
Everest Re Group Ltd. reported second quarter 2011 after-tax operating income, which excludes net realized capital gains and losses, of $134.0 million, or $2.46 per diluted common share, compared to after-tax operating income of $184.8 million, or $3.18 per diluted common share, in the second quarter of 2010. Net income, including net realized capital gains and losses, was $131.3 million, or $2.41 per diluted common share, for the second quarter of 2011 compared to $156.7 million, or $2.70 per diluted common share, for the same period last year.
For the six months ended June 30, 2011, the after-tax operating loss was $189.6 million, or $3.49 per common share, compared to after-tax operating income of $111 million or $1.89 per diluted common share, for the first six months of 2010. Including net realized capital gains and losses, the net loss was $184.6 million, or $3.40 per common share, for the first six months of 2011, compared to net income of $134.0 million, or $2.28 per diluted common share, for the same period in 2010.
“While volatility persisted into the second quarter with further catastrophe loss events, our business franchise and capital position remains strong,” said Joseph V. Taranto, chairman and CEO. “We continue to be disciplined in our approach to risk and pricing and we are pleased with the underwriting portfolio we have constructed through the recent renewal cycles. While premium has come down modestly, overall we are achieving higher risk-adjusted returns on our business.”
Fidelity National Financial Inc. reported operating results for the three- and six-month periods ended June 30, 2011. The insurer generated an 11.7 percent pre-tax margin in its title business, a 200 basis point increase over the prior year and a sequential increase of 240 basis points from the first quarter of this year. While refinance orders represented 51 percent of closed order volumes this quarter versus 46 percent in the prior year, Fidelity still produced a 5 percent increase in the fee per file.
“Much of this can be attributed to the strength of our commercial business, as we generated nearly $94 million in commercial revenue in the second quarter, a 38 percent increase over the prior year and a sequential increase of 43 percent from the first quarter of this year,” said William P. Foley, II, chairman. “The commercial business produced a fee per file increase of 26 percent over both the prior year quarter and the first quarter of this year. The impact of cost reduction initiatives also contributed to our strong 11.7 percent pre-tax title margin. On a sequential basis from the first quarter, title segment personnel costs and other operating expenses increased by less than 1 percent, while title gross operating revenue grew by nearly 11 percent.”
First American Financial Corp. announced financial results for the second quarter ended June 30, 2011. Total revenues for the second quarter of 2011 were $927.3 million, a decline of 4 percent relative to the second quarter of 2010. Net income in the current quarter was $32.3 million, or 30 cents per diluted share, compared with net income of $33.8 million, or 32 cents per diluted share, in the second quarter of 2010. The current quarter results include net realized investment losses of $2.9 million, or 2 cents per diluted share, compared with net realized investment gains of $3.2 million, or 2 cents per diluted share, in the second quarter of 2010.
"We earned 30 cents per share in the second quarter, driven by strong results from our National Commercial Services division and continued actions to optimize the company's cost structure," said Dennis J. Gilmore, CEO. "Given the outlook for mortgage and real estate markets, we executed on an expense reduction program that is expected to yield $40 million in annualized cost savings beginning in the third quarter. The program is primarily directed toward shared service functions in the Title segment.
"Going forward, we will continue to focus on operational efficiency and on maintaining a conservative balance sheet while we pursue opportunities for organic growth and strategic investment in our core business."
Genworth Financial Inc. reported a net loss of $96 million, or $0.20 per diluted share, compared with net income of $42 million, or $0.08 per diluted share, in the second quarter of 2010. The net operating loss for the second quarter of 2011 was $74 million, or $0.15 per diluted share, compared with net operating income of $118 million, or $0.24 per diluted share, in the second quarter of 2010. The net loss and net operating loss in the quarter reflect a reserve strengthening of approximately $300 million in U.S. Mortgage Insurance.
“Disappointing results in U.S. Mortgage Insurance more than offset continued sound progress in our Retirement and Protection and International businesses this quarter,” said Michael D. Fraizer, chairman and CEO. “In U.S. Mortgage Insurance, despite declines in total and new delinquencies this quarter and prior reserve actions, the troubled U.S. residential real estate environment and loan servicer processing challenges necessitated additional reserve strengthening. Life insurance earnings improved notably and we were pleased with our agreement to sell our Medicare supplement business. International performance, excluding tax items, remained stable with strong improvements in lifestyle protection profits. While we are focused on continuing to improve Retirement and Protection performance and to turn around U.S. Mortgage Insurance, we are also working to accelerate multiple strategies to free up capital for redeployment to enhance shareholder value."
Liberty Mutual Group reported a net loss of $170 million and net income of $192 million for the three and six months ended June 30, 2011, versus net income of $220 million and $535 million in the same periods in 2010.
Revenues for the three months ending June 30, 2011 were $8.560 billion, an increase of $494 million or 6.1 percent over the same period in 2010. Net written premium for the three months ended June 30, 2011 was $7.723 billion, an increase of $440 million or 6.0 percent over the same period in 2010. Pre-tax operating loss before private equity income for the three months ended June 30, 2011 was $384 million versus $183 million of pre-tax operating income before private equity income in the same period in 2010. Pre-tax operating loss for the three months ended June 30, 2011 was $256 million versus $188 million of pre-tax operating income in the same period in 2010. Net loss for the three months ended June 30, 2011 was $170 million versus $220 million of net income in the same period in 2010.
“It was an unprecedented second quarter in terms of severe storm and tornado activity in the U.S., and our operating results reflect the financial cost,” said David H. Long, President and CEO. “More importantly, the human cost in lives, anguish and loss is incalculable, and our thoughts are with all of those affected by these storms. Our claims staff continues to work diligently assisting our policyholders with putting their lives back together, and I am very proud of their efforts. Our diversified operating model ensures that we can respond to the needs of all of our policyholders while absorbing the financial impact of such tragic events.”
MetLife Inc. reported second-quarter 2011 net income of $1.2 billion, or $1.13 per share, and operating earnings of $1.3 billion, or $1.24 per share.
Operating earnings of $1.3 billion, or $1.24 per share reflect strong variable investment income, which was above the plan range by $46 million, or $0.04 per share, after tax and the impact of deferred acquisition costs (DAC), the company said. MetLife also reported additional insurance claims and increased operating expenses of $44 million ($0.04 per share), after tax, due to the March 11 earthquake in Japan. Its U.S. annuity sales of $7.3 billion, were up 48 percent over the second quarter of 2010, driven by strong demand for variable annuities.
“MetLife delivered strong results during the second quarter,” said Steven A. Kandarian, president and CEO. “We grew earnings per share by 13 percent over the prior-year quarter while generating a record $11.8 billion in premiums, fees and other revenues. The fact that we were able to deliver these results despite losses from natural disasters in the United States and Japan is a testament to the earnings power of MetLife’s diverse portfolio of businesses. Our Alico integration work is proceeding on plan, and we’re well positioned for continued profitable growth that adds shareholder value.”
Selective Insurance Group Inc. reported net income for the second quarter ended June 30, 2011was $0.04 per diluted share and operating income was $0.01 per diluted share. Net investment income, after tax, increased 5 percent to $29.4 million compared to second quarter 2010.
Selective's second quarter 2011 highlights compared to second quarter 2010:
• Net income was down 88 percent to $2.3 million, or $0.04 per diluted share, compared to $18.8 million, or $0.35 per diluted share;
• Net realized gains on investments were $1.4 million, after tax, or $0.03 per diluted share, compared to net realized losses of $2.1 million, after tax;
• Operating income decreased 96 percent to $0.9 million, or $0.01 per diluted share, compared to $22.2 million, or $0.41 per diluted share;
• Combined ratio: GAAP: 109.2 percent compared to 100.9 percent; Statutory: 109.5 percent compared to 101.0 percent;
"The industry experienced unprecedented catastrophe losses due to severe storms thus far this year, but on a relative basis ours were not of the same magnitude," said Gregory E. Murphy, chairman, president and CEO. "Selective's catastrophe losses for the quarter were $38 million or 10.7 points on the statutory combined ratio of 109.5 percent. Catastrophe losses aside, the underlying good news is that the market appears to be firming. We had a solid quarter with our Commercial Lines net premiums written up 6 percent. Retention also was strong as we saw movement in commercial lines pricing, reducing the highly competitive nature of the marketplace
Torchmark Corp. reported that for the quarter ended June 30, 2011, net income was $1.32 per share, compared with $1.02 per share for the year-ago quarter. Net operating income for the quarter was $1.14 per share, an 8-percent increase compared with $1.06 per share for the year-ago quarter.
Comparing the second quarter 2011 with second quarter 2010:
• Life insurance accounted for 76 percent of the company's insurance underwriting margin for the quarter and 65 percent of total premium revenue.
• Health insurance, excluding Medicare Part D, accounted for 21 percent of Torchmark's insurance underwriting margin for the quarter and 28 percent of total premium revenue. Medicare Part D accounted for 3 percent of insurance underwriting margin and 7 percent of total premium revenue.
• Net sales of life insurance decreased 4 percent, while health sales, excluding Medicare Part D, fell 15 percent.
For the second quarter 2011, The Travelers Companies Inc. reported catastrophe losses in the quarter of $1.09 billion after tax ($1.67 billion pre tax), or $2.56 per diluted share. The company previously disclosed a range of $1.00 billion to $1.05 billion after tax for estimated catastrophe losses in the months of April and May. Net written premiums were up 2 percent reflecting pricing gains across all three business segments. Company achieved pricing gains in all business insurance product lines, led by gains in workers’ compensation. Book value per share was up 2 percent from year-end 2010, and adjusted book value per share (excludes after-tax net unrealized investment gains) up slightly from year-end 2010. Capital remains generally unchanged from the end of first quarter 2011.
“Our second quarter loss was due to the extraordinary tornadoes and hail storms that caused devastation across significant portions of the United States,” said Jay Fishman, chairman and CEO. “Pricing continued to improve across our diversified commercial insurance businesses. In particular, we were very pleased with the pricing gains we achieved in business insurance. All product lines within Business Insurance showed improved positive renewal rate change, most significantly in workers’ compensation. We were also encouraged that audit premiums, which turned positive in the first quarter, continued to increase. In Personal Insurance the production and pricing trends remained generally consistent with first quarter trends.
WellPoint Inc. announced that second quarter 2011 net income was $701.6 million, or $1.89 per share, including net investment gains of $21.5 million after-tax, or $0.06 per share. Net income in the second quarter of 2010 was $722.4 million, or $1.71 per share, including net investment gains of $19.6 million after-tax, or $0.04 per share.
Excluding the net investment gains in each period, adjusted net income was $1.83 per share in the second quarter of 2011, an increase of 9.6 percent compared with adjusted net income of $1.67 per share in the prior-year quarter.
"Our second quarter results exceeded our forecast and reflected the significant administrative cost savings we have been able to achieve through our continuous improvement and efficiency initiatives. This focus on execution has enabled us to exceed our goals through the first six months of the year," said Angela F. Braly, chair, president and CEO. "We remain committed to growth, continuous improvement, providing high quality products and services to our members, and creating the best health care value in our industry. By executing on these strategies, we now expect to achieve higher results in 2011, and believe that we can grow from these levels in the years ahead."
