A number of insurers have begun to release their financial results for Q4 as well as year-end numbers from 2012. The following is a compilation of their announcements:
American International Group Inc.
AIG reported a net loss of $4.0 billion for the fourth quarter ended December 31, 2012, compared with net income of $21.5 billion in the prior year’s fourth quarter. Full year 2012 net income was $3.4 billion, compared with $20.6 billion for the full year of 2011.
After-tax operating income in the 2012 fourth quarter was $290 million, compared with $1.5 billion in the prior year’s fourth quarter. After-tax operating income for the full year of 2012 was $6.6 billion, compared with $2.1 billion in 2011.
Fourth quarter and full year 2012 results included pre-tax catastrophe losses from Storm Sandy of $2.0 billion ($1.3 billion after-tax). Net income for the fourth quarter and full year of 2012 included a $4.4 billion net loss on sales from discontinued operations associated with the agreement to sell International Lease Finance Corporation (ILFC). Net income for the fourth quarter and full year of 2011 reflected a U.S. consolidated income tax deferred tax asset valuation allowance release of $19.3 billion and $18.4 billion, respectively.
“We achieved these operating profits in spite of Storm Sandy – the second largest single catastrophe event for AIG in the U.S. These results show how the people of AIG are working together and getting the job done,” said Robert Benmosche, AIG president and CEO. “In so many ways, this was an historic quarter—from the positive return we delivered to the American taxpayers on the investment in AIG, to our ability to monetize non-core assets, and to again becoming a unified AIG. When history is written, we will look back and see that by the end of 2012, a new era for AIG had begun.”
Allianz Life
Minneapolis-based Allianz Life Insurance Company of North America (Allianz Life) reported operating profit of $586 million for its 2012 financial year, an increase of 37 percent from $428 million in 2011. Growth in operating profit was driven by disciplined pricing, a growing asset base, a commitment to expense management, and realized gains on the company’s conservative and stable investment portfolio.
Allianz Life reported total premium (new sales and recurring premiums) of $9.4 billion for 2012, down 14 percent from the prior year total of $10.8 billion. Fixed annuity sales declined 16 percent to $5.5 billion in 2012 compared to $6.5 billion of premium in 2011. Variable annuity sales decreased 12 percent to $3.3 billion of premium in 2012 compared to $3.8 billion in 2011. Life insurance sales increased 75 percent to $65 million in 2012 from $37 million in 2011. Sales results reflected the impact of market conditions, pricing discipline and an increasingly focused distribution strategy.
At the close of 2012, Allianz Life’s assets under management increased 8 percent to $102.9 billion compared with $95.3 billion at the end of 2011.
“Allianz Life is financially strong, which is what Americans expect when working with us to help grow and protect their retirement savings. We posted very strong operating profits and continued to deliver innovative products, despite low interest rates,” said Walter White, Allianz Life President and CEO. “Our focus on financial strength, as demonstrated by our improved capital ratio, places us as one of the strongest financial companies in our marketplace.”
EMC Insurance Group
EMC Insurance Group Inc. (EMCI) today reported operating income of $12.73 million for the fourth quarter ended December 31, 2012, compared to $8.14 million for the fourth quarter of 2011. For the year ended December 31, 2012, operating income totaled $32.76million, compared to an operating loss of $8.78 million for the same period in 2011.
Net income, including realized investment gains and losses, totaled $12.99 million for the fourth quarter of 2012, compared to $10 million for the fourth quarter of 2011. For the year ended Dec. 31, 2012, net income totaled $38 million compared to a net loss of $2.74 million for the same period in 2011.
Premiums earned increased 4.9 percent to $117.27 million for the fourth quarter of 2012, from $111.77 million for the fourth quarter of 2011. For the year ended Dec. 31, 2012, premiums earned increased 10.2 percent to $458.85 million from $416.40 million in 2011. In the property/casualty segment, premium income increased 11.0 percent for the year, with the majority of the increase attributable to rate level increases, growth in insured exposures and an increase in retained policies. In the reinsurance segment, premium income declined 14.4 percent in the fourth quarter, but increased 7.3 percent for the year. The decline for the fourth quarter is primarily attributed to a significant decline in the year-end estimate of “earned but not reported” premiums on several pro rata accounts, including the new offshore energy and liability account that Employers Mutual Casualty Company began participating in effective Jan. 1, 2012. The increase for the year is primarily attributed to rate level increases implemented during the January 1 renewal season, as well as the new offshore energy and liability proportional account.
First American
Total revenues for the fourth quarter of 2012 were $1.3 billion, an increase of 28 percent relative to the fourth quarter of 2011. Net income in the current quarter was $93.3 million, compared with net income of $40.2 million in the fourth quarter of 2011. The current quarter results include net realized investment gains of $6.2 million, compared with net realized losses of $2.2 million in the prior year. The fourth quarter results for 2011 also include a $19.2 million charge for a legal settlement.
Total revenues for the full year of 2012 were $4.5 billion, an increase of 19 percent relative to the prior year. Net income was $301 million, compared with $78.3 million in 2011. The results for the full year 2012 include $57 million of net realized investment gains, primarily due to the sale of CoreLogic common stock, compared with net realized investment losses of $9.2 million in 2011. In addition, the prior year results for 2011 include charges of $77.5 million, which incorporate a $45.3 million reserve addition for the guaranteed valuation product offered in Canada and $32.2 million for a legal settlement.
Total revenues for the title insurance and services segment were $1.2 billion in the fourth quarter of 2012, an increase of 30 percent from the same quarter of 2011. Direct premiums and escrow fees were up 38 percent compared to the fourth quarter of 2011, due to a 34 percent increase in the number of direct title orders closed in the quarter and a small increase in average revenue per order. Average revenue per direct title order was $1,547, an increase of 3 percent compared with the fourth quarter of 2011. Agent premiums were up by 30 percent in the current quarter, reflecting the normal reporting lag of approximately one quarter.
State Auto
State Auto Financial Corporation (STFC) reported a fourth quarter 2012 net income of $20.9 million, versus net income of $99.3 million for the fourth quarter of 2011. Net income for the fourth quarter of 2011 included a $14.9 million postretirement benefit curtailment gain and $35.7 million of federal income tax benefit.
STFC’s GAAP combined ratio for the fourth quarter 2012 was 101.7 versus 94.31 for the fourth quarter of 2011. Catastrophe losses during the fourth quarter 2012 accounted for 2.2 points of the 68.7 total loss ratio points, or $5.9 million vs. a favorable impact of 0.5 points of the total 59.7 loss ratio points, or $1.8 million, for the same period in 2011.
Net written premium for the fourth quarter of 2012 increased 76.7 percent over the same period in 2011. By segment, net written premium for the fourth quarter of 2012 increased 207.2 percent for personal insurance, 64.5 percent for business insurance and 0.5 percent for specialty insurance from the same period in 2011.
For the year 2012, STFC had net income of $10.7 million, compared to a loss of $160.7 million for the same 2011 period. STFC’s GAAP combined ratio for 2012 was 107.9 compared to 116.51 for the same 2011 period. Catastrophe losses accounted for 6.4 points, or $67.1 million, during 2012, compared to 16.2 points, or $231.1 million, during 2011. The 2012 and 2011 catastrophe losses both included favorable prior accident years’ development, which reduced the loss ratio by 1.0 points, or $10.4 million for 2012, and 0.3 points, or $4.3 million for 2011. Non-catastrophe favorable reserve development reduced the loss ratio by 0.6 points, or $6.5 million for 2012, and 2.0 points, or $29.0 million for 2011.
