A number of insurers have begun to release their financial results for Q3. The following is a compilation of their announcements:
American International Group Inc.
AIG reported Q3 2013 net income of $2.2 billion, or $1.46 diluted earnings per share, compared to $1.9 billion, or $1.13 diluted earnings per share, for the same quarter last year. After-tax operating income was $1.4 billion for the quarter, compared to $1.6 billion for the same period last year. “Net income attributable to AIG for the quarter exceeded after-tax operating income attributable to AIG largely due to valuation allowance releases associated with deferred tax assets from capital loss carryforwards, partially offset by a $260 million after-tax increase to litigation reserves related to legacy crisis matters,” the company said. After-tax operating income per share for Q3 2013 was $0.96, compared to $0.99 for the same quarter last year.
“AIG’s solid performance this quarter underscores the strong fundamentals of our businesses, and builds upon the momentum that we generated in the first half of this year,” said Robert Benmosche, president and CEO. “Our insurance operations reported improved pre-tax operating profits this quarter from the third quarter of 2012, and we continue to remain optimistic about the future.”
Pre-tax operating income increased 33 percent to $1.0 billion for AIG’s P&C group, attributable to improved underwriting results, which were partially offset by a decline in net investment. The Q3 2013 accident year combined ratio, excluding catastrophe losses and prior-year development, improved 2.1 points to 98.0. AIG Property Casualty distributed $716 million in cash dividends to AIG Parent during Q3 2013. The Q3 2013 combined ratio was 101.6, reflecting a 3.4 point improvement; CAT losses were $222 million, compared to $261 million for the same quarter last year.
For commercial insurance underwriting, net premiums written in Q3 2013 were $5.22 billion, a 2 percent increase from $ 5.1 billion for the same quarter last year. Net premiums earned decreased 2 percent to $5.142 billion from $5.24 billion for the same quarter last year. Underwriting losses were $8 million compared to a $317 million loss for the same quarter last year.
For AIG Life and Retirement, pre-tax operating income increased 38 percent to $1.1 billion attributable strong sales of variable annuities, retail mutual funds and increases in fixed annuity deposits. Net flows increased nearly $3.0 billion compared to the same quarter last year. Increased flows and higher account balances resulted in higher fee income in the quarter; results also benefitted active spread management. Net investment income declined attributable to lower returns on alternative investments and low interest rates. Pre-tax operating income also reflected positive adjustments netting to $118 million related to a review of estimated gross profit assumptions, compared to the same quarter last year, which reflected $196 million in charges for reserve-related items. Net investment income declined 5 percent to $2.5 billion, attributable to lower returns on alternative investments and declines in base yields and yield enhancements.
Aspen Insurance Holdings Ltd.
Aspen reported Q32013 after tax net income of $107.4 million, or $1.43 diluted net income per share, compared to $115.1 million, or $1.45 diluted net income per share. Net written premiums for Q3 2013 were $542.0 million compared to $507.1 million for the same quarter last year.
Total underwriting expenses for Q3 2013 increased to $499.6 million from $448.8 million for the same quarter last year, and underwriting income, including corporate expenses, increased to $44.7 milllion from $67.4 million. Net investment income for the quarter also declined to $45.0 million from $48 million in the same quarter last year. The combined ratio increased to 91.8 percent from 87.0 percent.
“In the third quarter, Aspen continued to make good progress in terms of strategic execution, operating results and profitability,” said Chris O’Kane, CEO. “We are pleased with the headway we are making on the three levers we outlined earlier this year. We repurchased $296 million of ordinary shares to date and continued to reallocate a portion of our investment portfolio to achieve higher risk-adjusted returns.”
Berkshire Hathaway Inc.
Berkshire Hathaway reported Q32013 net earnings attributable to Berkshire shareholders of $5.053 billion compared to $3.920 billion for the same quarter last year. Operating earnings increased to $3.662 billion from $3.399 billion for the same quarter last year.
Investment and derivative gains, including sales and redemptions of investments, were $1.207 billion for the quarter, compared to $597 million for the same period last year; derivative gains increased to $277 million from a loss of $76 million for the same quarter last year.
Insurance-underwriting for Q3 2013 decreased to $170 million from $392 million for the same quarter last year. Insurance-investment income increased for Q3 2013 to $861 million from $733 million in Q3 2012. Revenue from non-insurance businesses increased to $2.783 billion from $2.474 billion for the same quarter last year.
Cigna Corp.
Cigna reported Q3 2013 total revenues of $8.07 billion, a 10 percent increase from the $7.32 billion reported for the same quarter last year, and reflecting growth in premiums and fees of 7 percent in global health care, 29 percent in global supplemental benefits and 9 percent in group disability and life, driven by continued growth in targeted customer segments, Cigna said.
Adjusted income from operations for the quarter increased to $536 million from $489 million for the same quarter last year. Net realized investment gains, after taxes were $17 million, compared to $7 million for the same quarter last year.
“Our customers and clients continue to benefit from improved health outcomes and productivity driven by our differentiated capabilities,” said David Cordani, president and CEO. “The consistent, effective execution of our strategy coupled with ongoing strategic investments is driving strong financial performance in 2013 and positions us for continued long term growth.”
MetLife Inc.
MetLife reported Q3 2013 net income of $942 million, or $0.84 per share, including $355 million in after tax derivative losses, including negative impact from interest rates, changes in foreign currencies and the impact of MetLife’s own credit. For the same period last year, MetLife reported a net loss of $984 million, or $0.92 per share. Operating earnings for Q3 2013 were $1.5 billion, or $1.34 per share, a 6 percent increase over the period last year. Per share earnings were dampened by an increase in the number of common shares resulting from the conversion of equity units issued in 2010 to fund the acquisition of Alico.
Operating earnings in the Americas grew 7 percent and increased 37 percent on a reported basis and 28 percent on a constant currency basis for Europe, the Middle East and Africa (EMEA). Operating earnings in Asia decreased 1 percent on a reported basis but increased 7 percent on a constant currency basis.
Total operating earnings for the Americas increased 7% to $1.3 billion, driven by strong results in the United States. Premiums, fees & other revenues for the Americas were $8.7 billion, up 4%, primarily driven by results in Latin America, corporate benefit funding and retail.
Operating earnings for retail increased 34 percent $659 million, attributable market performance, disciplined expense management and the results of the annual actuarial assumption review, MetLife said. Premiums, fees and other revenues for the unit were $3.1 billion, a 6 percent increase over the same period last year, driven by separate account annuity fee growth, broker dealer annuity sales, and increased P&C sales; Q3 2013 variable annuity sales decreased 41 percent to $2.7 billion.
Operating earnings for group, voluntary and worksite benefits declined 20 percent to $226 million, driven by lower underwriting results in group life and disability, caused by higher average-claim size. Premiums, fees and other revenues for group, voluntary and worksite benefits increased 1 percent compared to the same period to $4.0 billion.
“MetLife’s third quarter results reflect continued growth in emerging markets, solid performance in the United States, and disciplined expense management,” said Steven Kandarian, chairman, president and CEO. “We are supplementing strong organic growth in emerging markets with acquisitions such as Provida, the largest pension provider in Chile, which closed earlier this month. We continue to shift our business toward lower-risk, protection-oriented products as we focus on providing long-term value for our shareholders.”
State Auto Financial Corp.
State Auto reported Q3 2013 net income of $18.5 million, or $0.45 per diluted share, compared to a net loss of $5.5 million, or $0.14 per diluted share, for the same quarter last year. Total revenue for Q3 2013 was $292.7 million, compared to $286.4 million for the same quarter last year. Earned premiums for the quarter increased to $266.0 million from $261.4 million for the same quarter last year; net investment income increased to $18.8 million from $17.2 million for the same quarter last year, and net realized gain on investments increased to $7.5 million from $7.0 for the same quarter last year.
“State Auto Financial Corporation’s third quarter 2013 performance is substantially improved on both a quarterly and a year-to-date basis resulting from higher prices, better weather patterns and the termination of the RED program,” said Bob Restrepo, president and CEO. “We continue to get price increases in excess of loss costs in all three insurance segments. STFC’s year-to-date combined ratio of 101.7 represents an 8.3 point improvement relative to 2012. Excluding the impact of RED and the homeowner quota share treaty, our third quarter combined ratio was comparable to the third quarter result in 2012 with improved ex-catastrophe loss ratios offset by higher catastrophe experience and expenses. Year to date, our combined ratio was 97.8 percent, excluding the impact of RED and the homeowner quota share treaty, a substantial improvement over our year-to-date result last year.
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