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:
Assured Guaranty Ltd.
Assured Guaranty reported Q4 2012 net income of $74 million, or $0.38 per diluted share, compared with Q4 2011 net loss of $84 million, or $0.46 per diluted share. Fiscal 2012 net income was $110 million, or $0.57 per diluted share, compared with fiscal 2011 net income of $773 million, or $4.16 per diluted share. The increases were driven by non-economic net unrealized fair value changes, which are expected to reverse by contract maturity.
“In a difficult operating environment, we created shareholder value through our successful execution of strategic objectives including new direct business production, assumed reinsurance, reassumption of ceded business, R&W recoveries, insurance terminations and purchases of our insured securities for loss mitigation,” said Dominic Frederico, president and CEO. “In addition, in February 2012 we doubled our quarterly dividend to $0.09 per share and further raised it to $0.10 per share in the first quarter of 2013, a total increase of 122 percent in the last 12 months.”
Q4 2012 operating income of $184 million, or $0.95 per diluted share, which is a 7-percent increase compared with Q4 2011. The increase is primarily attributable to higher terminations of structured finance exposures and refundings of public finance exposures, the company said. Operating income for fiscal 2012 was $535 million, or $2.81 per diluted share, compared with $601 million, or $3.24 per diluted share, for fiscal 2011. The decrease was primarily attributable to an increased loss expense on Greek sovereign exposures. Assured no longer has exposure to Greek sovereign debt, the company said.
Liberty Mutual Holding Co. Inc.
Liberty Mutual and subsidiaries reported net income of $829 million for the year ended Dec. 31, 2012, compared to $358 million for 2011, and a net loss of $234 million for Q4 2012, compared with a net income of $285 million for Q4 2011.
“Our net loss of $234 million in the quarter was principally driven by a $576 million after tax loss from Superstorm Sandy, and I’d like to express my gratitude to our claims professionals for their extraordinary response to help our policyholders post the event,” said David Long, president and CEO of Liberty Mutual Insurance. “Full year financial results also included a $125 million loss, after tax, from the refinancing of debt and a $64 million after tax loss associated with the realignment of our operating units.”
Highlights:
• Q4 2012 revenue was $9.628 billion, an increase of $665 million or 7.4 percent compared with Q4 2011.
• Net written premium for Q4 was $8.491 billion, an increase of $783 million or 10.2 percent compared with Q4 2011.
• Pre-tax operating loss before private limited partnership and limited liability company income for Q4 2012 was $622 million, including $886 million of catastrophe losses due to Superstorm Sandy, vs. pre-tax operating income before LP and LLC income of $156 million in Q4 2011.
• Total assets were $120.060 billion on Dec. 31, 2012, an increase of $3.209 billion over Dec. 31, 2011.
• Total equity was $18.525 billion on Dec. 31, 2012, an increase of $926 million over Dec. 31, 2011.
The consolidated combined ratio before catastrophes and net incurred losses attributable to prior years for fiscal 2012 was 97.1 percent, a decrease of 0.5 points compared to 2011. Including catastrophes and net incurred losses attributable to prior years, the combined ratio for fiscal 2012 decreased 2.8 points to 104.7 percent.
QBE Insurance Group Ltd.
QBE's North America operations announced gross written premium declined to $6.5 billion, compared to $7.5 billion the year before; the 2012 combined operating ratio was 106.8 percent, compared to 90.6 percent last year. Net earned premium decreased 12.5 percent to $3.5 billion, compared to $4.0 billion for 2011, consistent with the decline in gross written premium.
"2012 was a difficult year for North America as a severe drought across many parts of the U.S., in combination with Superstorm Sandy and prior-year portfolio adjustments provided a challenging backdrop," said John Rumpler, President and CEO of North America operations. "The organization benefited from rate increases in 2012 and we expect positive pricing trends to continue across most of our portfolios."
QBE also announced that effective April 1, Rumpler will leave QBE to pursue other interests. David Duclos will succeed Rumpler as CEO of QBE North America operations.
State Farm
Combined net worth for the State Farm group increased by $4.6 billion to reach $65.4 billion in 2012. The increase was primarily attributable to P&C affiliates' pre-tax operating profit of $2.7 billion and a $1.9 billion increase in P&C affiliates' unaffiliated stock portfolio. Total revenue, including premium revenue, earned investment income and realized capital gains was $65.3 billion for 2012, compared with $64.3 billion for 2011. State Farm reported after-tax net income of $3.2 billion in 2012, compared with $0.8 billion in net income in 2011. The increase was attributable primarily to improved underwriting results.
• Auto – Earned premium was $32.2 billion, an increase of 1.4 percent from 2011. Incurred claims and loss adjustment expenses were $25.5 billion, compared with $26.1 billion for 2011. The underwriting loss was $1.3 billion, compared with $1.9 billion for 2011.
• Homeowners – Earned premium was $18.3 billion, a 1.5 percent increase from 2011. Incurred claims and loss adjustment expenses were $13.5 billion, compared with $15.4 billion for 2011. The underwriting loss was $0.3 billion, compared with $2.6 billion for 2011.
• Health – Underwriting loss was $97 million, excluding premium deficiency reserve. Net written premium was $690 million, compared with an underwriting loss of $60 million, and net written premium of $692 million for 2011.
• P&C – The combined underwriting loss was $1.7 billion on earned premium of $52.3 billion, compared with an underwriting loss of $4.5 billion and earned premium of $51.4 billion for 2011. Pre-tax operating profit was $2.7 billion for 2012, compared to a pre-tax operating loss of $0.2 billion for 2011. After tax net income for 2012 was $2.6 billion compared to $0.2 billion for 2011.
• Life – Total insurance in force was $805 billion at the end of 2012, and increase of $27 billion.
Tower Group Inc.
Tower Group reported a Q4 2012 net loss of $52.1 million, or $1.36 per share, compared to Q4 2011 net income of $25.3 million, or $0.64 per share. The fiscal 2012, net loss was $28.2 million, or $0.73 per share, compared to net income of $60.5 million, or $1.48 per share, for fiscal 2011. The Q4 2012 operating loss was $54.9 million, or $1.43 per share, compared to operating income of $23.5 million, or $0.59 per share, in Q4 2011. The Fiscal 2012 operating loss was $27.9 million, or $0.72 per share, compared to fiscal 2011 operating income of $56.3 million, or $1.38 per share. Losses were primarily attributable to Superstorm Sandy. Tower paid $164.0 million before reinsurance collections to personal lines and commercial policyholders affected by Superstorm Sandy.
Fiscal 2012 Highlights:
• Net premiums earned increased 8.0 percent to $1.72 billion from $1.59 billion in 2011.
• Gross premiums written and managed increased 8.8 percent to $1.97 billion from $1.81 billion in 2011.
• Consolidated net combined ratio was 109.2 percent, compared with 100.3 percent in 2011.
• Consolidated net combined ratio excluding the impact of catastrophes and reserve development was 97.4 percent, compared with 96.6 percent in 2011. Net investment income was $127.2 million, compared with $126.5 million in 2011.
“Excluding the losses from Superstorm Sandy and reserve development, our ROE for 2012 was within our 10 to 12% near term target,” said Michael Lee, Tower Group president and CEO. “While Tower’s financial results were disappointing, we made substantial progress in 2012 on various important strategic initiatives. Tower’s organic growth initiative continued to drive premium growth by expanding our product offerings, improving existing business units and creating new business units.”
United Insurance Holdings Corp.
United Insurance reported fiscal 2012 revenue of $131.2 million, a 36 percent increase compared to $96.4 million for fiscal 2011. The increase was primarily attributable to a 35 percent annual increase in net premiums earned to $122.0 million, from $90.1 million, the company said. Net investment income and other revenues increased to $9.3 million from $6.3 million, driven by $2.1 million in realized gains and increased policy fee income.
Q4 2012 net income was $1.0 million, or $0.09 per diluted share; fiscal 2012 net income was $9.7 million, or $0.91 per diluted share; Q4 2012 gross premiums written increased 37 percent to $59.5 million; fiscal 2012 gross premiums written increased 25 percent to $255 million and the combined ratio was 94.8 percent. Cash and investment holdings totaled $223.4 million on Dec. 31, 2012, compared to $165.9 million on Dec. 31, 2011.
“We grew policies in force and revenues by over 30 percent, increased net income 20 percent, delivered return on equity over 16 percent despite several cat events during the year, brought on board four new executives to round out a world-class management team, and completed a successful public offering that launched us onto the NASDAQ,” said John Forney, CEO. “That record speaks for itself. We are gratified at the strong support we have received from investors, the independent agent community, policyholders, regulators and reinsurers during 2012, and we are singularly focused on executing our growth strategy and delivering results for each of these constituencies in 2013.”
