A number of insurers, including Allstate, Aspen, Hanover, Kemper, Lincoln and Prudential, have begun to release their financial results for year-end 2012. The following is a compilation of their announcements.
Allstate Corp.
For Q4 2014, Allstate reported net income of $394 million, or $0.81 per diluted share, compared with $712 million, or $1.40 per diluted share, for the same quarter last year, a decline of 44.7 percent. For the year ended Dec. 31, 2012, net income increased 193 percent to $2.306 billion, or $4.68 per diluted share, compared with $787 million, or $1.50 per diluted share, for 2011. Catastrophe losses for 2012 were $2.345 billion compared with $3.815 billion for 2011. The property-liability combined ratio was 95.5 percent for 2012, compared with 103.4 percent for 2011.
The Q4 2012 property-liability underlying combined ratio was 86.7, vs. 90.7 in Q4 2011, driven by improvements in auto and homeowners. The Q4 2012 recorded combined ratio was 101.7 and included 10 catastrophe events costing $1.16 billion, offset by favorable reserve reestimates of prior catastrophe losses worth $103 million, $80 million of which were for pre-2012 catastrophe events.
The loss estimate for Superstorm Sandy was updated to $1.117 billion from $1.075 billion; $22 million of the increase is due to losses not covered by reinsurance programs, and the balance resulting from claim expenses not recoverable under the National Flood Insurance Program.
Property-liability premiums written for the quarter were $6.637 billion, compared to $6.426 billion for the same quarter last year. For the year, property-liability premiums written were $27.027 billion compared with $25.98 billion.
"Allstate had a good finish to a strong year despite the costs incurred in the fourth quarter related to Superstorm Sandy," said Thomas J. Wilson, chairman, president and CEO.
Aspen Insurance Holdings Limited
Aspen reported net income after tax of $280.4 million for 2012, and $2.0 million for Q4 2012, equivalent to $3.38 net income per share diluted for the year and a $0.09 diluted net loss per share for Q4 2012.
Net catastrophe losses were $170 million, after tax and net of reinsurance and reinstatements, including $175 million from Superstorm Sandy and favorable development on the 2012 U.S. storms.
“In 2012, despite the impact of Superstorm Sandy, we made strong progress against our strategic objectives and generated an operating return on equity of 8.5 percent,” said Chris O’Kane, CEO. “In 2013, we will be intensely focused on further improving return on equity, against a backdrop of modestly improving insurance pricing, lackluster global economies, and a continued low interest rate environment. We will allocate capital efficiently to profitable underwriting opportunities, scale back in certain lines whose performance has not been consistent with our targeted risk profile, and return excess capital to shareholders through our expanded share repurchase authorization. We will also strive to generate increased returns from our investment portfolio while ensuring that our investments remain within our risk tolerance.”
Highlights from 2012
•
•
•
•
Highlights from Q4 2012
•
•
•
•
•
•
•
The Hanover Insurance Group Inc.
Hanover Insurance reported a net loss of $55.0 million, or $1.24 per diluted share, for Q4 2012, compared to net income of $49.6 million, or $1.09 per diluted share, for the same quarter last year. Results include catastrophe losses of $132.1 million after-tax ($203.3 million pre-tax), with $128.8 million after-tax ($198.1 million pre-tax) attributable to Superstorm Sandy. Catastrophe losses for Q4 2011 were $36.1 million after-tax ($55.6 million pre-tax).
Net income for 2012 was $55.9 million, or $1.23 per share, compared to $36.7 million, or $0.80 per share, in 2011. Segment income after-tax was $15.1 million, or $0.33 per diluted share, in the current year, compared to segment income of $14.2 million, or $0.31 per diluted share, for the prior year.
•
•
•
"While Superstorm Sandy clearly had a significant impact on our bottom line, we expect losses from this storm will be substantially lower than our market share would indicate, validating the effectiveness of our exposure management actions and underscoring the quality of our underwriting," said Frederick H. Eppinger, CEO. "We continued to drive forward on our areas of strategic focus during 2012, including mix improvement in our domestic businesses through rate and non-rate actions. The pricing momentum we experienced through the first three quarters of the year continued in the fourth quarter, as demonstrated by pricing increases of 8% in both Core Commercial and Personal Lines, and over 10% in specialty," adding that the company’s capital and liquidity positions remain strong, and book value increased 5 percent for the year to $58.59 per share.
Kemper Corporation
Kemper reported net income of $1.9 million, or $0.03 per share for Q4 2012, compared to $24.3 million, or $0.40 per share, for Q4 2011. Consolidated net operating loss was $3.4 million, or $0.06 per share, for Q4 2012, compared to consolidated net operating income of $24.1 million, or $0.40 per share, for Q4 2011.
Total revenues were $596.6 million for Q4 2012, compared to $613.3 million for the same quarter last year, driven by lower earned premiums, attributable to planned reductions at Kemper Direct, which declined $14.1 million. Net investment income was $72.9 million for the quarter, a $2.4 million decrease from last year, driven by lower yields on fixed income and higher expenses, offset by higher returns on equity investments. The portfolio generated a pre-tax equivalent annualized book yield of 5.4 percent for Q4 2012.
“Kemper's performance for 2012 was once again marked by significant unusual weather events. In the fourth quarter specifically, Superstorm Sandy adversely affected our results by $32 million after-tax,” said Donald G. Southwell, Kemper's Chairman, President and CEO. “During the fourth quarter, we concluded our strategic review of the Direct business and placed our direct-to-consumer operations in run-off. Going forward, we expect this business to be cash flow and earnings positive during the run-off period and expect to free up the majority of capital backing the run-off business in the next two to three years.”
Highlights
•
•
•
•
•
Lincoln Financial Group
Lincoln Financial reported Q4 2012 net income of $320 million, or $1.14 per diluted share, compared to a net loss in the fourth quarter of 2011 of $541 million, or $1.82 per diluted share. Income from operations was $310 million, or $1.10 per diluted share, compared to $277 million, or $0.91 per diluted share, for the same quarter last year. For the full year, net income was $1.3 billion, or $4.56 per diluted share, compared to $221 million, or $0.69 per diluted share, in 2011. Income from operations for 2012 was $1.3 billion, or $4.47 per diluted share, compared to $1.2 billion, or $3.94 per diluted share last year.
"The strength of our 2012 results reflected the benefits of ongoing investments in our businesses, actions to respond to the low interest rate environment and maintaining an active capital management program," said Dennis R. Glass, president and CEO of Lincoln Financial Group. "We enhanced new business profitability through product design and pricing changes, took additional steps related to expenses and interest margins, and would expect these changes to continue to benefit 2013 results."
•
•
•
•
"The strength of our 2012 results reflected the benefits of ongoing investments in our businesses, actions to respond to the low interest rate environment and maintaining an active capital management program," said Dennis R. Glass, president and CEO. "We enhanced new business profitability through product design and pricing changes, took additional steps related to expenses and interest margins, and would expect these changes to continue to benefit 2013 results."
Prudential Financial Inc.
Prudential Financial reported after-tax adjusted operating income of $2.958 billion, or $6.27 per common share, for 2012, compared to $2.845 billion, or $5.83 per common share, for last year. Net income was $428 million, or $0.94 per common share, compared to $3.420 billion, or $6.99 per common share, for 2011. Q4 after-tax adjusted operating income was $798 million, or $1.69 per common share, compared to $855 million, or $1.78 per common share, for Q4 2011. The Q4 net loss amounted to $214 million, or 48 cents per common share, compared to net income of $522 million, or $1.08 per common share, for Q4 2011.
The Q4 net loss includes $1.698 billion of pre-tax net realized investment losses and related charges and adjustments. The forgoing net loss includes pre-tax losses of $1.527 billion representing net changes in value relating to foreign-currency exchange rates, primarily resulting from changes in value of the Japanese yen.
At December 31, 2012, gross unrealized losses on fixed maturity investments were $2.146 billion, including $1.693 billion on high- and highest-quality securities based on NAIC or equivalent ratings. Gross unrealized losses include $390 million related to asset-backed securities collateralized by sub-prime mortgages. Gross unrealized losses on bonds at December 31, 2012 include $749 million of declines in value of 20 percent or more of amortized cost. Gross unrealized losses on bonds were $4.256 billion at December 31, 2011. Net unrealized gains on bonds amounted to $18.606 billion at December 31, 2012, compared to $10.493 billion at December 31, 2011.
The Company acquired AIG Star Life Insurance Co. Ltd. and AIG Edison Life Insurance Company in February 2011, and results include those businesses from the date of acquisition. Reported results for Q4 2012 and earlier periods presented reflect the implementation of a discretionary change in accounting principle related to the company’s pension plans.
The U.S. Individual Life and Group Insurance division reported adjusted operating income of $87 million for tQ4 2012, compared to $180 million for the same quarter last year.
The International Insurance segment reported adjusted operating income of $647 million for Q4 2012, compared to $502 million for the same quarter last year.
“We surpassed significant milestones during the year, including $1 trillion of assets under management, over $400 billion of account values in our Retirement and Annuities businesses, and annualized new business premiums of over $4 billion in International Insurance,” said John Strangfeld, Chairman and CEO. “We’ve strengthened our U.S. businesses with the completion of two major ground breaking pension risk transfer transactions in the fourth quarter, building a leadership position in an attractive market well suited to our proficiencies. These transactions speak to our capabilities, our culture of multi-discipline collaboration, and our financial strength. Our acquisition of The Hartford’s individual life insurance business, which was completed early this year, is also expected to provide financial and strategic benefits.”
