A number of insurers have begun to release their financial results for Q2 2012. The following is a compilation of their announcements.
American Safety Insurance Holdings reported second quarter 2012 net earnings of $2.2 million ($0.21 per diluted share), compared to $4.1 million ($0.38 per diluted share) for the same period last year.
Highlights for the quarter:
• Gross written premiums increased 6 percent to $87.5 million
• Net earned premiums increased 5 percent to $62.0 million
• Net investment income decreased to $7,402 million from $8,050 million
• Annualized return on average equity was 3.0 percent
• Book value was $32.28 per diluted share compared with $30.80 at Dec. 31, 2011
Total revenues increased to $70.1 million from $68.2 million for the same quarter last year due to an increase in net earned premiums. Net earnings include $3.0 million of after-tax net weather related property losses compared to $3.4 million in the 2011 quarter.
The combined ratio was 107.1 percent compared to 105.6 percent for Q2 2011. Pre-tax net weather related property losses in the 2012 quarter were $3.6 million (or 5.8 points) compared to $5.1 million (or 8.6 points) for the 2011 quarter. The expense ratio increase was attributable to lower acquisition costs in 2011 due to the impact of property catastrophe losses on profit commissions; mix of business; and costs associated with growth initiatives.
CNA Financial reported second quarter 2012 net operating income of $152 million ($0.56 per share) and net income of $166 million ($0.62 per share). Net operating income for property/casualty operations increased $12 million. The combined ratio for property/casualty operations was 101.7 percent. Book value per share was $45.34, compared with $44.48 for the same quarter last year. CNA also announced a quarterly dividend of $0.15 per share. Pretax net investment decreased $47 million compared with the same period in 2011.
CNA Specialty Highlights:
• Net written premiums increased $35 million, or 5 percent
• Net income decreased $8 million and net operating income decreased $9 million compared with the same period in 2011
• Combined ratio increased to 94.4 percent from 92.2 percent
CNA Commercial Highlights:
• Net written premiums increased $9 million, or 1 percent
• Net income and net operating income increased $21 million compared with the same period in 2011
• Net income and net operating income increased $21 million compared with the same period in 2011
• Combined ratios decreased to 108.1 percent from 118.3 percent
“We are pleased to report continued progress on our strategies to drive margin improvement and growth in our core P&C Operations,” said Thomas F. Motamed, chairman and CEO. “We achieved meaningful first half rate increases across our P&C portfolio, which helped drive nearly three points of improvement in our P&C combined ratio excluding catastrophes and prior year development.”
The Hartford reported a second quarter 2012 net loss of $101 million ($0.26 per diluted share), which included a $587 million loss on extinguishment of debt, compared with net income of $33 million ($0.05 per diluted share) in Q2 2011. Core earnings rose to $119 million ($0.23 per diluted share) from $14 million ($0.01 per diluted share) in Q2 2011.
Consumer Market Highlights
• New auto and homeowners written premium rose 17 percent due to strong production in AARP Direct and AARP Agency
• Automobile and homeowners policy count retention improved 2 points to 84 percent and 86 percent, respectively
• Combined ratio was 91.3 percent, excluding catastrophes and prior year development
• Written premiums decreased to $950 million, from $969 million
• Combined ratio was 91.3 percent compared with 91.2 percent in the same quarter last year
Commercial Market Highlights
• P&C Commercial written premiums grew 1 percent due to higher pricing
• Renewal written price increases averaged 7 percent in Small Commercial and Middle Market; 16 percent in Middle Market workers’ compensation
• Group Benefits core earnings were $34 million, up 13 percent from $30 million in Q2 2011
Commercial Markets net income rose to $184 million from $159 million in Q2 2011; core earnings increased 54 percent to $194 million from $126 million in the same quarter last year. Group Benefits core earnings were $34 million, up 13 percent compared with $30 million in the same quarter last year.
MetLife Inc. reported second quarter 2012 net income of $2.264 billion ($2.12 per share), compared with $1.069 billion in the same quarter last year, and operating earnings of $1.426 billion ($1.33 per share), compared with $1.207 billion in the same quarter last year. Net income included net derivative gains of $1.4 billion, after tax.
“MetLife continued to perform well in the second quarter particularly given the current environment,” said Steven A. Kandarian, chairman, president and chief executive officer. “Our story is clear – consistent execution on the fundamentals of the business. Our underwriting discipline is paying off, our investment income and core spreads are healthy, and we’re successfully managing through the low-interest-rate environment.”
• Operating earnings were $1.4 billion ($1.33 per share), up 18 percent over Q2 2011
• Book value was $48.60 per share, up 12 percent over Q2 2011
• Net investment income was $5.2 billion, up 4 percent over the Q2 2011
Total operating earnings for the Americas increased 11 percent to $1.1 billion driven. Premiums, fees and other revenues were $8.4 billion, down slightly, due to a decline in pension closeout sales,
Retail, including retail life insurance and annuities, were $380 million, up 14 percent due to favorable investment margins, higher fees and lower expenses.
Operating earnings for Group, Voluntary & Worksite Benefits were $295 million, up 29 percent. Premiums, fees & other revenues were $4.5 billion, up 4 percent due to growth across the businesses.
Operating earnings for Latin America were $135 million, up 5 percent. Operating earnings for Asia were $275 million, up 61 percent primarily due to growth in Japan and strong net investment income. Operating earnings for EMEA were $82 million, up 28 percent.
Prudential Financial Inc. reported second quarter 2012 net income for the Financial Services Businesses was $2.203 billion ($4.64 per common share), compared to $779 million ($1.58 per Common share) for the same quarter last year. After-tax adjusted operating income was $627 million ($1.34 per Common share), compared to $773 million ($1.57 per Common share) for the same quarter last year. Total revenue was $11,405 million compared to $10,099 million in the same quarter last year.
The U.S. Individual Life and Group Insurance division reported adjusted operating income of $107 million, compared to $184 million in the same quarter last year. Individual Life reported adjusted operating income of $61 million, compared to $135 million in the same quarter last year due to several large current-quarter claims from “seasoned vintages of business.”
Group Insurance reported adjusted operating income of $46 million compared to $49 million in the same quarter last year. The decrease was due to higher current quarter expenses, including updates of premium tax estimates.
International Insurance reported adjusted operating income of $681 million compared to $500 million in the same quarter last year. U.S. Retirement Solutions and Investment Management division reported adjusted operating income of $302 million, compared to $605 million in the same quarter last year
Willis Group Holdings plc reported second quarter 2012 net income was $107 million ($0.61 per diluted share), compared to $84 million ($0.48 per diluted share) for same period last year. Net income was positively impacted by the discovery and recovery of a $5 million insurance fraud. Q2 2011 net income was reduced by charges amounting to $18 million and $11 million related to the 2011 Operational Review and a regulatory settlement, respectively, the company said. Adjusted net income, which excludes the after-tax impact of those items, was $104 million ($0.59 per diluted share) compared with $107 million ($0.61 per diluted share) in the same period last year.
“The second quarter brought with it modest top-line growth and, more importantly, going forward, we are moving past many of the difficult comparable items that make it harder to see the progress we’ve made in the first half of this year,” said Joe Plumeri, chairman and CEO, Willis Group Holdings. “Strong results in our Global segment led the way and, looking forward, robust sales pipelines and increased recruitment of new producers are evident across our businesses and are providing momentum going into the second half of the year. The global economy continues to be challenging, but the reports from our business heads each show positive developments which we will be sharing with our investors on our earnings conference call.”
• Foreign currency movements increased earnings by $0.06 per diluted share compared with Q2 2011.
• Reported commissions and fees decreased 2 percent compared with Q2 2011
• Organic growth in commissions and fees of 2 percent; led by 7 percent organic growth in Global Segment
• Reported operating margin of 21.3 percent compared to 18.1 percent in Q2 2011; adjusted operating margin of 20.7 percent compared to 21.5 percent in Q2 2011
• Repurchased 1,040,000 shares for $37 million this quarter
• Investment income declined to $5 million from $8 million in same quarter last year due to declining net yields on cash and equivalents
North America segment reported commissions and fees declined 4 percent compared to the same quarter last year, organic commission and fees declined by 3 percent. Operating margin was 15.2 percent, compared with 18.6 percent in the same quarter last year.
International segment reported commissions declined 6 percent compared with the same period in 2011. Foreign currency movements had an 8 percent negative effect on commissions and fees during the quarter. Asia and Latin America delivered high single-digit growth; Continental Europe delivered low single-digit growth. That region was negatively affected by declines in Spain and the Netherlands. Operating margin was 16.4 percent compared with 21.5 percent in same quarter last year.
The Global segment, comprised by Reinsurance, Global Specialties, Willis Faber & Dumas, and Willis Capital Markets & Advisory, reported 5 percent growth in commissions and fees compared with the second quarter of 2011. Foreign currency movements had a negative 2 percent effect on commissions and fees. Organic growth was led by Reinsurance, which grew low double-digits, driven by strong new business growth and an improvement in the rate environment in both North America and International markets.
Expenses: Reported salaries and benefits were $500 million in the second quarter of 2012, compared with $505 million in the second quarter of 2011. Reported other operating expenses were $129 million in the second quarter of 2012 compared with $164 million in the second quarter of 2011. Foreign currency movements favorably impacted second quarter 2012 reported operating expenses by $23 million.
