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:
Arch Capital Group
Arch Capital Group Ltd. reported this week that net income available to common shareholders for the 2012 fourth quarter was $13.7 million, or $0.10 per share, compared to $138.9 million, or $1.01 per share, for the 2011 fourth quarter. For 2012, net income available to common shareholders was $568.3 million, or $4.11 per share, compared to $410.3 million, or $2.97 per share, for 2011.
The company also reported an after-tax operating loss to common shareholders of $24.7 million, or $0.18 per share, for the 2012 fourth quarter, compared to after-tax operating income available to common shareholders of $128.9 million, or $0.94 per share, for the 2011 fourth quarter.
Arch’s combined ratio for the fourth quarter this year was 112.4 percent, compared to 89.7 percent over the same period a year ago. For the full year ending Dec. 31, 2012, the company reported a combined ratio of 95.4 percent, slightly lower than the 98.3 percent combined ratio reported a year earlier.
For the 2012 fourth quarter, the combined ratio of the Company’s insurance and reinsurance subsidiaries consisted of a loss ratio of 79.9 percent and an underwriting expense ratio of 32.5 percent, compared to a loss ratio of 56.2 percent and an underwriting expense ratio of 33.5 percent for the 2011 fourth quarter.
The company’s fourth-quarter results included losses for Superstorm Sandy of $203.5 million, net of reinsurance and the effects of reinstatement premiums.
CNA Financial Corp. announced a net operating loss of $7 million and a net loss of $9 million, or $0.03 per common share, for the fourth quarter of 2012. Full-year 2012 net operating income was $587 million and net income was $628 million. P&C operations’ combined ratio for the fourth quarter and full year was 116.1 percent and 105 percent, respectively.
P&C operations' net operating income was $60 million for the fourth quarter of 2012 as compared with $345 million in the prior year quarter. Superstorm Sandy impact for the fourth quarter of 2012, including reinstatement premiums, was $190 million after-tax as compared with catastrophe losses of $11 million after-tax in the prior year quarter. This was partially offset by higher net investment income.
Pretax net investment income increased to $563 million for the fourth quarter of 2012 as compared with $523 million in the prior year quarter. Net operating results for our non-core segments improved $86 million as compared with the prior year quarter.
Net operating income for the full year 2012 decreased $23 million as compared with the prior year. P&C net operating income was $758 million for the full year as compared with $884 million in the prior year. Similar to the drivers for the fourth quarter, this decrease was primarily due to higher catastrophe losses and decreased favorable net prior year development, partially offset by higher net investment income. The catastrophe losses for the full year, including reinstatement premiums, were $270 million after-tax as compared with $144 million after-tax in the prior year. Net operating results for our non-core segments improved $103 million as compared with the prior year, primarily due to lower after-tax charges associated with unlocking actuarial assumptions in the payout annuity business.
Main Street America Group
The Main Street America Group announced today its 2012 financial results included an 11.9-percent return on equity, 99.9 combined ratio, $978 million net written premium, surplus growth of $71 million and net income of $56.7 million for the fiscal year ended Dec. 31, 2012.
The company’s net income of $56.7 million represents an 80 percent gain over the prior year ($31.5 million), when the company’s results were heavily impacted by $63 million in catastrophe losses. In 2012, the company sustained $23 million in catastrophe losses. Main Street’s combined ratio of 99.9 similarly represents a vast improvement over the company’s 2011 catastrophe-impacted 106.7 combined ratio. Specifically, commercial lines, which accounts for 58 percent of Main Street America’s net written premium, achieved a 92.6 combined ratio and 8.5 percent premium growth.
Also in 2012, Main Street achieved an underwriting profit for the sixth time in the last seven years.
“We finished the year with a very strong balance sheet,” said Tom Van Berkel, Main Street America’s chairman and CEO. “We significantly increased our surplus, grew our total assets to more than $2.1 billion and are very well-positioned to benefit from an improving property/casualty marketplace.”
Van Berkel added, “Our strong capital position will enable us to continue actively seeking profitable growth opportunities in existing states and new states, which will allow us to further spread our risk and increase scale.”
Marsh & McLennan
Marsh released its Q4 financials on Tuesday, revealing minor increases in several major categories. The company reported consolidated revenue in Q4 2012 of $3 billion, an increase of 3 percent on both a reported and underlying basis compared with the fourth quarter of 2011. Operating income rose 4 percent to $406 million, compared with $391 million in the prior year period. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 10 percent in the fourth quarter to $450 million.
Dan Glaser, President and CEO, said: “We are pleased with Marsh & McLennan Companies' performance. Adjusted operating income rose 10 percent in the fourth quarter. For the third consecutive year, both Risk and Insurance Services and Consulting achieved double-digit growth in adjusted operating income, contributing to overall growth of 12 percent.”
Income from continuing operations was $265 million, or $.47 per share, in the fourth quarter. This compares with $244 million, or $.44 per share, in the fourth quarter of 2011. Net income was $259 million, compared with $256 million in the fourth quarter of 2011.
For the full year 2012, revenue increased 3 percent to $11.9 billion, or 4 percent on an underlying basis. Operating income rose 12 percent to $1.8 billion, compared with $1.6 billion in the prior year. Adjusted operating income also grew 12 percent, to $1.9 billion.
Risk and Insurance Services revenue increased 3 percent to $1.6 billion in the fourth quarter of 2012, and for the year, Risk and Insurance Services revenue was $6.6 billion, an increase of 4 percent from the prior year. Operating income increased 6 percent to $322 million in the fourth quarter, compared with $304 million.
This week, MetLife reported fourth quarter 2012 net income of $96 million, or $0.09 per share. The life insurer also reported operating earnings of $1.4 billion, or $1.25 per share, up 10 percent over the fourth quarter of 2011. Growth was driven by a 21-percent increase in operating earnings in the Americas and a 26-percent increase (34 percent when adjusted for the impact of foreign currency exchange rates) in the Europe, Middle East and Africa (EMEA) segment. Operating earnings in Asia were down 24 percent primarily due to the annual review of actuarial assumptions.
Fourth-quarter 2012 operating earnings included the following items:
• variable investment income above the company’s 2012 quarterly plan range by $80 million, or $0.07 per share, after tax and the impact of deferred policy acquisition costs (DAC);
• favorable claim development related to prior accident years in the company’s P&C business of $13 million, or $0.01 per share, after tax;
• catastrophes of $70 million, or $0.06 per share, after tax, above the company’s quarterly plan provision;
Premiums, fees & other revenues were $13.2 billion, up 15 percent over the fourth quarter of 2011. Net investment income was $5.2 billion, up 6 percent over the fourth quarter of 2011, reflecting variable investment income above the 2012 quarterly plan range by $80 million, or $0.07 per share, after tax and the impact of DAC.
For the full year 2012, MetLife reported operating earnings of $5.7 billion, or $5.28 per share, up 22 percent over 2011. The increase reflects operating earnings growth of 24 percent in the Americas, 18 percent in Asia and 8 percent in EMEA.
On a GAAP basis, MetLife reported full year 2012 net income of $1.2 billion, or $1.12 per share. Total operating earnings for the Americas increased 21 percent to $1.3 billion. Results in the Americas were impacted by $70 million, or $0.06 per share, after tax, in catastrophe losses driven by Superstorm Sandy that were above the company’s quarterly plan provision. This was partially offset by favorable claim development related to prior accident years of $13 million, or $0.01 per share, after tax. Premiums, fees & other revenues for the Americas were $9.9 billion, up 18 percent.
Earlier this week, Nationwide reported net operating income of $741 million in 2012, compared to $517 million in 2011, an increase of more than 43 percent.
“During 2012, Nationwide was able to meet the challenges brought on by an uncertain economic environment and continued severe weather that was underscored with events like Superstorm Sandy,” said Steve Rasmussen, CEO for Nationwide.
Total operating revenue for 2012 was $22.4 billion, an increase of $1.7 billion compared to 2011, representing one of the largest single-year increases in recent history. P&C net operating income for the year was $117 million, compared to a net operating loss of $213 million in 2011.
“P&C direct written premiums grew across all major product lines in 2012, particularly in our commercial lines,” said Mark Thresher, Nationwide’s CFO. “In total, P&C premiums rose more than 10 percent to $16.2 billion, including nearly $800 million in premiums from Harleysville Insurance.”
Nationwide also paid more than $13.7 billion in property/casualty, life insurance and other benefits to customers in 2012. Weather-related claims totaled $1.5 billion for 2012. While weather claims were more than expected, they were less than the record $2.3 billion reported in 2011.
Despite weather-related claims from Superstorm Sandy, Nationwide still reported net operating income of $18 million in the fourth quarter, compared to $142 million during the same period in 2011. Fourth-quarter 2012 results include more than $400 million in claims and associated costs related to Sandy.
Willis Group Holdings announced Q4 and 2012 financial results that mark the culmination of Joe Plumeri’s 12-year tenure as CEO.
Willis Group reported a net loss from continuing operations of $804 million, or $4.65 per share, for the fourth quarter, compared with reported net income of $24 million, or $0.14 per diluted share, in the same period a year ago. The quarter’s results were negatively impacted by charges of $492 million related to the goodwill impairment in North America; $200 million related to the write-off of unamortized cash retention awards; $252 million related to the accrual of 2012 cash bonuses; and a $113 million tax charge to establish a deferred tax asset valuation allowance.
Reported net income in the fourth quarter of 2011 was reduced by a $50 million charge related to the 2011 Operational Review and $22 million related to the write-off of uncollectable accounts receivable.
Reported net loss from continuing operations for the year ended Dec. 31, 2012, was $446 million, or $2.58 per share, compared with reported net income of $203 million, or $1.15 per diluted share, in 2011.
Reported operating margin was 6.0 percent for the year ended Dec. 31, 2012, compared with 16.4 percent for the prior year. Excluding items detailed in note 4 of the supplemental financial information, adjusted operating margin was 21.6 percent in 2012 compared with 22.5 percent a year ago.
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