A number of insurers have begun to release their financial results for Q1. The following is a compilation of their announcements:
ACE reported Q1 2013 net income of $953 million, or $2.77 per share, a 2-percent decline compared with $973 million, or $2.84 per share, for the same quarter last year. Operating income after tax was $746 million, or $2.17 per share, a 6-percent increase compared with $701 million, or $2.05 per share for the same quarter last year.
Book value increased 1.6 percent and tangible book value per share by 2.2 percent from Dec. 31, 2012. Book value now stands at $82.17 and tangible book value per share at $67.74. Operating return on equity for the quarter was 11.9 percent. The property/casualty combined ratio for the quarter was 88.2 percent.
“We produced $746 million in after-tax operating income, and our operating ROE was 12 percent, driven by strong underwriting results,” said Evan Greenberg, chairman and CEO. “We had a P&C combined ratio of 88.2 percent that benefited from excellent current accident year underwriting income as a result of both improved margin and growth in our U.S. and international businesses. Premium revenue growth across the company was very good, with total net premiums up over 6 percent. We are taking full advantage of the improved commercial P&C pricing environment in the U.S., and our strong presence in areas of the world where economic fundamentals are superior, such as Asia and Latin America. We completed our acquisition of Mexican surety company Fianzas Monterrey and anticipate closing our acquisition of ABA Seguros, Mexico’s fourth-largest personal lines company, over the next few weeks.”
Allstate’s net income for Q1 2013 was $709 million, or $1.47 per diluted share, compared with $766 million, or $1.53 per diluted share for the same quarter last year. Operating income was $647 million, or $1.35 per diluted share, compared with $710 million, or $1.42 per diluted share, for the same quarter last year.
The decline in net and operating income was primarily due to higher catastrophe losses, partially offset by a lower property-liability underlying combined ratio. Realized capital gains before tax were $131 million, compared with $168 million for the same quarter last year. Book value per share increased to $43.46 from $38.57 for the same quarter last year. The combined ratio was 102.1 percent, up from 99.6 percent for the same quarter last year.
"Property-liability net written premium increased in each of our brands with the total growing 2.5 percent over the prior year quarter,” said Thomas Wilson, chairman, president and CEO. “Allstate agency premium growth was the result of slightly higher prices, progress in new business unit growth and improved customer retention in Allstate brand standard auto. Esurance had another strong quarter with policies in force up 36 percent over the prior year. We maintained our Allstate brand standard auto margins with a combined ratio of 94.2 and made progress improving Allstate brand homeowners returns with an underlying combined ratio of 65.8. Proactive management of the investment portfolio generated a positive total return of 1.2 percent for the quarter.”
Erie Indemnity Co.
Erie Insurance announced Q1 2013 earnings of $37 million, compared with $36 million for the same quarter last year. Operating income was $37 million, compared with $34 million in the same quarter last year. Income from operations before tax and interest was $56 million, compared with $54 million for the same quarter last year. The company also repurchased 189,563 shares of its class A nonvoting common stock for $14 million.
The Hanover Insurance Group Inc.
The Hanover reported Q1 2013 net income of $66.2 million, or $1.46 per diluted share, compared with $49.7 million, or $1.09 per diluted share, for the same quarter last year. Operating income was $59.9 million, or $1.32 per diluted share, compared with $46.0 million, or $1.01 per diluted share, for the same quarter last year.
Q1 2013 earnings highlights:
Book value per share was $59.58 a 2-percent increase from Dec. 31, 2012, and up 3 percent from March 31, 2012.
"Underlying profitability in our domestic operations is expanding,” said Frederick Eppinger, CEO. “And, while we clearly have more work to do, our results this quarter and the progress we are making provide us with continued confidence in future margin expansion and our ability to execute on our strategic and financial goals for the year. We achieved pricing increases of 9 percent in both core Commercial and Personal Lines during the quarter, and we are seeing even greater increases in our specialty businesses. We also continued to execute on targeted and deliberate profit improvement and exposure management actions. Chaucer made another strong contribution to our earnings, benefitting from lower-than-expected losses, and once again demonstrating its strong underwriting expertise.”
The Hartford reported a Q1 2013 net loss of $241 million, or $0.58 per diluted share, compared with net income of $96 million, or $0.18 per diluted share, in Q1 2012. The loss was attributed to an after-tax $541 million unlock charge due to expanded hedging on the international variable annuity block and an after-tax $138 million loss on extinguishment of debt.
Core earnings were $456 million, or $0.92 per diluted share, for the quarter, a 7-percent increase compared with $426 million, or $0.87 per diluted share, for Q1 2012. Improved core earnings in the P&C, group benefits and mutual funds businesses, and lower core losses in corporate were offset by reduced core earnings from Talcott Resolution, the company's run-off life and annuity operation, attributed to the sales of the retirement plans and individual life businesses, and lower core earnings from annuities. Catastrophe losses for Q1 2013 totaled $21 million, after tax.
"The Hartford reported strong performance in the first quarter of 2013," said Liam McGee, chairman, president and CEO. “Our go-forward businesses delivered core earnings growth of 19 percent across Property and Casualty, Group Benefits and Mutual Funds. P&C Standard Commercial renewal written price increases averaged 9 percent and our consolidated P&C combined ratio, ex-catastrophes and prior year development, improved by more than 2 points to 91.8. Group Benefits core earnings of $30 million were significantly improved from last year and gross sales for Mutual Funds were up 34 percent over first quarter 2012. We are pleased with the progress we are making with these businesses, as well as their outlook for profitable growth."
Lincoln Financial Group
Lincoln Financial Group reported Q1 2013 net income of $239 million, or $0.86 per diluted share, compared with $243 million, or $0.82 per diluted share for the same quarter last year. Operating income was $285 million, or $1.02 per diluted share, compared with $293 million, or $0.99 per diluted share, for the same quarter last year.
Income from operations for the annuities segment was $159 million, up 16 percent from $137 million in the same quarter last year.
Income from operations for life Insurance was $112 million, compared with $139 million for the same quarter last year. Sales were $150 million, a 23-percent increase over the same quarter last year, driven by an 82-percent increase in the Pivot products, which include variable universal life, indexed universal life, flexible premium MoneyGuard and term life insurance products. As a result, sales of guaranteed universal life accounted for just 18 percent of first quarter sales, down from 30 percent in the prior-year quarter.
For the quarter, book value per share, increased 20 percent from a year ago. Compared with the same quarter last year, book value per share at $42.00 increased 14 percent.
Q1 2013 operating highlights:
"Results in the quarter continued to reflect the successful execution of our product strategy as our distribution strength led to sales growth across all businesses," said Dennis Glass, president and CEO. "Although overall earnings were reduced by fluctuations in mortality and alternative investment income, our topline fundamentals and expense discipline remain strong, supplemented by continued active capital management."
PartnerRe reported Q1 2013 net income of $210.5 million, or $3.53 per share, compared with $344.7 million, or $5.24 per share. Operating earnings were $202.1 million, or $3.39 per share, compared with $181.7 million, or $2.76 per share, for the same quarter last year.
Q1 2013 earnings highlights:
“We began 2013 with a very good first quarter result, driven by strong underwriting performance, generating a non-life combined ratio of 81.7 percent, and growth in our underlying portfolio,” said Costas Miranthis, president and CEO. “This, combined with modest gains in our investment portfolio resulted in book value growth of more than 2 percent for the quarter.”
The Travelers Companies Inc.
Travelers reported net income of $896 million, or $2.33 per diluted share, for Q1 2013, compared with $806 million, or $2.02 per diluted share, for the same quarter last year.
Operating income was $887 million, or $2.31 per diluted share, compared with $801 million, or $2.01 per diluted share, for the same quarter last year. The increase was a result of higher underlying underwriting margins (i.e., excluding net favorable prior year reserve development and catastrophe losses) and lower catastrophe losses, which more than offset lower net-investment income and lower net-favorable prior-year reserve development.
Written rate gains exceeded expected-loss cost trends in all segments. Renewal rate change of 8 percent in business insurance, including nearly 10 percent in commercial accounts. The company repurchased 3.7 million shares for $300 million in the quarter and book value per share was $68.00, a 7-percent increase from end-of-prior-year quarter and 1 percent from year-end 2012.
“We are pleased to report our highest quarterly operating income per diluted share since Travelers’ initial public offering in 2002,” said Jay Fishman, chairman and CEO. “Operating income of $887 million and operating return on equity of 15.8 percent reflect continued improvement in our underlying underwriting margins primarily due to the pricing and underwriting actions we have taken across all segments. Our high quality investment portfolio continued to perform well, with returns modestly declining in line with our expectations given continued low interest rates.”
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