A number of insurers have begun to release their financial results for Q3. The following is a compilation of their announcements:
Aetna reported Q3 2013 operating earnings of $561.8 million, or $1.50 per share, a 7 percent increase over the $523.2 million, or $1.55 per share, reported for the same period last year. Net income was $518.6 million, or $1.38 per share, compared to $499.2 million for the same quarter last year.
Aetna Health Care reported Q32013 operating earnings of $585.8 million, compared with $531.8 million for the same period last year; operating earnings were 10 percent higher for the quarter due to the Coventry acquisition, but partially offset by lower underwriting margins in the underlying Medicare business. Net income was $549.1 million, compared with $532.3 million for Q3 2012. Operating revenue was $12.3 billion for Q3 2013 compared with $8.2 billion for Q3 2012.
Group Insurance, including group life, disability and long-term care, reported Q3 2013 operating earnings of $19.7 million, compared with $29.3 million for Q3 2012, reflecting lower underwriting margins. Net income was $17.2 million for the quarter, compared with $33.2 million Q3 2012. Operating revenue was $577.7 million for the third quarter of 2013, a 9-percent increase over $531.2 million for the third quarter of 2012. Total revenue was $573.7 million in the third quarter of 2013 and $537.1 million in the third quarter of 2012.
“Aetna’s diversified business model produced another solid performance in the third quarter, which includes our first full quarter of results from the Coventry operations,” said Mark Bertolini, chairman, CEO and president. “Bolstered by the acquisition and continued strong performance in our Commercial and Medicaid businesses, Aetna generated higher operating earnings and operating revenues year over year. As we look to the final quarter of 2013, we continue to project strong year-over-year performance.”
Cincinnati Financial reported Q32013 total revenue of $1.152 billion, or $0.79 per diluted share, compared to $1.035 billion, or $0.68 per diluted share, for the same quarter last year. Net income was $131 million, compared to $111 million for the same quarter last year.
The Q3 2013 P&C combined ratio improved to 93.7 percent from 94.8 percent for the same quarter last year. Net written premiums increased 15 percent, the company said, reflecting higher prices and planned growth from strategic initiatives. New business written premiums increased by $11 million to $141 million for the quarter, a record high for any quarter.
Total Q3 2013 revenues for P&C operations were $955 million, compared to $852 million for the same quarter last year; Earned premiums for the quarter were $954 million compared to $851 million for the same quarter last year. Current accident year combined ratio before CAT losses was 91.0 percent, an improvement from 95.4 percent for the same quarter last year.
"Our operating income rose to our best-ever third-quarter result. Initiatives to increase the profitability and growth of our insurance business led our strong performance as property casualty net written premiums surpassed $1 billion for the first time in any quarter,” said Steven Johnston, president and CEO. "Pretax income from our investment portfolio also continued to contribute at a satisfactory level slightly above what we reported for last year's third quarter, reflecting our relatively large allocation to high-quality, dividend-paying stocks. The equity portfolio represents approximately 30 percent of our invested assets. Our strong 93.7 percent combined ratio benefited from improved weather, with catastrophes adding just 5.7 percentage points an impact in line with long-term historical averages.”
CNA Financial Corp.
CNA reported net income of $272 million, or $1.01 per share for Q3 2013, compared to $221 million for the same quarter last year, and net operating income of $269 million, or $1.00 per share, compared to $216 million for the same quarter last year. The combined ratio for the P&C operations was 94.0 percent, CNA said. Net investment income for Q3 was $597 million, unchanged from $601 million for the same period last year.
"CNA's third quarter results reflect improved earnings and sustained progress in our core P&C business performance," said Thomas Motamed, chairman and CEO of CNA Financial Corporation. "We are pleased with these results and are encouraged by the margin improvement, the ongoing favorable rate trends, and the continued shift in our book of business toward focus customer segments."
Net operating income for P&C operations was $330 million for the quarter, compared to $264 million for the same period last year. CNA attributed the increase to improved underwriting results and higher favorable net prior year development, partially offset by higher catastrophe losses. Net written premiums increased 2 percent year-over-year, driven by increases in CNA Specialty and Hardy, CNA said.
Book value per share for Q3 2013 was $45.06, compared to $45.71 for the same period last year. Net operating results decreased $13 million for non-core segments compared with the same period last year, The CNA Life & Group segment was affected adversely by unfavorable morbidity in the long-term care segment, which was offset partially by rate increases.
The Hartford reported Q3 2013 net income of $293 million, or $0.60 per diluted share, including after tax capital losses of $105 million attributable to variable annuity hedging programs and an unlock charge of $67 million after-tax. Net income for Q32012 was $13 million, or $0.01 per diluted share, which included after tax capital gains of $62 million attributable to VA hedging programs and an unlock charge of $79 million after-tax; Q32012 net income also included an after tax net loss of $388 million attributable to the sale of the individual life business.
Core earnings for Q32013 were $505 million, or $1.03 per diluted share, a 17 percent increase from $433 million, or $0.90 per diluted share, for the same quarter last year. The Hartford attributed the increase to higher core earnings in commercial P&C, group benefits, Talcott Resolution and Corporate.
The combined ratio for P&C improved to 92.8 percent from 96.3 percent for the same quarter last year, before catastrophes and prior year development.
"Margins are improving in our go-forward businesses, contributing to a 17 percent year-over-year increase in core earnings, and the company continues to reduce its overall risk profile,” said Liam McGee, chairman, president and CEO. “We are ahead of plan in executing the strategy we outlined in March 2012 and, with continued strong surrenders in Talcott, the variable annuity block is running off faster than anticipated."
Mercury General Corp.
Mercury General reported Q32013 net income of $39.57 million, a 40.2 percent decrease from $66.20 reported for the same quarter last year. Net premiums written were $704.89 million, a 2.9 percent increase from the $684.88 million reported for the same quarter last year. Operating income was $29.03 million for the quarter, compared to $33.86 million for the same quarter last year. Catastrophe losses increased to $2 million from $1 million for the same quarter last year. The combined ratio increased to 99.2 percent from 99.1 percent for the same quarter last year.
Net investment income declined for the quarter to $30.86 million from $33.41 million for the same quarter last year. Net realized investment gains also declined, falling to $16.21 million from $49.75 million for the same quarter last year. Total expenses for the quarter increased to $673.87 million from $630.45 million for the same quarter last year.
PartnerRe reported Q3 2013 net income of $333.4 million, or $5.84 per share, including net after-tax realized and unrealized losses on investments of $1.3 million, or $0.03 per share. Net income for the same period last year was $486.7 million, or $7.53 per share, including net after-tax realized and unrealized investment gains of $221.8 million, or $3.55 per share. Total Q32013 revenues were $1.565 billion compared to $1.633 billion for the same period last year.
Operating earnings for Q3 2013 were $311.2 million, or $5.70 per share, for the third quarter of 2013 compared to $244.4 million, or $3.90 per share, for the same quarter last year. Gross premiums written for Q3 2013 were $1.281 billion compared to $1.056 billion for the same quarter last year. Net premiums written for Q3 2013 were $1.265 billion, compared to $1.043 billion for the same quarter last year.
“We had very strong third quarter results reflecting a low level of large loss activity and strong core performance for most of our businesses, culminating in a 74.9 percent combined ratio and a 22.6 percent operating return on equity,” said Costas Miranthis, president and CEO. “For the year to date, we have recorded a 13 percent operating return on equity and an increase of 4.7 percent in book value per share. I would like to thank our teams for their exceptional focus and determination over the last few years, without which we would not be enjoying such excellent results.”
Reinsurance Group of America Inc.
Reinsurance Group of America reported Q32013 net income of $138.0 million, or $1.93 per diluted share, compared with $144.5 million, or $1.95 per diluted share, for the same quarter last year. Operating income was $152.9 million, or $2.14 per diluted share, compared to $99.9 million, or $1.35 per diluted share, for the same quarter last year. Net premiums for the quarter increased to $2.026 million from $1.913 million for the same quarter last year.
“We are pleased to report strong results this quarter, as we achieved an annualized operating return on equity of 13 percent,” said Greig Woodring, president and CEO. “Operating earnings per share of $2.14 were considerably better than last year’s $1.35, as the year-ago period included elevated claims in several markets and a claim liability increase in Australia. Overall mortality and morbidity results this quarter were in line with expectations and stable across all operating segments, with favorable mortality experienced in several markets. We also had another strong quarter in our asset intensive and financial reinsurance businesses. Our efforts to return excess capital to shareholders increased operating earnings per share as well.”
Willis Group reported total Q32013 revenues of $795 million, including commissions, fees, investment and other income, a 5.4 percent increase from the same period last year.
Total reported commissions and fees for Willis Group were $791 million, compared to $749 million for the same period last year. Commissions and fees were negatively affected by $4 million of foreign currency movements in Q3 2013. Third quarter 2013 organic commissions and fees grew 5.7 percent relative to the third quarter of 2012, Willis said. Investment income for the quarter was $4 million and unchanged from the same period last year.
The Willis North America segment achieved 3.9 percent organic commissions and fees growth in the third quarter compared to the same period last year. Almost all of the major industry practices recorded positive growth; Human Capital and Construction, the two largest practices, grew in the low-single digits and mid-single digits, respectively.
The Willis International segment grew 7.8 percent in commissions and fees for Q3 2013 compared with the same period last year. Operations in Western Europe were flat; Eastern Europe grew in the low-double digits; operations in the U.K. declined mid-single digits; Latin America operations grew mid-teens; operations in Asia grew high-double digits; Australasia grew in the low-double digits.
The Willis Global segment, encompassing Willis Re, Specialty, Placement and Willis Capital Markets and Advisory, grew 6.4 percent in commissions and fees for Q2 2013, compared with the third quarter of 2012. Willis Re grew in the high-single digits. The Specialties reinsurance business grewth in the mid-teens, driven by new business, Willis said. North America reinsurance business grew in the high-single digits and the International reinsurance business grew mid-single digits. Global Specialty grew mid-single digits, attributable to new business, notably from financial and executive risks, P&C and Construction.
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