A number of insurers, including The Hartford, Allianz Life, ACE Limited, Alleghany Corp., Baldwin & Lyons Inc., Cincinnati Financial Corp., Enstar, and State Auto Financial Corp., have begun to release their financial results for Q3 2012. The following is a compilation of their announcements.
ACE Limited
ACE Limited reported Q3 net income of $640 million, or $1.86 per share, compared with a net loss of $39 million, or $0.11 per share, for the same quarter last year. From the prior quarter, book value increased 4.7 percent to $79.36, and tangible-book value increased 5.0 percent to $64.67. Operating return on equity for the quarter was 11.5 percent; and the P&C combined ratio for the quarter was 92.0 percent.
Other Q3 2012 earnings highlights:
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“Premium revenue growth in the quarter was the strongest so far this year with total company net premiums written up 8.6 percent, or 11.1 percent when adjusted for the impact of foreign exchange,” said Evan Greenberg, chairman and CEO. “We continue to benefit from the favorable P&C pricing trend in North America, where we recorded strong double-digit premium growth, and internationally, excluding the impact of foreign exchange, we also registered good growth across a broad spectrum of property and casualty, accident and health, and personal lines businesses, particularly in Asia and Latin America.
Alleghany Corp.
Alleghany reported Q3 2012 net earnings before merger related items and income taxes of $224.2 million, compared with $33.7 for the same quarter last year. Net investment income for the quarter was $90.5 million, compared with $22.1 million for the same quarter last year.
“Growth in Alleghany’s book value in the third quarter and year to date reflects the benefits of the transatlantic merger, favorable underwriting results at Transatlantic and RSUI, and a 5.1 percent total return on our investment portfolio,” said Weston Hicks, president and CEO. “We continue to see good premium growth at RSUI and in Capitol Transamerica’s continuing business driven by increased submissions coupled with modest overall rate increases. We believe we have also started to see the beginning of a much needed recovery in the California workers’ compensation market.”
As of September 30, 2012, stockholder’s equity per common share was $388.67, an increase of 13.6 percent from stockholders’ equity per common share of $342.12 at 2011 year-end; that reflects 8,360,959 shares issued in connection with the merger between Alleghany and Transatlantic Holdings Inc., which closed on March 6, 2012.
Allianz Life Insurance Company of North America
Allianz Life reported an operating profit of $559 million through the third quarter of 2012 compared to an operating profit of $379 million through the same period in last year, reflecting diligent pricing, spread management and expense discipline, the company said. Gains on the disposal of bonds also contributed to the increase in operating profit.
"The year‐to‐date operating profit is strong, but challenges posed by low interest rates are significant and demand innovative and sustainable product offerings to achieve future success," said Walter White, president and CEO. "We are actively managing the current environment and have launched new products and enhanced our existing products to lay the groundwork for continued growth in current and new markets."
Total assets under management increased 12 percent to $103.3 billion at September 30, 2012, compared with $92.4 billion at September 30, 2011. The company attributed the increase to strong returns on investments. Premiums decreased to $7.4 billion through the third quarter of 2012, compared to $8.3 billion for the same period last year. Fixed annuity premiums decreased 16 percent to $4.2 billion compared to $5.1 billion in 2011; variable annuity premium decreased 6 percent to $2.7 billion from $2.9 billion in 2011. Life insurance sales increased 109 percent to $48 million through the third quarter from $23 million for the same period in 2011.
Baldwin & Lyons Inc.
Baldwin & Lyons reported Q3 net income of $11.7 million, or $.78 per share, compared to a net loss of $13.0 million, or $.87 per share, for the same quarter last year. After-tax operating income for Q3 2012 was $6.0 million, or $.40 per share, compared to a loss of $1.6 million, or $.11 per share, for the same quarter last year. Net investment gains for the quarter were $5.7 million after tax, or $.38 per share, compared to losses of $11.3 million in the same quarter last year.
Premiums written and assumed by the subsidiaries totaled $81.2 million for the quarter, a 1 percent increase over the same period last year; the P&C segment experienced a 4 percent increase related to higher premium volume in fleet transportation and professional liability products. Net premiums earned for the quarter decreased 9 percent to $54.853 million, compared with $60.429 for the same quarter last year.
Cincinnati Financial Corp.
Cincinnati Financial reported Q3 2012 net income of $111 million, or 68 cents per share, compared to $19 million, or 12 cents per share, for the same quarter last year. Operating income was $105 million, or 64 cents per share, compared to $20 million, or 13 cents per share, for the same quarter last year. The increase in net income reflected an $81 million improvement, after taxes, in property casualty underwriting, including $16 million from lower catastrophe losses.
"On the insurance side, our combined ratio for the quarter was under 95 percent, indicating the third quarterly underwriting profit over the past four quarters and our best quarterly result so far this year,” said Steven Johnston, president and CEO. “Initiatives to expand our independent agency force and improve our policy pricing tools over the past two years contributed to 14 percent growth of property casualty net written premiums during the third quarter.”
Net written premiums for the P&C group improved 14 percent increase, reflecting higher pricing and planned growth from strategic initiatives. The P&C combined ratio improved to 94.8 percent from 110.6 percent. P&C new business written premiums were $130 million, up $15 million from the same quarter last year.
Enstar Group Limited
Enstar reported Q3 2012 net earnings of $47.7 million, or $2.86 per fully diluted share, compared with $12.1 million, or $0.83 per fully diluted share, for the same quarter last year. Shareholders’ equity amounted to $1.487.3 billion, or $88.99 per fully diluted share, compared with $1.39 billion, or $82.97 per fully diluted share, at Dec. 31, 2011.
The Hartford
The Hartford reported Q3 2012 net income of $401 million, or $0.83 per diluted share, compared with $60 million, or $0.11 per diluted share, for the same quarter last year. Hartford also reported Q3 2012 core earnings rose to $378 million, or $0.78 per diluted share, from $50 million, or $0.08 per diluted share, in the third quarter of 2011. Book value per diluted share increased to $48.13 for the quarter, compared to $43.81 for the same quarter last year.
Other Q3 2012 earnings highlights:
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"The Hartford achieved several strategic objectives this quarter, including the successful completion of sales agreements, ahead of schedule, for Individual Life, Retirement Plans and Woodbury Financial Services," said Liam McGee, president, chairman and CEO. "These transactions, which are expected to generate an approximately $2.2 billion statutory capital benefit, are a significant step forward in The Hartford's progress towards sharpening our focus on our P&C, Group Benefits and Mutual Funds businesses."
State Auto Financial Corp.
State Auto reported a Q3 2012 net loss of $5.5 million, or $0.14 per diluted share, compared to a net loss of $58.7 million, or $1.46 per diluted share, for the same quarter last year. The Q3 2012 net loss from operations was $0.25 per diluted share compared to $1.62 for the same period last year. Net written premium decreased 29.1 percent to $265.9 million from $375.1 million for the same period last year. Earned premiums decreased to $261.4 million from $$356.8 million; net realized gain on investments decreased to $7 million from $10.2 million. The combined ratio for the third quarter 2012 improved to 110.2 compared to 122.41 for the same quarter last year.
“Third quarter results were helped by significantly better weather, continued improvements in our ex-catastrophe loss ratio performance for our personal, business and specialty insurance segments, and an improving pricing environment,” said Bob Restrepo, president and CEO. “These positive developments were offset by the previously announced reserve adjustment for the RED business now in run-off. Investment income is also down as interest rates and fixed income returns remain at historically low levels. While we’re very disappointed in the RED performance, we have confidence that the actions we’ve taken will eliminate a drag on our financial performance.”
Catastrophe losses, net of reinsurance recoveries, accounted for 2.8 points of the 77.1 total loss ratio points, or $7.2 million, compared to 17.0 points of the total 88.4 loss ratio points, or $60.8 million, for the same period in 2011. Non-catastrophe losses included $19.5 million of loss and loss expense reserve increases for prior periods on program business written by subsidiary Risk Evaluation & Design LLC. The reserve increases related to a large commercial auto trucking program that was cancelled as of April 1, 2012. Net written premium for the third quarter of 2012 decreased 29.1 percent over the same period in 2011.
