A number of insurers have begun to release their financial results for Q2 2010. The following is a compilation of their announcements:
Aon Corp. reported results for the second quarter ended June 30, 2010. Total revenue increased 1% to $1.9 billion with a decline in organic revenue of 1%, the company says.
Net income attributable to Aon stockholders was $153 million or $0.54 per share, compared to $149 million or $0.51 per share for the prior year quarter. Net income attributable to Aon stockholders from continuing operations increased 22% to $179 million or $0.63 per share, compared to $147 million or $0.50 per share for the prior year quarter. Net income per share attributable to Aon stockholders from continuing operations, excluding certain items, increased 7% to $0.81 compared to $0.76 for the prior year quarter. Certain items that impacted second-quarter results and comparisons with the prior year quarter are detailed in the reconciliation of non-GAAP measures on page 12 of this press release.
"Our second quarter results reflect strong operational performance in brokerage and consulting," says Greg Case, president and CEO. "In brokerage, our Americas business delivered a 2% increase in organic revenue highlighted by strong growth in Latin America and benefits related to the global risk insight platform. Consulting delivered a 2% increase in organic revenue highlighted by strong growth in international health and benefits and compensation consulting. On an adjusted basis, total operating margins increased 110 basis points, including a 200 basis point increase in brokerage operating margins, and EPS from continuing operations increased 7%. In addition, we continue to make substantial investments across our firm, including the recently announced merger of Hewitt with Aon, which upon close, will substantially strengthen our position as the preeminent global professional services firm focused on risk and human capital solutions."
First American Financial Corp., a global provider of title insurance and settlement services for real estate transactions, announced financial results for the second quarter ended June 30, 2010.
Total revenues for Q2 2010 were $969.9 million, a decrease of 5% relative Q2 2009. Net income was $33.8 million, or 32 cents per diluted share, compared with $28.6 million, or 27 cents per diluted share, in Q2 2009. The current quarter results include net realized investment gains of $3.2 million, or 2 cents per diluted share, compared with net realized investment losses of $23.2 million, or 13 cents per diluted share, in Q2 2009.
"I am pleased with the progress we are making in the face of difficult market conditions," says Dennis Gilmore, CEO of First American Financial Corp. "The completion of the spin-off transaction on June 1, 2010, was a substantial accomplishment for First American and its shareholders. We've come out of the spin-off solidly profitable, with a strong balance sheet and well positioned to continue to execute on our strategy of improving the efficiency of our business while pursuing selective, profitable growth opportunities.”
First Commonwealth Financial Corp. reported net income of $13.5 million, or $0.15 diluted earnings per share, for the second quarter ended June 30, 2010, compared to a net loss of $18.6 million, or $0.22 per share, in Q2 2009. For the six months ended June 30, 2010, net income was $0.4 million, compared to a net loss of $16.9 million or $0.20 per share in the first six months of 2009. The increase in net income was primarily the result of improved net interest income, a lower provision for credit losses, a decrease in net securities impairment losses on investments in pooled trust preferred collateralized debt obligations and a decrease in Federal Deposit Insurance Corp. premiums due to the special assessment of $2.9 million recorded in Q2 2009.
"We are very pleased to report favorable financial results for the second quarter,” says John Dolan, president and CEO. “We have made significant progress toward the resolution of the relatively small number of troubled credits that have caused disproportionate earnings pressure over the last few quarters and have obscured very favorable trends in substantially all other areas of our community banking operations. I couldn't be more proud of how well First Commonwealth employees are performing during this unprecedented economic period as we continue to move the organization forward."
Genworth Financial Inc. reported results for Q2 2010. Net income, before provision for non-controlling interests, was $77 million, or $0.16 per diluted share, compared with a net loss of $50 million, or $0.11 per diluted share, in Q2 2009. Net operating income, before provision for non-controlling interests, for Q2 2010 was $153 million, or $0.31 per diluted share, compared with net operating income of $9 million, or $0.02 per diluted share, in Q2 2009.
Reflecting the company's reduction in ownership of Genworth MI Canada in Q3 2009 from 100% to 57.5% in connection with an initial public offering transaction, Genworth's net income available to Genworth's common stockholders was $42 million, or $0.08 per diluted share, in Q2 2010. On this same basis, net operating income available to Genworth's common stockholders for Q2 2010 was $118 million, or $0.24 per diluted share.
Genworth's results in the quarter included net operating income of $114 million from the Retirement and Protection segment and $105 million from the International segment. This was partially offset by lower net operating losses of $40 million in the U.S. Mortgage Insurance segment and a loss of $61 million in Corporate and Other. The impact of foreign exchange on net operating income in Q2 2010 was a favorable $13 million versus the prior year quarter.
"Genworth continued strategic progress on all fronts delivering strong international results, good sales momentum and improved performance in U.S. Mortgage Insurance and investment income," says Michael Fraizer, chairman and CEO. "Looking ahead, we continue to position the company effectively to navigate the slow economic recoveries we see in the U.S. and Europe while investing in our priority growth platforms."
Global Indemnity plc
Global Indemnity plc reported net income for the three months ended June 30, 2010, of $24.5 million or $0.81 per share compared to net income of $16.3 million or $0.64 per share for the same period in 2009. Results for the six months ended June 30, 2010, include net income of $43.4 million or $1.44 per share compared to net income of $23.4 million or $1.09 per share for the same period of 2009. Operating income for the three months ended June 30, 2010, was $20.7 million or $0.69 per share compared to operating income of $12.7 million or $0.50 per share for the same period of 2009. Operating income for the six months ended June 30, 2010, was $28.6 million or $0.95 per share compared to operating income of $26.2 million or $1.22 per share for the same period of 2009.
Marsh & McLennan Companies Inc. (MMC) reported financial results for the second quarter ended June 30, 2010.
MMC’s consolidated revenue in Q2 2010 rose 6% to $2.6 billion from Q2 2009, or 1% on an underlying basis. Underlying revenue measures the change in revenue before the impact of acquisitions and dispositions, using consistent currency exchange rates. For the six months ended June 30, 2010, MMC’s consolidated revenue was $5.2 billion, an increase of 7%, or 1% on an underlying basis.
For Q22010, net income was $236 million, or $.43 per share, compared with a loss in the prior period. MMC reported a loss from continuing operations in Q2 2010 of $29 million, or $.06 per share, compared with income of $157 million, or $.28 per share, in the same period of 2009. Kroll has been classified as a discontinued operation following the agreement reached by MMC in June to sell Kroll to Altegrity for $1.13 billion. The transaction is expected to close this week. Discontinued operations, net of tax, was $271 million, or $.49 per share, compared with a loss in the prior period.
In the second quarter, earnings per share on an adjusted basis increased 28% to $.46, compared with $.36 in 2009.
“We are pleased with the progress MMC made in the second quarter,” says Brian Duperreault, MMC President and CEO. “Our Risk and Insurance Services segment grew revenue in an environment of continued soft market conditions in the property and casualty marketplace. Marsh produced strong new business globally, with especially good revenue growth in Asia Pacific and Latin America. Guy Carpenter generated underlying revenue growth, reflecting new business production. In our Consulting segment, Mercer continued to control expenses in a weak economic environment. We were also pleased with the growth in revenue and operating income generated by Oliver Wyman.”
Meadowbrook Insurance Group Inc. reported that Q2 2010 net operating income, a non-GAAP measure, grew by $0.7 million to $12.6 million, or $0.23 per diluted share, up from $11.9 million, or $0.21 per diluted share, in Q2 2009. Net income increased by $1.3 million to $12.9 million, or $0.24 per diluted share, compared to $11.6 million, or $0.20 per diluted share, in the prior year quarter.
Second quarter gross written premium increased 21.0% to $189.8 million, compared to $156.9 million in Q2 2009. The increase in premium is primarily due to new business initiated in the second half of 2009.
For the three-months ended June 30, 2010, net earned premium increased 28.0% to $162.8 million, compared to $127.1 million in Q2 2009.
The GAAP combined ratio for Q2 2010 was 96.2%, compared to 93.3% for Q2 2009.
Mercury General Corp.’s net income in Q2 2010 was $17.8 million ($0.32 per diluted share) compared with net income of $114.4 million ($2.07 per diluted share) for the same period in 2009. For the first six months of 2010, net income was $79.0 million ($1.44 per diluted share) compared with net income of $211.1 million ($3.83 per diluted share) for the same period in 2009. Included in net income are net realized investment losses, net of tax, of $18.0 million ($0.33 per diluted share) in Q2 2010 compared with net realized investment gains, net of tax, of $67.1 million ($1.21 per diluted share) for the same period in 2009, and net realized investment losses, net of tax, of $3.7 million ($0.07 per diluted share) for the first six months of 2010 compared with net realized investment gains, net of tax, of $117.8 million ($2.14 per diluted share) for the same period in 2009. Operating income was $35.8 million ($0.65 per diluted share) for Q2 2010 compared with operating income of $47.3 million ($0.86 per diluted share) for the same period in 2009. For the first six months of 2010, operating income was $82.7 million ($1.51 per diluted share) compared with operating income of $93.3 million ($1.69 per diluted share) for the same period in 2009.
Net premiums written were $631.1 million in Q2 2010, a 1.0% decrease compared to the second quarter 2009 net premiums written of $637.4 million, and were approximately $1.3 billion for the first six months of 2010, a 1.9% decrease compared to the same period in 2009. Net realized investment losses, net of tax, of $18.0 million and $3.7 million for the second quarter and for the first six months of 2010, respectively, include losses, net of tax, of $19.8 million and $7.5 million, respectively, from the application of the fair value option. Gains, net of tax, from the sale of securities were $1.2 million and $3.2 million during the second quarter and the first six months of 2010, respectively.
MetLife Inc. reported Q2 2010 net income of $1.5 billion, or $1.84 per share. Net income reflects net investment gains of $767 million, after tax, including gains on derivatives. Operating earnings for Q2 2010 were $1.0 billion, or $1.23 per share.
“MetLife continued to deliver strong results during the second quarter as we achieved top line growth and increased operating earnings by 41% over the prior year period,” says C. Robert Henrikson, chairman, president & CEO of MetLife. “Highlights of the quarter included strong underwriting results, higher net investment income and our disciplined approach to expense management. Through our strong presence in the U.S. and with the pending acquisition of Alico, we are well positioned to provide valuable financial solutions for a growing customer base. This increased reach and diverse business mix will help drive future growth and generate long-term value for our shareholders.”
National Financial Partners Corp., a provider of benefits, insurance and wealth management services, reported financial results for the second quarter ended June 30, 2010.
NFP reported second quarter 2010 net income of $12.1 million, or net income of $0.27 per diluted share, compared with net income of $10.0 million, or net income of $0.23 per diluted share in the prior year period.
Second quarter 2010 cash earnings was $25.2 million, or $0.57 per diluted share, compared with $26.4 million, or $0.62 per diluted share, in the second quarter 2009. Cash earnings in the second quarter 2010 included a $7.7 million net non-cash gain on sale of businesses. Excluding this gain, cash earnings was $20.8 million or $0.47 per diluted share in the second quarter 2010. Cash earnings in the second quarter 2009 included $5.5 million in key-person life insurance proceeds. Excluding the key-person life insurance proceeds, cash earnings was $20.9 million or $0.49 per diluted share in the second quarter 2009.
"We are proud to have recently been ranked as the ninth top insurance broker globally by Best's Review,” says Jessica Bibliowicz, chairman, president and CEO. “As a leader in the industry, and through our client-centric business segments, we continue to focus on providing the highest quality of service to our clients. Our performance this quarter included positive contributions from each of our three business segments, driving organic revenue growth of 7.3% in a challenging market environment."
XL Group plc reported its results for Q2 2010. According to the company’s release, its P&C operations had a combined ratio of 92.2%. XL Group had a book value per ordinary share of $27.74 at June 30, 2010, which represented an increase of 5% in the quarter and 13% from Dec. 31, 2009. XL also announced a net income attributable to ordinary shareholders of $191.8 million, or $0.56 per share, and operating income attributable to ordinary shareholders of $242.6 million, or $0.71 per share.
"We are pleased to report another quarter of solid operating results,” says CEO Mike McGavick. “Our P&C operations delivered a healthy combined ratio of 92.2% which includes 6.8 points of favorable prior period development. The current accident year combined ratio for our P&C operations was 99.0% in the quarter and our top-line remains strong. Our operating income was $242.6 million in the second quarter, compared to $291.4 million in the same quarter last year. Included in operating income was a net charge of $23.5 million for the previously announced termination of the EIB guarantees. This termination continues our progress in eliminating distractions from our core P&C focus.
"We grew our book value per ordinary share for the fifth consecutive quarter, this time by 5%, driven by both investment portfolio gains and net income,” he continues. “Our tangible book value per ordinary share increased 6% during the quarter to $25.30. Total shareholders' equity was $10.5 billion at June 30, 2010, an increase of 5% in the quarter and 11% since the end of 2009.”
