A number of insurers have released financial results for Q1 2012. The following is a compilation of their announcements:
The Cincinnati Insurance Companies' property/casualty group expects pretax catastrophe losses of approximately $85 million to $95 million during the first quarter, with more than half of that total from its personal lines insurance segment.
The company estimates the impact of those losses on the Q1 combined ratio would be approximately 10.5 to 11.5 percentage points, based on estimated property casualty earned premiums, which is higher than the historical 10-year average of 3.0 percentage points for the first quarter and 5.4 points on a full-year basis.
The first-quarter catastrophe losses were substantially from two storms in the Midwest and Southeast in late February and early March.
"Before the effects of catastrophes, our combined ratio continued the favorable trend of fourth-quarter 2011, reflecting our improved pricing precision and successful initiatives to contain loss costs, as well as improving market conditions,” said Steven Johnston, president and CEO, commented in a press release. “Healthy new business and renewal price increases contributed to first-quarter net written premium growth of approximately 8 percent.”
Meadowbrook Insurance Group Inc. announced an expected after-tax loss of $6.6 million, or $0.13 per diluted share in the first quarter of 2012. The pre-tax loss of $10.2 million, or 5.3 combined ratio points in the first quarter of 2012, relates to an increase in net ultimate loss estimate for 2011 and prior accident years. Results for the quarter will be available after the market closes on April 30, 2012.
"Despite the increase in these ultimate loss projections from older years, our current accident year loss ratios show positive signs of the cumulative pricing increases and underwriting actions we have taken over the last three years to stay ahead of industry loss cost trends,” said Robert Cubbin, Meadowbrook president and CEO.
The company expects to report a current accident year combined ratio, a non-GAAP measure that excludes the impact of any increase or decrease in net ultimate loss estimates for prior year losses, of 96.2 percent and a GAAP combined ratio of 101.5 percent for the first quarter of 2012, inclusive of the reserve increase. The first quarter 2012 accident year combined ratio and GAAP combined ratio also include a benefit of 1.9 combined ratio points related to better than expected insurance-related assessments.
The company expects to report positive first quarter 2012 net operating income, a non-GAAP measure the company defines as net income excluding after-tax realized gains and losses, of $0.14 per diluted share to $0.15 per diluted share.
"Our 2012 accident year loss ratio for the first quarter is expected to be 63.6 percent. We have achieved overall cumulative rate increases of 7.9 percent on premiums written in the last nine quarters,” Cubbin said. “These rate increases, which are estimated to exceed loss cost trends, will continue to earn out throughout 2012. We also will continue to see the positive impact of the underwriting actions taken in 2011 and the first part of 2012."
Platinum Underwriters Holdings Ltd. reported net income of $53.3 million and diluted earnings per common share of $1.49 for the quarter ended March 31, 2012. That compares to a net loss of $157.2 million for the same quarter last year.
Net premiums written decreased $51.1 million (or 26.2 percent) to $143.7 million from $194.8 million in the same quarter last year.
Net premiums earned decreased $44.7 million (or 24.4 percent) to $138.2 million from $182.9 million in the same quarter last year.
The GAAP combined ratio decreased 112.2 percentage points to 88.2 percent; net investment income decreased $3.8 million (or 11.8 percent) to $28.6 million; net realized gains on investments increased by $21.9 million to $22.3.
The results also reflect the net negative impact of $24.8 million from major catastrophe losses, net of retrocessional coverage, reinstatement premiums and taxes.
"Our results reflect the previously announced negative financial impact from severe weather in the United States, favorable prior period development, strong investment results on a total return basis and active capital management,” said Michael Price, Platinum CEO. “Our book value per common share grew to $49as of March 31, 2012, an increase of 3.0 percent from Dec. 31, 2011."
RLI Corp. reported Q1 2012 earnings declined to $20.6 million ($0.96 per share), from $24.8 million ($1.17 per share). The company notes that the results were revised to reflect the adoption of a new accounting standard for policy acquisition costs.
“We ended last year on a strong note, delivering our 16th consecutive year of underwriting profit, and are pleased to be off to a solid start in the first quarter by posting a respectable 89.1 combined ratio,” said Jonathan Michael, RLI chairman and CEO. “In addition to growth from our acquisition of Contractors Bonding and Insurance Company, we recognized organic growth across each of our segments.”
Other highlights for the quarter included:
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According to the release, RLI achieved $14.9 million of underwriting income in the first quarter of 2012 on an 89.1 combined ratio, compared to $20.9 million of underwriting income on an 82.0 combined ratio in the same quarter for 2011. Results for 2012 include $7.8 million in favorable development in prior years’ loss reserves, compared to $10.5 million in favorable development in prior years’ loss reserves in 2011.
The Travelers Companies Inc. reported Q1 net income decreased to $806 million, or $2.02 per diluted share, from $839 million, or $1.92 per diluted share in the same quarter last year. Operating income decreased to $801 million, or $2.01 per diluted share, from $826 million, or $1.89 per diluted share, in the prior year quarter. Net and operating income in the prior year quarter included a $104 million benefit from the resolution of prior year tax matters.
“Our underwriting performance reflected a GAAP combined ratio of 92.2 percent, an improvement of 2.5 points from the prior year quarter and 3.7 points from fourth quarter 2011. Net investment income, while down modestly from the prior year quarter as a result of continuing low fixed reinvestment yields, remained strong,” said Jay Fishman, chairman and CEO.
The quarterly net income of $806 million generated return on equity of 13.1 percent, and the book value per share was $63.81, up 7 percent year-over-year and 2 percent from year-end 2011. The board also approved a 12-percent increase in the regular quarterly dividend to $0.46. During Q1 2012, the company repurchased 6.0 million common shares under its existing share repurchase authorization for a total cost of $350 million and dividends were $162 million.
UnitedHealth Group Inc. reported first quarter 2012 net earnings were $1.31 per share. For the quarter ending March 31, 2012, revenues increased to $27.3 billion from $25.9 billion in the prior quarter, and $25.4 billion, or 7 percent from the same quarter in 2011.
Earnings from operations increased to $2.3 billion from $2.2 billion in the same quarter the prior year, and $2.1 billion in the prior quarter. Net margin decreased to 5.1 percent from 5.3 percent in the same quarter the prior year, but increased from 4.9 percent the prior quarter.
“We continue to serve customers with high-quality, innovative products and services that consistently deliver the most affordable care and make the best use of our health care system resources for everyone,” said Stephen Hemsley, president and CEO of UnitedHealth Group.
UnitedHealth Group also increased its outlook for 2012 net earnings to a range of $4.80 to $4.95 per share and cash flows from operations to a range of $6.2 billion to $6.5 billion on revenues of $109 billion to $110 billion. Adjusted cash flow from operations was $1.1 billion and inline with Q1 2011 and expectations; Q1 income tax rate was 3.6 percent and also consistent year-over-year.
The company repurchased in Q1 18.5 million shares for $1 billion, and paid $168 million in shareholder dividends, an increase of 24 percent year-over-year. The company ended the quarter with $1.1 billion in cash available for general corporate use.
UnitedHealthcare’s Q1 2012 revenues increased by $1.7 billion, or 7 percent year-over year, to $25.5 billion. The growth was driven by an increase of 1.6 million customers in the past year, which includes 1 million in the first quarter of 2012. Membership growth was balanced and diversified, the company said, with more than half in the commercial markets and the remainder in the public and senior markets. As a result, the company increased its membership outlook by 750,000 people, to a range of 1.7 million to 1.9 million.
Optum revenues for Q1 2012 were $7.3 billion, an 8-percent increase over the $6.8 percent reported for the same quarter last year. However, revenues decreased from $7.6 billion in the quarter ended Dec. 31, 2011. OptumInsight Technology and Services backlog increased 25 percent to $4.1 billion.
