Ohio | 0-4604 | 31-0746871 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
6200 S. Gilmore Road, Fairfield, Ohio | 45014-5141 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit 99.1 | News release dated August 4, 2005, Cincinnati Financial Net Income up 1.6% and Operating Income* Gains 25.4% for second-quarter 2005. |
Exhibit 99.2 | Supplemental Financial Data dated August 4, 2005 |
CINCINNATI FINANCIAL CORPORATION |
||||
Date August 4, 2005 | By: | /s/ Kenneth W. Stecher | ||
Kenneth W. Stecher | ||||
Chief Financial Officer, Senior Vice President, Secretary and Treasurer (Principal Accounting Officer) | ||||
Mailing Address: | P.O. BOX 145496 |
(Dollars in millions except share data) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2005 | 2004 | Change % | 2005 | 2004 ** | Change % | |||||||||||||||||||
Revenue Highlights |
||||||||||||||||||||||||
Earned premiums |
$ | 794 | $ | 744 | 6.7 | $ | 1,571 | $ | 1,484 | 5.8 | ||||||||||||||
Investment income |
129 | 121 | 7.3 | 256 | 241 | 6.5 | ||||||||||||||||||
Total revenues |
940 | 923 | 1.9 | 1,856 | 1,793 | 3.5 | ||||||||||||||||||
Income Statement Data |
||||||||||||||||||||||||
Net income |
$ | 158 | $ | 155 | 1.6 | $ | 302 | $ | 301 | 0.2 | ||||||||||||||
Net realized investment gains and losses |
8 | 36 | (77.3 | ) | 14 | 40 | (65.2 | ) | ||||||||||||||||
Operating income* |
$ | 150 | $ | 119 | 25.4 | $ | 288 | $ | 261 | 10.4 | ||||||||||||||
Per Share Data (diluted) *** |
||||||||||||||||||||||||
Net income |
$ | 0.89 | $ | 0.87 | 2.3 | $ | 1.70 | $ | 1.69 | 0.6 | ||||||||||||||
Net realized investment gains and losses |
0.05 | 0.20 | (75.0 | ) | 0.08 | 0.23 | (65.2 | ) | ||||||||||||||||
Operating income* |
$ | 0.84 | $ | 0.67 | 25.4 | $ | 1.62 | $ | 1.46 | 11.0 | ||||||||||||||
Cash dividend declared |
$ | 0.305 | $ | 0.26 | 16.4 | $ | 0.595 | $ | 0.51 | 16.7 | ||||||||||||||
Book value |
| | $ | 35.08 | $ | 34.54 | 1.6 | |||||||||||||||||
Average shares outstanding |
177,097,493 | 178,684,929 | (0.9 | ) | 177,451,366 | 178,658,935 | (0.7 | ) | ||||||||||||||||
| Six-month net income unchanged on lower realized gains; operating income rises 10.4 percent to record six-month high on strong property casualty insurance profitability and higher investment income. | |
| Pretax investment income growth accelerating, with full-year growth now expected to be in line with 6.5 percent year-to-date increase. | |
| Book value rises from first quarter but remained below year-end 2004 level on lower unrealized gains. | |
| Average shares outstanding down 1.2 million for six months. Second-quarter repurchases totaled 850,000 shares at a cost of $34 million. |
| Agent-centered business strategy led to 2.6 percent increase in six-month adjusted net written premiums* for the property casualty operations. Commercial lines adjusted net written premiums* rose 4.5 percent. | |
| 88.2 percent GAAP combined ratio for first six months reflected continued strong commercial lines underwriting results, improved personal lines performance and unusually low catastrophe losses. | |
| Property casualty underwriting profit reached $179 million compared with $150 million a year ago. | |
| 2005 outlook remains positive, anticipating low single-digit written premium growth and GAAP combined ratio at or below 93 percent. | |
| Life insurance segment contributed 13 cents to six-month results, up from 10 cents a year ago. |
* | The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 11 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles or Statutory Accounting Principles. Property casualty written premiums are affected by an actuarial estimate of premiums for policies that were in process but not yet booked at period end. The estimate is updated each quarter, and earned premiums are not materially affected. | |
** | Six-month 2004 income included a benefit of $21 million, or 11 cents per share, after tax, and GAAP combined ratio included a benefit of 2.2 percentage points from the release of reserves for uninsured/underinsured motorist (UM/UIM) losses. | |
*** | Per share amounts for all periods have been adjusted for the 5 percent stock dividend paid April 26, 2005. |
2
(Dollars in millions) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2005 | 2004 | Change % | 2005 | 2004 | Change % | |||||||||||||||||||
Written premiums |
$ | 791 | $ | 734 | 7.7 | $ | 1,588 | $ | 1,524 | 4.2 | ||||||||||||||
Earned premiums |
$ | 765 | $ | 717 | 6.7 | $ | 1,518 | $ | 1,432 | 6.0 | ||||||||||||||
Loss and loss expenses excluding catastrophes |
421 | 395 | 6.6 | 877 | 806 | 8.8 | ||||||||||||||||||
Catastrophe loss and loss expenses |
15 | 46 | (67.9 | ) | 17 | 47 | (63.8 | ) | ||||||||||||||||
Commission expenses |
157 | 142 | 10.5 | 299 | 296 | 1.1 | ||||||||||||||||||
Underwriting expenses |
75 | 73 | 3.6 | 141 | 127 | 11.1 | ||||||||||||||||||
Policyholder dividends |
2 | 3 | (48.4 | ) | 5 | 6 | (15.8 | ) | ||||||||||||||||
Underwriting profit |
$ | 95 | $ | 58 | 64.2 | $ | 179 | $ | 150 | 18.8 | ||||||||||||||
Combined ratio: |
||||||||||||||||||||||||
Loss and loss expenses excluding catastrophes |
55.0 | % | 55.0 | % | 57.8 | % | 56.2 | % | ||||||||||||||||
Catastrophe loss and loss expenses |
2.0 | 6.5 | 1.1 | 3.3 | ||||||||||||||||||||
Loss and loss expenses |
57.0 | % | 61.5 | % | 58.9 | % | 59.5 | % | ||||||||||||||||
Commission expenses |
20.5 | 19.8 | 19.7 | 20.7 | ||||||||||||||||||||
Underwriting expenses |
9.8 | 10.1 | 9.3 | 8.9 | ||||||||||||||||||||
Policyholder dividends |
0.2 | 0.5 | 0.3 | 0.4 | ||||||||||||||||||||
Combined ratio |
87.5 | % | 91.9 | % | 88.2 | % | 89.5 | % | ||||||||||||||||
| Adjusted net written premiums* rose 2.6 percent for both the second quarter and six months ended June 30, 2005. | |
| New business written directly by agencies was $81 million and $152 million in the three months and six months ended June 30, 2005, compared with $87 million and $167 million in the comparable 2004 periods. | |
| 4.4 percentage-point improvement in the overall property casualty combined ratio for the three months ended June 30, 2005, was due to the unusually low level of catastrophe losses. Only one period of severe weather in May affected The Cincinnati Insurance Companies policyholders across 10 Midwestern states. | |
| Improvement in second-quarter personal lines profitability offset a slightly higher commercial lines loss and loss expense ratio excluding catastrophe losses. The commercial lines loss and loss expense ratio excluding catastrophe losses rose primarily because favorable loss reserve development from prior accident years was below last years level. | |
| Overall loss and loss expense ratio for the six months ended June 30, 2005, included a previously announced single large loss. That loss reduced the six-month underwriting profit by $22 million, net of reinsurance, and contributed 1.5 percentage points to the loss and loss expense ratio. The ratio for the comparable 2004 period included a 2.2 percentage-points benefit from the release of UM/UIM reserves. |
* | The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 11 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP). Property casualty written premiums are affected by an actuarial estimate of premiums for policies that were in process but not yet booked at period end. The estimate is updated each quarter, and earned premiums are not materially affected. |
3
(Dollars in millions) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2005 | 2004 | Change % | 2005 | 2004 | Change % | |||||||||||||||||||
Written premiums |
$ | 567 | $ | 512 | 10.6 | $ | 1,195 | $ | 1,122 | 6.5 | ||||||||||||||
Earned premiums |
$ | 563 | $ | 520 | 8.3 | $ | 1,114 | $ | 1,038 | 7.3 | ||||||||||||||
Loss and loss expenses excluding catastrophes |
306 | 265 | 15.6 | 635 | 541 | 17.3 | ||||||||||||||||||
Catastrophe loss and loss expenses |
2 | 15 | (84.4 | ) | 9 | 16 | (47.4 | ) | ||||||||||||||||
Commission expenses |
111 | 103 | 7.6 | 215 | 216 | (0.5 | ) | |||||||||||||||||
Underwriting expenses |
56 | 53 | 6.9 | 96 | 88 | 9.4 | ||||||||||||||||||
Policyholder dividends |
2 | 3 | (48.4 | ) | 5 | 6 | (15.8 | ) | ||||||||||||||||
Underwriting profit |
$ | 86 | $ | 81 | 5.9 | $ | 154 | $ | 171 | (9.7 | ) | |||||||||||||
Combined ratio: |
||||||||||||||||||||||||
Loss and loss expenses excluding catastrophes |
54.4 | % | 50.9 | % | 57.0 | % | 52.1 | % | ||||||||||||||||
Catastrophe loss and loss expenses |
0.4 | 3.0 | 0.8 | 1.6 | ||||||||||||||||||||
Loss and loss expenses |
54.8 | % | 53.9 | % | 57.8 | % | 53.7 | % | ||||||||||||||||
Commission expenses |
19.7 | 19.8 | 19.3 | 20.8 | ||||||||||||||||||||
Underwriting expenses |
10.0 | 10.0 | 8.6 | 8.4 | ||||||||||||||||||||
Policyholder dividends |
0.3 | 0.7 | 0.4 | 0.6 | ||||||||||||||||||||
Combined ratio |
84.8 | % | 84.4 | % | 86.1 | % | 83.5 | % | ||||||||||||||||
| Adjusted net written premiums* rose 3.8 percent for the second quarter and 4.5 percent for the six months ended June 30, 2005. | |
| New commercial lines business was $72 million and $135 million for the three-month and six-month periods compared with $75 million and $142 million last year. | |
| Growth has slowed because of the more competitive pricing environment and the underwriting discipline maintained for both renewal and new business. The commercial lines written premium growth rate appears to exceed the average for the overall industry, which A.M. Best Company estimated at 1.3 percent for the first three months of 2005. | |
| Technology programs reached milestones, bringing agencies greater efficiencies and permitting associates to spend more time with people and less with paper. WinCPP, an online rate quoting system for commercial package, commercial auto and workers compensation policies, now is available for agencies in all active states except Delaware. Businessowner policy quoting capabilities now have been extended to 25 states. Development of a full-featured commercial lines policy processing system remains on track for delivering a full version of the system for businessowners policies to Ohio, the companys largest premium volume state, by the end of 2005. | |
| The company continues to enhance its agency education programs at its headquarters, regional locations and online. Courses on products, underwriting, risk management and selling skills give agencies and the company a distinct competitive advantage. During the first half of 2005, the companys new online learning center delivered more than 1,000 courses directly to agency desktops. | |
| Loss and loss expenses excluding catastrophes rose in the three months and six months ended June 30, 2005, largely because of a lower level of favorable loss reserve development from prior accident years. Loss and loss expenses excluding catastrophes in the six months ended June 30, 2005, was increased 2.0 percentage-points by a single large loss in the first quarter. Loss and loss expenses excluding catastrophes in the six months ended June 30, 2004, included a 3.0 percentage point benefit from the release of UM/UIM reserves. | |
| Commercial lines profitability remained strong in the three months ended June 30, 2005, benefiting from pricing discipline and the skilled underwriting of our agents and field and headquarters associates, as well as an unusually low level of catastrophe losses. | |
| For 2005, the company expects commercial lines written premium growth of approximately 3 percent to 5 percent with the combined ratio at or below 90 percent. |
* | The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 11 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP). Property casualty written premiums are affected by an actuarial estimate of premiums for policies that were in process but not yet booked at period end. The estimate is updated each quarter, and earned premiums are not materially affected. |
4
(Dollars in millions) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2005 | 2004 | Change % | 2005 | 2004 | Change % | |||||||||||||||||||
Written premiums |
$ | 224 | $ | 222 | 1.1 | $ | 393 | $ | 402 | (2.5 | ) | |||||||||||||
Earned premiums |
$ | 202 | $ | 197 | 2.5 | $ | 404 | $ | 394 | 2.4 | ||||||||||||||
Loss and loss expenses excluding catastrophes |
115 | 130 | (11.6 | ) | 242 | 265 | (8.8 | ) | ||||||||||||||||
Catastrophe loss and loss expenses |
13 | 31 | (59.7 | ) | 8 | 31 | (72.4 | ) | ||||||||||||||||
Commission expenses |
46 | 39 | 18.3 | 84 | 80 | 5.4 | ||||||||||||||||||
Underwriting expenses |
19 | 20 | (5.1 | ) | 45 | 39 | 14.7 | |||||||||||||||||
Underwriting profit (loss) |
$ | 9 | $ | (23 | ) | nm | $ | 25 | $ | (21 | ) | nm | ||||||||||||
Combined ratio: |
||||||||||||||||||||||||
Loss and loss expenses excluding catastrophes |
56.7 | % | 65.9 | % | 59.8 | % | 67.1 | % | ||||||||||||||||
Catastrophe loss and loss expenses |
6.2 | 15.7 | 2.1 | 7.8 | ||||||||||||||||||||
Loss and loss expenses |
62.9 | % | 81.6 | % | 61.9 | % | 74.9 | % | ||||||||||||||||
Commission expenses |
22.9 | 19.8 | 20.9 | 20.3 | ||||||||||||||||||||
Underwriting expenses |
9.5 | 10.2 | 11.2 | 10.0 | ||||||||||||||||||||
Combined ratio |
95.3 | % | 111.6 | % | 94.0 | % | 105.2 | % | ||||||||||||||||
| Adjusted net written premiums* declined 0.4 percent for the second quarter and declined 2.6 percent for the six months ended June 30, 2005, primarily because the companys homeowner and auto rates in many markets are not competitively priced. During the first and second quarters of 2005, retention rates declined slightly and new business activity was weak. | |
| New personal lines business was $9 million and $17 million for the three-month and six-month periods compared with $12 million and $25 million last year. | |
| Personal lines earned premiums for the three months and six months rose slightly, due to growth in homeowner written premiums over the past 12 months following rate increases in 2003 and the first half of 2004. | |
| Significant rate modifications in selected states and territories are scheduled to take effect in September 2005 to better position the companys homeowner and auto products in the market. | |
| The slowdown in written premium growth may have been partially due to the introduction of Diamond, our personal lines processing system, in some of our larger states. Diamond gives agents new options that increase their choice and control and will offer significant efficiencies when policies renew. However, the system has an initial learning curve, requires substantial effort on the part of the agencies to convert business to the system and needs enhancements to achieve satisfactory stability and speed. These enhancements are expected to be completed in the next few months. | |
| Diamond is in use in six states representing approximately 62 percent of total 2004 personal lines earned premium volume. Through June 30, 2005, policies representing approximately $250 million of in-force premium had been issued through Diamond. The introduction of Diamond into Illinois, which represents about 7 percent of total 2004 personal lines earned premium volume, now is scheduled for September. Prior to the Illinois roll-out, improvements to system stability and speed are being implemented. Planned rate changes were released in Diamond in July, as scheduled. | |
| After agent training is complete in Illinois, training is expected to begin for agents in Georgia, Kentucky and Wisconsin, which represented about 15 percent of total 2004 personal lines earned premium volume. Those states will be followed by Minnesota, Missouri and Tennessee, which represent about 6 percent of volume. The company now believes training in some states may not begin until early 2006. | |
| Excluding catastrophe losses, the personal lines GAAP combined ratio improved in both the three-month and six-month periods, primarily because of marked improvement in homeowner profitability and modest improvement in personal auto profitability from already healthy levels. | |
| For 2005, the company expects a mid-single digit decline in personal lines written premiums with the combined ratio at approximately 100 percent. |
* | The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 11 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP). Property casualty written premiums are affected by an actuarial estimate of premiums for policies that were in process but not yet booked at period end. The estimate is updated each quarter, and earned premiums are not materially affected. |
5
(In millions) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2005 | 2004 | Change % | 2005 | 2004 | Change % | |||||||||||||||||||
Earned premiums |
$ | 29 | $ | 27 | 8.3 | $ | 53 | $ | 52 | 2.6 | ||||||||||||||
Investment income, net of expenses |
24 | 22 | 10.1 | 48 | 44 | 9.7 | ||||||||||||||||||
Other income |
1 | 1 | 12.3 | 2 | 2 | 7.4 | ||||||||||||||||||
Total revenues, excluding realized investment gains
and losses |
54 | 50 | 9.2 | 103 | 98 | 5.9 | ||||||||||||||||||
Policyholder benefits |
26 | 26 | 0.5 | 50 | 48 | 3.8 | ||||||||||||||||||
Expenses |
14 | 13 | 8.5 | 25 | 26 | (1.4 | ) | |||||||||||||||||
Total benefits and expenses |
40 | 39 | 3.2 | 75 | 74 | 1.9 | ||||||||||||||||||
Net income before income tax and
realized investment gains and losses |
14 | 11 | 30.4 | 28 | 24 | 18.3 | ||||||||||||||||||
Income tax |
5 | 4 | 32.4 | 10 | 8 | 19.4 | ||||||||||||||||||
Net income before realized investment
gains and losses |
$ | 9 | $ | 7 | 29.4 | $ | 18 | $ | 16 | 17.8 | ||||||||||||||
| Higher earned premiums led to revenue growth for the three months and six months ended June 30, 2005. | |
| Face amount of life policies in force rose 7.5 percent to $48.294 billion at June 30, 2005, from $44.921 billion at year-end 2004. For the first six months of 2005, applications submitted rose 5.5 percent, with an 8.4 percent gain in worksite applications. | |
| Operating expenses remained relatively level and mortality experience remained within pricing guidelines, resulting in improved results and a higher contribution to earnings per share. | |
| Nine new term life insurance products were introduced in the second quarter, including a new series with an optional return-of-premium feature, to replace the existing product portfolio. | |
| In 2005, Cincinnati Life is exploring additional programs to simplify the worksite marketing sales process for independent property casualty agencies, including enrollment software. Plans call for simplifying the worksite product portfolio to make it more competitive. | |
| Pending product development and introductions include features that customers indicate are important, such as a new universal life product that will offer a secondary guarantee. |
* | The Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures on Page 11 defines and reconciles measures presented in this release that are not based on Generally Accepted Accounting Principles (non-GAAP). |
6
(In millions) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2005 | 2004 | Change % | 2005 | 2004 | Change % | |||||||||||||||||||
Investment income: |
||||||||||||||||||||||||
Interest |
$ | 70 | $ | 62 | 13.4 | $ | 138 | $ | 123 | 12.0 | ||||||||||||||
Dividends |
59 | 59 | 0.6 | 117 | 117 | (0.3 | ) | |||||||||||||||||
Other |
2 | 1 | 38.4 | 4 | 3 | 68.3 | ||||||||||||||||||
Investment expenses |
(2 | ) | (1 | ) | (34.8 | ) | (3 | ) | (2 | ) | (32.3 | ) | ||||||||||||
Total net investment income |
129 | 121 | 7.3 | 256 | 241 | 6.5 | ||||||||||||||||||
Investment interest credited to contract holders |
(13 | ) | (11 | ) | (13.8 | ) | (25 | ) | (22 | ) | (13.4 | ) | ||||||||||||
Net realized investment gains and losses: |
||||||||||||||||||||||||
Other-than-temporary impairment charges |
0 | (1 | ) | 22.1 | 0 | (3 | ) | 84.8 | ||||||||||||||||
Realized investment gains and losses |
13 | 53 | (76.4 | ) | 29 | 62 | (53.7 | ) | ||||||||||||||||
Change in valuation of embedded derivatives |
0 | 3 | (68.3 | ) | (7 | ) | 3 | (331.2 | ) | |||||||||||||||
Net realized investment gains |
13 | 55 | (76.6 | ) | 22 | 62 | (64.9 | ) | ||||||||||||||||
Investment operations income |
$ | 129 | $ | 165 | (21.3 | ) | $ | 253 | $ | 281 | (9.8 | ) | ||||||||||||
(Dollars in millions) | June 30, | December 31, | June 30, | |||||||||
2005 | 2004 | 2004 | ||||||||||
Balance Sheet Data |
||||||||||||
Total assets |
$ | 16,024 | $ | 16,107 | $ | 15,530 | ||||||
Invested assets |
12,600 | 12,677 | 12,117 | |||||||||
Shareholders equity |
6,132 | 6,249 | 6,103 | |||||||||
Ratio Data |
||||||||||||
Return on equity, annualized |
9.8 | % | 9.4 | % | 9.8 | % | ||||||
Return on equity, annualized, based
on comprehensive income |
0.6 | % | 4.6 | % | (0.1) | % | ||||||
| Higher interest income from fixed-income securities led to the increase in investment income for the three months and six months ended June 30, 2005. | |
| Dividend income for the three months and six months was essentially unchanged from last year. Dividend increases from common stocks in the portfolio were offset by the loss of income from the sale or call of convertible preferred securities over the past 12 months. Fifth Third Bancorp, the companys largest equity holding, contributed 43.6 percent of total dividend income in the first six months of 2005. | |
| Realized investment gains primarily were due to routine sales and calls of securities. Last years gains primarily were due to equity sales undertaken as part of a program to support the companys insurer financial strength ratings. During the three months and six months ended June 30, 2005, only one security was written down as other-than-temporarily impaired for less than $500,000. | |
| Investment income growth for the year now is expected to be in line with the 6.5 percent growth in the first six months of 2005. This outlook is based on anticipated growth in dividend income, strong cash flow from insurance operations and the higher-than-normal allocation of new cash flow to fixed-income securities over the past 18 months. | |
| Dividend increases by Fifth Third Bancorp and another 38 of the 51 common stock holdings in the equity portfolio during the 12 months ended June 30, 2005, should add $19 million to annualized investment income. | |
| At June 30, 2005, statutory surplus for the property casualty insurance group was $4.180 billion compared with $4.191 billion at year-end 2004. The ratio of common stock to statutory surplus for the property casualty insurance group portfolio was 98.4 percent at June 30, 2005, compared with 103.5 percent at year-end 2004. | |
| The ratio of investment securities held at the holding-company level to total holding-company-only assets was 34.9 percent at June 30, 2005, in line with managements below 40 percent target. | |
| The company repurchased 965,000 shares at a total cost of $39 million in the first half of 2005, including 850,000 shares in the second quarter. |
7
| Unusually high levels of catastrophe losses due to changes in weather patterns, environmental events, terrorism incidents or other causes | |
| Ability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased and financial strength of reinsurers | |
| Increased frequency and/or severity of claims | |
| Events or conditions that could weaken or harm the companys relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the companys opportunities for growth, such as: |
| Downgrade of the companys financial strength ratings, | ||
| Concerns that doing business with the company is too difficult or | ||
| Perceptions that the companys level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace |
| Increased competition that could result in a significant reduction in the companys premium growth rate | |
| Personal lines pricing methods adopted by others that could allow them more flexibility and greater ability to underwrite individual risks accurately, decreasing our advantage in those areas. | |
| Insurance regulatory actions, legislation or court decisions or legal actions that increase expenses or place us at a disadvantage in the marketplace | |
| Delays in the development, implementation, performance and benefits of technology projects and enhancements | |
| Inaccurate estimates or assumptions used for critical accounting estimates, including loss reserves | |
| Events that reduce the companys ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002 in the future | |
| Recession or other economic conditions or regulatory, accounting or tax changes resulting in lower demand for insurance products | |
| Sustained decline in overall stock market values negatively affecting the companys equity portfolio; in particular a sustained decline in the market value of Fifth Third Bancorp shares, a significant equity holding | |
| Events that lead to a significant decline in the value of a particular security and impairment of the asset | |
| Prolonged low interest rate environment or other factors that limit the companys ability to generate growth in investment income | |
| Adverse outcomes from litigation or administrative proceedings | |
| Effect on the insurance industry as a whole, and thus on the companys business, of the recent actions undertaken by the Attorney General of the State of New York and other regulators against participants in the insurance industry, as well as any increased regulatory oversight that might result | |
| Limited flexibility in conducting investment activities if the restrictions imposed by the Investment Company Act of 1940 were to become applicable to the parent company or the application for exemptive relief is not approved |
8
(Dollars in millions except per share data) | June 30, 2005 |
December 31, 2004 |
|||||||||
(unaudited) | |||||||||||
Assets |
|||||||||||
Investments |
|||||||||||
Fixed maturities, at fair value (amortized cost: 2005$5,179; 2004$4,854) |
$ | 5,412 | $ | 5,141 | |||||||
Equity securities, at fair value (cost: 2005$1,982; 2004$1,945) |
7,148 | 7,498 | |||||||||
Other invested assets |
40 | 38 | |||||||||
Cash |
172 | 306 | |||||||||
Investment income receivable |
113 | 107 | |||||||||
Finance receivable |
97 | 95 | |||||||||
Premiums receivable |
1,189 | 1,119 | |||||||||
Reinsurance receivable |
685 | 680 | |||||||||
Prepaid reinsurance premiums |
15 | 15 | |||||||||
Deferred policy acquisition costs |
421 | 400 | |||||||||
Property and equipment, net, for company use (accumulated depreciation: 2005$219;
2004$206) |
164 | 156 | |||||||||
Other assets |
79 | 75 | |||||||||
Separate accounts |
489 | 477 | |||||||||
Total assets |
$ | 16,024 | $ | 16,107 | |||||||
Liabilities |
|||||||||||
Insurance reserves |
|||||||||||
Loss and loss expense reserves |
$ | 3,608 | $ | 3,549 | |||||||
Life policy reserves |
1,286 | 1,194 | |||||||||
Unearned premiums |
1,610 | 1,539 | |||||||||
Other liabilities |
424 | 474 | |||||||||
Deferred income tax |
1,684 | 1,834 | |||||||||
6.125% senior notes due 2034 |
371 | 371 | |||||||||
6.90% senior debentures due 2028 |
28 | 420 | |||||||||
6.92% senior debentures due 2028 |
392 | 0 | |||||||||
Separate accounts |
489 | 477 | |||||||||
Total liabilities |
9,892 | 9,858 | |||||||||
Shareholders equity |
|||||||||||
Common stock, par value$2 per share; authorized: 2005500 million shares,
2004200 million shares; issued: 2005194 million shares, 2004185 million shares |
389 | 370 | |||||||||
Paid-in capital |
964 | 618 | |||||||||
Retained earnings |
1,894 | 2,057 | |||||||||
Accumulated other comprehensive incomeunrealized gains on investments and derivatives |
3,505 | 3,787 | |||||||||
Treasury stock at cost (200519 million shares, 200418 million shares) |
(620 | ) | (583 | ) | |||||||
Total shareholders equity |
6,132 | 6,249 | |||||||||
Total liabilities and shareholders equity |
$ | 16,024 | $ | 16,107 | |||||||
9
(In millions except per share data) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Revenues |
||||||||||||||||
Earned premiums |
||||||||||||||||
Property casualty |
$ | 765 | $ | 717 | $ | 1,518 | $ | 1,432 | ||||||||
Life |
29 | 27 | 53 | 52 | ||||||||||||
Investment income, net of expenses |
129 | 121 | 256 | 241 | ||||||||||||
Realized investment gains and losses |
13 | 55 | 22 | 62 | ||||||||||||
Other income |
4 | 3 | 7 | 6 | ||||||||||||
Total revenues |
940 | 923 | 1,856 | 1,793 | ||||||||||||
Benefits and expenses |
||||||||||||||||
Insurance losses and policyholder benefits |
461 | 466 | 942 | 899 | ||||||||||||
Commissions |
166 | 150 | 316 | 311 | ||||||||||||
Other operating expenses |
72 | 67 | 139 | 129 | ||||||||||||
Taxes, licenses and fees |
18 | 20 | 35 | 40 | ||||||||||||
Increase in deferred policy acquisition costs |
(7 | ) | (6 | ) | (18 | ) | (24 | ) | ||||||||
Interest expense |
13 | 9 | 26 | 17 | ||||||||||||
Other expenses |
2 | 3 | 6 | 6 | ||||||||||||
Total benefits and expenses |
725 | 709 | 1,446 | 1,378 | ||||||||||||
Income before income taxes |
215 | 214 | 410 | 415 | ||||||||||||
Provision (benefit) for income taxes |
||||||||||||||||
Current |
57 | (6 | ) | 107 | 42 | |||||||||||
Deferred |
0 | 65 | 1 | 72 | ||||||||||||
Total provision for income taxes |
57 | 59 | 108 | 114 | ||||||||||||
Net income |
$ | 158 | $ | 155 | $ | 302 | $ | 301 | ||||||||
Per common share |
||||||||||||||||
Net incomebasic |
$ | 0.90 | $ | 0.88 | $ | 1.72 | $ | 1.71 | ||||||||
Net incomediluted |
$ | 0.89 | $ | 0.87 | $ | 1.70 | $ | 1.69 | ||||||||
10
| Operating income: Operating income (readers also may have seen this measure defined as net income before realized investment gains and losses) is calculated by excluding net realized investment gains and losses from net income. Management evaluates operating income to measure the success of pricing, rate and underwriting strategies. While realized investment gains (or losses) are integral to the companys insurance operations over the long term, the determination to realize investment gains or losses in any period may be subject to managements discretion and is independent of the insurance underwriting process. Moreover, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities without actual realization. Management believes that the level of realized investment gains or losses for any particular period, while it may be material, may not fully indicate the performance of ongoing underlying business operations in that period. | |
For these reasons, many investors and shareholders consider operating income to be one of the more meaningful measures for evaluating insurance company performance. Equity analysts who report on the insurance industry and the company generally focus on this metric in their analyses. The company presents operating income so that all investors have what management believes to be a useful supplement to GAAP information. |
| Statutory accounting rules: For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, insurers also must calculate certain data according to statutory accounting rules as defined in the NAICs Accounting Practices and Procedures Manual, which may be, and has been, modified by various state insurance departments. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data, study industry trends and compare insurance companies. | |
| Written premium: Under statutory accounting rules, written premium is the amount recorded for policies issued and recognized on an annualized basis at the effective date of the policy. Management analyzes trends in written premium to assess business efforts. Earned premium, used in both statutory and GAAP accounting, is calculated ratably over the policy term. The difference between written and earned premium is unearned premium. | |
| Written premium adjustment statutory basis only: In 2002, the company refined its estimation process for matching written premiums to policy effective dates, which added $117 million to 2002 written premiums. To better assess ongoing business trends, management may exclude this adjustment when analyzing trends in written premiums and statutory ratios that make use of written premiums. | |
| Codification: Adoption of Codification of Statutory Accounting Principles was required for Ohio-based insurance companies effective January 1, 2001. The adoption of Codification changed the manner in which the company recognized statutory property casualty written premiums. As a result, 2001 statutory written premiums included $402 million to account for unbooked premiums related to policies with effective dates prior to January 1, 2001. To better assess ongoing business trends, management excludes this $402 million when analyzing written premiums and statutory ratios that make use of written premiums. | |
| Life insurance gross written premiums: In analyzing the life insurance companys gross written premiums, management excludes five larger, single-pay life insurance policies (bank-owned life insurance or BOLIs) written in 2004, 2002, 2000 and 1999 to focus on the trend in premiums written through the independent agency distribution channel. | |
| One-time charges or adjustments: Management analyzes earnings and profitability excluding the impact of one-time items. |
| In 2003, as the result of a settlement negotiated with a vendor, pretax results included the recovery of $23 million of the $39 million one-time, pretax charge incurred in 2000. | ||
| In 2000, the company recorded a one-time charge of $39 million, pre-tax, to write down previously capitalized costs related to the development of software to process property casualty policies. | ||
| In 2000, the company earned $5 million in interest in the first quarter from a $303 million single-premium BOLI policy that was booked at the end of 1999 and segregated as a separate account effective April 1, 2000. Investment income and realized investment gains and losses from separate accounts generally accrue directly to the contract holder and, therefore, are not included in the companys consolidated financials. |
11
(In millions except per share data) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 6/30/2005 | 6/30/2004 | 9/30/2005 | 9/30/2004 | 12/31/2005 | 12/31/2004 | ||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 158 | $ | 144 | $ | 192 | $ | 90 | $ | 155 | $ | 146 | $ | 302 | $ | 301 | $ | 392 | $ | 584 | |||||||||||||||||||||||||||||||||||||
One-time item |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income before one-time item |
$ | 158 | $ | 144 | $ | 192 | $ | 90 | $ | 155 | $ | 146 | $ | 302 | $ | 301 | $ | 392 | $ | 584 | |||||||||||||||||||||||||||||||||||||
Net realized investment gains and losses |
8 | 6 | 24 | (5 | ) | 36 | 4 | 14 | 40 | 36 | 60 | ||||||||||||||||||||||||||||||||||||||||||||||
Operating income before one-time item |
$ | 150 | $ | 138 | $ | 168 | $ | 95 | $ | 119 | $ | 142 | $ | 288 | $ | 261 | $ | 356 | $ | 524 | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
(9 | ) | (2 | ) | (10 | ) | (56 | ) | (30 | ) | 0 | (11 | ) | (30 | ) | (86 | ) | (96 | ) | ||||||||||||||||||||||||||||||||||||||
Operating income before catastrophe losses and
one-time item |
$ | 159 | $ | 140 | $ | 178 | $ | 151 | $ | 149 | $ | 142 | $ | 299 | $ | 291 | $ | 442 | $ | 620 | |||||||||||||||||||||||||||||||||||||
Diluted per share data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 0.89 | $ | 0.81 | $ | 1.09 | $ | 0.50 | $ | 0.87 | $ | 0.82 | $ | 1.70 | $ | 1.77 | $ | 2.30 | $ | 3.28 | |||||||||||||||||||||||||||||||||||||
One-time item |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income before one-time item |
$ | 0.89 | $ | 0.81 | $ | 1.09 | $ | 0.50 | $ | 0.87 | $ | 0.82 | $ | 1.70 | $ | 1.77 | $ | 2.30 | $ | 3.28 | |||||||||||||||||||||||||||||||||||||
Net realized investment gains and losses |
0.05 | 0.03 | 0.14 | (0.03 | ) | 0.20 | 0.03 | 0.08 | 0.24 | 0.21 | 0.35 | ||||||||||||||||||||||||||||||||||||||||||||||
Operating income before one-time item |
$ | 0.84 | $ | 0.78 | $ | 0.95 | $ | 0.53 | $ | 0.67 | $ | 0.79 | $ | 1.62 | $ | 1.53 | $ | 2.09 | $ | 2.93 | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
(0.05 | ) | (0.01 | ) | (0.06 | ) | (0.31 | ) | (0.17 | ) | 0.00 | (0.06 | ) | (0.18 | ) | (0.51 | ) | (0.54 | ) | ||||||||||||||||||||||||||||||||||||||
Operating income before catastrophe losses and
one-time item |
$ | 0.89 | $ | 0.79 | $ | 1.10 | $ | 0.84 | $ | 0.84 | $ | 0.79 | $ | 1.68 | $ | 1.71 | $ | 2.60 | $ | 3.47 | |||||||||||||||||||||||||||||||||||||
12
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | ||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 781 | $ | 787 | $ | 748 | $ | 750 | $ | 761 | $ | 767 | $ | 1,568 | $ | 1,528 | $ | 2,278 | $ | 3,026 | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
10 | 10 | (25 | ) | 0 | (27 | ) | 23 | 20 | (4 | ) | (4 | ) | (29 | ) | ||||||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 791 | $ | 797 | $ | 723 | $ | 750 | $ | 734 | $ | 790 | $ | 1,588 | $ | 1,524 | $ | 2,274 | $ | 2,997 | |||||||||||||||||||||||||||||||||||||
Unearned premiums change |
(26 | ) | (44 | ) | 31 | (17 | ) | (17 | ) | (74 | ) | (70 | ) | (92 | ) | (108 | ) | (78 | ) | ||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 765 | $ | 753 | $ | 754 | $ | 733 | $ | 717 | $ | 716 | $ | 1,518 | $ | 1,432 | $ | 2,166 | $ | 2,919 | |||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
86.6 | % | 87.4 | % | 83.6 | % | 97.9 | % | 91.2 | % | 85.1 | % | 86.9 | % | 88.1 | % | 91.4 | % | 89.4 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio |
86.6 | % | 87.4 | % | 83.6 | % | 97.9 | % | 91.2 | % | 85.1 | % | 86.9 | % | 88.1 | % | 91.4 | % | 89.4 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
2.0 | 0.3 | 2.0 | 11.7 | 6.5 | 0.1 | 1.1 | 3.3 | 6.1 | 5.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio
excluding catastrophe losses |
84.6 | % | 87.1 | % | 81.6 | % | 86.2 | % | 84.7 | % | 85.0 | % | 85.8 | % | 84.8 | % | 85.3 | % | 84.3 | % | |||||||||||||||||||||||||||||||||||||
Reported commission expense ratio* |
19.3 | % | 16.8 | % | 19.7 | % | 19.9 | % | 18.9 | % | 18.3 | % | 18.0 | % | 18.6 | % | 19.0 | % | 19.2 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted commission expense ratio |
19.3 | % | 16.8 | % | 19.7 | % | 19.9 | % | 18.9 | % | 18.3 | % | 18.0 | % | 18.6 | % | 19.0 | % | 19.2 | % | |||||||||||||||||||||||||||||||||||||
Reported other expense ratio* |
10.3 | % | 9.8 | % | 11.0 | % | 9.5 | % | 10.8 | % | 9.3 | % | 10.0 | % | 10.0 | % | 9.8 | % | 10.1 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted other expense ratio |
10.3 | % | 9.8 | % | 11.0 | % | 9.5 | % | 10.8 | % | 9.3 | % | 10.0 | % | 10.0 | % | 9.8 | % | 10.1 | % | |||||||||||||||||||||||||||||||||||||
Reported statutory expense ratio* |
29.6 | % | 26.6 | % | 30.7 | % | 29.4 | % | 29.7 | % | 27.6 | % | 28.0 | % | 28.6 | % | 28.9 | % | 29.3 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory expense ratio |
29.6 | % | 26.6 | % | 30.7 | % | 29.4 | % | 29.7 | % | 27.6 | % | 28.0 | % | 28.6 | % | 28.9 | % | 29.3 | % | |||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
87.5 | % | 88.9 | % | 82.6 | % | 97.8 | % | 91.9 | % | 87.1 | % | 88.2 | % | 89.5 | % | 92.3 | % | 89.8 | % | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio before one-time
item |
87.5 | % | 88.9 | % | 82.6 | % | 97.8 | % | 91.9 | % | 87.1 | % | 88.2 | % | 89.5 | % | 92.3 | % | 89.8 | % | |||||||||||||||||||||||||||||||||||||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. |
14
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | ||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 557 | $ | 617 | $ | 555 | $ | 530 | $ | 537 | $ | 587 | $ | 1,174 | $ | 1,124 | $ | 1,656 | $ | 2,209 | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
9 | 12 | (23 | ) | 2 | (25 | ) | 23 | 21 | (2 | ) | (2 | ) | (23 | ) | ||||||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 566 | $ | 629 | $ | 532 | $ | 532 | $ | 512 | $ | 610 | $ | 1,195 | $ | 1,122 | $ | 1,654 | $ | 2,186 | |||||||||||||||||||||||||||||||||||||
Unearned premiums change |
(3 | ) | (78 | ) | 19 | 5 | 8 | (91 | ) | (81 | ) | (84 | ) | (79 | ) | (60 | ) | ||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 563 | $ | 551 | $ | 551 | $ | 537 | $ | 520 | $ | 519 | $ | 1,114 | $ | 1,038 | $ | 1,575 | $ | 2,126 | |||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
83.9 | % | 85.5 | % | 79.1 | % | 92.0 | % | 84.1 | % | 80.3 | % | 84.6 | % | 82.0 | % | 85.4 | % | 83.7 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio |
83.9 | % | 85.5 | % | 79.1 | % | 92.0 | % | 84.1 | % | 80.3 | % | 84.6 | % | 82.0 | % | 85.4 | % | 83.7 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
0.4 | 1.1 | 1.3 | 9.0 | 3.0 | 0.2 | 0.8 | 1.6 | 4.1 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio
excluding catastrophe losses |
83.5 | % | 84.4 | % | 77.8 | % | 83.0 | % | 81.1 | % | 80.1 | % | 83.8 | % | 80.4 | % | 81.3 | % | 80.3 | % | |||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
84.8 | % | 87.5 | % | 78.2 | % | 91.4 | % | 84.4 | % | 82.6 | % | 86.1 | % | 83.5 | % | 86.2 | % | 84.1 | % | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio before
one-time item |
84.8 | % | 87.5 | % | 78.2 | % | 91.4 | % | 84.4 | % | 82.6 | % | 86.1 | % | 83.5 | % | 86.2 | % | 84.1 | % | |||||||||||||||||||||||||||||||||||||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. |
13
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 6/30/2005 | 6/30/2004 | 9/30/2005 | 9/30/2004 | 12/31/2005 | 12/31/2004 | ||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 223 | $ | 170 | $ | 194 | $ | 218 | $ | 224 | $ | 180 | $ | 393 | $ | 404 | $ | 623 | $ | 817 | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
1 | (2 | ) | (3 | ) | (1 | ) | (2 | ) | 0 | (1 | ) | (2 | ) | (3 | ) | (6 | ) | |||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 224 | $ | 168 | $ | 191 | $ | 217 | $ | 222 | $ | 180 | $ | 392 | $ | 402 | $ | 620 | $ | 811 | |||||||||||||||||||||||||||||||||||||
Unearned premiums change |
(22 | ) | 34 | 12 | (21 | ) | (25 | ) | 17 | 8 | (8 | ) | (30 | ) | (18 | ) | |||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 202 | $ | 202 | $ | 203 | $ | 196 | $ | 197 | $ | 197 | $ | 404 | $ | 394 | $ | 590 | $ | 793 | |||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
93.6 | % | 94.0 | % | 96.0 | % | 114.4 | % | 110.1 | % | 98.7 | % | 93.7 | % | 104.3 | % | 107.6 | % | 104.6 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio |
93.6 | % | 94.0 | % | 96.0 | % | 114.4 | % | 110.1 | % | 98.7 | % | 93.7 | % | 104.3 | % | 107.6 | % | 104.6 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
6.2 | 2.0 | 4.2 | 19.3 | 15.7 | 0.0 | 2.1 | 7.8 | 11.6 | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio
excluding catastrophe losses |
87.4 | % | 96.0 | % | 91.8 | % | 95.1 | % | 94.4 | % | 98.9 | % | 91.6 | % | 96.5 | % | 96.0 | % | 94.9 | % | |||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
95.3 | % | 92.7 | % | 94.5 | % | 115.4 | % | 111.6 | % | 98.8 | % | 94.0 | % | 105.2 | % | 108.6 | % | 105.0 | % | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio before
one-time item |
95.3 | % | 92.7 | % | 94.5 | % | 115.4 | % | 111.6 | % | 98.8 | % | 94.0 | % | 105.2 | % | 108.6 | % | 105.0 | % | |||||||||||||||||||||||||||||||||||||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. |
15
1
Page | Status | |||||||
Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures |
3 | 8/4/2005 | ||||||
Consolidated |
||||||||
Quick Reference |
4 | 8/4/2005 | ||||||
Consolidated Statements of Income |
5 | 8/4/2005 | ||||||
CFC and Subsidiary Consolidation Six Months Ended June 30, 2005 |
6 | 8/4/2005 | ||||||
CFC and Subsidiary Consolidation Six Months Ended June 30, 2004 |
7 | 8/4/2005 | ||||||
CFC and Subsidiary Consolidation Three Months Ended June 30, 2005 |
8 | 8/4/2005 | ||||||
CFC and Subsidiary Consolidation Three Months Ended June 30, 2004 |
9 | 8/4/2005 | ||||||
Consolidated Balance Sheets |
10 | 8/4/2005 | ||||||
10-Year Net Income Reconciliation |
11 | 8/4/2005 | ||||||
Quarterly Net Income Reconciliation |
12 | 8/4/2005 | ||||||
Top Holdings
Common Stocks |
13 | 8/4/2005 | ||||||
Property Casualty Insurance Operations
|
||||||||
GAAP Statements of Income |
14 | 8/4/2005 | ||||||
Statutory Income Statements |
15 | 8/4/2005 | ||||||
Statutory Quarterly Analysis Consolidated |
16 | 8/4/2005 | ||||||
Statutory Quarterly Analysis Commercial Lines |
17 | 8/4/2005 | ||||||
Statutory Quarterly Analysis Personal Lines |
18 | 8/4/2005 | ||||||
Direct Written Premiums by Line of Business and State |
19 | 8/4/2005 | ||||||
Reconciliation Data |
||||||||
11-Year Property Casualty Data Consolidated |
20 | 8/4/2005 | ||||||
6-Year Property Casualty Data Commercial Lines |
21 | 8/4/2005 | ||||||
6-Year Property Casualty Data Personal Lines |
22 | 8/4/2005 | ||||||
Quarterly Property Casualty Data Consolidated |
23 | 8/4/2005 | ||||||
Quarterly Property Casualty Data Commercial Lines |
24 | 8/4/2005 | ||||||
Quarterly Property Casualty Data Personal Lines |
25 | 8/4/2005 | ||||||
Quarterly Property Casualty Line of Business |
26 | 8/4/2005 | ||||||
Life Insurance Operations |
||||||||
GAAP Statements of Income |
27 | 8/4/2005 | ||||||
Statutory Statements of Income |
28 | 8/4/2005 | ||||||
Expenses as a Percentage of Premium |
29 | 8/4/2005 |
2
| Operating income: Operating income (readers also may have seen this measure defined as net income before realized investment gains and losses) is calculated by excluding net realized investment gains and losses from net income. Management evaluates operating income to measure the success of pricing, rate and underwriting strategies. While realized investment gains (or losses) are integral to the companys insurance operations over the long term, the determination to realize investment gains or losses in any period may be subject to managements discretion and is independent of the insurance underwriting process. Moreover, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities without actual realization. Management believes that the level of realized investment gains or losses for any particular period, while it may be material, may not fully indicate the performance of ongoing underlying business operations in that period. | |
For these reasons, many investors and shareholders consider operating income to be one of the more meaningful measures for evaluating insurance company performance. Equity analysts who report on the insurance industry and the company generally focus on this metric in their analyses. The company presents operating income so that all investors have what management believes to be a useful supplement to GAAP information. | ||
| Statutory accounting rules: For public reporting, insurance companies prepare financial statements in accordance with GAAP. However, insurers also must calculate certain data according to statutory accounting rules as defined in the NAICs Accounting Practices and Procedures Manual, which may be, and has been, modified by various state insurance departments. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data, study industry trends and compare insurance companies. |
| Written premium: Under statutory accounting rules, written premium is the amount recorded for policies issued and recognized on an annualized basis at the effective date of the policy. Management analyzes trends in written premium to assess business efforts. Earned premium, used in both statutory and GAAP accounting, is calculated ratably over the policy term. The difference between written and earned premium is unearned premium. |
| Written premium adjustment statutory basis only: In 2002, the company refined its estimation process for matching written premiums to policy effective dates, which added $117 million to 2002 written premiums. To better assess ongoing business trends, management may exclude this adjustment when analyzing trends in written premiums and statutory ratios that make use of written premiums. |
| Codification: Adoption of Codification of Statutory Accounting Principles was required for Ohio-based insurance companies effective January 1, 2001. The adoption of Codification changed the manner in which the company recognized statutory property casualty written premiums. As a result, 2001 statutory written premiums included $402 million to account for unbooked premiums related to policies with effective dates prior to January 1, 2001. To better assess ongoing business trends, management excludes this $402 million when analyzing written premiums and statutory ratios that make use of written premiums. |
| Life insurance gross written premiums: In analyzing the life insurance companys gross written premiums, management excludes five larger, single-pay life insurance policies (bank-owned life insurance or BOLIs) written in 2004, 2002, 2000 and 1999 to focus on the trend in premiums written through the independent agency distribution channel. |
| One-time charges or adjustments: Management analyzes earnings and profitability excluding the impact of one-time items. |
o | In 2003, as the result of a settlement negotiated with a vendor, pretax results included the recovery of $23 million of the $39 million one-time, pretax charge incurred in 2000. | ||
o | In 2000, the company recorded a one-time charge of $39 million, pre-tax, to write down previously capitalized costs related to the development of software to process property casualty policies. | ||
o | In 2000, the company earned $5 million in interest in the first quarter from a $303 million single-premium BOLI policy that was booked at the end of 1999 and segregated as a separate account effective April 1, 2000. Investment income and realized investment gains and losses from separate accounts generally accrue directly to the contract holder and, therefore, are not included in the companys consolidated financials. |
3
(Dollars in millions except share data) | ||||
Revenues: |
||||
Commercial lines net written premiums |
$ | 568 | ||
Year-over-year
percentage change |
10.6 | % | ||
Personal lines net written premiums |
$ | 224 | ||
Year-over-year
percentage change |
1.1 | % | ||
Property casualty net written premiums |
$ | 791 | ||
Year-over-year percentage change |
7.7 | % | ||
Commercial lines net earned premiums |
$ | 563 | ||
Year-over-year percentage change |
8.3 | % | ||
Personal lines net earned premiums |
$ | 202 | ||
Year-over-year percentage change |
2.5 | % | ||
Property casualty net earned premiums |
$ | 765 | ||
Year-over-year percentage change |
6.7 | % | ||
Life and accident and health net earned premiums |
$ | 29 | ||
Year-over-year percentage change |
8.3 | % | ||
Investment income |
$ | 129 | ||
Year-over-year percentage change |
7.3 | % | ||
Realized gains on investments |
$ | 13 | ||
Year-over-year percentage change |
(76.4 | )% | ||
Other income |
$ | 4 | ||
Year-over-year percentage change |
30.6 | % | ||
Total revenues |
$ | 940 | ||
Year-over-year percentage change |
1.9 | % | ||
Income: |
||||
Operating income |
$ | 150 | ||
Year-over-year percentage change |
25.6 | % | ||
Net realized investment gains and losses |
$ | 8 | ||
Year-over-year percentage change |
(77.9 | )% | ||
Net income |
$ | 158 | ||
Year-over-year percentage change |
1.6 | % | ||
Per share: (diluted) |
||||
Operating income |
$ | 0.84 | ||
Year-over-year percentage change |
25.4 | % | ||
Net realized investment gains and losses |
$ | 0.05 | ||
Year-over-year percentage change |
(75.0 | )% | ||
Net income |
$ | 0.89 | ||
Year-over-year percentage change |
2.3 | % | ||
Book value |
$ | 35.08 | ||
Year-over-year percentage change |
0.5 | % | ||
Weighted average shares diluted |
177,097,493 | |||
Year-over-year percentage change |
(0.9 | )% | ||
Benefits and expenses: |
||||
Commercial lines losses |
$ | 308 | ||
Year-over-year percentage change |
10.1 | % | ||
Personal lines losses |
$ | 128 | ||
Year-over-year percentage change |
(20.9) | % | ||
Property casualty losses |
$ | 436 | ||
Year-over-year percentage change |
(1.2) | % | ||
Life and accident and health losses and policy benefits |
$ | 26 | ||
Year-over-year percentage change |
0.5 | % | ||
Operating expenses |
$ | 251 | ||
Year-over-year percentage change |
9.7 | % | ||
Interest expenses |
$ | 13 | ||
Year-over-year percentage change |
55.6 | % | ||
Total expenses |
$ | 725 | ||
Year-over-year percentage change |
2.3 | % | ||
Income before income taxes |
$ | 215 | ||
Year-over-year percentage change |
0.5 | % | ||
Total income tax |
$ | 57 | ||
Year-over-year percentage change |
(2.4) | % | ||
Effective tax rate |
26.6 | % | ||
Ratios: |
||||
Commercial lines GAAP combined ratio |
84.8 | % | ||
Personal lines GAAP combined ratio |
95.3 | % | ||
Property casualty GAAP combined ratio |
87.5 | % | ||
Commercial lines STAT combined ratio |
83.9 | % | ||
Personal lines STAT combined ratio |
93.6 | % | ||
Property casualty STAT combined ratio |
86.6 | % | ||
Return on equity based upon net income (annualized) |
10.4 | % | ||
Return on equity based upon operating income (annualized) |
13.8 | % | ||
Balance Sheet: |
||||
Fixed maturity investments |
$ | 5,412 | ||
Equity securities |
7,148 | |||
Other invested assets |
40 | |||
Total invested assets |
$ | 12,600 | ||
Property casualty and life loss and loss expense reserves |
$ | 3,608 | ||
Total debt |
$ | 791 | ||
Shareholders equity |
$ | 6,132 |
4
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||
2005 | 2004 | Change | % Change | 2005 | 2004 | Change | % Change | ||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||
Property casualty |
$ | 807,297,492 | $ | 757,427,656 | $ | 49,869,836 | 6.58 | $ | 1,601,793,433 | $ | 1,511,077,308 | $ | 90,716,125 | 6.00 | |||||||||||||||||||
Life |
38,053,773 | 33,745,792 | 4,307,981 | 12.77 | 69,570,579 | 64,339,306 | 5,231,273 | 8.13 | |||||||||||||||||||||||||
Accident health |
1,436,094 | 1,392,820 | 43,274 | 3.11 | 3,089,251 | 2,973,784 | 115,467 | 3.88 | |||||||||||||||||||||||||
Premiums ceded |
(53,058,357 | ) | (48,568,942 | ) | (4,489,415 | ) | (9.24 | ) | (104,008,726 | ) | (94,320,708 | ) | (9,688,018 | ) | (10.27 | ) | |||||||||||||||||
Total premiums earned |
793,729,002 | 743,997,326 | 49,731,676 | 6.68 | 1,570,444,537 | 1,484,069,690 | 86,374,847 | 5.82 | |||||||||||||||||||||||||
Investment income |
129,327,901 | 120,515,574 | 8,812,327 | 7.31 | 256,367,172 | 240,822,768 | 15,544,404 | 6.45 | |||||||||||||||||||||||||
Realized gain on investments |
12,900,303 | 55,098,831 | (42,198,528 | ) | (76.59 | ) | 21,685,286 | 61,807,307 | (40,122,021 | ) | (64.91 | ) | |||||||||||||||||||||
Other income |
3,845,636 | 2,944,656 | 900,980 | 30.60 | 7,594,030 | 6,402,081 | 1,191,949 | 18.62 | |||||||||||||||||||||||||
Total revenues |
$ | 939,802,842 | $ | 922,556,387 | $ | 17,246,455 | 1.87 | $ | 1,856,091,025 | $ | 1,793,101,846 | $ | 62,989,179 | 3.51 | |||||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 499,176,791 | $ | 525,210,564 | $ | (26,033,773 | ) | (4.96 | ) | $ | 1,037,034,038 | $ | 986,324,213 | $ | 50,709,825 | 5.14 | |||||||||||||||||
Reinsurance recoveries |
(38,552,521 | ) | (59,444,839 | ) | 20,892,318 | 35.15 | (95,227,939 | ) | (86,975,866 | ) | (8,252,073 | ) | (9.49 | ) | |||||||||||||||||||
Commissions |
165,775,469 | 150,208,650 | 15,566,819 | 10.36 | 316,215,128 | 311,380,600 | 4,834,528 | 1.55 | |||||||||||||||||||||||||
Other operating expenses |
72,558,984 | 67,024,755 | 5,534,229 | 8.26 | 139,503,234 | 128,722,741 | 10,780,493 | 8.37 | |||||||||||||||||||||||||
Interest expense |
12,888,705 | 8,285,105 | 4,603,600 | 55.56 | 25,846,835 | 16,611,180 | 9,235,655 | 55.60 | |||||||||||||||||||||||||
Taxes, licenses & fees |
18,267,417 | 20,185,296 | (1,917,879 | ) | (9.50 | ) | 35,123,104 | 39,459,007 | (4,335,903 | ) | (10.99 | ) | |||||||||||||||||||||
Incr deferred acq expense |
(7,455,455 | ) | (6,034,212 | ) | (1,421,243 | ) | (23.55 | ) | (18,824,447 | ) | (23,635,286 | ) | 4,810,839 | 20.35 | |||||||||||||||||||
Other expenses |
2,187,945 | 3,213,308 | (1,025,363 | ) | (31.91 | ) | 6,035,551 | 6,042,781 | (7,230 | ) | (0.12 | ) | |||||||||||||||||||||
Total expenses |
$ | 724,847,335 | $ | 708,648,627 | $ | 16,198,708 | 2.29 | $ | 1,445,705,504 | $ | 1,377,929,370 | $ | 67,776,134 | 4.92 | |||||||||||||||||||
Income before income taxes |
$ | 214,955,507 | $ | 213,907,760 | $ | 1,047,747 | 0.49 | $ | 410,385,521 | $ | 415,172,476 | $ | (4,786,955 | ) | (1.15 | ) | |||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||
Current operating income |
$ | 52,030,764 | $ | 23,509,245 | $ | 28,521,519 | 121.32 | $ | 99,339,804 | $ | 68,875,326 | $ | 30,464,478 | 44.23 | |||||||||||||||||||
Current realized investments gains and losses |
4,738,332 | 19,073,757 | (14,335,425 | ) | (75.16 | ) | 7,646,452 | 21,421,722 | (13,775,270 | ) | (64.31 | ) | |||||||||||||||||||||
Deferred |
390,078 | 16,005,141 | (15,615,063 | ) | (97.56 | ) | 1,246,528 | 23,437,200 | (22,190,672 | ) | (94.68 | ) | |||||||||||||||||||||
Total income taxes |
$ | 57,159,174 | $ | 58,588,143 | $ | (1,428,969 | ) | (2.44 | ) | $ | 108,232,784 | $ | 113,734,248 | $ | (5,501,464 | ) | (4.84 | ) | |||||||||||||||
Net income |
$ | 157,796,333 | $ | 155,319,617 | $ | 2,476,716 | 1.59 | $ | 302,152,737 | $ | 301,438,228 | $ | 714,509 | 0.24 | |||||||||||||||||||
Comprehensive net income |
$ | 209,090,157 | $ | (50,983,132 | ) | $ | 260,073,289 | 510.12 | $ | 20,010,966 | $ | (4,530,560 | ) | $ | 24,541,526 | 541.69 | |||||||||||||||||
Operating income |
$ | 149,634,362 | $ | 119,294,546 | $ | 30,339,816 | 25.43 | $ | 288,113,903 | $ | 261,052,643 | $ | 27,061,260 | 10.37 | |||||||||||||||||||
Net realized investments gains and losses |
$ | 8,161,971 | $ | 36,025,075 | $ | (27,863,104 | ) | (77.34 | ) | $ | 14,038,834 | $ | 40,385,585 | $ | (26,346,751 | ) | (65.24 | ) | |||||||||||||||
Net income per share: |
|||||||||||||||||||||||||||||||||
Operating income |
$ | 0.85 | $ | 0.68 | $ | 0.17 | 25.00 | $ | 1.64 | $ | 1.48 | $ | 0.16 | 10.81 | |||||||||||||||||||
Net realized investments gains
and losses |
0.05 | 0.20 | (0.15 | ) | (75.00 | ) | 0.08 | 0.23 | (0.15 | ) | (65.22 | ) | |||||||||||||||||||||
Net income per share (basic) |
$ | 0.90 | $ | 0.88 | $ | 0.02 | 2.27 | $ | 1.72 | $ | 1.71 | $ | 0.01 | 0.58 | |||||||||||||||||||
Operating income |
$ | 0.84 | $ | 0.67 | $ | 0.17 | 25.37 | $ | 1.62 | $ | 1.46 | $ | 0.16 | 10.96 | |||||||||||||||||||
Net realized investments gains
and losses |
0.05 | 0.20 | (0.15 | ) | (75.00 | ) | 0.08 | 0.23 | (0.15 | ) | (65.22 | ) | |||||||||||||||||||||
Net income per share (diluted) |
$ | 0.89 | $ | 0.87 | $ | 0.02 | 2.30 | $ | 1.70 | $ | 1.69 | $ | 0.01 | 0.59 | |||||||||||||||||||
Dividends per share: |
|||||||||||||||||||||||||||||||||
Paid |
$ | 0.2900 | $ | 0.2620 | $ | 0.0280 | 10.69 | $ | 0.5520 | $ | 0.5000 | $ | 0.0520 | 10.40 | |||||||||||||||||||
Declared |
$ | 0.3050 | $ | 0.2620 | $ | 0.0430 | 16.41 | $ | 0.5950 | $ | 0.5100 | $ | 0.0850 | 16.67 | |||||||||||||||||||
Number of shares: |
|||||||||||||||||||||||||||||||||
Weighted avg basic |
175,226,612 | 176,654,359 | (1,427,747 | ) | (0.81 | ) | 175,389,421 | 176,703,010 | (1,313,589 | ) | (0.74 | ) | |||||||||||||||||||||
Weighted avg diluted |
177,097,493 | 178,684,929 | (1,587,436 | ) | (0.89 | ) | 177,451,366 | 178,658,935 | (1,207,569 | ) | (0.68 | ) | |||||||||||||||||||||
5
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | ELIM | |||||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||||
Property casualty |
$ | 1,601,793,433 | $ | 0 | $ | 1,602,171,328 | $ | 0 | $ | 0 | $ | 0 | $ | (377,895 | ) | ||||||||||||||||||||
Life |
69,570,579 | 0 | 0 | 69,570,579 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Accident health |
3,089,251 | 0 | 0 | 3,089,251 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Premiums ceded |
(104,008,726 | ) | 0 | (84,348,733 | ) | (19,659,993 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Total earned premium |
1,570,444,537 | 0 | 1,517,822,595 | 52,999,837 | 0 | 0 | (377,895 | ) | |||||||||||||||||||||||||||
Investment income |
256,367,172 | 42,321,541 | 163,734,128 | 48,396,996 | 783,018 | 63,053 | 1,068,436 | ||||||||||||||||||||||||||||
Realized gain on investments |
21,685,286 | (2,084,034 | ) | 15,467,723 | 7,644,838 | 0 | 8,056 | 648,703 | |||||||||||||||||||||||||||
Other income |
7,594,030 | 5,901,324 | 1,650,935 | 1,594,320 | 4,741,900 | 1,112,801 | (7,407,250 | ) | |||||||||||||||||||||||||||
Total revenues |
$ | 1,856,091,025 | $ | 46,138,831 | $ | 1,698,675,381 | $ | 110,635,991 | $ | 5,524,918 | $ | 1,183,910 | $ | (6,068,006 | ) | ||||||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 1,037,034,038 | $ | 0 | $ | 958,955,510 | $ | 79,180,808 | $ | 0 | $ | 0 | $ | (1,102,280 | ) | ||||||||||||||||||||
Reinsurance recoveries |
(95,227,939 | ) | 0 | (65,657,710 | ) | (29,570,229 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Commissions |
316,215,128 | 0 | 299,223,059 | 16,992,069 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Other operating expenses |
139,503,234 | 9,903,322 | 121,970,560 | 11,264,457 | 2,157,663 | 210,806 | (6,003,574 | ) | |||||||||||||||||||||||||||
Interest expense |
25,846,835 | 25,850,396 | 0 | 0 | 675,730 | 0 | (679,291 | ) | |||||||||||||||||||||||||||
Taxes, licenses & fees |
35,123,104 | 351,084 | 32,310,566 | 2,151,112 | 292,094 | 18,248 | 0 | ||||||||||||||||||||||||||||
Incr deferred acq expenses |
(18,824,447 | ) | 0 | (14,041,675 | ) | (4,782,772 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Other expenses |
6,035,551 | 0 | 6,035,443 | 108 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses |
$ | 1,445,705,504 | $ | 36,104,802 | $ | 1,338,795,753 | $ | 75,235,553 | $ | 3,125,487 | $ | 229,054 | $ | (7,785,145 | ) | ||||||||||||||||||||
Income before income taxes |
$ | 410,385,521 | $ | 10,034,029 | $ | 359,879,628 | $ | 35,400,438 | $ | 2,399,431 | $ | 954,856 | $ | 1,717,139 | |||||||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||||
Current operating income |
$ | 99,339,804 | $ | (11,230,521 | ) | $ | 103,005,087 | $ | 6,245,875 | $ | 1,002,354 | $ | 317,009 | $ | | ||||||||||||||||||||
Current capital gains/losses |
7,646,452 | (443,270 | ) | 5,413,703 | 2,675,693 | 0 | 326 | 0 | |||||||||||||||||||||||||||
Deferred |
1,246,528 | 5,541,677 | (7,851,378 | ) | 3,123,875 | (168,494 | ) | (151 | ) | 600,999 | |||||||||||||||||||||||||
Total income tax |
$ | 108,232,784 | $ | (6,132,114 | ) | $ | 100,567,412 | $ | 12,045,443 | $ | 833,860 | $ | 317,184 | $ | 600,999 | ||||||||||||||||||||
Net income current year |
$ | 302,152,737 | $ | 16,166,143 | $ | 259,312,216 | $ | 23,354,995 | $ | 1,565,571 | $ | 637,672 | $ | 1,116,140 | |||||||||||||||||||||
Net income prior year |
$ | 301,438,228 | $ | 47,243,058 | $ | 323,579,153 | $ | 18,656,595 | $ | 1,431,148 | $ | 571,461 | $ | (90,043,187 | ) | ||||||||||||||||||||
Change in net income |
0.2 | % | -65.8 | % | -19.9 | % | 25.2 | % | 9.4 | % | 11.6 | % |
6
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | ELIM | |||||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||||
Property casualty |
$ | 1,511,077,308 | $ | 0 | $ | 1,511,077,308 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||||||
Life |
64,339,306 | 0 | 0 | 64,339,306 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Accident health |
2,973,784 | 0 | 0 | 2,973,784 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Premiums ceded |
(94,320,708 | ) | 0 | (78,646,281 | ) | (15,674,427 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Total earned premium |
1,484,069,690 | 0 | 1,432,431,027 | 51,638,663 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Investment income |
240,822,768 | 65,429,445 | 130,432,779 | 44,126,900 | 797,690 | 35,954 | 0 | ||||||||||||||||||||||||||||
Realized gain on investments |
61,807,307 | 8,162,598 | 187,482,942 | 4,698,869 | 0 | (9,123 | ) | (138,527,979 | ) | ||||||||||||||||||||||||||
Other income |
6,402,081 | 5,105,116 | 1,496,911 | 1,483,565 | 4,333,967 | 1,037,905 | (7,055,383 | ) | |||||||||||||||||||||||||||
Total revenue |
$ | 1,793,101,846 | $ | 78,697,159 | $ | 1,751,843,659 | $ | 101,947,997 | $ | 5,131,657 | $ | 1,064,736 | $ | (145,583,362 | ) | ||||||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 986,324,214 | $ | 0 | $ | 906,248,054 | $ | 81,170,392 | $ | 0 | $ | 0 | $ | (1,094,232 | ) | ||||||||||||||||||||
Reinsurance recoveries |
(86,975,866 | ) | 0 | (53,616,903 | ) | (33,358,963 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Commissions |
311,380,600 | 0 | 295,968,362 | 15,412,238 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Other operating expenses |
128,722,741 | 9,190,833 | 110,852,517 | 12,443,398 | 1,600,387 | 184,613 | (5,549,007 | ) | |||||||||||||||||||||||||||
Interest expense |
16,611,180 | 16,010,112 | 0 | 0 | 1,013,211 | 0 | (412,143 | ) | |||||||||||||||||||||||||||
Taxes, licenses & fees |
39,459,007 | 1,087,996 | 35,962,601 | 2,084,414 | 310,869 | 13,127 | 0 | ||||||||||||||||||||||||||||
Incr deferred acq expenses |
(23,635,286 | ) | 0 | (19,681,035 | ) | (3,954,251 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Other expenses |
6,042,781 | 0 | 6,042,676 | 105 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses |
$ | 1,377,929,371 | $ | 26,288,941 | $ | 1,281,776,272 | $ | 73,797,333 | $ | 2,924,467 | $ | 197,740 | $ | (7,055,382 | ) | ||||||||||||||||||||
Income before income taxes |
$ | 415,172,475 | $ | 52,408,218 | $ | 470,067,387 | $ | 28,150,664 | $ | 2,207,190 | $ | 866,996 | $ | (138,527,980 | ) | ||||||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||||
Current operating income |
$ | 20,390,533 | $ | (22,429,458 | ) | $ | 35,536,740 | $ | 5,784,353 | $ | 1,201,272 | $ | 297,626 | $ | | ||||||||||||||||||||
Current capital gains/losses |
21,421,722 | 2,646,075 | 65,619,029 | 1,644,604 | 0 | (3,193 | ) | (48,484,793 | ) | ||||||||||||||||||||||||||
Deferred |
71,921,993 | 24,948,543 | 45,332,465 | 2,065,113 | (425,230 | ) | 1,102 | 0 | |||||||||||||||||||||||||||
Total income tax |
$ | 113,734,248 | $ | 5,165,160 | $ | 146,488,234 | $ | 9,494,070 | $ | 776,042 | $ | 295,535 | $ | (48,484,793 | ) | ||||||||||||||||||||
Net income current year |
$ | 301,438,227 | $ | 47,243,058 | $ | 323,579,153 | $ | 18,656,594 | $ | 1,431,148 | $ | 571,461 | $ | (90,043,187 | ) | ||||||||||||||||||||
Net income prior year |
$ | 141,102,477 | $ | 24,517,533 | $ | 108,607,539 | $ | 6,252,125 | $ | 1,221,234 | $ | 504,047 | $ | (1 | ) | ||||||||||||||||||||
Change in net income |
113.6 | % | 92.7 | % | 197.9 | % | 198.4 | % | 17.2 | % | 13.4 | % |
7
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | ELIM | |||||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||||
Property casualty |
$ | 807,297,492 | $ | 0 | $ | 807,470,314 | $ | 0 | $ | 0 | $ | 0 | $ | (172,822 | ) | ||||||||||||||||||||
Life |
38,053,773 | 0 | 0 | 38,053,773 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Accident health |
1,436,094 | 0 | 0 | 1,436,094 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Premiums ceded |
(53,058,357 | ) | 0 | (42,791,656 | ) | (10,266,701 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Total earned premium |
793,729,002 | 0 | 764,678,658 | 29,223,166 | 0 | 0 | (172,822 | ) | |||||||||||||||||||||||||||
Investment income |
129,327,901 | 21,228,766 | 82,982,613 | 24,422,519 | 356,320 | 33,178 | 304,505 | ||||||||||||||||||||||||||||
Realized gain on investments |
12,900,303 | (2,442,069 | ) | 9,414,823 | 5,352,141 | 0 | 6,617 | 568,791 | |||||||||||||||||||||||||||
Other income |
3,845,636 | 3,051,964 | 722,052 | 846,798 | 2,400,047 | 561,390 | (3,736,615 | ) | |||||||||||||||||||||||||||
Total revenue |
$ | 939,802,842 | $ | 21,838,661 | $ | 857,798,146 | $ | 59,844,624 | $ | 2,756,367 | $ | 601,185 | $ | (3,036,141 | ) | ||||||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 499,176,791 | $ | 0 | $ | 455,193,701 | $ | 44,534,290 | $ | 0 | $ | 0 | $ | (551,200 | ) | ||||||||||||||||||||
Reinsurance recoveries |
(38,552,521 | ) | 0 | (19,742,198 | ) | (18,810,323 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Commissions |
165,775,469 | 0 | 157,079,211 | 8,696,258 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Other operating expenses |
72,558,984 | 4,003,223 | 63,597,860 | 6,726,436 | 1,132,022 | 89,035 | (2,989,592 | ) | |||||||||||||||||||||||||||
Interest expense |
12,888,705 | 12,888,705 | 0 | 0 | 368,645 | 0 | (368,645 | ) | |||||||||||||||||||||||||||
Taxes, licenses & fees |
18,267,417 | 522,757 | 16,534,001 | 1,073,625 | 156,034 | (19,000 | ) | 0 | |||||||||||||||||||||||||||
Incr deferred acq expenses |
(7,455,455 | ) | 0 | (5,422,878 | ) | (2,032,577 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Other expenses |
2,187,945 | 0 | 2,187,901 | 44 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses |
$ | 724,847,335 | $ | 17,414,685 | $ | 669,427,598 | $ | 40,187,753 | $ | 1,656,701 | $ | 70,035 | $ | (3,909,437 | ) | ||||||||||||||||||||
Income before income taxes |
$ | 214,955,507 | $ | 4,423,976 | $ | 188,370,548 | $ | 19,656,871 | $ | 1,099,666 | $ | 531,150 | $ | 873,296 | |||||||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||||
Current operating income |
$ | 52,030,764 | $ | (3,781,881 | ) | $ | 52,137,573 | $ | 3,031,405 | $ | 467,784 | $ | 175,883 | $ | 0 | ||||||||||||||||||||
Current capital gains/losses |
4,738,332 | (598,727 | ) | 3,463,484 | 1,873,249 | 0 | 326 | 0 | |||||||||||||||||||||||||||
Deferred |
390,078 | 1,099,340 | (2,740,809 | ) | 1,811,804 | (85,924 | ) | 13 | 305,654 | ||||||||||||||||||||||||||
Total income tax |
$ | 57,159,174 | $ | (3,281,268 | ) | $ | 52,860,248 | $ | 6,716,458 | $ | 381,860 | $ | 176,222 | $ | 305,654 | ||||||||||||||||||||
Net income current year |
$ | 157,796,333 | $ | 7,705,244 | $ | 135,510,300 | $ | 12,940,413 | $ | 717,806 | $ | 354,928 | $ | 567,642 | |||||||||||||||||||||
Net income prior year |
$ | 155,319,622 | $ | 27,121,903 | $ | 206,982,220 | $ | 10,213,346 | $ | 758,476 | $ | 286,864 | $ | (90,043,187 | ) | ||||||||||||||||||||
Change in net income |
1.6 | % | -71.6 | % | -34.5 | % | 26.7 | % | -5.4 | % | 23.7 | % |
8
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | ELIM | |||||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||||
Property casualty |
$ | 757,427,656 | $ | 0 | $ | 757,179,115 | $ | 0 | $ | 0 | $ | 0 | $ | 248,541 | |||||||||||||||||||||
Life |
33,745,792 | 0 | 0 | 33,745,792 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Accident health |
1,392,820 | 0 | 0 | 1,392,820 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Premiums ceded |
(48,568,942 | ) | 0 | (40,403,051 | ) | (8,165,891 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Total earned premium |
743,997,326 | 0 | 716,776,064 | 26,972,721 | 0 | 0 | 248,541 | ||||||||||||||||||||||||||||
Investment income |
120,515,575 | 31,538,424 | 65,987,117 | 22,172,675 | 797,690 | 19,669 | 0 | ||||||||||||||||||||||||||||
Realized gain on investments |
55,098,831 | 9,815,704 | 179,354,949 | 4,465,280 | 0 | (9,123 | ) | (138,527,979 | ) | ||||||||||||||||||||||||||
Other income |
2,944,654 | 2,571,416 | 751,428 | 753,782 | 1,853,947 | 519,444 | (3,505,363 | ) | |||||||||||||||||||||||||||
Total revenue |
$ | 922,556,386 | $ | 43,925,544 | $ | 962,869,558 | $ | 54,364,458 | $ | 2,651,637 | $ | 529,990 | $ | (141,784,801 | ) | ||||||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 525,210,565 | $ | 0 | $ | 482,394,308 | $ | 43,364,974 | $ | 0 | $ | 0 | $ | (548,717 | ) | ||||||||||||||||||||
Reinsurance recoveries |
(59,444,840 | ) | 0 | (41,679,481 | ) | (17,765,359 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Commissions |
150,208,650 | 0 | 142,141,041 | 8,067,609 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Other operating expenses |
67,024,754 | 4,138,074 | 57,733,889 | 6,794,170 | 805,752 | 88,408 | (2,535,539 | ) | |||||||||||||||||||||||||||
Interest expense |
8,285,104 | 7,948,360 | 0 | 0 | 509,309 | 0 | (172,565 | ) | |||||||||||||||||||||||||||
Taxes, licenses & fees |
20,185,296 | 543,989 | 18,504,707 | 967,678 | 162,395 | 6,527 | 0 | ||||||||||||||||||||||||||||
Incr deferred acq expenses |
(6,034,212 | ) | 0 | (3,534,923 | ) | (2,499,289 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||
Other expenses |
3,213,307 | 0 | 3,213,238 | 69 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses |
$ | 708,648,624 | $ | 12,630,423 | $ | 658,772,779 | $ | 38,929,852 | $ | 1,477,456 | $ | 94,935 | $ | (3,256,821 | ) | ||||||||||||||||||||
Income before income taxes |
$ | 213,907,762 | $ | 31,295,121 | $ | 304,096,779 | $ | 15,434,606 | $ | 1,174,181 | $ | 435,055 | $ | (138,527,980 | ) | ||||||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||||
Current operating income |
$ | (24,975,547 | ) | $ | (19,716,559 | ) | $ | (7,465,338 | ) | $ | 1,476,390 | $ | 579,478 | $ | 150,482 | $ | 0 | ||||||||||||||||||
Current capital gains/losses |
19,073,755 | 3,224,662 | 62,774,231 | 1,562,848 | 0 | (3,193 | ) | (48,484,793 | ) | ||||||||||||||||||||||||||
Deferred |
64,489,933 | 20,665,115 | 41,805,666 | 2,182,023 | (163,773 | ) | 902 | 0 | |||||||||||||||||||||||||||
Total income tax |
$ | 58,588,141 | $ | 4,173,218 | $ | 97,114,559 | $ | 5,221,261 | $ | 415,705 | $ | 148,191 | $ | (48,484,793 | ) | ||||||||||||||||||||
Net income current year |
$ | 155,319,621 | $ | 27,121,903 | $ | 206,982,220 | $ | 10,213,345 | $ | 758,476 | $ | 286,864 | $ | (90,043,187 | ) | ||||||||||||||||||||
Net income prior year |
$ | 84,476,619 | $ | 18,068,400 | $ | 58,844,510 | $ | 6,753,663 | $ | 567,799 | $ | 242,249 | $ | (2 | ) | ||||||||||||||||||||
Change in net income |
83.9 | % | 50.1 | % | 251.7 | % | 51.2 | % | 33.6 | % | 18.4 | % |
9
June 30, | December 31, | |||||||
(Dollars in millions except per share data) | 2005 | 2004 | ||||||
(unaudited) | ||||||||
Assets |
||||||||
Investments |
||||||||
Fixed maturities, at fair value (amortized cost: 2005$5,179; 2004$4,854) |
$ | 5,412 | $ | 5,141 | ||||
Equity securities, at fair value (cost: 2005$1,982; 2004$1,945) |
7,148 | 7,498 | ||||||
Other invested assets |
40 | 38 | ||||||
Cash |
172 | 306 | ||||||
Investment income receivable |
113 | 107 | ||||||
Finance receivable |
97 | 95 | ||||||
Premiums receivable |
1,189 | 1,119 | ||||||
Reinsurance receivable |
685 | 680 | ||||||
Prepaid reinsurance premiums |
15 | 15 | ||||||
Deferred policy acquisition costs |
421 | 400 | ||||||
Property and equipment, net, for company use (accumulated depreciation: 2005$219; 2004$206) |
164 | 156 | ||||||
Other assets |
79 | 75 | ||||||
Separate accounts |
489 | 477 | ||||||
Total assets |
$ | 16,024 | $ | 16,107 | ||||
Liabilities |
||||||||
Insurance reserves |
||||||||
Losses and loss expense |
$ | 3,608 | $ | 3,549 | ||||
Life policy reserves |
1,286 | 1,194 | ||||||
Unearned premiums |
1,610 | 1,539 | ||||||
Other liabilities |
424 | 474 | ||||||
Deferred income tax |
1,684 | 1,834 | ||||||
Notes payable |
0 | 0 | ||||||
6.125% senior debenture due 2034 |
371 | 371 | ||||||
6.90% senior debenture due 2028 |
28 | 420 | ||||||
6.92% senior debenture due 2028 |
392 | 0 | ||||||
Separate accounts |
489 | 477 | ||||||
Total liabilities |
9,892 | 9,858 | ||||||
Shareholders equity |
||||||||
Common stock, par value-$2 per share; authorized: 2005 500 million shares, 2004-
200 million shares; issued: 2005-194 million shares, 2004-185 million shares |
389 | 370 | ||||||
Paid-in capital |
964 | 618 | ||||||
Retained earnings |
1,894 | 2,057 | ||||||
Accumulated other comprehensive income-unrealized gains on investments and derivatives |
3,505 | 3,787 | ||||||
Treasury stock at cost (200519 million shares, 200418 million shares) |
(620 | ) | (583 | ) | ||||
Total shareholders equity |
6,132 | 6,249 | ||||||
Total liabilities and shareholders equity |
$ | 16,024 | $ | 16,107 | ||||
10
Years ended December 31, | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions except per share data) | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 | 1996 | 1995 | ||||||||||||||||||||||||||||||
Net income |
$ | 584 | $ | 374 | $ | 238 | $ | 193 | $ | 118 | $ | 255 | $ | 242 | $ | 299 | $ | 224 | $ | 227 | ||||||||||||||||||||
One-time item |
0 | 15 | 0 | 0 | (25 | ) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Net income before one-time item |
$ | 584 | $ | 359 | $ | 238 | $ | 193 | $ | 143 | $ | 255 | $ | 242 | $ | 299 | $ | 224 | $ | 227 | ||||||||||||||||||||
Net realized investment gains and losses |
60 | (27 | ) | (62 | ) | (17 | ) | (2 | ) | 0 | 43 | 45 | 31 | 20 | ||||||||||||||||||||||||||
Operating income before one-time item |
$ | 524 | $ | 386 | $ | 300 | $ | 210 | $ | 145 | $ | 255 | $ | 199 | $ | 254 | $ | 193 | $ | 207 | ||||||||||||||||||||
Less catastrophe losses |
(96 | ) | (63 | ) | (57 | ) | (42 | ) | (33 | ) | (24 | ) | (61 | ) | (17 | ) | (42 | ) | (18 | ) | ||||||||||||||||||||
Operating income before catastrophe losses and one-time item |
$ | 620 | $ | 449 | $ | 357 | $ | 252 | $ | 178 | $ | 279 | $ | 260 | $ | 271 | $ | 235 | $ | 225 | ||||||||||||||||||||
Diluted per share data |
||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 3.28 | $ | 2.10 | $ | 1.32 | $ | 1.08 | $ | 0.67 | $ | 1.37 | $ | 1.28 | $ | 1.61 | $ | 1.17 | $ | 1.19 | ||||||||||||||||||||
One-time item |
0.00 | 0.09 | 0.00 | 0.00 | (0.14 | ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||
Net income before one-time item |
$ | 3.28 | $ | 2.01 | $ | 1.32 | $ | 1.07 | $ | 0.81 | $ | 1.37 | $ | 1.28 | $ | 1.61 | $ | 1.17 | $ | 1.19 | ||||||||||||||||||||
Net realized investment gains and losses |
0.35 | (0.15 | ) | (0.34 | ) | (0.10 | ) | (0.01 | ) | 0.00 | 0.23 | 0.26 | 0.16 | 0.10 | ||||||||||||||||||||||||||
Operating income before one-time item |
$ | 2.93 | $ | 2.16 | $ | 1.67 | $ | 1.17 | $ | 0.82 | $ | 1.37 | $ | 1.05 | $ | 1.35 | $ | 1.01 | $ | 1.09 | ||||||||||||||||||||
Less catastrophe losses |
(0.54 | ) | (0.35 | ) | (0.31 | ) | (0.23 | ) | (0.18 | ) | (0.13 | ) | (0.32 | ) | (0.13 | ) | (0.33 | ) | (0.14 | ) | ||||||||||||||||||||
Operating income before catastrophe losses and one-time item |
$ | 3.47 | $ | 2.51 | $ | 1.98 | $ | 1.40 | $ | 1.00 | $ | 1.50 | $ | 1.37 | $ | 1.49 | $ | 1.35 | $ | 1.23 | ||||||||||||||||||||
Return on equity |
||||||||||||||||||||||||||||||||||||||||
Return on average equity |
9.4 | % | 6.3 | % | 4.1 | % | 3.2 | % | 2.1 | % | 4.6 | % | 4.7 | % | 7.6 | % | 7.7 | % | 9.9 | % | ||||||||||||||||||||
One-time item |
0.0 | (0.3 | ) | 0.0 | 0.0 | 0.4 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||
Return on average equity before one-time item |
9.4 | % | 6.0 | % | 4.1 | % | 3.2 | % | 2.5 | % | 4.6 | % | 4.7 | % | 7.6 | % | 7.7 | % | 9.9 | % | ||||||||||||||||||||
Return on equity based on comprehensive income |
||||||||||||||||||||||||||||||||||||||||
ROE based on comprehensive income |
4.6 | % | 13.8 | % | (4.0 | %) | 2.5 | % | 13.1 | % | 1.9 | % | 19.6 | % | 42.6 | % | 20.3 | % | 34.2 | % | ||||||||||||||||||||
One-time item |
0.0 | (0.3 | ) | 0.0 | 0.0 | 0.4 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||
ROE based on comprehensive income before one-time item |
4.6 | % | 13.5 | % | (4.0 | %) | 2.5 | % | 13.5 | % | 1.9 | % | 19.6 | % | 42.6 | % | 20.3 | % | 34.2 | % | ||||||||||||||||||||
Investment income, net of expenses |
$ | 492 | $ | 465 | $ | 445 | $ | 421 | $ | 415 | $ | 387 | $ | 368 | $ | 349 | $ | 327 | $ | 300 | ||||||||||||||||||||
BOLI |
0 | 0 | 0 | 0 | (5 | ) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Investment income before BOLI |
$ | 492 | $ | 465 | $ | 445 | $ | 421 | $ | 410 | $ | 387 | $ | 368 | $ | 349 | $ | 327 | $ | 300 | ||||||||||||||||||||
11
Three months ended | Six months ended | Nine months ended | Twelve months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions except per share data) | 12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 6/30/2005 | 6/30/2004 | 9/30/2005 | 9/30/2004 | 12/31/2005 | 12/31/2004 | |||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 158 | $ | 144 | $ | 192 | $ | 90 | $ | 155 | $ | 146 | $ | 302 | $ | 301 | $ | 392 | $ | 584 | |||||||||||||||||||||||||||||||||||||
One-time item |
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income before one-time item |
$ | 158 | $ | 144 | $ | 192 | $ | 90 | $ | 155 | $ | 146 | $ | 302 | $ | 301 | $ | 392 | $ | 584 | |||||||||||||||||||||||||||||||||||||
Net realized investment gains and losses |
8 | 6 | 24 | (5 | ) | 36 | 4 | 14 | 40 | 36 | 60 | ||||||||||||||||||||||||||||||||||||||||||||||
Operating income before one-time item |
$ | 150 | $ | 138 | $ | 168 | $ | 95 | $ | 119 | $ | 142 | $ | 288 | $ | 261 | $ | 356 | $ | 524 | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
(9 | ) | (2 | ) | (10 | ) | (56 | ) | (30 | ) | 0 | (11 | ) | (30 | ) | (86 | ) | (96 | ) | ||||||||||||||||||||||||||||||||||||||
Operating income before catastrophe losses and
one-time item |
$ | 159 | $ | 140 | $ | 178 | $ | 151 | $ | 149 | $ | 142 | $ | 299 | $ | 291 | $ | 442 | $ | 620 | |||||||||||||||||||||||||||||||||||||
Diluted per share data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 0.89 | $ | 0.81 | $ | 1.09 | $ | 0.50 | $ | 0.87 | $ | 0.82 | $ | 1.70 | $ | 1.77 | $ | 2.30 | $ | 3.28 | |||||||||||||||||||||||||||||||||||||
One-time item |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income before one-time item |
$ | 0.89 | $ | 0.81 | $ | 1.09 | $ | 0.50 | $ | 0.87 | $ | 0.82 | $ | 1.70 | $ | 1.77 | $ | 2.30 | $ | 3.28 | |||||||||||||||||||||||||||||||||||||
Net realized investment gains and losses |
0.05 | 0.03 | 0.14 | (0.03 | ) | 0.20 | 0.03 | 0.08 | 0.24 | 0.21 | 0.35 | ||||||||||||||||||||||||||||||||||||||||||||||
Operating income before one-time item |
$ | 0.84 | $ | 0.78 | $ | 0.95 | $ | 0.53 | $ | 0.67 | $ | 0.79 | $ | 1.62 | $ | 1.53 | $ | 2.09 | $ | 2.93 | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
(0.05 | ) | (0.01 | ) | (0.06 | ) | (0.31 | ) | (0.17 | ) | 0.00 | (0.06 | ) | (0.18 | ) | (0.51 | ) | (0.54 | ) | ||||||||||||||||||||||||||||||||||||||
Operating income before catastrophe losses and
one-time item |
$ | 0.89 | $ | 0.79 | $ | 1.10 | $ | 0.84 | $ | 0.84 | $ | 0.79 | $ | 1.68 | $ | 1.71 | $ | 2.60 | $ | 3.47 | |||||||||||||||||||||||||||||||||||||
12
As of and for the six months ended June 30, 2005 | ||||||||||||||||
Earned | ||||||||||||||||
Actual | Fair | Percent of | dividend | |||||||||||||
(Dollars in millions) | cost | value | fair value | income | ||||||||||||
Fifth Third Bancorp |
$ | 283 | $ | 2,996 | 42.4 | % | $ | 51 | ||||||||
ALLTEL Corporation |
119 | 821 | 11.6 | 10 | ||||||||||||
ExxonMobil Corporation |
133 | 515 | 7.3 | 5 | ||||||||||||
National City Corporation |
171 | 335 | 4.7 | 7 | ||||||||||||
The Procter & Gamble Company |
99 | 300 | 4.2 | 3 | ||||||||||||
PNC Financial Services Group, Inc. |
62 | 256 | 3.6 | 5 | ||||||||||||
Wyeth |
57 | 192 | 2.7 | 2 | ||||||||||||
U.S. Bancorp |
109 | 165 | 2.3 | 3 | ||||||||||||
Alliance Capital Management Holding L.P. |
53 | 148 | 2.1 | 4 | ||||||||||||
FirstMerit Corporation |
54 | 140 | 2.0 | 3 | ||||||||||||
Wells Fargo & Company |
66 | 136 | 1.9 | 2 | ||||||||||||
Johnson & Johnson |
101 | 135 | 1.9 | 1 | ||||||||||||
Piedmont Natural Gas Company, Inc. |
62 | 133 | 1.9 | 1 | ||||||||||||
Sky Financial Group, Inc. |
91 | 131 | 1.9 | 2 | ||||||||||||
All other common stock holdings |
446 | 664 | 9.5 | 11 | ||||||||||||
Total |
$ | 1,906 | $ | 7,067 | 100.0 | % | $ | 110 | ||||||||
13
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||
2005 | 2004 | Change | % Change | 2005 | 2004 | Change | % Change | ||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||
Property casualty |
$ | 807,470,314 | $ | 757,179,115 | $ | 50,291,199 | 6.64 | $ | 1,602,171,328 | $ | 1,511,077,308 | $ | 91,094,020 | 6.03 | |||||||||||||||||||
Life |
0 | 0 | 0 | NA | 0 | 0 | 0 | NA | |||||||||||||||||||||||||
Accident health |
0 | 0 | 0 | NA | 0 | 0 | 0 | NA | |||||||||||||||||||||||||
Premiums ceded |
(42,791,656 | ) | (40,403,051 | ) | (2,388,605 | ) | (5.91 | ) | (84,348,733 | ) | (78,646,281 | ) | (5,702,452 | ) | (7.25 | ) | |||||||||||||||||
Total premiums earned |
764,678,658 | 716,776,064 | 47,902,594 | 6.68 | 1,517,822,595 | 1,432,431,027 | 85,391,568 | 5.96 | |||||||||||||||||||||||||
Investment income |
82,982,613 | 65,987,116 | 16,995,497 | 25.76 | 163,734,128 | 130,432,779 | 33,301,349 | 25.53 | |||||||||||||||||||||||||
Realized gain on investments |
9,414,823 | 179,354,949 | (169,940,126 | ) | (94.75 | ) | 15,467,723 | 187,482,942 | (172,015,219 | ) | (91.75 | ) | |||||||||||||||||||||
Other income |
722,052 | 751,428 | (29,376 | ) | (3.91 | ) | 1,650,935 | 1,496,911 | 154,024 | 10.29 | |||||||||||||||||||||||
Total revenues |
$ | 857,798,146 | $ | 962,869,557 | $ | (105,071,411 | ) | (10.91 | ) | $ | 1,698,675,381 | $ | 1,751,843,659 | $ | (53,168,278 | ) | (3.03 | ) | |||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 455,193,701 | $ | 482,394,308 | $ | (27,200,607 | ) | (5.64 | ) | $ | 958,955,510 | $ | 906,248,054 | $ | 52,707,456 | 5.82 | |||||||||||||||||
Reinsurance recoveries |
(19,742,198 | ) | (41,679,481 | ) | 21,937,283 | 52.63 | (65,657,710 | ) | (53,616,903 | ) | (12,040,807 | ) | (22.46 | ) | |||||||||||||||||||
Commissions |
157,079,211 | 142,141,041 | 14,938,170 | 10.51 | 299,223,059 | 295,968,362 | 3,254,697 | 1.10 | |||||||||||||||||||||||||
Other operating expenses |
63,597,860 | 57,733,890 | 5,863,970 | 10.16 | 121,970,560 | 110,852,517 | 11,118,043 | 10.03 | |||||||||||||||||||||||||
Interest expense |
0 | 0 | 0 | NA | 0 | 0 | 0 | NA | |||||||||||||||||||||||||
Taxes, licenses & fees |
16,534,001 | 18,504,707 | (1,970,706 | ) | (10.65 | ) | 32,310,566 | 35,962,601 | (3,652,035 | ) | (10.16 | ) | |||||||||||||||||||||
Incr deferred acq expense |
(5,422,878 | ) | (3,534,923 | ) | (1,887,955 | ) | (53.41 | ) | (14,041,675 | ) | (19,681,035 | ) | 5,639,360 | 28.65 | |||||||||||||||||||
Other expenses |
2,187,901 | 3,213,239 | (1,025,338 | ) | (31.91 | ) | 6,035,443 | 6,042,676 | (7,233 | ) | (0.12 | ) | |||||||||||||||||||||
Total expenses |
$ | 669,427,598 | $ | 658,772,781 | $ | 10,654,817 | 1.62 | $ | 1,338,795,753 | $ | 1,281,776,272 | $ | 57,019,481 | 4.45 | |||||||||||||||||||
Income before income taxes |
$ | 188,370,548 | $ | 304,096,776 | $ | (115,726,228 | ) | (38.06 | ) | $ | 359,879,628 | $ | 470,067,387 | $ | (110,187,759 | ) | (23.44 | ) | |||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||
Current operating income |
$ | 52,137,573 | $ | (7,465,339 | ) | $ | 59,602,912 | 798.40 | $ | 103,005,087 | $ | 35,536,740 | $ | 67,468,347 | 189.86 | ||||||||||||||||||
Current realized investments gains and losses |
3,463,484 | 62,774,233 | (59,310,749 | ) | (94.48 | ) | 5,413,703 | 65,619,029 | (60,205,326 | ) | (91.75 | ) | |||||||||||||||||||||
Deferred |
(2,740,809 | ) | 41,805,666 | (44,546,475 | ) | (106.56 | ) | (7,851,378 | ) | 45,332,465 | (53,183,843 | ) | (117.32 | ) | |||||||||||||||||||
Total income taxes |
$ | 52,860,248 | $ | 97,114,560 | $ | (44,254,312 | ) | (45.57 | ) | $ | 100,567,412 | $ | 146,488,234 | $ | (45,920,822 | ) | (31.35 | ) | |||||||||||||||
Net income |
$ | 135,510,300 | $ | 206,982,216 | $ | (71,471,916 | ) | (34.53 | ) | $ | 259,312,216 | $ | 323,579,153 | $ | (64,266,937 | ) | (19.86 | ) |
14
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||
2005 | 2004 | % Change | 2005 | 2004 | % Change | ||||||||||||||||||||
Underwriting income |
|||||||||||||||||||||||||
Net premiums written |
$ | 790,765,652 | $ | 734,015,916 | 7.73 | $ | 1,587,508,386 | $ | 1,524,030,841 | 4.17 | |||||||||||||||
Unearned premiums increase |
26,086,995 | 17,239,852 | 69,685,791 | 91,599,814 | |||||||||||||||||||||
Earned premiums |
764,678,658 | 716,776,064 | 6.68 | 1,517,822,595 | 1,432,431,027 | 5.96 | |||||||||||||||||||
Losses incurred |
$ | 358,805,024 | $ | 367,879,976 | (2.47 | ) | $ | 737,257,505 | $ | 708,326,787 | 4.08 | ||||||||||||||
Allocated loss expenses incurred |
39,571,544 | 36,040,113 | 9.80 | 75,307,150 | 71,436,340 | 5.42 | |||||||||||||||||||
Unallocated loss expenses incurred |
37,074,934 | 36,794,738 | 0.76 | 80,733,145 | 72,868,024 | 10.79 | |||||||||||||||||||
Other underwriting expenses incurred |
232,023,269 | 214,565,445 | 8.14 | 440,223,939 | 429,674,013 | 2.46 | |||||||||||||||||||
Workers compensation dividend incurred |
1,743,134 | 3,378,309 | (48.40 | ) | 5,136,069 | 6,097,741 | (15.77 | ) | |||||||||||||||||
Total underwriting deductions |
$ | 669,217,904 | $ | 658,658,581 | 1.60 | $ | 1,338,657,808 | $ | 1,288,402,904 | 3.90 | |||||||||||||||
Net underwriting gain (loss) |
$ | 95,460,753 | $ | 58,117,484 | 64.25 | $ | 179,164,787 | $ | 144,028,123 | 24.40 | |||||||||||||||
Investment income |
|||||||||||||||||||||||||
Gross investment income earned |
$ | 84,001,241 | $ | 66,593,460 | 26.14 | $ | 165,622,151 | $ | 131,479,550 | 25.97 | |||||||||||||||
Net investment income earned |
82,982,614 | 65,986,594 | 25.76 | 163,734,128 | 130,431,653 | 25.53 | |||||||||||||||||||
Net realized capital gains |
9,749,866 | 177,734,335 | (94.51 | ) | 21,933,169 | 185,319,769 | (88.16 | ) | |||||||||||||||||
Net investment gains (excl. subs) |
$ | 92,732,479 | $ | 243,720,929 | (61.95 | ) | $ | 185,667,298 | $ | 315,751,422 | (41.20 | ) | |||||||||||||
Dividend from subsidiary |
|||||||||||||||||||||||||
Net investment gains |
$ | 92,732,479 | $ | 243,720,929 | (61.95 | ) | $ | 185,667,298 | $ | 315,751,422 | (41.20 | ) | |||||||||||||
Other income |
$ | 292,286 | $ | 946,402 | (69.12 | ) | $ | 770,562 | $ | 1,575,880 | (51.10 | ) | |||||||||||||
Net income before federal income taxes |
$ | 188,485,519 | $ | 302,784,815 | (37.75 | ) | $ | 365,602,646 | $ | 461,355,424 | (20.75 | ) | |||||||||||||
Federal and foreign income taxes incurred |
$ | 55,601,056 | $ | 55,308,893 | 0.53 | $ | 108,418,790 | $ | 101,155,769 | 7.18 | |||||||||||||||
Net income (statutory) |
$ | 132,884,463 | $ | 247,475,922 | (46.30 | ) | $ | 257,183,857 | $ | 360,199,655 | (28.60 | ) | |||||||||||||
15
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | ||||||||||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 791 | $ | 797 | $ | 723 | $ | 750 | $ | 734 | $ | 790 | $ | 1,588 | $ | 1,524 | $ | 2,274 | $ | 2,997 | |||||||||||||||||||||||||||||||||||||
Net premiums earned |
765 | 753 | 754 | 733 | 717 | 716 | 1,518 | 1,432 | 2,166 | 2,919 | |||||||||||||||||||||||||||||||||||||||||||||||
Losses paid |
336 | 345 | 381 | 360 | 328 | 298 | 681 | 625 | 985 | 1,366 | |||||||||||||||||||||||||||||||||||||||||||||||
Loss reserve change |
23 | 33 | (67 | ) | 70 | 40 | 43 | 56 | 83 | 154 | 86 | ||||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 359 | $ | 378 | $ | 314 | $ | 430 | $ | 368 | $ | 341 | $ | 737 | $ | 708 | $ | 1,139 | $ | 1,452 | |||||||||||||||||||||||||||||||||||||
Allocated loss expense paid |
29 | 25 | 31 | 27 | 26 | 26 | 54 | 52 | 78 | 110 | |||||||||||||||||||||||||||||||||||||||||||||||
Allocated loss expense reserve change |
10 | 11 | 6 | 10 | 11 | 10 | 21 | 20 | 30 | 36 | |||||||||||||||||||||||||||||||||||||||||||||||
Total allocated loss expense incurred |
$ | 39 | $ | 36 | $ | 37 | $ | 37 | $ | 37 | $ | 36 | $ | 75 | $ | 72 | $ | 108 | $ | 146 | |||||||||||||||||||||||||||||||||||||
Unallocated loss expense paid |
37 | 34 | 46 | 32 | 36 | 32 | 71 | 68 | 100 | 146 | |||||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense reserve change |
0 | 10 | 2 | 3 | 1 | 4 | 10 | 5 | 8 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||
Total unallocated loss expense incurred |
$ | 37 | $ | 44 | $ | 48 | $ | 35 | $ | 37 | $ | 36 | $ | 81 | $ | 73 | $ | 108 | $ | 156 | |||||||||||||||||||||||||||||||||||||
Underwriting expenses incurred |
234 | 212 | 222 | 220 | 218 | 218 | 445 | 436 | 656 | 878 | |||||||||||||||||||||||||||||||||||||||||||||||
Underwriting profit (loss) |
$ | 96 | $ | 83 | $ | 133 | $ | 11 | $ | 57 | $ | 85 | $ | 180 | $ | 143 | $ | 155 | $ | 287 | |||||||||||||||||||||||||||||||||||||
Loss
Detail
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses $1 million or more |
$ | 28 | $ | 43 | $ | 12 | $ | 27 | $ | 17 | $ | 42 | $ | 71 | $ | 59 | $ | 86 | $ | 97 | |||||||||||||||||||||||||||||||||||||
Losses $250 thousand to $1 million |
36 | 32 | 33 | 29 | 46 | 39 | 68 | 85 | 113 | 146 | |||||||||||||||||||||||||||||||||||||||||||||||
Development and case reserve increases
of $250,000 or more |
40 | 36 | 44 | 35 | 42 | 31 | 76 | 73 | 109 | 153 | |||||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
$ | 104 | $ | 111 | $ | 89 | $ | 91 | $ | 105 | $ | 112 | $ | 215 | $ | 217 | $ | 308 | $ | 396 | |||||||||||||||||||||||||||||||||||||
IBNR incurred |
14 | 13 | 18 | 12 | 17 | 13 | 27 | 29 | 41 | 59 | |||||||||||||||||||||||||||||||||||||||||||||||
Catastrophe losses incurred |
15 | 2 | 16 | 86 | 46 | 0 | 17 | 47 | 133 | 149 | |||||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
226 | 252 | 190 | 241 | 201 | 215 | 478 | 416 | 657 | 848 | |||||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 359 | $ | 378 | $ | 313 | $ | 430 | $ | 369 | $ | 340 | $ | 737 | $ | 709 | $ | 1,139 | $ | 1,452 | |||||||||||||||||||||||||||||||||||||
Ratio Data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss ratio |
46.9 | % | 50.3 | % | 41.6 | % | 58.7 | % | 51.3 | % | 47.6 | % | 48.6 | % | 49.4 | % | 52.6 | % | 49.7 | % | |||||||||||||||||||||||||||||||||||||
Allocated loss expense ratio |
5.2 | 4.7 | 4.9 | 5.1 | 5.0 | 4.9 | 5.0 | 5.0 | 5.0 | 5.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense ratio |
4.8 | 5.8 | 6.4 | 4.7 | 5.1 | 5.0 | 5.3 | 5.1 | 5.0 | 5.3 | |||||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expense ratio |
29.6 | 26.6 | 30.7 | 29.4 | 29.7 | 27.6 | 28.1 | 28.6 | 28.9 | 29.3 | |||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
86.5 | % | 87.4 | % | 83.6 | % | 97.9 | % | 91.1 | % | 85.1 | % | 87.0 | % | 88.1 | % | 91.5 | % | 89.3 | % | |||||||||||||||||||||||||||||||||||||
Statutory
combined ratio excluding
catastrophes |
84.6 | % | 87.1 | % | 81.6 | % | 86.2 | % | 84.7 | % | 85.0 | % | 85.8 | % | 84.8 | % | 85.3 | % | 84.3 | % | |||||||||||||||||||||||||||||||||||||
Loss Ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses $1 million or more |
3.6 | % | 5.7 | % | 1.5 | % | 3.6 | % | 2.3 | % | 5.9 | % | 4.7 | % | 4.1 | % | 4.0 | % | 3.3 | % | |||||||||||||||||||||||||||||||||||||
Losses $250 thousand to $1 million |
4.8 | 4.3 | 4.4 | 3.9 | 6.4 | 5.4 | 4.5 | 5.9 | 5.2 | 5.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Development and case reserve increases
of $250,000 or more |
5.2 | 4.7 | 5.9 | 4.9 | 5.8 | 4.3 | 5.0 | 5.1 | 5.0 | 5.2 | |||||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
13.6 | % | 14.7 | % | 11.8 | % | 12.4 | % | 14.5 | % | 15.6 | % | 14.2 | % | 15.1 | % | 14.2 | % | 13.5 | % | |||||||||||||||||||||||||||||||||||||
IBNR incurred |
1.8 | 1.8 | 2.4 | 1.6 | 2.3 | 1.7 | 1.8 | 2.0 | 1.9 | 2.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Total catastrophe losses incurred |
1.9 | 0.3 | 2.1 | 11.8 | 6.5 | 0.1 | 1.1 | 3.3 | 6.1 | 5.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
29.6 | 33.5 | 25.3 | 32.9 | 28.0 | 30.0 | 31.5 | 29.1 | 30.4 | 29.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Total loss ratio |
46.9 | % | 50.3 | % | 41.6 | % | 58.7 | % | 51.3 | % | 47.4 | % | 48.6 | % | 49.5 | % | 52.6 | % | 49.6 | % | |||||||||||||||||||||||||||||||||||||
Loss Claim Count |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses $1 million or more |
17 | 15 | 9 | 17 | 11 | 27 | 32 | 38 | 55 | 64 | |||||||||||||||||||||||||||||||||||||||||||||||
Losses $250 thousand to $1 million |
93 | 73 | 84 | 76 | 103 | 91 | 166 | 194 | 270 | 354 | |||||||||||||||||||||||||||||||||||||||||||||||
Development and case reserve increases
of $250,000 or more |
61 | 67 | 79 | 76 | 70 | 59 | 128 | 129 | 205 | 284 | |||||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
171 | 155 | 172 | 169 | 184 | 177 | 326 | 361 | 530 | 702 | |||||||||||||||||||||||||||||||||||||||||||||||
Total catastrophe losses incurred |
1,158 | 1,258 | 3,275 | 6,144 | 4,758 | 928 | 2,416 | 5,686 | 11,830 | 15,105 | |||||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
66,262 | 75,040 | 65,148 | 66,802 | 67,488 | 85,588 | 141,302 | 153,076 | 219,878 | 285,026 | |||||||||||||||||||||||||||||||||||||||||||||||
Total |
67,591 | 76,453 | 68,595 | 73,115 | 72,430 | 86,693 | 144,044 | 159,123 | 232,238 | 300,833 | |||||||||||||||||||||||||||||||||||||||||||||||
16
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | |||||||||||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 567 | $ | 629 | $ | 532 | $ | 532 | $ | 512 | $ | 610 | $ | 1,195 | $ | 1,122 | $ | 1,654 | $ | 2,186 | ||||||||||||||||||||||||||||||||||||||
Net premiums earned |
563 | 551 | 551 | 537 | 520 | 518 | 1,114 | 1,038 | 1,575 | 2,126 | ||||||||||||||||||||||||||||||||||||||||||||||||
Losses paid |
214 | 219 | 246 | 228 | 203 | 193 | 434 | 396 | 624 | 870 | ||||||||||||||||||||||||||||||||||||||||||||||||
Loss reserve change |
32 | 51 | (45 | ) | 50 | 21 | 28 | 84 | 49 | 98 | 54 | |||||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 246 | $ | 270 | $ | 201 | $ | 278 | $ | 224 | $ | 221 | $ | 518 | $ | 445 | $ | 722 | $ | 924 | ||||||||||||||||||||||||||||||||||||||
Allocated loss expense paid |
26 | 22 | 27 | 24 | 23 | 23 | 48 | 46 | 70 | 97 | ||||||||||||||||||||||||||||||||||||||||||||||||
Allocated loss expense reserve change |
10 | 10 | 2 | 9 | 10 | 9 | 20 | 19 | 28 | 30 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total allocated loss expense incurred |
$ | 36 | $ | 32 | $ | 29 | $ | 33 | $ | 33 | $ | 32 | $ | 68 | $ | 65 | $ | 98 | $ | 127 | ||||||||||||||||||||||||||||||||||||||
Unallocated loss expense paid |
25 | 22 | 30 | 21 | 23 | 21 | 48 | 45 | 65 | 95 | ||||||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense reserve change |
1 | 10 | 3 | 2 | 1 | 3 | 11 | 3 | 5 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total unallocated loss expense incurred |
$ | 26 | $ | 32 | $ | 33 | $ | 23 | $ | 24 | $ | 24 | $ | 59 | $ | 48 | $ | 70 | $ | 103 | ||||||||||||||||||||||||||||||||||||||
Underwriting expenses incurred |
165 | 156 | 166 | 159 | 155 | 163 | 321 | 318 | 477 | 643 | ||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting profit (loss) |
$ | 90 | $ | 61 | $ | 122 | $ | 44 | $ | 84 | $ | 78 | $ | 148 | $ | 162 | $ | 208 | $ | 329 | ||||||||||||||||||||||||||||||||||||||
Loss Detail |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses $1 million or more |
$ | 26 | $ | 43 | $ | 8 | $ | 23 | $ | 14 | $ | 35 | $ | 68 | $ | 49 | $ | 72 | $ | 80 | ||||||||||||||||||||||||||||||||||||||
Losses $250 thousand to $1 million |
29 | 22 | 23 | 19 | 33 | 28 | 51 | 61 | 80 | 103 | ||||||||||||||||||||||||||||||||||||||||||||||||
Development and case reserve increases
of $250,000 or more |
38 | 29 | 38 | 32 | 36 | 27 | 67 | 63 | 95 | 133 | ||||||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
$ | 93 | $ | 94 | $ | 69 | $ | 74 | $ | 83 | $ | 90 | $ | 186 | $ | 173 | $ | 247 | $ | 316 | ||||||||||||||||||||||||||||||||||||||
IBNR incurred |
12 | 12 | 26 | 11 | 14 | 11 | 24 | 26 | 36 | 63 | ||||||||||||||||||||||||||||||||||||||||||||||||
Catastrophe losses incurred |
2 | 6 | 7 | 48 | 15 | 1 | 9 | 16 | 64 | 72 | ||||||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
139 | 159 | 99 | 145 | 112 | 118 | 298 | 230 | 375 | 473 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 246 | $ | 271 | $ | 201 | $ | 278 | $ | 224 | $ | 220 | $ | 517 | $ | 445 | $ | 722 | $ | 924 | ||||||||||||||||||||||||||||||||||||||
Ratio Data |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss ratio |
43.8 | % | 49.1 | % | 36.5 | % | 51.7 | % | 43.1 | % | 42.6 | % | 46.4 | % | 42.8 | % | 45.9 | % | 43.4 | % | ||||||||||||||||||||||||||||||||||||||
Allocated loss expense ratio |
6.4 | 5.8 | 5.3 | 6.2 | 6.2 | 6.2 | 6.1 | 6.2 | 6.2 | 6.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense ratio |
4.6 | 5.9 | 6.0 | 4.2 | 4.6 | 4.7 | 5.2 | 4.6 | 4.5 | 4.9 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expense ratio |
29.1 | 24.7 | 31.2 | 29.9 | 30.2 | 26.8 | 26.8 | 28.3 | 28.8 | 29.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
83.9 | % | 85.5 | % | 79.0 | % | 92.0 | % | 84.1 | % | 80.3 | % | 84.5 | % | 81.9 | % | 85.4 | % | 83.7 | % | ||||||||||||||||||||||||||||||||||||||
Statutory combined ratio excluding catastrophes |
83.5 | % | 84.4 | % | 77.8 | % | 83.0 | % | 81.1 | % | 80.1 | % | 83.8 | % | 80.4 | % | 81.3 | % | 80.3 | % | ||||||||||||||||||||||||||||||||||||||
Loss Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses $1 million or more |
4.5 | % | 7.8 | % | 1.5 | % | 4.3 | % | 2.6 | % | 6.8 | % | 6.1 | % | 4.7 | % | 4.6 | % | 3.8 | % | ||||||||||||||||||||||||||||||||||||||
Losses $250 thousand to $1 million |
5.2 | 3.9 | 4.2 | 3.6 | 6.3 | 5.4 | 4.5 | 5.8 | 5.1 | 4.9 | ||||||||||||||||||||||||||||||||||||||||||||||||
Development and case reserve increases
of $250,000 or more |
6.8 | 5.3 | 6.8 | 5.9 | 7.0 | 5.2 | 6.0 | 6.1 | 6.0 | 6.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
16.5 | % | 17.0 | % | 12.5 | % | 13.8 | % | 15.9 | % | 17.4 | % | 16.6 | % | 16.6 | % | 15.7 | % | 14.9 | % | ||||||||||||||||||||||||||||||||||||||
IBNR incurred |
2.2 | 2.2 | 4.8 | 2.0 | 2.8 | 2.2 | 2.2 | 2.5 | 2.3 | 3.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total catastrophe losses incurred |
0.4 | 1.1 | 1.3 | 9.0 | 2.9 | 0.2 | 0.8 | 1.6 | 4.1 | 3.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
24.7 | 28.8 | 17.9 | 26.9 | 21.5 | 22.8 | 26.8 | 22.2 | 23.8 | 22.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total loss ratio |
43.8 | % | 49.1 | % | 36.5 | % | 51.7 | % | 43.1 | % | 42.6 | % | 46.4 | % | 42.9 | % | 45.9 | % | 43.6 | % | ||||||||||||||||||||||||||||||||||||||
17
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | |||||||||||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 224 | $ | 168 | $ | 191 | $ | 217 | $ | 222 | $ | 180 | $ | 393 | $ | 402 | $ | 620 | $ | 811 | ||||||||||||||||||||||||||||||||||||||
Net premiums earned |
202 | 202 | 203 | 196 | 197 | 197 | 404 | 394 | 590 | 793 | ||||||||||||||||||||||||||||||||||||||||||||||||
Losses paid |
122 | 126 | 134 | 132 | 125 | 105 | 247 | 229 | 362 | 496 | ||||||||||||||||||||||||||||||||||||||||||||||||
Loss reserve change |
(9 | ) | (18 | ) | (22 | ) | 21 | 19 | 15 | (27 | ) | 34 | 54 | 33 | ||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 113 | $ | 108 | $ | 112 | $ | 153 | $ | 144 | $ | 120 | $ | 220 | $ | 263 | $ | 416 | $ | 529 | ||||||||||||||||||||||||||||||||||||||
Allocated loss expense paid |
3 | 3 | 4 | 3 | 3 | 3 | 6 | 6 | 9 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||
Allocated loss expense reserve change |
1 | 1 | 4 | 1 | 1 | 1 | 1 | 1 | 2 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total allocated loss expense incurred |
$ | 4 | $ | 4 | $ | 8 | $ | 4 | $ | 4 | $ | 4 | $ | 7 | $ | 7 | $ | 11 | $ | 19 | ||||||||||||||||||||||||||||||||||||||
Unallocated loss expense paid |
12 | 12 | 16 | 11 | 12 | 11 | 23 | 23 | 34 | 50 | ||||||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense reserve change |
(1 | ) | 0 | (1 | ) | 1 | 1 | 1 | (1 | ) | 2 | 3 | 2 | |||||||||||||||||||||||||||||||||||||||||||||
Total unallocated loss expense incurred |
$ | 11 | $ | 12 | $ | 15 | $ | 12 | $ | 13 | $ | 12 | $ | 22 | $ | 25 | $ | 37 | $ | 52 | ||||||||||||||||||||||||||||||||||||||
Underwriting expenses incurred |
69 | 56 | 56 | 61 | 63 | 55 | 125 | 118 | 179 | 236 | ||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting profit (loss) |
$ | 5 | $ | 22 | $ | 12 | $ | (34 | ) | $ | (27 | ) | $ | 6 | $ | 30 | $ | (19 | ) | $ | (53 | ) | $ | (43 | ) | |||||||||||||||||||||||||||||||||
Loss Detail |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses $1 million or more |
$ | 2 | $ | 0 | $ | 3 | $ | 3 | $ | 3 | $ | 7 | $ | 2 | $ | 10 | $ | 13 | $ | 17 | ||||||||||||||||||||||||||||||||||||||
Losses $250 thousand to $1 million |
8 | 10 | 10 | 9 | 13 | 11 | 18 | 24 | 33 | 43 | ||||||||||||||||||||||||||||||||||||||||||||||||
Development and case reserve increases
of $250,000 or more |
2 | 7 | 7 | 5 | 5 | 4 | 9 | 9 | 14 | 21 | ||||||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
$ | 12 | $ | 17 | $ | 20 | $ | 17 | $ | 21 | $ | 22 | $ | 29 | $ | 43 | $ | 60 | $ | 81 | ||||||||||||||||||||||||||||||||||||||
IBNR incurred |
1 | 1 | (8 | ) | 1 | 2 | 1 | 3 | 3 | 4 | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Catastrophe losses incurred |
12 | (4 | ) | 9 | 38 | 31 | 0 | 8 | 31 | 68 | 77 | |||||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
87 | 93 | 92 | 97 | 89 | 97 | 180 | 186 | 283 | 375 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 112 | $ | 107 | $ | 113 | $ | 153 | $ | 143 | $ | 120 | $ | 220 | $ | 263 | $ | 415 | $ | 529 | ||||||||||||||||||||||||||||||||||||||
Ratio Data |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss ratio |
55.6 | % | 53.3 | % | 55.3 | % | 78.0 | % | 73.0 | % | 60.6 | % | 54.4 | % | 66.8 | % | 70.5 | % | 66.7 | % | ||||||||||||||||||||||||||||||||||||||
Allocated loss expense ratio |
1.8 | 1.8 | 3.9 | 1.9 | 1.8 | 1.7 | 1.8 | 1.8 | 1.8 | 2.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense ratio |
5.5 | 5.7 | 7.4 | 6.3 | 6.7 | 6.0 | 5.6 | 6.3 | 6.3 | 6.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expense ratio |
30.7 | 33.2 | 29.4 | 28.2 | 28.6 | 30.4 | 31.8 | 29.4 | 28.9 | 29.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
93.6 | % | 94.0 | % | 96.0 | % | 114.4 | % | 110.1 | % | 98.7 | % | 93.6 | % | 104.3 | % | 107.5 | % | 104.6 | % | ||||||||||||||||||||||||||||||||||||||
Statutory combined ratio excluding catastrophes |
87.4 | % | 96.0 | % | 91.8 | % | 95.1 | % | 94.4 | % | 98.9 | % | 91.5 | % | 96.5 | % | 96.0 | % | 94.9 | % | ||||||||||||||||||||||||||||||||||||||
Loss Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses $1 million or more |
1.1 | % | 0.0 | % | 1.7 | % | 1.7 | % | 1.5 | % | 3.7 | % | 0.6 | % | 2.6 | % | 2.3 | % | 2.1 | % | ||||||||||||||||||||||||||||||||||||||
Losses $250 thousand to $1 million |
3.7 | 5.2 | 4.9 | 4.7 | 6.7 | 5.4 | 4.4 | 6.0 | 5.6 | 5.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
Development and case reserve increases
of $250,000 or more |
1.0 | 3.2 | 3.3 | 2.4 | 2.7 | 2.0 | 2.1 | 2.4 | 2.4 | 2.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
5.8 | % | 8.4 | % | 9.9 | % | 8.8 | % | 10.9 | % | 11.1 | % | 7.1 | % | 11.0 | % | 10.3 | % | 10.1 | % | ||||||||||||||||||||||||||||||||||||||
IBNR incurred |
0.6 | 0.7 | (3.9 | ) | 0.6 | 1.1 | 0.6 | 0.7 | 0.8 | 0.7 | (0.5 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Total catastrophe losses incurred |
6.2 | (2.0 | ) | 4.2 | 19.3 | 15.7 | (0.2 | ) | 2.1 | 7.8 | 11.6 | 9.7 | ||||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
42.9 | 46.2 | 45.2 | 49.4 | 45.3 | 49.1 | 44.5 | 47.2 | 48.0 | 47.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total loss ratio |
55.5 | % | 53.3 | % | 55.4 | % | 78.1 | % | 73.0 | % | 60.6 | % | 54.4 | % | 66.8 | % | 70.6 | % | 66.5 | % | ||||||||||||||||||||||||||||||||||||||
18
Comm | 06/30/05 | 06/30/04 | ||||||||||||||||||||||||||||||||||||||
Home- | Pers | Comm | Multi- | Work | Other | All | Agency | Agency | Percent | |||||||||||||||||||||||||||||||
State | owner | Auto | Auto | Peril | Comp | Liability | Other | Direct | Direct | Change | ||||||||||||||||||||||||||||||
AL |
$ | 10.1 | $ | 8.7 | $ | 4.1 | $ | 10.5 | $ | 0.5 | $ | 6.4 | $ | 4.6 | $ | 44.9 | $ | 40.7 | 10.1 | |||||||||||||||||||||
AZ |
| | 4.6 | 4.2 | 0.1 | 3.6 | 1.3 | 13.8 | 11.9 | 16.7 | ||||||||||||||||||||||||||||||
AR |
1.6 | 1.8 | 3.4 | 7.0 | 3.0 | 4.2 | 2.6 | 23.6 | 25.2 | (6.1 | ) | |||||||||||||||||||||||||||||
FL |
7.5 | 6.5 | 6.2 | 11.2 | 1.2 | 12.0 | 8.2 | 52.8 | 43.7 | 20.7 | ||||||||||||||||||||||||||||||
GA |
11.8 | 16.4 | 9.8 | 17.2 | 6.0 | 8.8 | 6.4 | 76.4 | 68.2 | 12.1 | ||||||||||||||||||||||||||||||
IL |
8.8 | 15.8 | 18.4 | 40.5 | 30.2 | 23.4 | 17.0 | 154.1 | 156.1 | (1.3 | ) | |||||||||||||||||||||||||||||
IN |
13.8 | 18.3 | 16.2 | 31.5 | 17.2 | 15.7 | 11.1 | 123.8 | 123.4 | 0.4 | ||||||||||||||||||||||||||||||
IA |
2.1 | 2.8 | 5.0 | 11.0 | 11.0 | 7.9 | 4.5 | 44.3 | 41.9 | 6.1 | ||||||||||||||||||||||||||||||
KS |
3.6 | 3.1 | 2.2 | 4.9 | 2.9 | 2.5 | 2.2 | 21.4 | 21.2 | 1.6 | ||||||||||||||||||||||||||||||
KY |
6.7 | 11.1 | 7.1 | 12.6 | 1.5 | 7.7 | 5.7 | 52.4 | 49.9 | 5.2 | ||||||||||||||||||||||||||||||
MD |
0.5 | | 4.0 | 3.6 | 3.7 | 4.0 | 1.7 | 17.5 | 14.9 | 17.5 | ||||||||||||||||||||||||||||||
MI |
9.3 | 9.3 | 11.1 | 26.1 | 10.7 | 11.7 | 7.9 | 86.2 | 91.4 | (5.6 | ) | |||||||||||||||||||||||||||||
MN |
2.9 | 4.8 | 6.6 | 13.2 | 3.8 | 9.6 | 5.2 | 46.1 | 41.9 | 9.9 | ||||||||||||||||||||||||||||||
MO |
2.9 | 2.4 | 5.7 | 14.6 | 6.5 | 5.5 | 5.4 | 43.0 | 44.3 | (2.9 | ) | |||||||||||||||||||||||||||||
MT |
| | 3.7 | 5.2 | | 2.9 | 1.7 | 13.5 | 12.0 | 12.5 | ||||||||||||||||||||||||||||||
NE |
1.0 | 1.2 | 2.5 | 5.1 | 4.3 | 2.9 | 1.5 | 18.4 | 16.9 | 9.1 | ||||||||||||||||||||||||||||||
NY |
| | 4.2 | 7.4 | 1.0 | 7.7 | 2.0 | 22.3 | 15.1 | 46.9 | ||||||||||||||||||||||||||||||
NC |
0.7 | 1.3 | 12.0 | 23.5 | 11.0 | 11.8 | 7.3 | 67.6 | 58.3 | 15.9 | ||||||||||||||||||||||||||||||
OH |
45.7 | 83.7 | 44.3 | 86.2 | | 57.1 | 37.5 | 354.5 | 355.9 | (0.4 | ) | |||||||||||||||||||||||||||||
PA |
2.9 | 4.4 | 17.1 | 27.6 | 29.9 | 12.6 | 9.1 | 103.6 | 94.9 | 9.0 | ||||||||||||||||||||||||||||||
SC |
| | 4.3 | 7.5 | 2.5 | 3.4 | 2.2 | 19.9 | 16.8 | 18.0 | ||||||||||||||||||||||||||||||
TN |
3.7 | 4.4 | 9.1 | 14.1 | 6.0 | 9.3 | 5.1 | 51.7 | 46.9 | 10.5 | ||||||||||||||||||||||||||||||
VT |
0.4 | 0.5 | 1.5 | 2.6 | 3.4 | 1.4 | 1.2 | 11.0 | 9.7 | 13.9 | ||||||||||||||||||||||||||||||
VA |
3.7 | 5.3 | 12.0 | 18.7 | 9.2 | 8.2 | 6.6 | 63.7 | 63.9 | (0.4 | ) | |||||||||||||||||||||||||||||
WV |
0.4 | | 3.0 | 5.2 | | 2.3 | 1.6 | 12.5 | 11.5 | 8.9 | ||||||||||||||||||||||||||||||
WI |
4.3 | 7.0 | 8.1 | 17.1 | 15.6 | 10.7 | 6.5 | 69.2 | 65.6 | 5.5 | ||||||||||||||||||||||||||||||
All Other |
0.7 | 0.9 | 8.1 | 12.5 | 6.2 | 9.0 | 6.0 | 43.4 | 35.8 | (0.2 | ) | |||||||||||||||||||||||||||||
Total Agency Direct |
$ | 145.1 | $ | 209.7 | $ | 234.3 | $ | 440.8 | $ | 187.4 | $ | 262.3 | $ | 172.1 | $ | 1,651.6 | $ | 1,578.0 | 4.7 | |||||||||||||||||||||
Other Direct |
| 0.6 | 0.4 | 0.4 | 4.8 | 0.3 | 0.8 | 7.3 | 9.0 | (19.0 | ) | |||||||||||||||||||||||||||||
Total Direct |
$ | 145.1 | $ | 210.3 | $ | 234.7 | $ | 441.2 | $ | 192.2 | $ | 262.6 | $ | 172.9 | $ | 1,658.9 | $ | 1,587.0 | 4.5 | |||||||||||||||||||||
19
(Dollars in millions) | Years ended December 31, | |||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 | 1996 | 1995 | 1994 | ||||||||||||||||||||||||||||||||||
Premiums |
||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory)* |
$ | 3,026 | $ | 2,789 | $ | 2,496 | $ | 2,188 | $ | 1,936 | $ | 1,681 | $ | 1,558 | $ | 1,472 | $ | 1,384 | $ | 1,296 | $ | 1,191 | ||||||||||||||||||||||
Codification |
0 | 0 | 0 | 402 | (55 | ) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Written premium adjustment statutory only |
(29 | ) | 26 | 117 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Reported written premiums (statutory)** |
2,997 | 2,815 | 2,613 | 2,590 | 1,881 | 1,681 | 1,558 | 1,472 | 1,384 | 1,296 | 1,191 | |||||||||||||||||||||||||||||||||
Unearned premiums change |
(78 | ) | (162 | ) | (220 | ) | (517 | ) | (53 | ) | (23 | ) | (15 | ) | (18 | ) | (17 | ) | (33 | ) | (21 | ) | ||||||||||||||||||||||
Earned premiums (GAAP) |
$ | 2,919 | $ | 2,653 | $ | 2,393 | $ | 2,073 | $ | 1,828 | $ | 1,658 | $ | 1,543 | $ | 1,454 | $ | 1,367 | $ | 1,263 | $ | 1,170 | ||||||||||||||||||||||
Year-over-year growth rate: |
||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
8.5 | % | 11.7 | % | 14.1 | % | 13.0 | % | 15.2 | % | 7.9 | % | 5.8 | % | 6.4 | % | 6.8 | % | 8.8 | % | 6.0 | % | ||||||||||||||||||||||
Written premiums (statutory) |
6.5 | % | 7.7 | % | 0.9 | % | 37.7 | % | 11.9 | % | 7.9 | % | 5.8 | % | 6.4 | % | 6.8 | % | 8.8 | % | 6.0 | % | ||||||||||||||||||||||
Earned premiums |
10.0 | % | 10.9 | % | 15.4 | % | 13.4 | % | 10.3 | % | 7.5 | % | 6.1 | % | 6.4 | % | 8.2 | % | 7.9 | % | 7.1 | % | ||||||||||||||||||||||
Statutory combined ratio |
||||||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
89.4 | % | 94.2 | % | 98.4 | % | 99.5 | % | 112.5 | % | 100.4 | % | 104.2 | % | 98.3 | % | 103.5 | % | 99.9 | % | 100.8 | % | ||||||||||||||||||||||
Codification |
0.0 | 0.0 | 0.0 | 4.1 | (0.9 | ) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | 1.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.8 | 0.0 | 0.0 | (1.7 | ) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||
Statutory combined ratio (adjusted) |
89.4 | % | 95.0 | % | 99.6 | % | 103.6 | % | 109.9 | % | 100.4 | % | 104.2 | % | 98.3 | % | 103.5 | % | 99.9 | % | 100.8 | % | ||||||||||||||||||||||
Less catastrophe losses |
5.1 | 3.6 | 3.6 | 3.1 | 2.7 | 2.5 | 6.1 | |||||||||||||||||||||||||||||||||||||
Statutory combined ratio excluding
catastrophe losses (adjusted) |
84.3 | % | 91.4 | % | 96.0 | % | 100.5 | % | 107.2 | % | 97.9 | % | 98.1 | % | ||||||||||||||||||||||||||||||
Reported commission expense ratio* |
19.2 | % | 17.6 | % | 15.9 | % | 13.9 | % | 17.4 | % | 17.4 | % | 17.6 | % | ||||||||||||||||||||||||||||||
Codification |
0.0 | 0.0 | 0.0 | 2.6 | (0.5 | ) | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | 0.8 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||
Commission expense ratio (adjusted) |
19.2 | % | 17.6 | % | 16.7 | % | 16.5 | % | 16.9 | % | 17.4 | % | 17.6 | % | ||||||||||||||||||||||||||||||
Reported other expense ratio* |
10.1 | % | 8.9 | % | 9.6 | % | 8.7 | % | 12.6 | % | 11.4 | % | 11.9 | % | ||||||||||||||||||||||||||||||
Codification |
0.0 | 0.0 | 0.0 | 1.5 | (0.4 | ) | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | 0.4 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.8 | 0.0 | 0.0 | (1.7 | ) | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||||||
Other expense ratio (adjusted) |
10.1 | % | 9.7 | % | 10.0 | % | 10.2 | % | 10.5 | % | 11.4 | % | 11.9 | % | ||||||||||||||||||||||||||||||
Reported statutory expense ratio* |
29.3 | % | 26.5 | % | 25.5 | % | 22.6 | % | 30.0 | % | 28.8 | % | 29.5 | % | ||||||||||||||||||||||||||||||
Codification |
0.0 | 0.0 | 0.0 | 4.1 | (0.9 | ) | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | 1.2 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.8 | 0.0 | 0.0 | (1.7 | ) | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||||||
Statutory expense ratio (adjusted) |
29.3 | % | 27.3 | % | 26.7 | % | 26.7 | % | 27.4 | % | 28.8 | % | 29.5 | % | ||||||||||||||||||||||||||||||
GAAP combined ratio |
||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
89.8 | % | 94.7 | % | 99.7 | % | 104.9 | % | 112.8 | % | 100.2 | % | 104.3 | % | 98.4 | % | 103.6 | % | 100.1 | % | 100.9 | % | ||||||||||||||||||||||
One-time item |
0.0 | 0.8 | 0.0 | 0.0 | (2.1 | ) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||
GAAP combined ratio before one-time item |
89.8 | % | 95.5 | % | 99.7 | % | 104.9 | % | 110.7 | % | 100.2 | % | 104.3 | % | 98.4 | % | 103.6 | % | 100.1 | % | 100.9 | % | ||||||||||||||||||||||
Written premiums to surplus |
||||||||||||||||||||||||||||||||||||||||||||
Adjusted premiums to statutory surplus ratio |
0.721 | 1.002 | 1.067 | 0.864 | ||||||||||||||||||||||||||||||||||||||||
Written premium adjustment |
(0.007 | ) | 0.010 | 0.050 | 0.159 | |||||||||||||||||||||||||||||||||||||||
Reported premiums to statutory surplus ratio |
0.714 | 1.012 | 1.117 | 1.023 | ||||||||||||||||||||||||||||||||||||||||
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. nm Not meaningful | ||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. | |
** | Prior to 2001, property casualty written premiums were recognized as they were billed throughout the policy period. Effective January 1, 2001, written premiums have been recognized on an annualized basis at the effective date of the policy. Written premiums for 2000 were reclassified to conform with the 2001 presentation; information was not readily available to reclassify earlier year statutory data. The growth rates in written premiums between 1999 and 2000 are overstated because 1999 premiums are shown on a billed basis. |
20
(Dollars in millions) | Years ended December 31, | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||||||||||
Premiums |
||||||||||||||||||||||||
Adjusted written premiums (statutory)* |
$ | 2,209 | $ | 2,009 | $ | 1,795 | $ | 1,551 | $ | 1,326 | $ | 1,100 | ||||||||||||
Codification |
0 | 0 | 0 | 276 | (51 | ) | 0 | |||||||||||||||||
Written premium adjustment statutory only |
(23 | ) | 22 | 110 | 0 | 0 | 0 | |||||||||||||||||
Reported written premiums (statutory)** |
$ | 2,186 | $ | 2,031 | $ | 1,905 | $ | 1,827 | $ | 1,275 | $ | 1,100 | ||||||||||||
Unearned premiums change |
(60 | ) | (123 | ) | (182 | ) | (374 | ) | (43 | ) | (12 | ) | ||||||||||||
Earned premiums (GAAP) |
$ | 2,126 | $ | 1,908 | $ | 1,723 | $ | 1,453 | $ | 1,232 | $ | 1,088 | ||||||||||||
Year-over-year growth rate: |
||||||||||||||||||||||||
Adjusted written premiums (statutory) |
10.0 | % | 11.9 | % | 15.7 | % | 17.0 | % | 20.5 | % | 7.8 | % | ||||||||||||
Written premiums (statutory) |
7.6 | % | 6.6 | % | 4.3 | % | 43.3 | % | 15.9 | % | 7.8 | % | ||||||||||||
Earned premiums |
11.4 | % | 10.8 | % | 18.6 | % | 17.9 | % | 13.2 | % | 6.7 | % | ||||||||||||
Statutory combined ratio |
||||||||||||||||||||||||
Reported statutory combined ratio* |
83.7 | % | 90.9 | % | 95.3 | % | 96.7 | % | 117.2 | % | 101.2 | % | ||||||||||||
Codification |
0.0 | 0.0 | 0.0 | 4.0 | (1.2 | ) | 0.0 | |||||||||||||||||
Written premium adjustment statutory only |
nm | nm | 1.5 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||
One-time item |
0.0 | 0.7 | 0.0 | 0.0 | (1.6 | ) | 0.0 | |||||||||||||||||
Statutory combined ratio (adjusted) |
83.7 | % | 91.6 | % | 96.8 | % | 100.7 | % | 114.4 | % | 101.2 | % | ||||||||||||
Less catastrophe losses |
3.4 | 2.2 | 2.3 | 1.9 | 1.5 | 2.7 | ||||||||||||||||||
Statutory combined ratio excluding
catastrophe losses (adjusted) |
80.3 | % | 89.4 | % | 94.5 | % | 98.8 | % | 112.9 | % | 98.5 | % | ||||||||||||
GAAP combined ratio |
||||||||||||||||||||||||
GAAP combined ratio |
84.1 | % | 91.3 | % | 96.6 | % | 101.7 | % | 117.2 | % | 103.5 | % | ||||||||||||
One-time item |
0.0 | 0.8 | 0.0 | 0.0 | (2.0 | ) | 0.0 | |||||||||||||||||
GAAP combined ratio before one-time item |
84.1 | % | 92.1 | % | 96.6 | % | 101.7 | % | 115.2 | % | 103.5 | % | ||||||||||||
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. nm Not meaningful | ||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. | |
** | Prior to 2001, property casualty written premiums were recognized as they were billed throughout the policy period. Effective January 1, 2001, written premiums have been recognized on an annualized basis at the effective date of the policy. Written premiums for 2000 were reclassified to conform with the 2001 presentation; information was not readily available to reclassify earlier year statutory data. The growth rates in written premiums between 1999 and 2000 are overstated because 1999 premiums are shown on a billed basis. |
21
(Dollars in millions) | Years ended December 31, | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||||||||||
Premiums |
||||||||||||||||||||||||
Adjusted written premiums (statutory)* |
$ | 817 | $ | 780 | $ | 701 | $ | 637 | $ | 610 | $ | 581 | ||||||||||||
Codification |
0 | 0 | 0 | 126 | (4 | ) | 0 | |||||||||||||||||
Written premium adjustment statutory only |
(6 | ) | 4 | 7 | 0 | 0 | 0 | |||||||||||||||||
Reported written premiums (statutory)** |
$ | 811 | $ | 784 | $ | 708 | $ | 763 | $ | 606 | $ | 581 | ||||||||||||
Unearned premiums change |
(18 | ) | (39 | ) | (38 | ) | (143 | ) | (10 | ) | (11 | ) | ||||||||||||
Earned premiums (GAAP) |
$ | 793 | $ | 745 | $ | 670 | $ | 620 | $ | 596 | $ | 570 | ||||||||||||
Year-over-year growth rate: |
||||||||||||||||||||||||
Adjusted written premiums (statutory) |
4.7 | % | 11.3 | % | 10.0 | % | 4.4 | % | 5.0 | % | 8.0 | % | ||||||||||||
Written premiums (statutory) |
3.4 | % | 10.7 | % | (7.2 | )% | 25.9 | % | 4.3 | % | 8.0 | % | ||||||||||||
Earned premiums |
6.4 | % | 11.2 | % | 8.1 | % | 4.0 | % | 4.6 | % | 9.0 | % | ||||||||||||
Statutory combined ratio |
||||||||||||||||||||||||
Reported statutory combined ratio* |
104.6 | % | 102.9 | % | 106.5 | % | 105.9 | % | 110.6 | % | 97.8 | % | ||||||||||||
Codification |
0.0 | 0.0 | 0.0 | 4.6 | (0.2 | ) | 0.0 | |||||||||||||||||
Written premium adjustment statutory only |
nm | nm | 0.3 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||
One-time item |
0.0 | 1.0 | 0.0 | 0.0 | (2.0 | ) | 0.0 | |||||||||||||||||
Statutory combined ratio (adjusted) |
104.6 | % | 103.9 | % | 106.8 | % | 110.5 | % | 108.4 | % | 97.8 | % | ||||||||||||
Less catastrophe losses |
9.7 | 7.3 | 7.1 | 5.8 | 5.4 | 1.4 | ||||||||||||||||||
Statutory combined ratio excluding
catastrophe losses (adjusted) |
94.9 | % | 96.6 | % | 99.7 | % | 104.7 | % | 103.0 | % | 96.4 | % | ||||||||||||
GAAP combined ratio |
||||||||||||||||||||||||
GAAP combined ratio |
105.0 | % | 103.6 | % | 107.6 | % | 112.4 | % | 110.4 | % | 93.8 | % | ||||||||||||
One-time item |
0.0 | 1.1 | 0.0 | 0.0 | (2.4 | ) | 0.0 | |||||||||||||||||
GAAP combined ratio before one-time item |
105.0 | % | 104.7 | % | 107.6 | % | 112.4 | % | 108.0 | % | 93.8 | % | ||||||||||||
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. nm Not meaningful | ||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. | |
** | Prior to 2001, property casualty written premiums were recognized as they were billed throughout the policy period. Effective January 1, 2001, written premiums have been recognized on an annualized basis at the effective date of the policy. Written premiums for 2000 were reclassified to conform with the 2001 presentation; information was not readily available to reclassify earlier year statutory data. The growth rates in written premiums between 1999 and 2000 are overstated because 1999 premiums are shown on a billed basis. |
22
Three months ended | Six months ended | Nine months ended | Twelve months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | |||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 781 | $ | 787 | $ | 748 | $ | 750 | $ | 761 | $ | 767 | $ | 1,568 | $ | 1,528 | $ | 2,278 | $ | 3,026 | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
10 | 10 | (25 | ) | 0 | (27 | ) | 23 | 20 | (4 | ) | (4 | ) | (29 | ) | ||||||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 791 | $ | 797 | $ | 723 | $ | 750 | $ | 734 | $ | 790 | $ | 1,588 | $ | 1,524 | $ | 2,274 | $ | 2,997 | |||||||||||||||||||||||||||||||||||||
Unearned premiums change |
(26 | ) | (44 | ) | 31 | (17 | ) | (17 | ) | (74 | ) | (70 | ) | (92 | ) | (108 | ) | (78 | ) | ||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 765 | $ | 753 | $ | 754 | $ | 733 | $ | 717 | $ | 716 | $ | 1,518 | $ | 1,432 | $ | 2,166 | $ | 2,919 | |||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
86.6 | % | 87.4 | % | 83.6 | % | 97.9 | % | 91.2 | % | 85.1 | % | 86.9 | % | 88.1 | % | 91.4 | % | 89.4 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio |
86.6 | % | 87.4 | % | 83.6 | % | 97.9 | % | 91.2 | % | 85.1 | % | 86.9 | % | 88.1 | % | 91.4 | % | 89.4 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
2.0 | 0.3 | 2.0 | 11.7 | 6.5 | 0.1 | 1.1 | 3.3 | 6.1 | 5.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio
excluding catastrophe losses |
84.6 | % | 87.1 | % | 81.6 | % | 86.2 | % | 84.7 | % | 85.0 | % | 85.8 | % | 84.8 | % | 85.3 | % | 84.3 | % | |||||||||||||||||||||||||||||||||||||
Reported commission expense ratio* |
19.3 | % | 16.8 | % | 19.7 | % | 19.9 | % | 18.9 | % | 18.3 | % | 18.0 | % | 18.6 | % | 19.0 | % | 19.2 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted commission expense ratio |
19.3 | % | 16.8 | % | 19.7 | % | 19.9 | % | 18.9 | % | 18.3 | % | 18.0 | % | 18.6 | % | 19.0 | % | 19.2 | % | |||||||||||||||||||||||||||||||||||||
Reported other expense ratio* |
10.3 | % | 9.8 | % | 11.0 | % | 9.5 | % | 10.8 | % | 9.3 | % | 10.0 | % | 10.0 | % | 9.8 | % | 10.1 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted other expense ratio |
10.3 | % | 9.8 | % | 11.0 | % | 9.5 | % | 10.8 | % | 9.3 | % | 10.0 | % | 10.0 | % | 9.8 | % | 10.1 | % | |||||||||||||||||||||||||||||||||||||
Reported statutory expense ratio* |
29.6 | % | 26.6 | % | 30.7 | % | 29.4 | % | 29.7 | % | 27.6 | % | 28.0 | % | 28.6 | % | 28.9 | % | 29.3 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory expense ratio |
29.6 | % | 26.6 | % | 30.7 | % | 29.4 | % | 29.7 | % | 27.6 | % | 28.0 | % | 28.6 | % | 28.9 | % | 29.3 | % | |||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
87.5 | % | 88.9 | % | 82.6 | % | 97.8 | % | 91.9 | % | 87.1 | % | 88.2 | % | 89.5 | % | 92.3 | % | 89.8 | % | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio before one-time item |
87.5 | % | 88.9 | % | 82.6 | % | 97.8 | % | 91.9 | % | 87.1 | % | 88.2 | % | 89.5 | % | 92.3 | % | 89.8 | % | |||||||||||||||||||||||||||||||||||||
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not equal the full year as each is computed independently. | ||
nm Not meaningful | ||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. |
23
Three months ended | Six months ended | Nine months ended | Twelve months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | |||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 557 | $ | 617 | $ | 555 | $ | 530 | $ | 537 | $ | 587 | $ | 1,174 | $ | 1,124 | $ | 1,656 | $ | 2,209 | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
9 | 12 | (23 | ) | 2 | (25 | ) | 23 | 21 | (2 | ) | (2 | ) | (23 | ) | ||||||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 566 | $ | 629 | $ | 532 | $ | 532 | $ | 512 | $ | 610 | $ | 1,195 | $ | 1,122 | $ | 1,654 | $ | 2,186 | |||||||||||||||||||||||||||||||||||||
Unearned premiums change |
(3 | ) | (78 | ) | 19 | 5 | 8 | (91 | ) | (81 | ) | (84 | ) | (79 | ) | (60 | ) | ||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 563 | $ | 551 | $ | 551 | $ | 537 | $ | 520 | $ | 519 | $ | 1,114 | $ | 1,038 | $ | 1,575 | $ | 2,126 | |||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
83.9 | % | 85.5 | % | 79.1 | % | 92.0 | % | 84.1 | % | 80.3 | % | 84.6 | % | 82.0 | % | 85.4 | % | 83.7 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio |
83.9 | % | 85.5 | % | 79.1 | % | 92.0 | % | 84.1 | % | 80.3 | % | 84.6 | % | 82.0 | % | 85.4 | % | 83.7 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
0.4 | 1.1 | 1.3 | 9.0 | 3.0 | 0.2 | 0.8 | 1.6 | 4.1 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio
excluding catastrophe losses |
83.5 | % | 84.4 | % | 77.8 | % | 83.0 | % | 81.1 | % | 80.1 | % | 83.8 | % | 80.4 | % | 81.3 | % | 80.3 | % | |||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
84.8 | % | 87.5 | % | 78.2 | % | 91.4 | % | 84.4 | % | 82.6 | % | 86.1 | % | 83.5 | % | 86.2 | % | 84.1 | % | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio before one-time item |
84.8 | % | 87.5 | % | 78.2 | % | 91.4 | % | 84.4 | % | 82.6 | % | 86.1 | % | 83.5 | % | 86.2 | % | 84.1 | % | |||||||||||||||||||||||||||||||||||||
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not equal the full year as each is computed independently. | ||
nm Not meaningful | ||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. |
24
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 6/30/2005 | 6/30/2004 | 9/30/2005 | 9/30/2004 | 12/31/2005 | 12/31/2004 | ||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 223 | $ | 170 | $ | 194 | $ | 218 | $ | 224 | $ | 180 | $ | 393 | $ | 404 | $ | 623 | $ | 817 | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
1 | (2 | ) | (3 | ) | (1 | ) | (2 | ) | 0 | (1 | ) | (2 | ) | (3 | ) | (6 | ) | |||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 224 | $ | 168 | $ | 191 | $ | 217 | $ | 222 | $ | 180 | $ | 392 | $ | 402 | $ | 620 | $ | 811 | |||||||||||||||||||||||||||||||||||||
Unearned premiums change |
(22 | ) | 34 | 12 | (21 | ) | (25 | ) | 17 | 8 | (8 | ) | (30 | ) | (18 | ) | |||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 202 | $ | 202 | $ | 203 | $ | 196 | $ | 197 | $ | 197 | $ | 404 | $ | 394 | $ | 590 | $ | 793 | |||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
93.6 | % | 94.0 | % | 96.0 | % | 114.4 | % | 110.1 | % | 98.7 | % | 93.7 | % | 104.3 | % | 107.6 | % | 104.6 | % | |||||||||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
nm | nm | nm | nm | nm | nm | nm | nm | nm | nm | |||||||||||||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted statutory combined ratio |
93.6 | % | 94.0 | % | 96.0 | % | 114.4 | % | 110.1 | % | 98.7 | % | 93.7 | % | 104.3 | % | 107.6 | % | 104.6 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
6.2 | 2.0 | 4.2 | 19.3 | 15.7 | 0.0 | 2.1 | 7.8 | 11.6 | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted
statutory combined ratio excluding catastrophe losses |
87.4 | % | 96.0 | % | 91.8 | % | 95.1 | % | 94.4 | % | 98.9 | % | 91.6 | % | 96.5 | % | 96.0 | % | 94.9 | % | |||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
95.3 | % | 92.7 | % | 94.5 | % | 115.4 | % | 111.6 | % | 98.8 | % | 94.0 | % | 105.2 | % | 108.6 | % | 105.0 | % | |||||||||||||||||||||||||||||||||||||
One-time item |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio before one-time
item |
95.3 | % | 92.7 | % | 94.5 | % | 115.4 | % | 111.6 | % | 98.8 | % | 94.0 | % | 105.2 | % | 108.6 | % | 105.0 | % | |||||||||||||||||||||||||||||||||||||
25
Three months ended | Six months ended | Nine months ended | Twelve months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | 12/31/04 | 9/30/04 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 9/30/05 | 9/30/04 | 12/31/05 | 12/31/04 | |||||||||||||||||||||||||||||||||||||||||||
Commercial multi-peril: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 202 | $ | 197 | $ | 195 | $ | 187 | $ | 182 | $ | 186 | $ | 399 | $ | 368 | $ | 556 | $ | 751 | |||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
57.3 | % | 72.2 | % | 62.6 | % | 72.4 | % | 56.8 | % | 57.7 | % | 64.7 | % | 57.2 | % | 62.4 | % | 62.4 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
0.9 | 2.6 | 1.4 | 23.0 | 6.6 | (0.7 | ) | 1.8 | 2.9 | 9.6 | 7.5 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
56.4 | % | 69.6 | % | 61.1 | % | 49.4 | % | 50.2 | % | 58.4 | % | 62.9 | % | 54.4 | % | 52.8 | % | 54.9 | % | |||||||||||||||||||||||||||||||||||||
Workers compensation: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 82 | $ | 79 | $ | 80 | $ | 80 | $ | 78 | $ | 75 | $ | 161 | $ | 153 | $ | 233 | $ | 313 | |||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
77.1 | % | 76.5 | % | 82.8 | % | 79.1 | % | 69.2 | % | 90.6 | % | 76.8 | % | 79.7 | % | 79.5 | % | 80.3 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
77.1 | % | 76.5 | % | 82.8 | % | 79.1 | % | 69.2 | % | 90.6 | % | 76.8 | % | 79.7 | % | 79.5 | % | 80.3 | % | |||||||||||||||||||||||||||||||||||||
Commercial auto: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 113 | $ | 113 | $ | 115 | $ | 114 | $ | 111 | $ | 110 | $ | 226 | $ | 221 | $ | 335 | $ | 450 | |||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
58.8 | % | 57.9 | % | 51.9 | % | 59.6 | % | 53.1 | % | 44.7 | % | 58.4 | % | 48.9 | % | 52.6 | % | 52.4 | % | |||||||||||||||||||||||||||||||||||||
Less Catastrophe loss ratio |
0.2 | 0.0 | 0.3 | 1.0 | 0.5 | (0.5 | ) | 0.1 | 0.0 | 0.3 | 0.3 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
58.6 | % | 57.9 | % | 51.6 | % | 58.6 | % | 52.6 | % | 45.2 | % | 58.3 | % | 48.9 | % | 52.3 | % | 52.1 | % | |||||||||||||||||||||||||||||||||||||
Other liability: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 109 | $ | 106 | $ | 107 | $ | 103 | $ | 98 | $ | 94 | $ | 215 | $ | 193 | $ | 296 | $ | 402 | |||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
39.3 | % | 39.1 | % | (0.1 | )% | 37.2 | % | 45.9 | % | 34.4 | % | 39.2 | % | 40.2 | % | 39.2 | % | 28.8 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
39.3 | % | 39.1 | % | (0.1 | )% | 37.2 | % | 45.9 | % | 34.4 | % | 39.2 | % | 40.2 | % | 39.2 | % | 28.8 | % | |||||||||||||||||||||||||||||||||||||
Personal auto: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 110 | $ | 111 | $ | 113 | $ | 113 | $ | 112 | $ | 113 | $ | 220 | $ | 225 | $ | 338 | $ | 451 | |||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
61.5 | % | 60.6 | % | 71.2 | % | 63.9 | % | 62.9 | % | 66.3 | % | 61.0 | % | 64.6 | % | 64.4 | % | 66.1 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
1.1 | 0.2 | 0.6 | 1.4 | 2.3 | (0.2 | ) | 0.6 | 1.0 | 1.1 | 1.0 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
60.4 | % | 60.4 | % | 70.7 | % | 62.5 | % | 60.6 | % | 66.5 | % | 60.4 | % | 63.6 | % | 63.3 | % | 65.1 | % | |||||||||||||||||||||||||||||||||||||
Homeowner: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 71 | $ | 70 | $ | 68 | $ | 62 | $ | 64 | $ | 64 | $ | 141 | $ | 128 | $ | 191 | $ | 259 | |||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
73.3 | % | 64.0 | % | 68.3 | % | 130.7 | % | 119.1 | % | 68.8 | % | 68.7 | % | 94.0 | % | 106.0 | % | 96.1 | % | |||||||||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
15.6 | (7.2 | ) | 10.1 | 55.8 | 43.1 | (0.1 | ) | 4.3 | 21.5 | 32.7 | 26.8 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
57.7 | % | 71.2 | % | 58.2 | % | 74.9 | % | 76.0 | % | 68.9 | % | 64.4 | % | 72.5 | % | 73.3 | % | 69.3 | % | |||||||||||||||||||||||||||||||||||||
Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. The sum of quarterly amounts may not equal the full year as each is computed independently. |
26
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||||||||||||||||||||
2005 | 2004 | Change | % Change | 2005 | 2004 | Change | % Change | ||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||
Property casualty |
$ | 0 | $ | 0 | $ | 0 | NA | $ | 0 | $ | 0 | $ | 0 | NA | |||||||||||||||||||
Life |
38,053,773 | 33,745,792 | 4,307,981 | 12.77 | 69,570,579 | 64,339,306 | 5,231,273 | 8.13 | |||||||||||||||||||||||||
Accident health |
1,436,094 | 1,392,820 | 43,274 | 3.11 | 3,089,251 | 2,973,784 | 115,467 | 3.88 | |||||||||||||||||||||||||
Premiums ceded |
(10,266,701 | ) | (8,165,891 | ) | (2,100,810 | ) | (25.73 | ) | (19,659,993 | ) | (15,674,427 | ) | (3,985,566 | ) | (25.43 | ) | |||||||||||||||||
Total premiums earned |
29,223,166 | 26,972,721 | 2,250,445 | 8.34 | 52,999,837 | 51,638,663 | 1,361,174 | 2.64 | |||||||||||||||||||||||||
Investment income |
24,422,519 | 22,172,675 | 2,249,844 | 10.15 | 48,396,996 | 44,126,900 | 4,270,096 | 9.68 | |||||||||||||||||||||||||
Realized investment gains and losses |
5,352,141 | 4,465,280 | 886,861 | 19.86 | 7,644,838 | 4,698,869 | 2,945,969 | 62.70 | |||||||||||||||||||||||||
Other income |
846,798 | 753,783 | 93,015 | 12.34 | 1,594,320 | 1,483,565 | 110,755 | 7.47 | |||||||||||||||||||||||||
Total revenues |
$ | 59,844,624 | $ | 54,364,459 | $ | 5,480,165 | 10.08 | $ | 110,635,991 | $ | 101,947,997 | $ | 8,687,994 | 8.52 | |||||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 44,534,290 | $ | 43,364,973 | $ | 1,169,317 | 2.70 | $ | 79,180,808 | $ | 81,170,391 | $ | (1,989,583 | ) | (2.45 | ) | |||||||||||||||||
Reinsurance recoveries |
(18,810,323 | ) | (17,765,358 | ) | (1,044,965 | ) | (5.88 | ) | (29,570,229 | ) | (33,358,963 | ) | 3,788,734 | 11.36 | |||||||||||||||||||
Commissions |
8,696,258 | 8,067,609 | 628,649 | 7.79 | 16,992,069 | 15,412,238 | 1,579,831 | 10.25 | |||||||||||||||||||||||||
Other operating expenses |
6,726,436 | 6,794,170 | (67,734 | ) | (1.00 | ) | 11,264,457 | 12,443,398 | (1,178,941 | ) | (9.47 | ) | |||||||||||||||||||||
Interest expense |
0 | 0 | 0 | NA | 0 | 0 | 0 | NA | |||||||||||||||||||||||||
Taxes, licenses & fees |
1,073,625 | 967,678 | 105,947 | 10.95 | 2,151,112 | 2,084,414 | 66,698 | 3.20 | |||||||||||||||||||||||||
Incr deferred acq expense |
(2,032,577 | ) | (2,499,289 | ) | 466,712 | 18.67 | (4,782,772 | ) | (3,954,251 | ) | (828,521 | ) | (20.95 | ) | |||||||||||||||||||
Other expenses |
44 | 69 | (25 | ) | (36.23 | ) | 108 | 105 | 3 | 2.86 | |||||||||||||||||||||||
Total expenses |
$ | 40,187,753 | $ | 38,929,852 | $ | 1,257,901 | 3.23 | $ | 75,235,553 | $ | 73,797,332 | $ | 1,438,221 | 1.95 | |||||||||||||||||||
Income before income taxes |
$ | 19,656,871 | $ | 15,434,607 | $ | 4,222,264 | 27.36 | $ | 35,400,438 | $ | 28,150,665 | $ | 7,249,773 | 25.75 | |||||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||
Current |
$ | 3,031,405 | $ | 1,476,390 | $ | 1,555,015 | 105.33 | $ | 6,245,875 | $ | 5,784,353 | $ | 461,522 | 7.98 | |||||||||||||||||||
Current capital gains/losses |
1,873,249 | 1,562,848 | 310,401 | 19.86 | 2,675,693 | 1,644,604 | 1,031,089 | 62.70 | |||||||||||||||||||||||||
Deferred |
1,811,804 | 2,182,023 | (370,219 | ) | (16.97 | ) | 3,123,875 | 2,065,113 | 1,058,762 | 51.27 | |||||||||||||||||||||||
Total income taxes |
$ | 6,716,458 | $ | 5,221,261 | $ | 1,495,197 | 28.64 | $ | 12,045,443 | $ | 9,494,070 | $ | 2,551,373 | 26.87 | |||||||||||||||||||
Net income |
$ | 12,940,413 | $ | 10,213,346 | $ | 2,727,067 | 26.70 | $ | 23,354,995 | $ | 18,656,595 | $ | 4,698,400 | 25.18 |
27
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||||||||||||
2005 | 2004 | % Change | 2005 | 2004 | % Change | ||||||||||||||||||||
Net premiums written |
$ | 50,826,408.30 | $ | 47,635,868.48 | 6.70 | $ | 100,310,028.60 | $ | 78,646,215.80 | 27.55 | |||||||||||||||
Net investment income |
24,422,518.82 | 22,172,674.91 | 10.15 | 48,396,996.07 | 44,126,900.04 | 9.68 | |||||||||||||||||||
Amortization of interest maintenance reserve |
1,414,427.00 | 158,697.50 | 791.27 | 1,679,919.00 | 289,157.50 | 480.97 | |||||||||||||||||||
Commissions and expense allowances on reinsurance ceded |
2,834,889.60 | 4,217,377.76 | (32.78 | ) | 6,452,441.57 | 8,441,717.89 | (23.56 | ) | |||||||||||||||||
Income from fees associated with Separate Accounts |
846,797.36 | 753,782.80 | 12.34 | 1,594,319.63 | 1,483,565.37 | 7.47 | |||||||||||||||||||
Total revenues |
$ | 80,345,041.08 | $ | 74,938,401.45 | 7.21 | $ | 158,433,704.87 | $ | 132,987,556.60 | 19.13 | |||||||||||||||
Death benefits and matured endowments |
$ | 7,332,486.61 | $ | 8,133,953.38 | (9.85 | ) | $ | 15,022,527.94 | $ | 15,391,041.94 | (2.39 | ) | |||||||||||||
Annuity benefits |
4,699,020.66 | 5,758,999.12 | (18.41 | ) | 7,767,445.31 | 10,754,892.68 | (27.78 | ) | |||||||||||||||||
Disability benefits and benefits under accident and health contracts |
521,623.60 | 490,986.41 | 6.24 | 562,209.61 | 1,005,718.41 | (44.10 | ) | ||||||||||||||||||
Surrender benefits and group conversions |
3,730,233.58 | 4,593,509.42 | (18.79 | ) | 9,503,648.72 | 7,984,187.92 | 19.03 | ||||||||||||||||||
Interest and adjustments on deposit-type contract funds |
2,751,374.83 | 2,214,791.27 | 24.23 | 5,023,109.51 | 4,077,637.94 | 23.19 | |||||||||||||||||||
Increase in aggregate reserves for life and accident and health
contracts |
40,627,409.96 | 29,789,854.87 | 36.38 | 77,628,755.97 | 46,341,508.67 | 67.51 | |||||||||||||||||||
Payments on supplementary contracts with life contingencies |
75,156.91 | 150,170.54 | (49.95 | ) | 147,405.58 | 214,977.10 | (31.43 | ) | |||||||||||||||||
Total benefit expenses |
$ | 59,737,306.15 | $ | 51,132,265.01 | 16.83 | $ | 115,655,102.64 | $ | 85,769,964.66 | 34.84 | |||||||||||||||
Commissions |
$ | 8,696,258.57 | $ | 8,067,608.55 | 7.79 | $ | 16,992,069.38 | $ | 15,412,237.66 | 10.25 | |||||||||||||||
General insurance expenses and taxes |
7,904,098.10 | 7,517,650.66 | 5.14 | 15,818,695.39 | 15,156,971.62 | 4.37 | |||||||||||||||||||
Increase in loading on deferred and uncollected premiums |
(1,309,051.35 | ) | (739,756.00 | ) | (76.96 | ) | (3,805,278.35 | ) | (2,304,843.00 | ) | (65.10 | ) | |||||||||||||
Net transfers to or (from) Separate Accounts |
0.00 | 0.00 | N/A | 0.00 | 0.00 | N/A | |||||||||||||||||||
Other deductions |
44.15 | 69.17 | (36.17 | ) | 107.96 | 105.49 | 2.34 | ||||||||||||||||||
Total operating expenses |
$ | 15,291,349.47 | $ | 14,845,572.38 | 3.00 | $ | 29,005,594.38 | $ | 28,264,471.77 | 2.62 | |||||||||||||||
Federal and Foreign Income Taxes Incurred |
3,589,629.00 | 2,273,000.00 | 57.92 | 6,577,240.00 | 6,565,000.00 | 0.19 | |||||||||||||||||||
Net gain from operations before realized capital gains or (losses) |
$ | 1,726,756.46 | $ | 6,687,564.06 | (74.18 | ) | $ | 7,195,767.85 | $ | 12,388,120.17 | (41.91 | ) | |||||||||||||
Net realized gains or (losses) net of capital gains tax |
109,922.36 | 1,261,655.38 | (91.29 | ) | 1,320,603.67 | 1,101,764.97 | 19.86 | ||||||||||||||||||
Net Income (Statutory) |
$ | 1,836,678.82 | $ | 7,949,219.44 | (76.89 | ) | $ | 8,516,371.52 | $ | 13,489,885.14 | (36.87 | ) | |||||||||||||
* | Statutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. |
28
(In millions) | Three months ended | Six months ended | Years ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
6/30/05 | 3/31/05 | 6/30/04 | 3/31/04 | 6/30/05 | 6/30/04 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||||||||||||||||||||||||||||||
Gross Written Premiums | $ | 64 | $ | 62 | $ | 59 | $ | 43 | $ | 126 | $ | 102 | $ | 230 | $ | 173 | $ | 244 | $ | 122 | $ | 157 | $ | 421 | ||||||||||||||||||||||||||
Bank Owned Life Insurance (BOLI) Adjustment | 0 | | 0 | | 0 | | (10 | ) | | (34 | ) | | (20 | ) | (303 | ) | ||||||||||||||||||||||||||||||||||
Adjusted Gross Written Premiums | $ | 64 | $ | 62 | $ | 59 | $ | 43 | $ | 126 | $ | 102 | $ | 220 | $ | 173 | $ | 210 | $ | 122 | $ | 137 | $ | 118 | ||||||||||||||||||||||||||
Insurance Expense | $ | 8 | $ | 7 | $ | 6 | $ | 7 | $ | 14 | $ | 13 | $ | 25 | $ | 25 | $ | 27 | $ | 25 | $ | 20 | $ | 19 | ||||||||||||||||||||||||||
Expense Ratio | 10.7 | % | 10.9 | % | 10.9 | % | 15.3 | % | 10.8 | % | 12.7 | % | 11.1 | % | 14.8 | % | 10.9 | % | 20.6 | % | 12.9 | % | 4.4 | % | ||||||||||||||||||||||||||
Expense Ratio based on Adjusted Gross Written Premium | 10.7 | % | 10.9 | % | 10.9 | % | 15.3 | % | 10.8 | % | 12.7 | % | 11.6 | % | 14.8 | % | 12.6 | % | 20.6 | % | 14.8 | % | 15.7 | % | ||||||||||||||||||||||||||
29
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