Ohio (State or other jurisdiction of incorporation) |
0-4604 (Commission File Number) |
31-0746871 (I.R.S. Employer Identification No.) |
6200 S. Gilmore Road, Fairfield, Ohio (Address of principal executive offices) |
45014-5141 (Zip Code) |
Exhibit 99.1 | News release dated February 6, 2008, Cincinnati Financial Reports Fourth-quarter and Full-year 2007 Results | ||
Exhibit 99.2 | Supplemental Financial Data dated February 6, 2008 | ||
Exhibit 99.3 | News release dated February 4, 2008, titled Cincinnati Financial Corporation Increases Cash Dividend | ||
Exhibit 99.4 | News release dated February 4, 2008, titled Cincinnati Financial Corporation and Subsidiaries Announce Appointments |
CINCINNATI FINANCIAL CORPORATION |
Kenneth W. Stecher | ||||
Chief Financial Officer, Executive Vice President,
Secretary and Treasurer (Principal Accounting Officer) |
||||
Investor Contact: Heather J. Wietzel 513-870-2768 CINF-IR@cinfin.com Media Contact: Joan O. Shevchik 513-603-5323 Media_Inquiries@cinfin.com |
| Fourth-quarter net income of $187 million, or $1.11 per share, compared with $130 million, or 75 cents, in the 2006 fourth quarter. Operating income* of $179 million, or $1.07 per share, compared with $122 million, or 70 cents. | |
| Full-year 2007 net income of $855 million, or $4.97 per share, compared with $930 million, or $5.30, in 2006. Operating income a record $610 million, or $3.54 per share, compared with $496 million, or $2.82. | |
| Full-year 2007 property casualty underwriting profits of $304 million compared with $181 million in 2006. |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
(Dollars in millions except share data) | 2007 | 2006 | Change % | 2007 | 2006 | Change % | ||||||||||||||||||
Revenue Highlights |
||||||||||||||||||||||||
Earned premiums |
$ | 809 | $ | 830 | (2.5 | ) | $ | 3,250 | $ | 3,270 | (0.6 | ) | ||||||||||||
Investment income |
157 | 145 | 8.5 | 608 | 570 | 6.6 | ||||||||||||||||||
Total revenues |
983 | 992 | (0.9 | ) | 4,259 | 4,542 | (6.2 | ) | ||||||||||||||||
Income Statement Data |
||||||||||||||||||||||||
Net income |
$ | 187 | $ | 130 | 43.2 | $ | 855 | $ | 930 | (8.0 | ) | |||||||||||||
Net realized investment gains and
losses |
8 | 8 | (4.7 | ) | 245 | 434 | (43.5 | ) | ||||||||||||||||
Operating income* |
$ | 179 | $ | 122 | 46.4 | $ | 610 | $ | 496 | 23.1 | ||||||||||||||
Per Share Data (diluted) |
||||||||||||||||||||||||
Net income |
$ | 1.11 | $ | 0.75 | 48.0 | $ | 4.97 | $ | 5.30 | (6.2 | ) | |||||||||||||
Net realized investment gains and
losses |
0.04 | 0.05 | (20.0 | ) | 1.43 | 2.48 | (42.3 | ) | ||||||||||||||||
Operating income* |
$ | 1.07 | $ | 0.70 | 52.9 | $ | 3.54 | $ | 2.82 | 25.5 | ||||||||||||||
Book value |
$ | 35.70 | $ | 39.38 | (9.3 | ) | ||||||||||||||||||
Cash dividend declared |
$ | 0.355 | $ | 0.335 | 6.0 | $ | 1.42 | $ | 1.34 | 6.0 | ||||||||||||||
Weighted average shares outstanding |
168,163,752 | 174,988,162 | (3.9 | ) | 172,167,452 | 175,451,341 | (1.9 | ) |
| 85.6 percent fourth-quarter 2007 property casualty combined ratio with 4.1 percent decrease in net written premiums; 90.3 percent full-year 2007 property casualty combined ratio with 1.9 percent decrease in net written premiums. | |
| Profitability improved from prior year periods because of lowest catastrophe loss ratio in over 15 years and $244 million in full-year savings from favorable development on prior period reserves compared with $116 million in 2006. | |
| Continuing new business activity and policyholder retention levels illustrate value of the companys relationships with independent insurance agents in a competitive market. | |
| 23 cent per share contribution from life insurance operating income to full-year results, up from 19 cents in 2006. |
| 8.5 percent growth in fourth-quarter 2007 pretax investment income with 6.6 percent full-year increase. Investment income benefited from strong dividend increases in the equity portfolio. | |
| Book value of $35.70 per share compared with $39.38 at year-end 2006. Invested assets and book value declined primarily on lower market values of financial sector equity holdings. | |
| $245 million in full-year 2007 net realized investment gains and losses compared with $434 million in full-year 2006. 2006 gains included the sale of the companys second largest common stock holding. | |
| 3.3 million reduction in weighted-average shares outstanding in 2007. Repurchases of the companys common stock totaled 7.5 million shares at a cost of $306 million, including fourth-quarter accelerated share repurchase. |
| Property casualty insurance operations Management anticipates lower net written premiums due to competitive pricing, with upward pressure on the combined ratio for 2008. | |
| Investment operations Management anticipates slower growth in investment income as financial sector holdings evaluate dividend levels. Portfolio strategies to balance near-term income generation and long-term book value growth continue to be our focus. |
* | 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. | |
** | Forward-looking statements and related assumptions are subject to the risks outlined in the companys safe-harbor statement (see Page 8). |
2
| Current accident year loss ratio excluding catastrophe losses The company believes the market trends that contributed to an increase in this ratio in 2007 are continuing and may put the ratio under further pressure in 2008. | |
| Catastrophe loss ratio The company assumes catastrophe losses would contribute approximately 4.5 percentage points to the full-year 2008 combined ratio. Stecher noted the unpredictability of catastrophic events in any given year. Catastrophe losses have made an average contribution of 3.7 percentage points to the companys combined ratio in the past 10 years, ranging from 2007s low of 0.8 points to 1998s high of 6.1 points. | |
| Savings from favorable development on prior period reserves The company assumes savings from favorable development would reduce the full-year 2008 combined ratio by approximately 4 percentage points. Stecher indicated that management will continue to rely on sound actuarial analysis in the determination of loss and loss expense reserves, even as market conditions soften. |
3
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
(Dollars in millions) | 2007 | 2006 | Change % | 2007 | 2006 | Change % | ||||||||||||||||||
Written premiums |
$ | 724 | $ | 755 | (4.1 | ) | $ | 3,117 | $ | 3,178 | (1.9 | ) | ||||||||||||
Earned premiums |
$ | 777 | $ | 802 | (3.1 | ) | $ | 3,125 | $ | 3,164 | (1.2 | ) | ||||||||||||
Loss and loss expenses excluding
catastrophes |
397 | 458 | (13.3 | ) | 1,806 | 1,833 | (1.5 | ) | ||||||||||||||||
Catastrophe loss and loss expenses |
(2 | ) | 44 | (104.0 | ) | 26 | 175 | (85.1 | ) | |||||||||||||||
Commission expenses |
159 | 144 | 10.3 | 599 | 596 | 0.4 | ||||||||||||||||||
Underwriting expenses |
105 | 108 | (2.3 | ) | 375 | 363 | 3.2 | |||||||||||||||||
Policyholder dividends |
6 | 4 | 41.6 | 15 | 16 | (5.4 | ) | |||||||||||||||||
Underwriting profit |
$ | 112 | $ | 44 | 153.4 | $ | 304 | $ | 181 | 68.3 | ||||||||||||||
Ratios as a percent of earned premiums: |
||||||||||||||||||||||||
Loss and loss expenses excluding
catastrophes |
51.1 | % | 57.1 | % | 57.8 | % | 58.0 | % | ||||||||||||||||
Catastrophe loss and loss expenses |
(0.2 | ) | 5.5 | 0.8 | 5.5 | |||||||||||||||||||
Loss and loss expenses |
50.9 | % | 62.6 | % | 58.6 | % | 63.5 | % | ||||||||||||||||
Commission expenses |
20.5 | 18.0 | 19.2 | 18.8 | ||||||||||||||||||||
Underwriting expenses |
13.4 | 13.3 | 12.0 | 11.5 | ||||||||||||||||||||
Policyholder dividends |
0.8 | 0.6 | 0.5 | 0.5 | ||||||||||||||||||||
Combined ratio |
85.6 | % | 94.5 | % | 90.3 | % | 94.3 | % |
| $81 million in fourth-quarter 2007 new business written directly by agencies compared with $88 million in last years fourth quarter. Full-year new business was $325 million in 2007 compared with $357 million in 2006. | |
| 1,092 agency relationships with 1,327 reporting locations marketed our insurance products at year-end 2007, up from 1,066 agency relationships with 1,289 reporting locations at year-end 2006. | |
| Contributions to premiums and underwriting income from excess and surplus lines will begin in 2008. | |
| 2008 property casualty reinsurance program finalized. Program updated to maintain balance between the cost of the program and the level of risk retained. Reinsurance costs expected to decline slightly due to slightly higher retention levels and moderating rates for certain lines of business. |
Treaties | Retention Summary | Comments | ||
Property catastrophe
|
For any one event, retain losses of: 100% of first $45 million
43% between $45 million and
$70 million
5% between $70 million and $200
million
11% to 19% for layers between $200
million and $500 million
|
After
reinsurance, our maximum
exposure to a
catastrophic event that
caused $500 million in
covered losses would be
$105 million compared
with $103 million in
2007. The largest
catastrophe loss in our
history was $87 million
before reinsurance. |
||
Casualty per risk
|
For a single loss, retain: 100% of first $5 million
0% between $5 million and $25 million
Obtain facultative reinsurance above
$25 million
|
Increased
casualty treaty
retention to $5 million
from $4 million |
||
Property per risk
|
For a single loss, retain: 100% of first $4 million
0% between $4 million and $25 million
Obtain facultative reinsurance above
$25 million
|
No changes in 2008 |
||
Casualty third excess
|
$25 million excess of $25 million
|
No changes in 2008 |
||
Casualty fourth excess
|
$20 million excess of $50 million
|
No changes in 2008 |
4
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
(Dollars in millions) | 2007 | 2006 | Change % | 2007 | 2006 | Change % | ||||||||||||||||||
Written premiums |
$ | 562 | $ | 589 | (4.6 | ) | $ | 2,413 | $ | 2,442 | (1.2 | ) | ||||||||||||
Earned premiums |
$ | 601 | $ | 619 | (3.0 | ) | $ | 2,411 | $ | 2,402 | 0.4 | |||||||||||||
Loss and loss expenses excluding
catastrophes |
310 | 357 | (13.2 | ) | 1,378 | 1,377 | 0.1 | |||||||||||||||||
Catastrophe loss and loss expenses |
0 | 11 | nm | 16 | 89 | (81.3 | ) | |||||||||||||||||
Commission expenses |
123 | 113 | 9.2 | 454 | 444 | 2.0 | ||||||||||||||||||
Underwriting expenses |
86 | 79 | 8.7 | 287 | 268 | 7.0 | ||||||||||||||||||
Policyholder dividends |
6 | 4 | 41.6 | 15 | 16 | (5.4 | ) | |||||||||||||||||
Underwriting profit |
$ | 76 | $ | 55 | 38.1 | $ | 261 | $ | 208 | 25.4 | ||||||||||||||
Ratios as a percent of earned premiums: |
||||||||||||||||||||||||
Loss and loss expenses excluding
catastrophes |
51.5 | % | 57.6 | % | 57.2 | % | 57.3 | % | ||||||||||||||||
Catastrophe loss and loss expenses |
0.0 | 1.9 | 0.7 | 3.7 | ||||||||||||||||||||
Loss and loss expenses |
51.5 | % | 59.5 | % | 57.9 | % | 61.0 | % | ||||||||||||||||
Commission expenses |
20.6 | 18.3 | 18.8 | 18.5 | ||||||||||||||||||||
Underwriting expenses |
14.1 | 12.6 | 11.9 | 11.1 | ||||||||||||||||||||
Policyholder dividends |
1.1 | 0.7 | 0.6 | 0.7 | ||||||||||||||||||||
Combined ratio |
87.3 | % | 91.1 | % | 89.2 | % | 91.3 | % | ||||||||||||||||
| $562 million of commercial lines net written premiums for the three months ended December 31, 2007. $71 million of new fourth-quarter commercial lines business written directly by agencies, down 10.5 percent from $80 million in the comparable 2006 quarter. | |
| $2.413 billion of commercial lines net written premiums for full-year 2007. $287 million of new 2007 commercial lines business written directly by agencies, down 11.5 percent from $324 million for full-year 2006. | |
| Direct bill payment option now available for businessowners policies issued through e-CLAS policy processing system. Selected agencies received this capability in 2007, with first-quarter 2008 rollout planned for all agencies currently using e-CLAS. By the end of 2008, development of a direct bill payment option for commercial policies not issued through e-CLAS is anticipated. | |
| 89.2 percent full-year 2007 commercial lines combined ratio, improved 2.1 percentage points over 91.3 percent in full-year 2006. This result included higher current accident year losses excluding catastrophe losses and higher expenses. These increases were more than offset by lower catastrophe losses and higher savings from favorable development on prior period reserves. | |
| 3.8 percentage point increase in full-year 2007 current accident year loss ratio excluding catastrophe losses, due to non-catastrophe weather-related losses and softening market conditions. | |
| Commercial lines insurance industry combined ratio for full-year 2007 estimated at 94.0 percent with decline in net written premiums estimated at 1.5 percent. |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
(Dollars in millions) | 2007 | 2006 | Change % | 2007 | 2006 | Change % | ||||||||||||||||||
Written premiums |
$ | 162 | $ | 166 | (2.3 | ) | $ | 704 | $ | 736 | (4.4 | ) | ||||||||||||
Earned premiums |
$ | 176 | $ | 183 | (3.7 | ) | $ | 714 | $ | 762 | (6.3 | ) | ||||||||||||
Loss and loss expenses excluding catastrophes |
87 | 101 | (13.9 | ) | 428 | 456 | (6.2 | ) | ||||||||||||||||
Catastrophe loss and loss expenses |
(2 | ) | 33 | (105.3 | ) | 10 | 86 | (89.0 | ) | |||||||||||||||
Commission expenses |
36 | 31 | 14.1 | 145 | 152 | (4.4 | ) | |||||||||||||||||
Underwriting expenses |
19 | 29 | (32.5 | ) | 88 | 95 | (7.5 | ) | ||||||||||||||||
Underwriting profit (loss) |
$ | 36 | $ | (11 | ) | 426.3 | $ | 43 | $ | (27 | ) | 260.9 | ||||||||||||
Ratios as a percent of earned premiums: |
||||||||||||||||||||||||
Loss and loss expenses excluding catastrophes |
49.6 | % | 55.5 | % | 60.0 | % | 59.9 | % | ||||||||||||||||
Catastrophe loss and loss expenses |
(1.0 | ) | 17.9 | 1.3 | 11.3 | |||||||||||||||||||
Loss and loss expenses |
48.6 | % | 73.4 | % | 61.3 | % | 71.2 | % | ||||||||||||||||
Commission expenses |
20.1 | 16.9 | 20.3 | 19.9 | ||||||||||||||||||||
Underwriting expenses |
11.0 | 15.7 | 12.3 | 12.5 | ||||||||||||||||||||
Combined ratio |
79.7 | % | 106.0 | % | 93.9 | % | 103.6 | % | ||||||||||||||||
| $162 million of personal lines net written premiums for the three months ended December 31, 2007. $10 million of new fourth-quarter personal lines business written directly by agencies, up 12.1 percent from $9 million in the comparable 2006 quarter. |
5
| $704 million of personal lines net written premiums for full-year 2007. $38 million of new 2007 personal lines business written directly by agencies, up 16.9 percent from $33 million in full-year 2006. | |
| This was the sixth consecutive quarter of new business growth following July 2006 introduction of a limited program of policy credits for homeowner and personal auto pricing in most states where the companys Diamond personal lines policy processing system is in use. Lower premiums per policy continue to constrain new and renewal premium growth. | |
| 93.9 percent full-year 2007 personal lines combined ratio, an improvement of 9.7 percentage points over 103.6 percent in full-year 2006. This result included higher current accident year losses excluding catastrophe losses. That increase was more than offset by lower catastrophe losses and higher savings from favorable development on prior period reserves. | |
| 2.3 percentage point increase in full-year 2007 current accident year loss ratio excluding catastrophe losses, due to non-catastrophe weather-related losses and lower personal auto pricing. | |
| Personal lines insurance industry combined ratio for full-year 2007 estimated at 97.0 percent on flat net written premiums. |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
(In millions) | 2007 | 2006 | Change % | 2007 | 2006 | Change % | ||||||||||||||||||
Written premiums |
$ | 41 | $ | 41 | (0.1 | ) | $ | 167 | $ | 161 | 3.2 | |||||||||||||
Earned premiums |
$ | 32 | $ | 29 | 11.0 | $ | 125 | $ | 107 | 17.4 | ||||||||||||||
Investment income, net of expenses |
30 | 27 | 10.2 | 115 | 108 | 6.3 | ||||||||||||||||||
Other income |
1 | 1 | (1.0 | ) | 4 | 3 | 25.1 | |||||||||||||||||
Total revenues, excluding realized investment gains and losses |
63 | 57 | 10.4 | 244 | 218 | 12.0 | ||||||||||||||||||
Policyholder benefits |
35 | 30 | 15.0 | 133 | 122 | 9.2 | ||||||||||||||||||
Expenses |
15 | 16 | (6.8 | ) | 52 | 43 | 20.1 | |||||||||||||||||
Total benefits and expenses |
50 | 46 | 7.6 | 185 | 165 | 12.0 | ||||||||||||||||||
Net income before income tax and
realized investment gains and losses |
13 | 11 | 22.8 | 59 | 53 | 12.1 | ||||||||||||||||||
Income tax |
4 | 4 | 17.9 | 20 | 19 | 5.2 | ||||||||||||||||||
Net income before realized investment gains and losses |
$ | 9 | $ | 7 | 25.3 | $ | 39 | $ | 34 | 15.9 | ||||||||||||||
| $167 million in total 2007 life insurance segment net written premiums. Written premiums include life insurance, annuity and accident and health premiums. | |
| 10.5 percent increase to $141 million in 2007 in written premiums for life insurance products. | |
| 21.6 percent rise in full-year term life insurance written premiums, reflecting marketing advantages of competitive, up-to-date products, providing close personal attention and exhibiting financial strength and stability. Statutory written annuity premiums decreased to $22 million in 2007 from $30 million in 2006. Since late 2005, the company has de-emphasized annuity sales due to unfavorable market conditions. | |
| 8.6 percent rise in face amount of life policies in force to $61.875 billion at year-end 2007, from $56.971 billion at year-end 2006. | |
| $5 million increase in 2007 operating profit due to favorable mortality experience and persistency as well as healthy earned premium and investment income growth. | |
| 2008 plans include redesign of all life term insurance products. In addition to redesigning the worksite term product, we will update the full worksite life portfolio. These improvements support opportunities to cross-sell life insurance products to clients of the independent agencies that sell Cincinnatis property casualty insurance policies. |
6
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
(In millions) | 2007 | 2006 | Change % | 2007 | 2006 | Change % | ||||||||||||||||||
Investment income: |
||||||||||||||||||||||||
Interest |
$ | 79 | $ | 75 | 4.4 | $ | 308 | $ | 300 | 2.5 | ||||||||||||||
Dividends |
75 | 68 | 10.4 | 294 | 262 | 12.1 | ||||||||||||||||||
Other |
4 | 4 | 0.8 | 15 | 15 | (0.5 | ) | |||||||||||||||||
Investment expenses |
(1 | ) | (2 | ) | 96.9 | (9 | ) | (7 | ) | (18.7 | ) | |||||||||||||
Total investment income, net of expenses |
157 | 145 | 8.5 | 608 | 570 | 6.6 | ||||||||||||||||||
Investment interest credited to contract holders |
(14 | ) | (14 | ) | (5.6 | ) | (57 | ) | (54 | ) | (5.1 | ) | ||||||||||||
Realized investment gains and losses summary: |
||||||||||||||||||||||||
Realized investment gains and losses |
38 | 11 | 254.0 | 409 | 678 | (39.6 | ) | |||||||||||||||||
Change in fair value of securities with
embedded derivatives |
(12 | ) | 2 | (933.2 | ) | (11 | ) | 7 | (263.6 | ) | ||||||||||||||
Other-than-temporary impairment charges |
(14 | ) | 0 | nm | (16 | ) | (1 | ) | (1,872.5 | ) | ||||||||||||||
Total realized investment gains and losses |
12 | 13 | (2.0 | ) | 382 | 684 | (44.1 | ) | ||||||||||||||||
Investment operations income |
$ | 155 | $ | 144 | 7.9 | $ | 933 | $ | 1,200 | (22.2 | ) | |||||||||||||
At December 31, | At December 31, | |||||||
(Dollars in millions except share data) | 2007 | 2006 | ||||||
Balance sheet data |
||||||||
Invested assets |
$ | 12,261 | $ | 13,759 | ||||
Total assets |
16,637 | 17,222 | ||||||
Short-term debt |
69 | 49 | ||||||
Long-term debt |
791 | 791 | ||||||
Shareholders equity |
5,929 | 6,808 | ||||||
Book value per share |
35.70 | 39.38 | ||||||
Debt-to-capital ratio |
12.7 | % | 11.0 | % |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Performance measures |
||||||||||||||||
Comprehensive income |
$ | (404 | ) | $ | 449 | $ | (376 | ) | $ | 1,057 | ||||||
Return on equity, annualized |
12.0 | % | 7.9 | % | 13.4 | % | 14.4 | % | ||||||||
Return on equity, annualized, based
on comprehensive income |
(25.9 | ) | 27.0 | (5.9 | ) | 16.4 |
| 8.5 percent growth in fourth-quarter net investment income to $157 million pretax. Full-year 2007 investment income up 6.6 percent to $608 million. | |
| 12.1 percent growth in full-year 2007 dividend income, which contributed $294 million to investment income. Increase reflected higher dividend payout by 35 of the companys 41 common stock holdings. Dividend income growth rate expected to moderate in 2008 as financial sector holdings evaluate dividend levels. | |
| Repurchases of the companys common stock totaled 4.0 million shares at a cost of $162 million in the fourth quarter and 7.5 million shares at a cost of $306 million for the year. 2007 repurchases represented 4.3 percent of shares outstanding. Approximately 13 million shares remain authorized for repurchase. | |
| Fourth-quarter repurchases largely due to accelerated share repurchase agreement announced in October. Completed in January 2008, ASR totaled 4,071,000 shares at an average price of $39.18. | |
| Sales of equity securities were the primary reason for $382 million in 2007 pre-tax realized investment gains. Equity sales in 2007 included the sale of approximately 3.8 million shares of Exxon Mobil Corporation common stock as well as the block sale of 5.5 million shares of Fifth Third Bancorp common stock. Sale of our large Alltel Corporation common stock holding was the primary reason for the $684 million in 2006 pre-tax realized investment gains. | |
| Fifth Third remains the companys largest equity holding and Cincinnati Financial remains Fifth Thirds largest shareholder. | |
| $12.198 billion in investment portfolio assets market value at year-end 2007 compared with $13.699 billion at year-end 2006. Lower market valuations of equity holdings due to broad concerns about credit quality, liquidity and the general health of the economy accounted for the majority of the decline. | |
| Shareholders equity at $5.929 billion, or $35.70 per share, at year-end 2007, down from $6.808 billion, or $39.38, at year-end 2006. Decline caused by lower market values for equity holdings and record level of repurchase activity. | |
| $4.306 billion in statutory surplus for the property casualty insurance group at year-end 2007, compared with $4.750 billion at year-end 2006. The ratio of common stock to statutory surplus for the property casualty insurance group portfolio was 84.5 percent at year-end 2007, compared with 96.7 percent at year-end 2006. | |
| 28.4 percent ratio of investment securities held at the holding-company level to total holding-company-only assets at year-end 2007, comfortably within managements below-40 percent target. |
7
| Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes | |
| Increased frequency and/or severity of claims | |
| Inaccurate estimates or assumptions used for critical accounting estimates | |
| Events or actions, including unauthorized intentional circumvention of controls, that reduce the companys future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002 | |
| Changing consumer buying habits and consolidation of independent insurance agencies that could alter our competitive advantages | |
| 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: |
o | Downgrade of the companys financial strength ratings | ||
o | Concerns that doing business with the company is too difficult or | ||
o | Perceptions that the companys level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace |
| Sustained decline in overall stock market values negatively affecting the companys equity portfolio and book value; in particular a sustained decline in the market value of Fifth Third shares, a significant equity holding | |
| Securities laws that could limit the manner and timing of our investment transactions | |
| Recession or other economic conditions or regulatory, accounting or tax changes resulting in lower demand for insurance products | |
| Events, such as the sub-prime mortgage lending crisis, that lead to a significant decline in the value of a particular security or group of securities, such as our financial sector holdings, and impairment of the asset(s) | |
| Prolonged low interest rate environment or other factors that limit the companys ability to generate growth in investment income or interest-rate fluctuations that result in declining values of fixed-maturity investments | |
| Delays or inadequacies in the development, implementation, performance and benefits of technology projects and enhancements | |
| Ability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased, financial strength of reinsurers and the potential for non-payment or delay in payment by reinsurers | |
| Increased competition that could result in a significant reduction in the companys premium growth rate | |
| Underwriting and pricing methods adopted by competitors that could allow them to identify and flexibly price risks, which could decrease our competitive advantages | |
| Personal lines pricing and loss trends that lead management to conclude that this segment could not attain sustainable profitability, which could prevent the capitalization of policy acquisition costs | |
| Actions of insurance departments, state attorneys general or other regulatory agencies that: |
o | Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business | ||
o | Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations | ||
o | Increase our expenses | ||
o | Add assessments for guaranty funds, other insurance related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes | ||
o | Limit our ability to set fair, adequate and reasonable rates | ||
o | Place us at a disadvantage in the marketplace or | ||
o | Restrict our ability to execute our business model, including the way we compensate agents |
| Adverse outcomes from litigation or administrative proceedings | |
| Investment activities or market value fluctuations that trigger restrictions applicable to the parent company under the Investment Company Act of 1940 | |
| Events, such as an epidemic, natural catastrophe, terrorism or construction delays, that could hamper our ability to assemble our workforce at our headquarters location |
8
December 31, | December 31, | |||||||
(Dollars in millions except per share data) | 2007 | 2006 | ||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Investments |
||||||||
Fixed maturities, at fair value (amortized cost: 2007$5,783; 2006$5,739) |
$ | 5,848 | $ | 5,805 | ||||
(includes securities pledged to creditors of $745 at December 31, 2007) |
||||||||
Equity securities, at fair value (cost: 2007$2,975; 2006$2,621) |
6,249 | 7,799 | ||||||
Short-term investments, at fair value (amortized cost: 2007$101;
2006$95) |
101 | 95 | ||||||
Other invested assets |
63 | 60 | ||||||
Total investments |
12,261 | 13,759 | ||||||
Cash and cash equivalents |
226 | 202 | ||||||
Securities lending collateral invested |
760 | 0 | ||||||
Investment income receivable |
124 | 121 | ||||||
Finance receivable |
92 | 108 | ||||||
Premiums receivable |
1,107 | 1,128 | ||||||
Reinsurance receivable |
754 | 683 | ||||||
Prepaid reinsurance premiums |
13 | 13 | ||||||
Deferred policy acquisition costs |
461 | 453 | ||||||
Land,
building and equipment, net, for company use (accumulated
depreciation: 2007$276; 2006$261) |
239 | 193 | ||||||
Other assets |
72 | 58 | ||||||
Separate accounts |
528 | 504 | ||||||
Total assets |
$ | 16,637 | $ | 17,222 | ||||
LIABILITIES |
||||||||
Insurance reserves |
||||||||
Loss and loss expense reserves |
$ | 3,967 | $ | 3,896 | ||||
Life policy reserves |
1,478 | 1,409 | ||||||
Unearned premiums |
1,564 | 1,579 | ||||||
Securities lending payable |
760 | 0 | ||||||
Other liabilities |
574 | 533 | ||||||
Deferred income tax |
977 | 1,653 | ||||||
Note payable |
69 | 49 | ||||||
6.125% senior notes due 2034 |
371 | 371 | ||||||
6.9% senior debentures due 2028 |
28 | 28 | ||||||
6.92% senior debentures due 2028 |
392 | 392 | ||||||
Separate accounts |
528 | 504 | ||||||
Total liabilities |
10,708 | 10,414 | ||||||
SHAREHOLDERS EQUITY |
||||||||
Common stock, par value$2 per share; (authorized: 2007500 million shares,
2006500 million shares; issued: 2007196 million shares, 2006196
million shares) |
393 | 391 | ||||||
Paid-in capital |
1,049 | 1,015 | ||||||
Retained earnings |
3,404 | 2,786 | ||||||
Accumulated other comprehensive income |
2,151 | 3,379 | ||||||
Treasury stock at cost (200730 million shares, 200623 million shares) |
(1,068 | ) | (763 | ) | ||||
Total shareholders equity |
5,929 | 6,808 | ||||||
Total liabilities and shareholders equity |
$ | 16,637 | $ | 17,222 | ||||
9
(In millions except per share data) | Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
REVENUES |
||||||||||||||||
Earned premiums |
||||||||||||||||
Property casualty |
$ | 777 | $ | 802 | $ | 3,125 | $ | 3,163 | ||||||||
Life |
32 | 29 | 125 | 107 | ||||||||||||
Investment income, net of expenses |
157 | 145 | 608 | 570 | ||||||||||||
Realized investment gains and losses |
12 | 12 | 382 | 684 | ||||||||||||
Other income |
5 | 4 | 19 | 18 | ||||||||||||
Total revenues |
983 | 992 | 4,259 | 4,542 | ||||||||||||
BENEFITS AND EXPENSES |
||||||||||||||||
Insurance losses and policyholder
benefits |
430 | 532 | 1,963 | 2,128 | ||||||||||||
Commissions |
164 | 150 | 624 | 622 | ||||||||||||
Other operating expenses |
96 | 100 | 362 | 354 | ||||||||||||
Taxes, licenses and fees |
18 | 19 | 75 | 77 | ||||||||||||
Increase in deferred policy
acquisition costs |
8 | 5 | (9 | ) | (21 | ) | ||||||||||
Interest expense |
13 | 14 | 52 | 53 | ||||||||||||
Total benefits and expenses |
729 | 820 | 3,067 | 3,213 | ||||||||||||
INCOME BEFORE INCOME TAXES |
254 | 172 | 1,192 | 1,329 | ||||||||||||
PROVISION (BENEFIT) FOR INCOME TAXES |
||||||||||||||||
Current |
71 | 41 | 336 | 404 | ||||||||||||
Deferred |
(4 | ) | 1 | 1 | (5 | ) | ||||||||||
Total provision for income taxes |
67 | 42 | 337 | 399 | ||||||||||||
NET INCOME |
$ | 187 | $ | 130 | $ | 855 | $ | 930 | ||||||||
PER COMMON SHARE |
||||||||||||||||
Net income basic |
$ | 1.12 | $ | 0.75 | $ | 5.01 | $ | 5.36 | ||||||||
Net income diluted |
$ | 1.11 | $ | 0.75 | $ | 4.97 | $ | 5.30 |
Mailing Address: | Street Address: | |||
P.O. Box 145496 | 6200 South Gilmore Road | |||
Cincinnati, Ohio 45250-5496 | Fairfield, Ohio 45014-5141 |
10
| Operating income: Operating income is calculated by excluding net realized investment gains and losses (defined as realized investment gains and losses after applicable federal and state income taxes) 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. Also, 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, property casualty 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 property casualty 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. |
11
(In millions except per share data) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 187 | $ | 124 | $ | 351 | $ | 194 | $ | 130 | $ | 115 | $ | 132 | $ | 552 | $ | 545 | $ | 684 | $ | 669 | $ | 800 | $ | 855 | $ | 930 | |||||||||||||||||||||||||||||||
Net realized investment gains and losses |
8 | 10 | 187 | 41 | 8 | | 6 | 421 | 228 | 426 | 238 | 427 | 245 | 434 | |||||||||||||||||||||||||||||||||||||||||||||
Operating income |
179 | 114 | 164 | 153 | 122 | 115 | 126 | 131 | 317 | 258 | 431 | 373 | 610 | 496 | |||||||||||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
1 | (9 | ) | (7 | ) | (2 | ) | (29 | ) | (18 | ) | (41 | ) | (26 | ) | (9 | ) | (67 | ) | (18 | ) | (85 | ) | (17 | ) | (113 | ) | ||||||||||||||||||||||||||||||||
Operating income before catastrophe losses |
$ | 178 | $ | 123 | $ | 171 | $ | 155 | $ | 151 | $ | 133 | $ | 167 | $ | 157 | $ | 326 | $ | 325 | $ | 449 | $ | 458 | $ | 627 | $ | 609 | |||||||||||||||||||||||||||||||
Diluted per share data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 1.11 | $ | 0.72 | $ | 2.02 | $ | 1.11 | $ | 0.75 | $ | 0.66 | $ | 0.76 | $ | 3.13 | $ | 3.13 | $ | 3.90 | $ | 3.86 | $ | 4.56 | $ | 4.97 | $ | 5.30 | |||||||||||||||||||||||||||||||
Net realized investment gains and losses |
0.04 | 0.06 | 1.08 | 0.23 | 0.05 | | 0.04 | 2.39 | 1.31 | 2.43 | 1.37 | 2.43 | 1.43 | 2.48 | |||||||||||||||||||||||||||||||||||||||||||||
Operating income |
1.07 | 0.66 | 0.94 | 0.88 | 0.70 | 0.66 | 0.72 | 0.74 | 1.82 | 1.47 | 2.49 | 2.13 | 3.54 | 2.82 | |||||||||||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
0.01 | (0.05 | ) | (0.04 | ) | (0.01 | ) | (0.16 | ) | (0.10 | ) | (0.24 | ) | (0.14 | ) | (0.05 | ) | (0.38 | ) | (0.10 | ) | (0.48 | ) | (0.10 | ) | (0.65 | ) | ||||||||||||||||||||||||||||||||
Operating income before catastrophe losses |
$ | 1.06 | $ | 0.71 | $ | 0.98 | $ | 0.89 | $ | 0.86 | $ | 0.76 | $ | 0.96 | $ | 0.88 | $ | 1.87 | $ | 1.85 | $ | 2.59 | $ | 2.61 | $ | 3.64 | $ | 3.47 | |||||||||||||||||||||||||||||||
12 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums
(statutory) |
$ | 749 | $ | 779 | $ | 808 | $ | 811 | $ | 785 | $ | 787 | $ | 804 | $ | 796 | $ | 1,619 | $ | 1,600 | $ | 2,398 | $ | 2,387 | $ | 3,149 | $ | 3,172 | |||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
(25 | ) | (43 | ) | 2 | 35 | (30 | ) | (7 | ) | 10 | 33 | 37 | 43 | (6 | ) | 36 | (32 | ) | 6 | |||||||||||||||||||||||||||||||||||||||
Reported written premiums
(statutory)* |
$ | 724 | $ | 736 | $ | 810 | $ | 846 | $ | 755 | $ | 780 | $ | 814 | $ | 829 | $ | 1,656 | $ | 1,643 | $ | 2,392 | $ | 2,423 | $ | 3,117 | $ | 3,178 | |||||||||||||||||||||||||||||||
Unearned premiums change |
53 | 41 | (23 | ) | (61 | ) | 47 | 11 | (21 | ) | (51 | ) | (85 | ) | (72 | ) | (44 | ) | (61 | ) | 8 | (14 | ) | ||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 777 | $ | 777 | $ | 787 | $ | 785 | $ | 802 | $ | 791 | $ | 793 | $ | 778 | $ | 1,571 | $ | 1,571 | $ | 2,348 | $ | 2,362 | $ | 3,125 | $ | 3,164 | |||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
87.8 | % | 98.7 | % | 87.7 | % | 87.7 | % | 95.9 | % | 96.4 | % | 93.7 | % | 89.6 | % | 87.7 | % | 91.7 | % | 91.3 | % | 93.2 | % | 90.3 | % | 93.9 | % | |||||||||||||||||||||||||||||||
Less catastrophe losses |
(0.3 | ) | 1.7 | 1.4 | 0.4 | 5.5 | 3.5 | 8.0 | 5.0 | 0.9 | 6.5 | 1.2 | 5.5 | 0.8 | 5.5 | ||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio
excluding catastrophe losses |
88.1 | % | 97.0 | % | 86.3 | % | 87.3 | % | 90.4 | % | 92.9 | % | 85.7 | % | 84.6 | % | 86.8 | % | 85.2 | % | 90.1 | % | 87.7 | % | 89.5 | % | 88.4 | % | |||||||||||||||||||||||||||||||
Commission expense ratio |
23.1 | % | 18.1 | % | 18.1 | % | 18.0 | % | 19.9 | % | 19.3 | % | 17.6 | % | 18.2 | % | 18.0 | % | 17.9 | % | 18.0 | % | 18.3 | % | 19.2 | % | 18.7 | % | |||||||||||||||||||||||||||||||
Other expense ratio |
13.9 | 13.2 | 11.7 | 11.4 | 13.4 | 11.9 | 10.8 | 10.8 | 11.6 | 10.8 | 12.1 | 11.2 | 12.5 | 11.7 | |||||||||||||||||||||||||||||||||||||||||||||
Statutory expense ratio |
37.0 | % | 31.3 | % | 29.8 | % | 29.4 | % | 33.3 | % | 31.2 | % | 28.4 | % | 29.0 | % | 29.6 | % | 28.7 | % | 30.1 | % | 29.5 | % | 31.7 | % | 30.4 | % | |||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
85.6 | % | 97.3 | % | 88.6 | % | 89.6 | % | 94.5 | % | 96.1 | % | 94.5 | % | 92.0 | % | 89.1 | % | 93.3 | % | 91.8 | % | 94.2 | % | 90.3 | % | 94.3 | % | |||||||||||||||||||||||||||||||
* | 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. | |
*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. |
13 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums
(statutory) |
$ | 586 | $ | 587 | $ | 611 | $ | 658 | $ | 618 | $ | 589 | $ | 593 | $ | 635 | $ | 1,269 | $ | 1,228 | $ | 1,857 | $ | 1,817 | $ | 2,444 | $ | 2,435 | |||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
(24 | ) | (43 | ) | 2 | 35 | (29 | ) | (7 | ) | 10 | 33 | 37 | 43 | (6 | ) | 36 | (31 | ) | 7 | |||||||||||||||||||||||||||||||||||||||
Reported written premiums
(statutory)* |
$ | 562 | $ | 544 | $ | 613 | $ | 693 | $ | 589 | $ | 582 | $ | 603 | $ | 668 | $ | 1,306 | $ | 1,271 | $ | 1,851 | $ | 1,853 | $ | 2,413 | $ | 2,442 | |||||||||||||||||||||||||||||||
Unearned premiums change |
39 | 56 | (6 | ) | (89 | ) | 30 | 20 | (4 | ) | (86 | ) | (96 | ) | (90 | ) | (41 | ) | (70 | ) | (2 | ) | (40 | ) | |||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 601 | $ | 600 | $ | 607 | $ | 604 | $ | 619 | $ | 602 | $ | 599 | $ | 582 | $ | 1,210 | $ | 1,181 | $ | 1,810 | $ | 1,783 | $ | 2,411 | $ | 2,402 | |||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
89.7 | % | 97.3 | % | 84.4 | % | 86.5 | % | 92.4 | % | 94.1 | % | 89.6 | % | 87.5 | % | 85.4 | % | 88.6 | % | 89.2 | % | 90.3 | % | 89.2 | % | 90.8 | % | |||||||||||||||||||||||||||||||
Less catastrophe losses |
| 0.2 | 0.8 | 1.8 | 1.9 | 2.3 | 5.6 | 5.1 | 1.3 | 5.3 | 0.9 | 4.3 | 0.6 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio
excluding catastrophe losses |
89.7 | % | 97.1 | % | 83.6 | % | 84.7 | % | 90.5 | % | 91.8 | % | 84.0 | % | 82.4 | % | 84.1 | % | 83.3 | % | 88.3 | % | 86.0 | % | 88.6 | % | 87.1 | % | |||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
87.3 | % | 95.4 | % | 85.2 | % | 88.9 | % | 91.1 | % | 93.4 | % | 90.3 | % | 90.5 | % | 87.0 | % | 90.4 | % | 89.8 | % | 91.4 | % | 89.2 | % | 91.3 | % | |||||||||||||||||||||||||||||||
* | 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. | |
*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. |
14 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 163 | $ | 192 | $ | 197 | $ | 153 | $ | 167 | $ | 198 | $ | 211 | $ | 161 | $ | 350 | $ | 372 | $ | 541 | $ | 570 | $ | 705 | $ | 737 | |||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
(1 | ) | | | | (1 | ) | | | | | | | | (1 | ) | (1 | ) | |||||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 162 | $ | 192 | $ | 197 | $ | 153 | $ | 166 | $ | 198 | $ | 211 | $ | 161 | $ | 350 | $ | 372 | $ | 541 | $ | 570 | $ | 704 | $ | 736 | |||||||||||||||||||||||||||||||
Unearned premiums change |
14 | (15 | ) | (17 | ) | 28 | 17 | (9 | ) | (17 | ) | 35 | 11 | 18 | (3 | ) | 9 | 10 | 26 | ||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 176 | $ | 177 | $ | 180 | $ | 181 | $ | 183 | $ | 189 | $ | 194 | $ | 196 | $ | 361 | $ | 390 | $ | 538 | $ | 579 | $ | 714 | $ | 762 | |||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
81.4 | % | 103.6 | % | 98.6 | % | 93.5 | % | 107.7 | % | 104.0 | % | 106.4 | % | 98.1 | % | 95.8 | % | 101.6 | % | 98.3 | % | 102.3 | % | 94.1 | % | 103.6 | % | |||||||||||||||||||||||||||||||
Less catastrophe losses |
(1.0 | ) | 7.0 | 3.5 | (4.1 | ) | 17.9 | 7.1 | 15.6 | 5.0 | (0.3 | ) | 10.3 | 2.1 | 9.2 | 1.3 | 11.3 | ||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio
excluding catastrophe losses |
82.4 | % | 96.6 | % | 95.1 | % | 97.6 | % | 89.8 | % | 96.9 | % | 90.8 | % | 93.1 | % | 96.1 | % | 91.3 | % | 96.2 | % | 93.1 | % | 92.8 | % | 92.3 | % | |||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
79.7 | % | 103.8 | % | 99.9 | % | 92.0 | % | 106.0 | % | 104.4 | % | 107.6 | % | 96.4 | % | 96.0 | % | 102.0 | % | 98.6 | % | 102.8 | % | 93.9 | % | 103.6 | % | |||||||||||||||||||||||||||||||
* | 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. |
15 |
Investor Contact: | Media Contact: | Shareholder Contact: | ||
Heather J. Wietzel | Joan O. Shevchik | Jerry L. Litton | ||
(513) 870-2768 | (513) 603-5323 | (513) 870-2639 |
Standard & | ||||||||||||||||
A.M. Best | Fitch | Moodys | Poors | |||||||||||||
Cincinnati Financial Corporation |
||||||||||||||||
Corporate Debt |
aa- | A+ | A2 | A | ||||||||||||
The Cincinnati Insurance Companies |
||||||||||||||||
Insurer Financial Strength |
||||||||||||||||
Property Casualty Group |
A++ | | Aa3 | AA- | ||||||||||||
Standard Market Subsidiaries: |
||||||||||||||||
The Cincinnati Insurance Company |
A++ | AA | Aa3 | AA- | ||||||||||||
The Cincinnati Indemnity Company |
A++ | AA | Aa3 | AA- | ||||||||||||
The Cincinnati Casualty Company |
A++ | AA | Aa3 | AA- | ||||||||||||
Excess and Surplus Lines Subsidiary: |
||||||||||||||||
The Cincinnati Specialty Underwriters Insurance Company |
A | | | | ||||||||||||
The Cincinnati Life Insurance Company |
A+ | AA | | AA- |
Page | ||||
Definitions of Non-GAAP Information and Reconciliation to Comparable GAAP Measures |
3 | |||
Consolidated |
||||
Quick Reference |
4 | |||
Consolidated Statements of Income |
5 | |||
CFC and Subsidiary Consolidation Twelve Months Ended December 31, 2007 |
6 | |||
CFC and Subsidiary Consolidation Twelve Months Ended December 31, 2007 |
7 | |||
CFC and Subsidiary Consolidation Three Months Ended December 31, 2007 |
8 | |||
CFC and Subsidiary Consolidation Three Months Ended December 31, 2007 |
9 | |||
Consolidated Balance Sheets |
10 | |||
10-Year Net
Income Reconciliation |
11 | |||
Quarterly Net Income Reconciliation |
12 | |||
Top Holdings Common Stocks |
13 | |||
CFC Subsidiaries Selected Balance Sheet Data |
14 | |||
Property Casualty Insurance Operations |
||||
GAAP Statements of Income |
15 | |||
Statutory Statements of Income |
16 | |||
Statutory Quarterly Analysis Consolidated |
17 | |||
Statutory Quarterly Analysis Commercial Lines |
18 | |||
Statutory Quarterly Analysis Personal Lines |
19 | |||
Direct Written Premiums by Line of Business and State |
20 | |||
Quarterly Property Casualty Data Commercial Lines of Business |
21 | |||
Quarterly Property Casualty Data Personal Lines of Business |
22 | |||
Quarterly Detailed Loss Analysis |
23 | |||
Reconciliation Data |
||||
10-Year
Property Casualty Data Consolidated |
24 | |||
6-Year
Property Casualty Data Commercial Lines |
25 | |||
6-Year
Property Casualty Data Personal Lines |
26 | |||
Quarterly Property Casualty Data Consolidated |
27 | |||
Quarterly Property Casualty Data Commercial Lines |
28 | |||
Quarterly Property Casualty Data Personal Lines |
29 | |||
Life Insurance Operations |
||||
GAAP Statements of Income |
30 | |||
Statutory Statements of Income |
31 | |||
Expenses as a Percentage of Premium |
32 |
| Operating income: Operating income is calculated by excluding net realized investment gains and losses (defined as realized investment gains and losses after applicable federal and state income taxes) 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. Also, under applicable GAAP accounting requirements, gains and losses can be recognized from certain changes in market values of securities and embedded derivatives 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, property casualty 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 property casualty 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement
|
3 |
Revenues: |
||||
Commercial lines net written premiums |
$ | 562 | ||
Year-over-year percentage change |
(4.6 | )% | ||
Personal lines net written premiums |
$ | 162 | ||
Year-over-year percentage change |
(2.3 | )% | ||
Property casualty net written premiums |
$ | 724 | ||
Year-over-year percentage change |
(4.1 | )% | ||
Commercial lines net earned premiums |
$ | 601 | ||
Year-over-year percentage change |
(3.0 | )% | ||
Personal lines net earned premiums |
$ | 176 | ||
Year-over-year percentage change |
(3.7 | )% | ||
Property casualty net earned premiums |
$ | 777 | ||
Year-over-year percentage change |
(3.1 | )% | ||
Life and accident and health net earned premiums |
$ | 32 | ||
Year-over-year percentage change |
11.0 | % | ||
Investment income |
$ | 157 | ||
Year-over-year percentage change |
8.5 | % | ||
Realized gains on investments |
$ | 12 | ||
Year-over-year percentage change |
(2.0 | )% | ||
Other income |
$ | 5 | ||
Year-over-year percentage change |
4.2 | % | ||
Total revenues |
$ | 983 | ||
Year-over-year percentage change |
(0.9 | )% | ||
Income: |
||||
Operating income |
$ | 179 | ||
Year-over-year percentage change |
46.4 | % | ||
Net realized investment gains and losses |
$ | 8 | ||
Year-over-year percentage change |
(4.7 | )% | ||
Net income |
$ | 187 | ||
Year-over-year percentage change |
43.2 | % | ||
Per share (diluted): |
||||
Operating income |
$ | 1.07 | ||
Year-over-year percentage change |
52.9 | % | ||
Net realized investment gains and losses |
$ | 0.04 | ||
Year-over-year percentage change |
(20.0 | )% | ||
Net income |
$ | 1.11 | ||
Year-over-year percentage change |
48.0 | % | ||
Book value |
$ | 35.70 | ||
Year-over-year percentage change |
(9.3 | )% | ||
Weighted average shares diluted |
172,167,452 | |||
Year-over-year percentage change |
(1.9 | )% | ||
Benefits and expenses: |
||||
Commercial lines loss and loss expenses |
$ | 310 | ||
Year-over-year percentage change |
(15.9 | )% | ||
Personal lines loss and loss expenses |
$ | 85 | ||
Year-over-year percentage change |
(36.2 | )% | ||
Property casualty loss and loss expenses |
$ | 395 | ||
Year-over-year percentage change |
(21.3 | )% | ||
Life and accident and health losses and policy benefits |
$ | 35 | ||
Year-over-year percentage change |
15.0 | % | ||
Operating expenses |
$ | 286 | ||
Year-over-year percentage change |
20.4 | % | ||
Interest expenses |
$ | 13 | ||
Year-over-year percentage change |
(7.6 | )% | ||
Total expenses |
$ | 729 | ||
Year-over-year percentage change |
(11.1 | )% | ||
Income before income taxes |
$ | 254 | ||
Year-over-year percentage change |
47.7 | % | ||
Total income tax |
$ | 67 | ||
Year-over-year percentage change |
61.7 | % | ||
Effective tax rate |
26.5 | % | ||
Ratios: |
||||
Commercial lines GAAP combined ratio |
87.3 | % | ||
Personal lines GAAP combined ratio |
79.7 | % | ||
Property casualty GAAP combined ratio |
85.6 | % | ||
Commercial lines STAT combined ratio |
89.7 | % | ||
Personal lines STAT combined ratio |
81.4 | % | ||
Property casualty STAT combined ratio |
87.9 | % | ||
Return on equity based upon net income |
12.0 | % | ||
Return on equity based upon operating income |
11.5 | % | ||
Balance Sheet: |
||||
Fixed maturity investments |
$ | 5,848 | ||
Equity securities |
6,249 | |||
Short-term investments |
101 | |||
Other invested assets |
63 | |||
Total invested assets |
$ | 12,261 | ||
Property casualty and life loss and loss expense reserves |
$ | 3,967 | ||
Total debt |
860 | |||
Shareholders equity |
5,929 |
2007 Fourth-Quarter and Full-Year Financial Supplement | 4 |
For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||||||||||||||||||||||
2007 | 2006 | Change | % Change | 2007 | 2006 | Change | % Change | ||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||
Property casualty |
$ | 821,187,212 | $ | 844,769,726 | $ | (23,582,514 | ) | (2.79 | ) | $ | 3,299,041,567 | $ | 3,320,696,134 | $ | (21,654,567 | ) | (0.65 | ) | |||||||||||||||
Life |
46,505,810 | 43,271,070 | 3,234,740 | 7.48 | 171,169,598 | 152,590,039 | 18,579,559 | 12.18 | |||||||||||||||||||||||||
Accident health |
1,836,071 | 1,703,987 | 132,084 | 7.75 | 6,977,193 | 6,652,508 | 324,685 | 4.88 | |||||||||||||||||||||||||
Premiums ceded |
(60,712,176 | ) | (59,801,313 | ) | (910,863 | ) | 1.52 | (227,667,790 | ) | (210,353,317 | ) | (17,314,473 | ) | 8.23 | |||||||||||||||||||
Total premiums earned |
808,816,917 | 829,943,470 | (21,126,553 | ) | (2.55 | ) | 3,249,520,568 | 3,269,585,364 | (20,064,796 | ) | (0.61 | ) | |||||||||||||||||||||
Investment income |
157,374,940 | 145,070,824 | 12,304,116 | 8.48 | 607,751,789 | 570,103,128 | 37,648,661 | 6.60 | |||||||||||||||||||||||||
Realized gain on investments |
12,084,183 | 12,324,063 | (239,880 | ) | (1.95 | ) | 382,230,702 | 683,701,293 | (301,470,591 | ) | (44.09 | ) | |||||||||||||||||||||
Other income |
4,880,874 | 4,682,861 | 198,013 | 4.23 | 19,774,644 | 18,461,940 | 1,312,704 | 7.11 | |||||||||||||||||||||||||
Total revenues |
$ | 983,156,914 | $ | 992,021,218 | $ | (8,864,304 | ) | (0.89 | ) | $ | 4,259,277,703 | $ | 4,541,851,725 | $ | (282,574,022 | ) | (6.22 | ) | |||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 460,900,672 | $ | 550,901,417 | $ | (90,000,745 | ) | (16.34 | ) | $ | 2,110,380,156 | $ | 2,245,203,172 | $ | (134,823,016 | ) | (6.00 | ) | |||||||||||||||
Reinsurance recoveries |
(31,151,130 | ) | (18,732,358 | ) | (12,418,772 | ) | 66.30 | (147,176,200 | ) | (117,399,472 | ) | (29,776,728 | ) | 25.36 | |||||||||||||||||||
Commissions |
164,183,225 | 150,038,921 | 14,144,304 | 9.43 | 623,629,441 | 622,008,105 | 1,621,336 | 0.26 | |||||||||||||||||||||||||
Other operating expenses |
90,444,253 | 95,572,466 | (5,128,213 | ) | (5.37 | ) | 347,808,218 | 338,085,073 | 9,723,145 | 2.88 | |||||||||||||||||||||||
Interest expense |
12,753,818 | 13,804,440 | (1,050,622 | ) | (7.61 | ) | 51,457,022 | 53,116,383 | (1,659,361 | ) | (3.12 | ) | |||||||||||||||||||||
Taxes, licenses & fees |
18,239,547 | 18,740,630 | (501,083 | ) | (2.67 | ) | 75,040,737 | 76,742,883 | (1,702,146 | ) | (2.22 | ) | |||||||||||||||||||||
Incr deferred acq expense |
8,241,247 | 5,382,897 | 2,858,350 | 53.10 | (8,772,600 | ) | (21,359,500 | ) | 12,586,900 | (58.93 | ) | ||||||||||||||||||||||
Other expenses |
5,396,854 | 4,244,124 | 1,152,730 | 27.16 | 14,436,935 | 16,342,089 | (1,905,154 | ) | (11.66 | ) | |||||||||||||||||||||||
Total expenses |
$ | 729,008,486 | $ | 819,952,537 | $ | (90,944,051 | ) | (11.09 | ) | $ | 3,066,803,709 | $ | 3,212,738,733 | $ | (145,935,024 | ) | (4.54 | ) | |||||||||||||||
Income before income taxes |
$ | 254,148,428 | $ | 172,068,681 | $ | 82,079,747 | 47.70 | $ | 1,192,473,994 | $ | 1,329,112,992 | $ | (136,638,998 | ) | (10.28 | ) | |||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||
Current operating income |
$ | 66,757,820 | $ | 36,443,951 | $ | 30,313,869 | 83.18 | $ | 199,004,461 | $ | 155,204,170 | $ | 43,800,291 | 28.22 | |||||||||||||||||||
Realized investments gains and losses |
4,445,507 | 4,310,013 | 135,494 | 3.14 | 136,858,385 | 249,202,156 | (112,343,771 | ) | (45.08 | ) | |||||||||||||||||||||||
Deferred |
(3,841,764 | ) | 895,840 | (4,737,604 | ) | (528.84 | ) | 1,137,231 | (5,497,770 | ) | 6,635,001 | (120.69 | ) | ||||||||||||||||||||
Total income taxes |
$ | 67,361,563 | $ | 41,649,804 | $ | 25,711,759 | 61.73 | $ | 337,000,077 | $ | 398,908,556 | $ | (61,908,479 | ) | (15.52 | ) | |||||||||||||||||
Net income |
$ | 186,786,865 | $ | 130,418,877 | $ | 56,367,988 | 43.22 | $ | 855,473,917 | $ | 930,204,436 | $ | (74,730,519 | ) | (8.03 | ) | |||||||||||||||||
Comprehensive net income |
$ | (403,694,647 | ) | $ | 448,641,905 | $ | (852,336,552 | ) | (189.98 | ) | $ | (375,607,721 | ) | $ | 1,058,081,420 | $ | (1,433,689,141 | ) | (135.50 | ) | |||||||||||||
Operating income |
$ | 179,148,189 | $ | 122,404,830 | $ | 56,743,359 | 46.36 | $ | 610,101,600 | $ | 495,705,299 | $ | 114,396,301 | 23.08 | |||||||||||||||||||
Net realized investments gains and losses |
$ | 7,638,676 | $ | 8,014,047 | $ | (375,371 | ) | (4.68 | ) | $ | 245,372,317 | $ | 434,499,137 | $ | (189,126,820 | ) | (43.53 | ) | |||||||||||||||
Net income per share: |
|||||||||||||||||||||||||||||||||
Operating income |
$ | 1.07 | $ | 0.71 | $ | 0.36 | 50.70 | $ | 3.57 | $ | 2.86 | $ | 0.71 | 24.83 | |||||||||||||||||||
Net realized investments gains
and losses |
0.05 | 0.04 | 0.01 | 25.00 | 1.44 | 2.50 | (1.06 | ) | (42.40 | ) | |||||||||||||||||||||||
Net income per share (basic) |
$ | 1.12 | $ | 0.75 | $ | 0.37 | 49.33 | $ | 5.01 | $ | 5.36 | $ | (0.35 | ) | (6.53 | ) | |||||||||||||||||
Operating income |
$ | 1.07 | $ | 0.70 | $ | 0.37 | 52.86 | $ | 3.54 | $ | 2.82 | $ | 0.72 | 25.53 | |||||||||||||||||||
Net realized investments gains
and losses |
0.04 | 0.05 | (0.01 | ) | (20.00 | ) | 1.43 | 2.48 | (1.05 | ) | (42.34 | ) | |||||||||||||||||||||
Net income per share (diluted) |
$ | 1.11 | $ | 0.75 | $ | 0.36 | 48.00 | $ | 4.97 | $ | 5.30 | $ | (0.33 | ) | (6.23 | ) | |||||||||||||||||
Dividends per share: |
|||||||||||||||||||||||||||||||||
Paid |
$ | 0.355 | $ | 0.335 | $ | 0.02 | 5.97 | $ | 1.40 | $ | 1.31 | $ | 0.09 | 6.87 | |||||||||||||||||||
Declared |
0.355 | 0.335 | 0.02 | 5.97 | $ | 1.42 | $ | 1.34 | 0.08 | 5.97 | |||||||||||||||||||||||
Number of shares: |
|||||||||||||||||||||||||||||||||
Weighted avg basic |
167,007,116 | 173,030,127 | (6,023,011 | ) | (3.48 | ) | 170,595,204 | 173,423,395 | (2,828,191 | ) | (1.63 | ) | |||||||||||||||||||||
Weighted avg diluted |
168,163,752 | 174,988,162 | (6,824,410 | ) | (3.90 | ) | 172,167,452 | 175,451,341 | (3,283,889 | ) | (1.87 | ) |
2007 Fourth-Quarter and Full-Year Financial Supplement | 5 |
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | CSR | ELIM | |||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Premiums earned: |
||||||||||||||||||||||||||||||||
Property casualty |
$ | 3,299,041,567 | $ | | $ | 3,299,384,836 | $ | | $ | | $ | | $ | | $ | (343,269 | ) | |||||||||||||||
Life |
171,169,598 | | | 171,169,598 | | | | | ||||||||||||||||||||||||
Accident health |
6,977,193 | | | 6,977,193 | | | | | ||||||||||||||||||||||||
Premiums ceded |
(227,667,790 | ) | | (174,551,071 | ) | (53,116,719 | ) | | | | | |||||||||||||||||||||
Total earned premium |
3,249,520,568 | | 3,124,833,765 | 125,030,072 | | | | (343,269 | ) | |||||||||||||||||||||||
Investment income |
607,751,789 | 100,486,597 | 392,580,307 | 114,416,869 | 357,173 | 271,563 | 3,045 | (363,765 | ) | |||||||||||||||||||||||
Realized gain on investments |
382,230,702 | 97,181,904 | 232,176,239 | 40,231,015 | 412,781 | (7,168 | ) | | 12,235,931 | |||||||||||||||||||||||
Other income |
19,774,644 | 10,025,896 | 4,661,137 | 4,444,171 | 10,079,013 | 2,469,300 | | (11,904,873 | ) | |||||||||||||||||||||||
Total revenues |
$ | 4,259,277,703 | $ | 207,694,397 | $ | 3,754,251,448 | $ | 284,122,127 | $ | 10,848,967 | $ | 2,733,695 | $ | 3,045 | $ | (375,976 | ) | |||||||||||||||
Benefits & expenses: |
||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 2,110,380,156 | $ | | $ | 1,939,058,201 | $ | 173,523,103 | $ | | $ | | $ | | $ | (2,201,148 | ) | |||||||||||||||
Reinsurance recoveries |
(147,176,200 | ) | | (106,882,598 | ) | (40,293,602 | ) | | | | | |||||||||||||||||||||
Commissions |
623,629,441 | | 598,432,647 | 25,196,794 | | | | | ||||||||||||||||||||||||
Other operating expenses |
347,808,218 | 17,042,561 | 302,566,198 | 34,666,846 | 4,487,896 | 749,826 | 262,192 | (11,967,301 | ) | |||||||||||||||||||||||
Interest expense |
51,457,022 | 48,898,521 | | | 2,888,190 | | | (329,689 | ) | |||||||||||||||||||||||
Taxes, licenses & fees |
75,040,737 | 1,212,217 | 70,051,616 | 3,605,001 | 45,125 | 126,778 | | | ||||||||||||||||||||||||
Incr deferred acq expenses |
(8,772,600 | ) | | 2,749,119 | (11,521,719 | ) | | | | | ||||||||||||||||||||||
Other expenses |
14,436,935 | | 14,436,827 | 108 | | | | | ||||||||||||||||||||||||
Total expenses |
$ | 3,066,803,709 | $ | 67,153,299 | $ | 2,820,412,010 | $ | 185,176,531 | $ | 7,421,211 | $ | 876,604 | $ | 262,192 | $ | (14,498,138 | ) | |||||||||||||||
Income before income taxes |
$ | 1,192,473,994 | $ | 140,541,098 | $ | 933,839,438 | $ | 98,945,596 | $ | 3,427,756 | $ | 1,857,091 | $ | (259,147 | ) | $ | 14,122,162 | |||||||||||||||
Provision for income taxes: |
||||||||||||||||||||||||||||||||
Current operating income |
$ | 199,004,461 | $ | (1,530,715 | ) | $ | 195,217,396 | $ | 7,629,012 | $ | 1,399,800 | $ | 616,493 | $ | (44,949 | ) | $ | (4,282,576 | ) | |||||||||||||
Capital gains/losses |
136,858,385 | 35,648,666 | 82,554,324 | 14,230,855 | 144,473 | (2,509 | ) | | 4,282,576 | |||||||||||||||||||||||
Deferred |
1,137,231 | (1,743,257 | ) | (13,769,174 | ) | 12,018,148 | (268,968 | ) | 3,478 | (45,753 | ) | 4,942,757 | ||||||||||||||||||||
Total income tax |
$ | 337,000,077 | $ | 32,374,694 | $ | 264,002,546 | $ | 33,878,015 | $ | 1,275,305 | $ | 617,462 | $ | (90,702 | ) | $ | 4,942,757 | |||||||||||||||
Net income current year |
$ | 855,473,917 | $ | 108,166,404 | $ | 669,836,892 | $ | 65,067,581 | $ | 2,152,451 | $ | 1,239,629 | $ | (168,445 | ) | $ | 9,179,405 | |||||||||||||||
Net income prior year |
$ | 930,204,436 | $ | 304,395,166 | $ | 557,879,628 | $ | 62,697,335 | $ | 1,876,129 | $ | 1,285,186 | $ | | $ | 2,070,992 | ||||||||||||||||
Change in net income |
-8.0 | % | -64.5 | % | 20.1 | % | 3.8 | % | 14.7 | % | -3.5 | % | N/A |
2007 Fourth-Quarter and Full-Year Financial Supplement | 6 |
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | ELIM | ||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Premiums earned: |
||||||||||||||||||||||||||||
Property casualty |
$ | 3,320,696,134 | $ | | $ | 3,321,610,148 | $ | | $ | | $ | | $ | (914,014 | ) | |||||||||||||
Life |
152,590,039 | | | 152,590,039 | | | | |||||||||||||||||||||
Accident health |
6,652,508 | | | 6,652,508 | | | | |||||||||||||||||||||
Premiums ceded |
(210,353,317 | ) | | (157,587,693 | ) | (52,765,624 | ) | | | | ||||||||||||||||||
Total earned premium |
3,269,585,364 | | 3,164,022,455 | 106,476,923 | | | (914,014 | ) | ||||||||||||||||||||
Investment income |
570,103,128 | 97,437,082 | 367,304,753 | 107,656,860 | 62,400 | 209,379 | (2,567,346 | ) | ||||||||||||||||||||
Realized gain on investments |
683,701,293 | 410,338,912 | 225,846,088 | 44,861,000 | (324,417 | ) | 5,697 | 2,974,013 | ||||||||||||||||||||
Other income |
18,461,940 | 10,098,558 | 3,266,830 | 3,552,294 | 11,131,714 | 2,374,373 | (11,961,829 | ) | ||||||||||||||||||||
Total revenues |
$ | 4,541,851,725 | $ | 517,874,552 | $ | 3,760,440,126 | $ | 262,547,077 | $ | 10,869,697 | $ | 2,589,449 | $ | (12,469,176 | ) | |||||||||||||
Benefits & expenses: |
||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 2,245,203,172 | $ | | $ | 2,085,421,315 | $ | 161,984,990 | $ | | $ | | $ | (2,203,133 | ) | |||||||||||||
Reinsurance recoveries |
(117,399,472 | ) | | (77,446,382 | ) | (39,953,090 | ) | | | | ||||||||||||||||||
Commissions |
622,008,105 | | 596,188,393 | 25,819,712 | | | | |||||||||||||||||||||
Other operating expenses |
338,085,073 | 19,609,842 | 292,709,156 | 31,977,077 | 5,416,146 | 626,085 | (12,253,233 | ) | ||||||||||||||||||||
Interest expense |
53,116,383 | 50,612,821 | 888,930 | 98,000 | 2,715,584 | | (1,198,952 | ) | ||||||||||||||||||||
Taxes, licenses & fees |
76,742,883 | 1,152,118 | 72,695,021 | 3,080,836 | (232,648 | ) | 47,556 | | ||||||||||||||||||||
Incr deferred acq expenses |
(21,359,500 | ) | | (3,642,356 | ) | (17,717,144 | ) | | | | ||||||||||||||||||
Other expenses |
16,342,089 | | 16,341,980 | 109 | | | | |||||||||||||||||||||
Total expenses |
$ | 3,212,738,733 | $ | 71,374,781 | $ | 2,983,156,057 | $ | 165,290,490 | $ | 7,899,082 | $ | 673,641 | $ | (15,655,318 | ) | |||||||||||||
Income before income taxes |
$ | 1,329,112,992 | $ | 446,499,771 | $ | 777,284,069 | $ | 97,256,587 | $ | 2,970,615 | $ | 1,915,808 | $ | 3,186,142 | ||||||||||||||
Provision for income taxes: |
||||||||||||||||||||||||||||
Current operating income |
$ | 155,204,170 | $ | (178,058 | ) | $ | 147,254,816 | $ | 6,273,558 | $ | 1,232,459 | $ | 621,395 | $ | | |||||||||||||
Capital gains/losses |
249,202,156 | 153,102,119 | 80,218,693 | 15,879,350 | | 1,994 | | |||||||||||||||||||||
Deferred |
(5,497,770 | ) | (10,819,456 | ) | (8,069,068 | ) | 12,406,344 | (137,973 | ) | 7,233 | 1,115,150 | |||||||||||||||||
Total income tax |
$ | 398,908,556 | $ | 142,104,605 | $ | 219,404,441 | $ | 34,559,252 | $ | 1,094,486 | $ | 630,622 | $ | 1,115,150 | ||||||||||||||
Net income current year |
$ | 930,204,436 | $ | 304,395,166 | $ | 557,879,628 | $ | 62,697,335 | $ | 1,876,129 | $ | 1,285,186 | $ | 2,070,992 | ||||||||||||||
Net income prior year |
$ | 601,970,190 | $ | 36,770,595 | $ | 511,573,782 | $ | 47,282,395 | $ | 3,072,943 | $ | 1,206,078 | $ | 2,064,397 | ||||||||||||||
Change in net income |
54.5 | % | 727.8 | % | 9.1 | % | 32.6 | % | -38.9 | % | 6.6 | % |
2007 Fourth-Quarter and Full-Year Financial Supplement | 7 |
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | CSR | ELIM | |||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Premiums earned: |
||||||||||||||||||||||||||||||||
Property casualty |
$ | 821,187,212 | $ | | $ | 821,196,485 | $ | | $ | | $ | | $ | | $ | (9,273 | ) | |||||||||||||||
Life |
46,505,810 | | | 46,505,810 | | | | | ||||||||||||||||||||||||
Accident health |
1,836,071 | | | 1,836,071 | | | | | ||||||||||||||||||||||||
Premiums ceded |
(60,712,176 | ) | | (44,194,344 | ) | (16,517,832 | ) | | | | | |||||||||||||||||||||
Total earned premium |
808,816,917 | | 777,002,141 | 31,824,049 | | | | (9,273 | ) | |||||||||||||||||||||||
Investment income |
157,374,940 | 26,048,205 | 100,841,548 | 29,822,571 | 150,801 | 74,816 | 3,045 | 433,954 | ||||||||||||||||||||||||
Realized gain on investments |
12,084,183 | (5,970,324 | ) | 29,802,182 | (11,519,842 | ) | 101,191 | | | (329,024 | ) | |||||||||||||||||||||
Other income |
4,880,874 | 2,536,460 | 1,350,240 | 982,465 | 2,377,727 | 616,954 | | (2,982,972 | ) | |||||||||||||||||||||||
Total revenues |
$ | 983,156,914 | $ | 22,614,341 | $ | 908,996,111 | $ | 51,109,243 | $ | 2,629,719 | $ | 691,770 | $ | 3,045 | $ | (2,887,315 | ) | |||||||||||||||
Benefits & expenses: |
||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 460,900,672 | $ | | $ | 415,795,751 | $ | 45,653,794 | $ | | $ | | $ | | $ | (548,873 | ) | |||||||||||||||
Reinsurance recoveries |
(31,151,130 | ) | | (20,512,028 | ) | (10,639,102 | ) | | | | | |||||||||||||||||||||
Commissions |
164,183,225 | | 158,923,102 | 5,260,123 | | | | | ||||||||||||||||||||||||
Other operating expenses |
90,444,253 | 3,185,174 | 77,236,002 | 11,284,880 | 1,171,021 | 226,499 | 262,192 | (2,921,515 | ) | |||||||||||||||||||||||
Interest expense |
12,753,818 | 12,301,347 | | | 708,758 | | | (256,287 | ) | |||||||||||||||||||||||
Taxes, licenses & fees |
18,239,547 | 291,948 | 17,073,630 | 848,388 | 9,331 | 16,250 | | | ||||||||||||||||||||||||
Incr deferred acq expenses |
8,241,247 | | 11,031,989 | (2,790,742 | ) | | | | | |||||||||||||||||||||||
Other expenses |
5,396,854 | | 5,396,854 | | | | | | ||||||||||||||||||||||||
Total expenses |
$ | 729,008,486 | $ | 15,778,469 | $ | 664,945,300 | $ | 49,617,341 | $ | 1,889,110 | $ | 242,749 | $ | 262,192 | $ | (3,726,675 | ) | |||||||||||||||
Income before income taxes |
$ | 254,148,428 | $ | 6,835,872 | $ | 244,050,811 | $ | 1,491,902 | $ | 740,609 | $ | 449,021 | $ | (259,147 | ) | $ | 839,360 | |||||||||||||||
Provision for income taxes: |
||||||||||||||||||||||||||||||||
Current operating income |
$ | 66,757,820 | $ | 4,709,097 | $ | 58,411,169 | $ | 3,120,097 | $ | 309,062 | $ | 138,186 | $ | (44,949 | ) | $ | 115,158 | |||||||||||||||
Capital gains/losses |
4,445,507 | (2,164,614 | ) | 10,714,301 | (4,026,945 | ) | 35,416 | 2,507 | | (115,158 | ) | |||||||||||||||||||||
Deferred |
(3,841,764 | ) | (6,078,191 | ) | 943,019 | 1,103,621 | (59,868 | ) | 1,632 | (45,753 | ) | 293,776 | ||||||||||||||||||||
Total income tax |
$ | 67,361,563 | $ | (3,533,708 | ) | $ | 70,068,489 | $ | 196,773 | $ | 284,610 | $ | 142,325 | $ | (90,702 | ) | $ | 293,776 | ||||||||||||||
Net income current year |
$ | 186,786,865 | $ | 10,369,580 | $ | 173,982,322 | $ | 1,295,129 | $ | 455,999 | $ | 306,696 | $ | (168,445 | ) | $ | 545,584 | |||||||||||||||
Net income prior year |
$ | 130,418,876 | $ | 12,506,126 | $ | 108,185,530 | $ | 8,602,213 | $ | 487,191 | $ | 289,645 | $ | | $ | 348,171 | ||||||||||||||||
Change in net income |
43.2 | % | -17.1 | % | 60.8 | % | -84.9 | % | -6.4 | % | 5.9 | % | N/A |
2007 Fourth-Quarter and Full-Year Financial Supplement | 8 |
Total | CFC | CIC GROUP | CLIC | CFC-I | CINFIN | ELIM | ||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Premiums earned: |
||||||||||||||||||||||||||||
Property casualty |
$ | 844,769,727 | $ | | $ | 845,479,506 | $ | | $ | | $ | | $ | (709,779 | ) | |||||||||||||
Life |
43,271,070 | | | 43,271,070 | | | | |||||||||||||||||||||
Accident health |
1,703,987 | | | 1,703,987 | | | | |||||||||||||||||||||
Premiums ceded |
(59,801,314 | ) | | (43,501,451 | ) | (16,299,863 | ) | | | | ||||||||||||||||||
Total earned premium |
829,943,470 | | 801,978,055 | 28,675,194 | | | (709,779 | ) | ||||||||||||||||||||
Investment income |
145,070,825 | 24,550,476 | 93,654,263 | 27,053,035 | 15,600 | 57,244 | (259,793 | ) | ||||||||||||||||||||
Realized gain on investments |
12,324,061 | 1,862,472 | 7,323,470 | 2,533,775 | 217,084 | (8,277 | ) | 395,537 | ||||||||||||||||||||
Other income |
4,682,861 | 2,536,489 | 723,643 | 992,375 | 2,806,674 | 621,838 | (2,998,158 | ) | ||||||||||||||||||||
Total revenues |
$ | 992,021,217 | $ | 28,949,437 | $ | 903,679,431 | $ | 59,254,379 | $ | 3,039,358 | $ | 670,805 | $ | (3,572,193 | ) | |||||||||||||
Benefits & expenses: |
||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 550,901,417 | $ | | $ | 507,755,637 | $ | 43,696,578 | $ | | $ | | $ | (550,798 | ) | |||||||||||||
Reinsurance recoveries |
(18,732,359 | ) | | (5,484,567 | ) | (13,247,792 | ) | | | | ||||||||||||||||||
Commissions |
150,038,921 | | 144,113,098 | 5,925,823 | | | | |||||||||||||||||||||
Other operating expenses |
95,572,467 | 4,960,848 | 80,278,976 | 12,192,870 | 1,461,656 | 230,387 | (3,552,270 | ) | ||||||||||||||||||||
Interest expense |
13,804,440 | 12,460,505 | 496,480 | 98,000 | 754,228 | | (4,773 | ) | ||||||||||||||||||||
Taxes, licenses & fees |
18,740,629 | 284,596 | 17,498,941 | 935,887 | 9,316 | 11,889 | | |||||||||||||||||||||
Incr deferred acq expenses |
5,382,897 | | 8,862,341 | (3,479,444 | ) | | | | ||||||||||||||||||||
Other expenses |
4,244,124 | | 4,244,123 | 1 | | | | |||||||||||||||||||||
Total expenses |
$ | 819,952,536 | $ | 17,705,949 | $ | 757,765,029 | $ | 46,121,923 | $ | 2,225,200 | $ | 242,276 | $ | (4,107,841 | ) | |||||||||||||
Income before income taxes |
$ | 172,068,681 | $ | 11,243,488 | $ | 145,914,402 | $ | 13,132,456 | $ | 814,158 | $ | 428,529 | $ | 535,648 | ||||||||||||||
Provision for income taxes: |
||||||||||||||||||||||||||||
Current operating income |
$ | 36,443,952 | $ | 3,406,871 | $ | 31,617,921 | $ | 953,701 | $ | 322,879 | $ | 142,580 | $ | | ||||||||||||||
Capital gains/losses |
4,310,014 | 661,562 | 2,703,528 | 947,821 | | (2,897 | ) | | ||||||||||||||||||||
Deferred |
895,839 | (5,331,071 | ) | 3,407,423 | 2,628,721 | 4,088 | (799 | ) | 187,477 | |||||||||||||||||||
Total income tax |
$ | 41,649,805 | $ | (1,262,638 | ) | $ | 37,728,872 | $ | 4,530,243 | $ | 326,967 | $ | 138,884 | $ | 187,477 | |||||||||||||
Net income current year |
$ | 130,418,876 | $ | 12,506,126 | $ | 108,185,530 | $ | 8,602,213 | $ | 487,191 | $ | 289,645 | $ | 348,171 | ||||||||||||||
Net income prior year |
$ | 182,672,096 | $ | 9,037,150 | $ | 156,687,048 | $ | 15,812,588 | $ | 421,720 | $ | 298,051 | $ | 415,539 | ||||||||||||||
Change in net income |
-28.6 | % | 38.4 | % | -31.0 | % | -45.6 | % | 15.5 | % | -2.8 | % |
2007 Fourth-Quarter and Full-Year Financial Supplement | 9 |
(Dollars in millions except per share data) | December 31, | December 31, | ||||||
2007 | 2006 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Investments |
||||||||
Fixed
maturities, at fair value (amortized cost: 2007$5,783;
2006$5,739) (includes securities pledged to creditors of $745 at December 31, 2007) |
$ | 5,848 | $ | 5,805 | ||||
Equity securities, at fair value (cost: 2007$2,975; 2006$2,621) |
6,249 | 7,799 | ||||||
Short-term investments, at fair value (amortized cost: 2007$101; 2006$95) |
101 | 95 | ||||||
Other invested assets |
63 | 60 | ||||||
Total investments |
12,261 | 13,759 | ||||||
Cash and cash equivalents |
226 | 202 | ||||||
Securities lending collateral |
760 | | ||||||
Investment income receivable |
124 | 121 | ||||||
Finance receivable |
92 | 108 | ||||||
Premiums receivable |
1,107 | 1,128 | ||||||
Reinsurance receivable |
754 | 683 | ||||||
Prepaid reinsurance premiums |
13 | 13 | ||||||
Deferred policy acquisition costs |
461 | 453 | ||||||
Land, building and equipment, net, for company use (accumulated
depreciation: 2007$276; 2006$261) |
239 | 193 | ||||||
Other assets |
72 | 58 | ||||||
Separate accounts |
528 | 504 | ||||||
Total assets |
$ | 16,637 | $ | 17,222 | ||||
Liabilities |
||||||||
Insurance reserves |
||||||||
Losses and loss expense |
$ | 3,967 | $ | 3,896 | ||||
Life policy reserves |
1,478 | 1,409 | ||||||
Unearned premiums |
1,564 | 1,579 | ||||||
Securities lending payable |
760 | | ||||||
Other liabilities |
574 | 533 | ||||||
Deferred income tax |
977 | 1,653 | ||||||
Notes payable |
69 | 49 | ||||||
6.125% senior debenture due 2034 |
371 | 371 | ||||||
6.90% senior debenture due 2028 |
28 | 28 | ||||||
6.92% senior debenture due 2028 |
392 | 392 | ||||||
Separate accounts |
528 | 504 | ||||||
Total liabilities |
10,708 | 10,414 | ||||||
Shareholders equity |
||||||||
Common stock, par value-$2 per share; authorized: 2007-500 million shares, 2006-
500 million shares; issued: 2007-196 million shares, 2006-196 million shares |
393 | 391 | ||||||
Paid-in capital |
1,049 | 1,015 | ||||||
Retained Earnings |
3,404 | 2,786 | ||||||
Accumulated other comprehensive income |
2,151 | 3,379 | ||||||
Treasury stock at cost (200730 million shares, 200623 million shares) |
(1,068 | ) | (763 | ) | ||||
Total shareholders equity |
5,929 | 6,808 | ||||||
Total liabilities and shareholders equity |
$ | 16,637 | $ | 17,222 | ||||
2007 Fourth-Quarter and Full-Year Financial Supplement | 10 |
(Dollars in millions except per share data) | Years ended December 31, | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | |||||||||||||||||||||||||||||||
Net income |
$ | 855 | $ | 930 | $ | 602 | $ | 584 | $ | 374 | $ | 238 | $ | 193 | $ | 118 | $ | 255 | $ | 242 | ||||||||||||||||||||
One-time item |
| | | | 15 | | | (25 | ) | | | |||||||||||||||||||||||||||||
Net income before one-time item |
855 | 930 | 602 | 584 | 359 | 238 | 193 | 143 | 255 | 242 | ||||||||||||||||||||||||||||||
Net realized investment gains and losses |
245 | 434 | 40 | 60 | (27 | ) | (62 | ) | (17 | ) | (2 | ) | | 43 | ||||||||||||||||||||||||||
Operating income before one-time item |
610 | 496 | 562 | 524 | 386 | 300 | 210 | 145 | 255 | 199 | ||||||||||||||||||||||||||||||
Less catastrophe losses |
(17 | ) | (113 | ) | (82 | ) | (96 | ) | (63 | ) | (57 | ) | (42 | ) | (33 | ) | (24 | ) | (61 | ) | ||||||||||||||||||||
Operating income before catastrophe losses and one-time item |
$ | 627 | $ | 609 | $ | 644 | $ | 620 | $ | 449 | $ | 357 | $ | 252 | $ | 178 | $ | 279 | $ | 260 | ||||||||||||||||||||
Diluted per share data |
||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 4.97 | $ | 5.30 | $ | 3.40 | $ | 3.28 | $ | 2.10 | $ | 1.32 | $ | 1.07 | $ | 0.67 | $ | 1.37 | $ | 1.28 | ||||||||||||||||||||
One-time item |
| | | | 0.09 | | | (0.14 | ) | | | |||||||||||||||||||||||||||||
Net income before one-time item |
4.97 | 5.30 | 3.40 | 3.28 | 2.01 | 1.32 | 1.07 | 0.81 | 1.37 | 1.28 | ||||||||||||||||||||||||||||||
Net realized investment gains and losses |
1.43 | 2.48 | 0.23 | 0.34 | (0.15 | ) | (0.35 | ) | (0.10 | ) | (0.01 | ) | | 0.23 | ||||||||||||||||||||||||||
Operating income before one-time item |
3.54 | 2.82 | 3.17 | 2.94 | 2.16 | 1.67 | 1.17 | 0.82 | 1.37 | 1.05 | ||||||||||||||||||||||||||||||
Less catastrophe losses |
(0.10 | ) | (0.65 | ) | (0.46 | ) | (0.54 | ) | (0.35 | ) | (0.31 | ) | (0.23 | ) | (0.18 | ) | (0.13 | ) | (0.32 | ) | ||||||||||||||||||||
Operating income before catastrophe losses and one-time item |
$ | 3.64 | $ | 3.47 | $ | 3.63 | $ | 3.48 | $ | 2.51 | $ | 1.98 | $ | 1.40 | $ | 1.00 | $ | 1.50 | $ | 1.37 | ||||||||||||||||||||
Return on equity |
||||||||||||||||||||||||||||||||||||||||
Return on average equity |
13.4 | % | 14.4 | % | 9.8 | % | 9.4 | % | 6.3 | % | 4.1 | % | 3.2 | % | 2.1 | % | 4.6 | % | 4.7 | % | ||||||||||||||||||||
One-time item |
| | | | (0.3 | ) | | | 0.4 | | | |||||||||||||||||||||||||||||
Return on average equity before one-time item |
13.4 | % | 14.4 | % | 9.8 | % | 9.4 | % | 6.0 | % | 4.1 | % | 3.2 | % | 2.5 | % | 4.6 | % | 4.7 | % | ||||||||||||||||||||
Return on equity based on comprehensive income |
||||||||||||||||||||||||||||||||||||||||
ROE based on comprehensive income |
(5.9 | )% | 16.4 | % | 1.6 | % | 4.6 | % | 13.8 | % | (4.0 | )% | 2.5 | % | 13.1 | % | 1.9 | % | 19.6 | % | ||||||||||||||||||||
One-time item |
| | | | (0.3 | ) | | | 0.4 | | | |||||||||||||||||||||||||||||
ROE based on comprehensive income before one-time item |
(5.9 | )% | 16.4 | % | 1.6 | % | 4.6 | % | 13.5 | % | (4.0 | )% | 2.5 | % | 13.5 | % | 1.9 | % | 19.6 | % | ||||||||||||||||||||
Investment income |
||||||||||||||||||||||||||||||||||||||||
Investment income, net of expenses |
$ | 608 | $ | 570 | $ | 526 | $ | 492 | $ | 465 | $ | 445 | $ | 421 | $ | 415 | $ | 387 | $ | 368 | ||||||||||||||||||||
BOLI |
| | | | | | | (5 | ) | | | |||||||||||||||||||||||||||||
Investment income before BOLI |
$ | 608 | $ | 570 | $ | 526 | $ | 492 | $ | 465 | $ | 445 | $ | 421 | $ | 410 | $ | 387 | $ | 368 | ||||||||||||||||||||
* | Dollar amounts shown are rounded to millions; certain amounts may not add due to rounding. Ratios are calculated based on whole dollar amounts. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 11 |
(In millions except per share data) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 187 | $ | 124 | $ | 351 | $ | 194 | $ | 130 | $ | 115 | $ | 132 | $ | 552 | $ | 545 | $ | 684 | $ | 669 | $ | 800 | $ | 855 | $ | 930 | |||||||||||||||||||||||||||||||
Net realized investment gains and losses |
8 | 10 | 187 | 41 | 8 | | 6 | 421 | 228 | 426 | 238 | 427 | 245 | 434 | |||||||||||||||||||||||||||||||||||||||||||||
Operating income |
179 | 114 | 164 | 153 | 122 | 115 | 126 | 131 | 317 | 258 | 431 | 373 | 610 | 496 | |||||||||||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
1 | (9 | ) | (7 | ) | (2 | ) | (29 | ) | (18 | ) | (41 | ) | (26 | ) | (9 | ) | (67 | ) | (18 | ) | (85 | ) | (17 | ) | (113 | ) | ||||||||||||||||||||||||||||||||
Operating income before catastrophe losses |
$ | 178 | $ | 123 | $ | 171 | $ | 155 | $ | 151 | $ | 133 | $ | 167 | $ | 157 | $ | 326 | $ | 325 | $ | 449 | $ | 458 | $ | 627 | $ | 609 | |||||||||||||||||||||||||||||||
Diluted per share data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 1.11 | $ | 0.72 | $ | 2.02 | $ | 1.11 | $ | 0.75 | $ | 0.66 | $ | 0.76 | $ | 3.13 | $ | 3.13 | $ | 3.90 | $ | 3.86 | $ | 4.56 | $ | 4.97 | $ | 5.30 | |||||||||||||||||||||||||||||||
Net realized investment gains and losses |
0.04 | 0.06 | 1.08 | 0.23 | 0.05 | | 0.04 | 2.39 | 1.31 | 2.43 | 1.37 | 2.43 | 1.43 | 2.48 | |||||||||||||||||||||||||||||||||||||||||||||
Operating income |
1.07 | 0.66 | 0.94 | 0.88 | 0.70 | 0.66 | 0.72 | 0.74 | 1.82 | 1.47 | 2.49 | 2.13 | 3.54 | 2.82 | |||||||||||||||||||||||||||||||||||||||||||||
Less catastrophe losses |
0.01 | (0.05 | ) | (0.04 | ) | (0.01 | ) | (0.16 | ) | (0.10 | ) | (0.24 | ) | (0.14 | ) | (0.05 | ) | (0.38 | ) | (0.10 | ) | (0.48 | ) | (0.10 | ) | (0.65 | ) | ||||||||||||||||||||||||||||||||
Operating income before catastrophe losses |
$ | 1.06 | $ | 0.71 | $ | 0.98 | $ | 0.89 | $ | 0.86 | $ | 0.76 | $ | 0.96 | $ | 0.88 | $ | 1.87 | $ | 1.85 | $ | 2.59 | $ | 2.61 | $ | 3.64 | $ | 3.47 | |||||||||||||||||||||||||||||||
2007 Fourth-Quarter and Full-Year Financial Supplement | 12 |
(Dollars in millions) | As of and for twelve months ended December 31, 2007 | |||||||||||||||
Earned | ||||||||||||||||
Actual | Fair | Percent of | dividend | |||||||||||||
cost | value | fair value | income | |||||||||||||
Fifth Third Bancorp |
$ | 185 | $ | 1,691 | 28.1 | % | $ | 121 | ||||||||
The Procter & Gamble Company |
206 | 552 | 9.2 | 10 | ||||||||||||
Exxon Mobil Corporation |
58 | 484 | 8.0 | 8 | ||||||||||||
U.S. Bancorp |
270 | 332 | 5.5 | 16 | ||||||||||||
PNC Financial Services Group, Inc. |
62 | 309 | 5.1 | 12 | ||||||||||||
AllianceBernstein Holding L.P. |
113 | 295 | 4.9 | 17 | ||||||||||||
Johnson & Johnson |
218 | 267 | 4.5 | 6 | ||||||||||||
Wyeth |
62 | 196 | 3.3 | 5 | ||||||||||||
Wells Fargo & Company |
128 | 194 | 3.2 | 7 | ||||||||||||
Huntington Bancshares Inc |
188 | 152 | 2.5 | 4 | ||||||||||||
Piedmont Natural Gas Company, Inc. |
64 | 147 | 2.4 | 6 | ||||||||||||
Wachovia Corp |
186 | 140 | 2.3 | 6 | ||||||||||||
National City Corporation |
132 | 140 | 2.3 | 16 | ||||||||||||
Chevron Corporation |
56 | 123 | 2.1 | 3 | ||||||||||||
General Electric Co. |
106 | 116 | 1.9 | 3 | ||||||||||||
All other common stock holdings |
681 | 882 | 14.7 | 31 | ||||||||||||
Total |
$ | 2,715 | $ | 6,020 | 100.0 | % | $ | 271 | ||||||||
2007 Fourth-Quarter and Full-Year Financial Supplement | 13 |
(Dollars in millions) | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 | 9/30/2006 | 6/30/2006 | 3/31/2006 | ||||||||||||||||||||||||
Cincinnati Insurance Property Casualty Group |
||||||||||||||||||||||||||||||||
Fixed Maturities and Equities (Fair Value) |
$ | 8,940 | $ | 9,586 | $ | 9,850 | $ | 9,837 | $ | 9,882 | $ | 9,393 | $ | 8,987 | $ | 9,261 | ||||||||||||||||
Fixed Maturities Pretax Net Unrealized Gain (Loss) |
58 | 23 | (30 | ) | 44 | 47 | 51 | (55 | ) | 2 | ||||||||||||||||||||||
Equities Pretax Net Unrealized Gain (Loss) |
2,077 | 2,657 | 2,917 | 3,017 | 3,166 | 2,859 | 2,621 | 2,758 | ||||||||||||||||||||||||
Loss and Loss Expense Reserves STAT |
3,398 | 3,461 | 3,374 | 3,373 | 3,356 | 3,314 | 3,237 | 3,169 | ||||||||||||||||||||||||
Surplus STAT |
4,306 | 4,782 | 4,937 | 4,741 | 4,750 | 4,607 | 4,342 | 4,334 | ||||||||||||||||||||||||
The Cincinnati Life Insurance Company |
||||||||||||||||||||||||||||||||
Fixed Maturities and Equities (Fair Value) |
$ | 1,887 | $ | 1,952 | $ | 1,922 | $ | 1,938 | $ | 1,916 | $ | 1,893 | $ | 1,803 | $ | 1,827 | ||||||||||||||||
Fixed Maturities Pretax Net Unrealized Gain (Loss) |
6 | 4 | (4 | ) | 20 | 15 | 17 | (17 | ) | 6 | ||||||||||||||||||||||
Equities Pretax Net Unrealized Gain (Loss) |
162 | 225 | 254 | 305 | 307 | 271 | 238 | 256 | ||||||||||||||||||||||||
Retained Earnings GAAP |
685 | 724 | 730 | 739 | 719 | 688 | 652 | 666 | ||||||||||||||||||||||||
Surplus STAT |
477 | 485 | 491 | 483 | 479 | 461 | 459 | 470 | ||||||||||||||||||||||||
12/31/2005 | 9/30/2005 | 6/30/2005 | 3/31/2005 | 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | |||||||||||||||||||||||||
Cincinnati Insurance Property Casualty Group |
||||||||||||||||||||||||||||||||
Fixed Maturities and Equities (Fair Value) |
$ | 8,947 | $ | 8,833 | $ | 8,802 | $ | 8,710 | $ | 8,806 | $ | 8,523 | $ | 6,599 | $ | 6,882 | ||||||||||||||||
Fixed Maturities Pretax Net Unrealized Gain (Loss) |
50 | 86 | 152 | 99 | 188 | 158 | 84 | 190 | ||||||||||||||||||||||||
Equities Pretax Net Unrealized Gain (Loss) |
2,803 | 2,807 | 2,903 | 2,931 | 3,135 | 1,746 | 1,740 | 1,924 | ||||||||||||||||||||||||
Loss and Loss Expense Reserves STAT |
3,111 | 3,150 | 3,065 | 3,031 | 2,977 | 3,036 | 2,952 | 2,901 | ||||||||||||||||||||||||
Surplus STAT |
4,220 | 4,224 | 4,180 | 4,065 | 4,196 | 4,037 | 2,871 | 2,791 | ||||||||||||||||||||||||
The Cincinnati Life Insurance Company |
||||||||||||||||||||||||||||||||
Fixed Maturities and Equities (Fair Value) |
$ | 1,788 | $ | 1,797 | $ | 1,748 | $ | 1,688 | $ | 1,637 | $ | 1,695 | $ | 1,637 | $ | 1,652 | ||||||||||||||||
Fixed Maturities Pretax Net Unrealized Gain (Loss) |
31 | 45 | 70 | 53 | 82 | 76 | 49 | 94 | ||||||||||||||||||||||||
Equities Pretax Net Unrealized Gain (Loss) |
266 | 274 | 275 | 257 | 274 | 261 | 252 | 266 | ||||||||||||||||||||||||
Retained Earnings GAAP |
651 | 348 | 655 | 622 | 639 | 612 | 584 | 610 | ||||||||||||||||||||||||
Surplus STAT |
451 | 447 | 447 | 440 | 439 | 409 | 401 | 395 |
2007 Fourth-Quarter and Full-Year Financial Supplement | 14 |
For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||||||||||||||||||||||
2007 | 2006 | Change | % Change | 2007 | 2006 | Change | % Change | ||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||
Property casualty |
$ | 821,196,485 | $ | 845,479,506 | $ | (24,283,021 | ) | (2.87 | ) | $ | 3,299,384,836 | $ | 3,321,610,148 | $ | (22,225,312 | ) | (0.67 | ) | |||||||||||||||
Life |
| | | | | | | | |||||||||||||||||||||||||
Accident health |
| | | | | | | | |||||||||||||||||||||||||
Premiums ceded |
(44,194,344 | ) | (43,501,451 | ) | (692,893 | ) | 1.59 | (174,551,071 | ) | (157,587,693 | ) | (16,963,378 | ) | 10.76 | |||||||||||||||||||
Total premiums earned |
777,002,141 | 801,978,055 | (24,975,914 | ) | (3.11 | ) | 3,124,833,765 | 3,164,022,455 | (39,188,690 | ) | (1.24 | ) | |||||||||||||||||||||
Investment income |
100,841,548 | 93,654,263 | 7,187,285 | 7.67 | 392,580,307 | 367,304,753 | 25,275,554 | 6.88 | |||||||||||||||||||||||||
Realized gain on investments |
29,802,182 | 7,323,470 | 22,478,712 | 306.94 | 232,176,239 | 225,846,088 | 6,330,151 | 2.80 | |||||||||||||||||||||||||
Other income |
1,350,240 | 723,643 | 626,597 | 86.59 | 4,661,137 | 3,266,830 | 1,394,307 | 42.68 | |||||||||||||||||||||||||
Total revenues |
$ | 908,996,111 | $ | 903,679,431 | $ | 5,316,680 | 0.59 | $ | 3,754,251,448 | $ | 3,760,440,126 | $ | (6,188,678 | ) | (0.16 | ) | |||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 415,795,751 | $ | 507,755,637 | $ | (91,959,886 | ) | (18.11 | ) | $ | 1,939,058,201 | $ | 2,085,421,315 | $ | (146,363,114 | ) | (7.02 | ) | |||||||||||||||
Reinsurance recoveries |
(20,512,028 | ) | (5,484,567 | ) | (15,027,461 | ) | 274.00 | (106,882,598 | ) | (77,446,382 | ) | (29,436,216 | ) | 38.01 | |||||||||||||||||||
Commissions |
158,923,102 | 144,113,098 | 14,810,004 | 10.28 | 598,432,647 | 596,188,393 | 2,244,254 | 0.38 | |||||||||||||||||||||||||
Other operating expenses |
77,236,002 | 80,278,976 | (3,042,974 | ) | (3.79 | ) | 302,566,198 | 292,709,156 | 9,857,042 | 3.37 | |||||||||||||||||||||||
Interest expense |
| 496,480 | (496,480 | ) | | | 888,930 | (888,930 | ) | | |||||||||||||||||||||||
Taxes, licenses & fees |
17,073,630 | 17,498,941 | (425,311 | ) | (2.43 | ) | 70,051,616 | 72,695,021 | (2,643,405 | ) | (3.64 | ) | |||||||||||||||||||||
Incr deferred acq expense |
11,031,989 | 8,862,341 | 2,169,648 | 24.48 | 2,749,119 | (3,642,356 | ) | 6,391,475 | (175.48 | ) | |||||||||||||||||||||||
Other expenses |
5,396,854 | 4,244,123 | 1,152,731 | 27.16 | 14,436,827 | 16,341,980 | (1,905,153 | ) | (11.66 | ) | |||||||||||||||||||||||
Total expenses |
$ | 664,945,300 | $ | 757,765,029 | $ | (92,819,729 | ) | (12.25 | ) | $ | 2,820,412,010 | $ | 2,983,156,057 | $ | (162,744,047 | ) | (5.46 | ) | |||||||||||||||
Income before income taxes |
$ | 244,050,811 | $ | 145,914,402 | $ | 98,136,409 | 67.26 | $ | 933,839,438 | $ | 777,284,069 | $ | 156,555,369 | 20.14 | |||||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||
Current operating income |
$ | 58,411,169 | $ | 31,617,921 | $ | 26,793,248 | 84.74 | $ | 195,217,396 | $ | 147,254,816 | $ | 47,962,580 | 32.57 | |||||||||||||||||||
Current realized investments gains and losses |
10,714,301 | 2,703,528 | 8,010,773 | 296.31 | 82,554,324 | 80,218,693 | 2,335,631 | 2.91 | |||||||||||||||||||||||||
Deferred |
943,019 | 3,407,423 | (2,464,404 | ) | (72.32 | ) | (13,769,174 | ) | (8,069,068 | ) | (5,700,106 | ) | 70.64 | ||||||||||||||||||||
Total income taxes |
$ | 70,068,489 | $ | 37,728,872 | $ | 32,339,617 | 85.72 | $ | 264,002,546 | $ | 219,404,441 | $ | 44,598,105 | 20.33 | |||||||||||||||||||
Net income |
$ | 173,982,322 | $ | 108,185,530 | $ | 65,796,792 | 60.82 | $ | 669,836,892 | $ | 557,879,628 | $ | 111,957,264 | 20.07 |
2007 Fourth-Quarter and Full-Year Financial Supplement | 15 |
For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||
Underwriting income |
|||||||||||||||||||||||||
Net premiums written |
$ | 724,187,641 | $ | 755,245,797 | (4.11 | ) | $ | 3,116,514,912 | $ | 3,178,105,582 | (1.94 | ) | |||||||||||||
Unearned premiums increase |
(52,814,420 | ) | (46,732,257 | ) | 13.01 | (8,318,774 | ) | 14,083,124 | (159.07 | ) | |||||||||||||||
Earned premiums |
777,002,061 | 801,978,054 | (3.11 | ) | 3,124,833,686 | 3,164,022,457 | (1.24 | ) | |||||||||||||||||
Losses incurred |
$ | 291,512,942 | $ | 379,133,413 | (23.11 | ) | $ | 1,457,860,156 | $ | 1,640,711,403 | (11.14 | ) | |||||||||||||
Allocated loss expenses incurred |
62,766,784 | 71,979,236 | (12.80 | ) | 195,930,636 | 183,420,723 | 6.82 | ||||||||||||||||||
Unallocated loss expenses incurred |
41,003,996 | 51,158,422 | (19.85 | ) | 178,384,811 | 183,842,807 | (2.97 | ) | |||||||||||||||||
Other underwriting expenses incurred |
260,736,489 | 246,289,916 | 5.87 | 972,581,974 | 948,113,154 | 2.58 | |||||||||||||||||||
Workers compensation dividend incurred |
7,035,552 | 5,135,756 | 36.99 | 15,087,864 | 17,343,175 | (13.00 | ) | ||||||||||||||||||
Total underwriting deductions |
$ | 663,055,764 | $ | 753,696,744 | (12.03 | ) | $ | 2,819,845,441 | $ | 2,973,431,262 | (5.17 | ) | |||||||||||||
Net underwriting gain (loss) |
$ | 113,946,297 | $ | 48,281,310 | 136.00 | $ | 304,988,244 | $ | 190,591,195 | 60.02 | |||||||||||||||
Investment income |
|||||||||||||||||||||||||
Gross investment income earned |
$ | 100,164,635 | $ | 94,867,708 | 5.58 | $ | 396,757,569 | $ | 371,912,860 | 6.68 | |||||||||||||||
Net investment income earned |
100,375,194 | 93,654,263 | 7.18 | 391,822,759 | 367,304,753 | 6.68 | |||||||||||||||||||
Net realized capital gains |
22,573,145 | 4,677,265 | 382.61 | 157,929,417 | 146,526,143 | 7.78 | |||||||||||||||||||
Net investment gains (excl. subs) |
$ | 122,948,339 | $ | 98,331,529 | 25.03 | $ | 549,752,176 | $ | 513,830,897 | 6.99 | |||||||||||||||
Dividend from subsidiary |
| 12,000,000 | | | 26,000,000 | | |||||||||||||||||||
Net investment gains |
$ | 122,948,339 | $ | 110,331,529 | 11.44 | $ | 549,752,176 | $ | 539,830,897 | 1.84 | |||||||||||||||
Other income |
$ | 1,165,955 | $ | 618,259 | 88.59 | $ | 3,960,135 | $ | 2,488,123 | 59.16 | |||||||||||||||
Net income before federal income taxes |
$ | 238,060,591 | $ | 159,231,098 | 49.51 | $ | 858,700,555 | $ | 732,910,214 | 17.16 | |||||||||||||||
Federal and foreign income taxes incurred |
$ | 55,496,700 | $ | 30,398,414 | 82.56 | $ | 186,877,064 | $ | 143,561,772 | 30.17 | |||||||||||||||
Net income (statutory) |
$ | 182,563,891 | $ | 128,832,684 | 41.71 | $ | 671,823,492 | $ | 589,348,442 | 13.99 | |||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 16 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 724 | $ | 736 | $ | 810 | $ | 846 | $ | 755 | $ | 780 | $ | 814 | $ | 829 | $ | 1,656 | $ | 1,643 | $ | 2,393 | $ | 2,422 | $ | 3,117 | $ | 3,178 | |||||||||||||||||||||||||||||||
Net premiums earned |
$ | 777 | $ | 777 | $ | 786 | $ | 785 | $ | 802 | $ | 791 | $ | 793 | $ | 778 | $ | 1,571 | $ | 1,570 | $ | 2,348 | $ | 2,362 | $ | 3,125 | $ | 3,164 | |||||||||||||||||||||||||||||||
Losses paid |
$ | 375 | $ | 363 | $ | 380 | $ | 365 | $ | 375 | $ | 367 | $ | 381 | $ | 347 | $ | 744 | $ | 727 | $ | 1,107 | $ | 1,094 | $ | 1,481 | $ | 1,469 | |||||||||||||||||||||||||||||||
Loss reserve change |
(83 | ) | 69 | (16 | ) | 6 | 4 | 66 | 59 | 42 | (9 | ) | 101 | 60 | 168 | (24 | ) | 172 | |||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 292 | $ | 432 | $ | 364 | $ | 371 | $ | 379 | $ | 433 | $ | 440 | $ | 389 | $ | 735 | $ | 828 | $ | 1,167 | $ | 1,262 | $ | 1,457 | $ | 1,641 | |||||||||||||||||||||||||||||||
Allocated loss expense paid |
37 | 29 | 33 | 31 | 37 | 33 | 31 | 28 | 65 | 58 | 94 | 91 | 131 | 127 | |||||||||||||||||||||||||||||||||||||||||||||
Allocated loss expense reserve change |
26 | 15 | 16 | 8 | 35 | 7 | 7 | 5 | 24 | 13 | 39 | 20 | 65 | 56 | |||||||||||||||||||||||||||||||||||||||||||||
Total allocated loss expense incurred |
$ | 63 | $ | 44 | $ | 49 | $ | 39 | $ | 72 | $ | 40 | $ | 38 | $ | 33 | $ | 89 | $ | 71 | $ | 133 | $ | 111 | $ | 196 | $ | 183 | |||||||||||||||||||||||||||||||
Unallocated loss expense paid |
46 | 44 | 41 | 46 | 49 | 40 | 38 | 40 | 87 | 78 | 132 | 118 | 178 | 167 | |||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense reserve change |
(6 | ) | 4 | 1 | 2 | 2 | 3 | 2 | 10 | 3 | 12 | 6 | 15 | 2 | 17 | ||||||||||||||||||||||||||||||||||||||||||||
Total unallocated loss expense incurred |
$ | 40 | $ | 48 | $ | 42 | $ | 48 | $ | 51 | $ | 43 | $ | 40 | $ | 50 | $ | 90 | $ | 90 | $ | 138 | $ | 133 | $ | 180 | $ | 184 | |||||||||||||||||||||||||||||||
Underwriting expenses incurred |
267 | 230 | 242 | 249 | 251 | 243 | 231 | 239 | 489 | 471 | 719 | 714 | 988 | 965 | |||||||||||||||||||||||||||||||||||||||||||||
Underwriting profit (loss) |
$ | 115 | $ | 23 | $ | 89 | $ | 78 | $ | 49 | $ | 32 | $ | 44 | $ | 67 | $ | 168 | $ | 110 | $ | 191 | $ | 142 | $ | 304 | $ | 191 | |||||||||||||||||||||||||||||||
Ratio Data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss ratio |
37.5 | % | 55.6 | % | 46.3 | % | 47.2 | % | 47.3 | % | 54.8 | % | 55.4 | % | 50.0 | % | 46.8 | % | 52.7 | % | 49.7 | % | 53.4 | % | 46.7 | % | 51.9 | % | |||||||||||||||||||||||||||||||
Allocated loss expense ratio |
8.1 | 5.7 | 6.3 | 5.0 | 9.0 | 5.0 | 4.8 | 4.3 | 5.7 | 4.6 | 5.7 | 4.7 | 6.3 | 5.8 | |||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense ratio |
5.3 | 6.1 | 5.3 | 6.1 | 6.4 | 5.4 | 5.1 | 6.4 | 5.7 | 5.7 | 5.8 | 5.6 | 5.7 | 5.8 | |||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expense ratio |
37.0 | 31.3 | 29.8 | 29.4 | 33.2 | 31.2 | 28.4 | 29.0 | 29.5 | 28.7 | 30.1 | 29.5 | 31.7 | 30.4 | |||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
87.9 | % | 98.7 | % | 87.7 | % | 87.7 | % | 95.9 | % | 96.4 | % | 93.7 | % | 89.7 | % | 87.7 | % | 91.7 | % | 91.3 | % | 93.2 | % | 90.4 | % | 93.9 | % | |||||||||||||||||||||||||||||||
Statutory combined ratio excluding
catastrophes |
88.1 | % | 97.0 | % | 86.3 | % | 87.3 | % | 90.4 | % | 92.9 | % | 85.7 | % | 84.6 | % | 86.8 | % | 85.2 | % | 90.1 | % | 87.7 | % | 89.5 | % | 88.4 | % | |||||||||||||||||||||||||||||||
Loss Detail |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
$ | 29 | $ | 24 | $ | 22 | $ | 23 | $ | 21 | $ | 22 | $ | 21 | $ | 23 | $ | 45 | $ | 44 | $ | 69 | $ | 66 | $ | 98 | $ | 87 | |||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
16 | 14 | 15 | 15 | 14 | 16 | 11 | 9 | 30 | 20 | 44 | 36 | 60 | 50 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
13 | 9 | 9 | 10 | 10 | 11 | 9 | 7 | 19 | 16 | 28 | 27 | 41 | 37 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
24 | 26 | 26 | 28 | 25 | 25 | 22 | 9 | 54 | 31 | 80 | 56 | 104 | 81 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
36 | 50 | 17 | 22 | 37 | 35 | 22 | 23 | 39 | 45 | 89 | 80 | 125 | 117 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| 5 | | | | | | | | | 5 | | 5 | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
68 | 50 | 48 | 53 | 64 | 51 | 59 | 50 | 101 | 109 | 151 | 160 | 219 | 224 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
$ | 186 | $ | 178 | $ | 137 | $ | 151 | $ | 171 | $ | 160 | $ | 144 | $ | 121 | $ | 288 | $ | 265 | $ | 466 | $ | 425 | $ | 652 | $ | 596 | |||||||||||||||||||||||||||||||
IBNR incurred |
(43 | ) | | 7 | 7 | (57 | ) | 11 | (5 | ) | 6 | 15 | 1 | 15 | 11 | (25 | ) | (47 | ) | ||||||||||||||||||||||||||||||||||||||||
Catastrophe losses incurred |
(2 | ) | 13 | 11 | 3 | 44 | 27 | 64 | 39 | 15 | 103 | 28 | 131 | 26 | 175 | ||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
151 | 241 | 209 | 210 | 221 | 235 | 237 | 223 | 417 | 459 | 658 | 695 | 804 | 917 | |||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 292 | $ | 432 | $ | 364 | $ | 371 | $ | 379 | $ | 433 | $ | 440 | $ | 389 | $ | 735 | $ | 828 | $ | 1,167 | $ | 1,262 | $ | 1,457 | $ | 1,641 | |||||||||||||||||||||||||||||||
Loss Ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
3.7 | % | 3.1 | % | 2.8 | % | 2.9 | % | 2.6 | % | 2.8 | % | 2.6 | % | 3.0 | % | 2.9 | % | 2.8 | % | 2.9 | % | 2.8 | % | 3.1 | % | 2.7 | % | |||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
2.1 | 1.8 | 1.9 | 1.9 | 1.7 | 2.0 | 1.5 | 1.2 | 1.9 | 1.3 | 1.9 | 1.5 | 1.9 | 1.6 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
1.7 | 1.2 | 1.1 | 1.3 | 1.2 | 1.4 | 1.2 | 0.9 | 1.2 | 1.0 | 1.2 | 1.1 | 1.3 | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
3.1 | 3.3 | 3.3 | 3.6 | 3.1 | 3.2 | 2.8 | 1.2 | 3.4 | 2.1 | 3.4 | 2.4 | 3.3 | 2.6 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
4.6 | 6.4 | 2.2 | 2.8 | 4.6 | 4.4 | 2.8 | 3.0 | 2.5 | 2.9 | 3.8 | 3.4 | 4.0 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| 0.6 | | | | | | | | | 0.2 | | 0.2 | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
8.8 | 6.4 | 6.1 | 6.8 | 8.0 | 6.3 | 7.4 | 6.4 | 6.4 | 6.9 | 6.4 | 6.8 | 7.0 | 7.1 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
23.9 | % | 22.9 | % | 17.4 | % | 19.2 | % | 21.3 | % | 20.1 | % | 18.4 | % | 15.6 | % | 18.3 | % | 17.0 | % | 19.8 | % | 18.0 | % | 20.9 | % | 18.8 | % | |||||||||||||||||||||||||||||||
IBNR incurred |
(5.5 | ) | | 0.9 | 1.0 | (7.2 | ) | 1.3 | (0.6 | ) | 0.8 | 0.9 | 0.1 | 0.6 | 0.5 | (0.9 | ) | (1.4 | ) | ||||||||||||||||||||||||||||||||||||||||
Total catastrophe losses incurred |
(0.2 | ) | 1.7 | 1.4 | 0.4 | 5.5 | 3.5 | 8.0 | 5.0 | 0.9 | 6.5 | 1.2 | 5.5 | 0.8 | 5.5 | ||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
19.3 | 31.0 | 26.6 | 26.6 | 27.7 | 29.9 | 29.6 | 28.6 | 26.7 | 29.1 | 28.1 | 29.4 | 25.9 | 29.0 | |||||||||||||||||||||||||||||||||||||||||||||
Total loss ratio |
37.5 | % | 55.6 | % | 46.3 | % | 47.2 | % | 47.3 | % | 54.8 | % | 55.4 | % | 50.0 | % | 46.8 | % | 52.7 | % | 49.7 | % | 53.4 | % | 46.7 | % | 51.9 | % | |||||||||||||||||||||||||||||||
Loss Claim Count |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
88 | 75 | 67 | 72 | 64 | 66 | 62 | 72 | 139 | 134 | 214 | 200 | 302 | 264 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
27 | 25 | 26 | 24 | 22 | 27 | 18 | 15 | 50 | 33 | 75 | 60 | 102 | 82 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
16 | 11 | 11 | 12 | 12 | 12 | 11 | 8 | 23 | 19 | 34 | 31 | 50 | 43 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
18 | 21 | 21 | 21 | 21 | 20 | 16 | 7 | 42 | 23 | 63 | 43 | 81 | 64 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
12 | 16 | 5 | 7 | 11 | 12 | 7 | 7 | 12 | 14 | 28 | 26 | 40 | 37 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| 1 | | | | | | | | | 1 | | 1 | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
112 | 93 | 82 | 93 | 94 | 101 | 101 | 84 | 175 | 185 | 268 | 286 | 380 | 380 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses total |
273 | 242 | 212 | 229 | 224 | 238 | 215 | 193 | 441 | 408 | 683 | 646 | 956 | 870 | |||||||||||||||||||||||||||||||||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement
|
17 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 562 | $ | 544 | $ | 613 | $ | 693 | $ | 589 | $ | 582 | $ | 603 | $ | 668 | $ | 1,306 | $ | 1,271 | $ | 1,851 | $ | 1,852 | $ | 2,413 | $ | 2,442 | |||||||||||||||||||||||||||||||
Net premiums earned |
$ | 601 | $ | 600 | $ | 606 | $ | 604 | $ | 619 | $ | 602 | $ | 599 | $ | 582 | $ | 1,210 | $ | 1,181 | $ | 1,810 | $ | 1,783 | $ | 2,411 | $ | 2,402 | |||||||||||||||||||||||||||||||
Losses paid |
$ | 272 | $ | 253 | $ | 270 | $ | 259 | $ | 256 | $ | 247 | $ | 251 | $ | 234 | $ | 530 | $ | 485 | $ | 783 | $ | 732 | $ | 1,055 | $ | 988 | |||||||||||||||||||||||||||||||
Loss reserve change |
(53 | ) | 66 | (12 | ) | 23 | 5 | 63 | 53 | 53 | 11 | 105 | 77 | 169 | 23 | 174 | |||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 219 | $ | 319 | $ | 258 | $ | 282 | $ | 261 | $ | 310 | $ | 304 | $ | 287 | $ | 541 | $ | 590 | $ | 860 | $ | 901 | $ | 1,078 | $ | 1,162 | |||||||||||||||||||||||||||||||
Allocated loss expense paid |
33 | 26 | 30 | 28 | 33 | 29 | 28 | 25 | 58 | 52 | 84 | 81 | 117 | 114 | |||||||||||||||||||||||||||||||||||||||||||||
Allocated loss expense reserve change |
27 | 16 | 16 | 8 | 37 | 7 | 6 | 5 | 24 | 12 | 40 | 19 | 67 | 56 | |||||||||||||||||||||||||||||||||||||||||||||
Total allocated loss expense incurred |
$ | 60 | $ | 42 | $ | 46 | $ | 36 | $ | 70 | $ | 36 | $ | 34 | $ | 30 | $ | 82 | $ | 64 | $ | 124 | $ | 100 | $ | 184 | $ | 170 | |||||||||||||||||||||||||||||||
Unallocated loss expense paid |
34 | 31 | 30 | 33 | 34 | 27 | 27 | 28 | 63 | 54 | 94 | 82 | 128 | 116 | |||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense reserve change |
(3 | ) | 4 | 1 | 3 | 3 | 3 | 2 | 10 | 4 | 13 | 8 | 15 | 5 | 18 | ||||||||||||||||||||||||||||||||||||||||||||
Total unallocated loss expense incurred |
$ | 31 | $ | 35 | $ | 31 | $ | 36 | $ | 37 | $ | 30 | $ | 29 | $ | 38 | $ | 67 | $ | 67 | $ | 102 | $ | 97 | $ | 133 | $ | 134 | |||||||||||||||||||||||||||||||
Underwriting expenses incurred |
215 | 170 | 179 | 193 | 194 | 184 | 171 | 177 | 371 | 349 | 541 | 532 | 757 | 726 | |||||||||||||||||||||||||||||||||||||||||||||
Underwriting profit (loss) |
$ | 76 | $ | 34 | $ | 92 | $ | 57 | $ | 57 | $ | 42 | $ | 61 | $ | 50 | $ | 149 | $ | 111 | $ | 183 | $ | 153 | $ | 259 | $ | 210 | |||||||||||||||||||||||||||||||
Ratio Data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss ratio |
36.4 | % | 53.2 | % | 42.6 | % | 46.8 | % | 42.2 | % | 51.5 | % | 50.7 | % | 49.2 | % | 44.7 | % | 50.0 | % | 47.5 | % | 50.5 | % | 44.8 | % | 48.4 | % | |||||||||||||||||||||||||||||||
Allocated loss expense ratio |
9.9 | 7.0 | 7.6 | 5.9 | 11.3 | 6.0 | 5.7 | 5.1 | 6.8 | 5.4 | 6.8 | 5.6 | 7.6 | 7.0 | |||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense ratio |
5.2 | 5.8 | 5.1 | 5.9 | 6.0 | 5.0 | 4.9 | 6.5 | 5.5 | 5.7 | 5.6 | 5.4 | 5.5 | 5.6 | |||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expense ratio |
38.2 | 31.2 | 29.1 | 27.9 | 32.9 | 31.6 | 28.3 | 26.7 | 28.4 | 27.4 | 29.3 | 28.8 | 31.4 | 29.7 | |||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
89.7 | % | 97.2 | % | 84.4 | % | 86.5 | % | 92.4 | % | 94.1 | % | 89.6 | % | 87.5 | % | 85.4 | % | 88.5 | % | 89.2 | % | 90.3 | % | 89.3 | % | 90.7 | % | |||||||||||||||||||||||||||||||
Statutory combined ratio excluding
catastrophes |
89.7 | % | 97.1 | % | 83.6 | % | 84.7 | % | 90.6 | % | 91.7 | % | 84.1 | % | 82.4 | % | 84.1 | % | 83.2 | % | 88.3 | % | 86.0 | % | 88.6 | % | 87.1 | % | |||||||||||||||||||||||||||||||
Loss Detail |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
$ | 21 | $ | 18 | $ | 16 | $ | 18 | $ | 17 | $ | 17 | $ | 15 | $ | 15 | $ | 34 | $ | 30 | $ | 52 | $ | 47 | $ | 73 | $ | 64 | |||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
14 | 11 | 12 | 12 | 10 | 12 | 10 | 8 | 24 | 18 | 35 | 30 | 49 | 40 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
11 | 8 | 6 | 9 | 10 | 7 | 6 | 5 | 15 | 11 | 23 | 18 | 34 | 28 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
19 | 25 | 23 | 23 | 21 | 21 | 19 | 7 | 46 | 26 | 71 | 47 | 90 | 68 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
34 | 43 | 13 | 22 | 37 | 30 | 20 | 23 | 35 | 43 | 78 | 73 | 112 | 110 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| 5 | | | | | | | | | 5 | | 5 | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
60 | 45 | 46 | 49 | 58 | 46 | 52 | 45 | 95 | 97 | 140 | 143 | 200 | 201 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
$ | 159 | $ | 155 | $ | 116 | $ | 133 | $ | 153 | $ | 133 | $ | 122 | $ | 103 | $ | 249 | $ | 225 | $ | 404 | $ | 358 | $ | 563 | $ | 511 | |||||||||||||||||||||||||||||||
IBNR incurred |
(29 | ) | | 6 | 7 | (45 | ) | 10 | (6 | ) | 6 | 14 | | 14 | 10 | (12 | ) | (36 | ) | ||||||||||||||||||||||||||||||||||||||||
Catastrophe losses incurred |
| 1 | 5 | 10 | 11 | 14 | 34 | 29 | 16 | 63 | 17 | 77 | 16 | 89 | |||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
89 | 163 | 131 | 132 | 142 | 153 | 154 | 149 | 262 | 302 | 425 | 456 | 511 | 598 | |||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 219 | $ | 319 | $ | 258 | $ | 282 | $ | 261 | $ | 310 | $ | 304 | $ | 287 | $ | 541 | $ | 590 | $ | 860 | $ | 901 | $ | 1,078 | $ | 1,162 | |||||||||||||||||||||||||||||||
Loss Ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
3.4 | % | 3.0 | % | 2.6 | % | 2.8 | % | 2.5 | % | 2.8 | % | 2.6 | % | 2.6 | % | 2.7 | % | 2.5 | % | 2.9 | % | 2.8 | % | 2.9 | % | 2.7 | % | |||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
2.2 | 1.8 | 2.0 | 2.0 | 1.5 | 2.0 | 1.8 | 1.4 | 2.0 | 1.5 | 1.9 | 1.9 | 2.0 | 1.7 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
1.8 | 1.3 | 1.0 | 1.5 | 1.5 | 1.2 | 1.0 | 0.9 | 1.2 | 0.9 | 1.3 | 1.1 | 1.4 | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
3.2 | 4.2 | 3.8 | 3.8 | 3.5 | 3.5 | 3.3 | 1.2 | 3.8 | 2.2 | 3.9 | 2.6 | 3.7 | 2.8 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
5.7 | 7.2 | 2.1 | 3.6 | 6.2 | 5.0 | 3.3 | 4.0 | 2.9 | 3.7 | 4.3 | 4.2 | 4.5 | 4.6 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| 0.8 | | | | | | | | | 0.3 | | 0.2 | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
10.1 | 7.5 | 7.6 | 8.1 | 9.4 | 7.6 | 8.7 | 7.6 | 7.8 | 8.2 | 7.6 | 7.5 | 8.3 | 8.4 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
26.4 | % | 25.8 | % | 19.1 | % | 21.8 | % | 24.6 | % | 22.1 | % | 20.7 | % | 17.6 | % | 20.4 | % | 19.2 | % | 22.2 | % | 20.2 | % | 23.2 | % | 21.3 | % | |||||||||||||||||||||||||||||||
IBNR incurred |
(4.8 | ) | | 1.0 | 1.2 | (7.3 | ) | 1.7 | (1.0 | ) | 0.9 | 1.1 | | 0.8 | 0.6 | (0.5 | ) | (1.5 | ) | ||||||||||||||||||||||||||||||||||||||||
Total catastrophe losses incurred |
| 0.2 | 0.8 | 1.8 | 1.9 | 2.4 | 5.6 | 5.2 | 1.3 | 5.3 | 0.9 | 4.3 | 0.7 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
14.8 | 27.2 | 21.7 | 22.0 | 23.0 | 25.3 | 25.4 | 25.5 | 21.9 | 25.5 | 23.6 | 25.4 | 21.4 | 24.9 | |||||||||||||||||||||||||||||||||||||||||||||
Total loss ratio |
36.4 | % | 53.2 | % | 42.6 | % | 46.8 | % | 42.2 | % | 51.5 | % | 50.7 | % | 49.2 | % | 44.7 | % | 50.0 | % | 47.5 | % | 50.5 | % | 44.8 | % | 48.4 | % | |||||||||||||||||||||||||||||||
Loss Claim Count |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
64 | 57 | 49 | 57 | 50 | 51 | 46 | 48 | 106 | 94 | 163 | 145 | 227 | 195 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
23 | 20 | 21 | 20 | 16 | 21 | 17 | 14 | 41 | 31 | 61 | 52 | 84 | 68 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
13 | 9 | 7 | 11 | 12 | 8 | 7 | 6 | 18 | 13 | 27 | 21 | 40 | 33 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
14 | 20 | 19 | 17 | 18 | 17 | 14 | 5 | 36 | 19 | 56 | 36 | 70 | 54 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
11 | 14 | 4 | 7 | 11 | 10 | 6 | 7 | 11 | 13 | 25 | 23 | 36 | 34 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| 1 | | | | | | | | | 1 | | 1 | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
96 | 80 | 75 | 85 | 81 | 88 | 89 | 72 | 160 | 161 | 240 | 249 | 336 | 330 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses total |
221 | 201 | 175 | 197 | 188 | 195 | 179 | 152 | 372 | 331 | 573 | 526 | 794 | 714 | |||||||||||||||||||||||||||||||||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement
|
18 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Net premiums written |
$ | 162 | $ | 192 | $ | 197 | $ | 153 | $ | 166 | $ | 198 | $ | 211 | $ | 161 | $ | 350 | $ | 372 | $ | 542 | $ | 570 | $ | 704 | $ | 736 | |||||||||||||||||||||||||||||||
Net premiums earned |
$ | 176 | $ | 177 | $ | 180 | $ | 181 | $ | 183 | $ | 189 | $ | 194 | $ | 196 | $ | 361 | $ | 389 | $ | 538 | $ | 579 | $ | 714 | $ | 762 | |||||||||||||||||||||||||||||||
Losses paid |
$ | 103 | $ | 110 | $ | 110 | $ | 105 | $ | 119 | $ | 120 | $ | 130 | $ | 113 | $ | 214 | $ | 242 | $ | 324 | $ | 362 | $ | 426 | $ | 481 | |||||||||||||||||||||||||||||||
Loss reserve change |
(30 | ) | 3 | (4 | ) | (17 | ) | (1 | ) | 3 | 6 | (11 | ) | (20 | ) | (4 | ) | (17 | ) | (1 | ) | (47 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 73 | $ | 113 | $ | 106 | $ | 88 | $ | 118 | $ | 123 | $ | 136 | $ | 102 | $ | 194 | $ | 238 | $ | 307 | $ | 361 | $ | 379 | $ | 479 | |||||||||||||||||||||||||||||||
Allocated loss expense paid |
4 | 3 | 3 | 3 | 4 | 4 | 3 | 3 | 7 | 6 | 10 | 10 | 14 | 13 | |||||||||||||||||||||||||||||||||||||||||||||
Allocated loss expense reserve change |
(1 | ) | (1 | ) | | | (2 | ) | | 1 | | | 1 | (1 | ) | 1 | (2 | ) | | ||||||||||||||||||||||||||||||||||||||||
Total allocated loss expense incurred |
$ | 3 | $ | 2 | $ | 3 | $ | 3 | $ | 2 | $ | 4 | $ | 4 | $ | 3 | $ | 7 | $ | 7 | $ | 9 | $ | 11 | $ | 12 | $ | 13 | |||||||||||||||||||||||||||||||
Unallocated loss expense paid |
12 | 13 | 11 | 13 | 15 | 13 | 11 | 12 | 24 | 24 | 38 | 36 | 50 | 51 | |||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense reserve change |
(3 | ) | | | (1 | ) | (1 | ) | | | | (1 | ) | (1 | ) | (2 | ) | | (3 | ) | (1 | ) | |||||||||||||||||||||||||||||||||||||
Total unallocated loss expense incurred |
$ | 9 | $ | 13 | $ | 11 | $ | 12 | $ | 14 | $ | 13 | $ | 11 | $ | 12 | $ | 23 | $ | 23 | $ | 36 | $ | 36 | $ | 47 | $ | 50 | |||||||||||||||||||||||||||||||
Underwriting expenses incurred |
52 | 60 | 63 | 56 | 57 | 59 | 60 | 62 | 118 | 122 | 178 | 182 | 231 | 239 | |||||||||||||||||||||||||||||||||||||||||||||
Underwriting profit (loss) |
$ | 39 | $ | (11 | ) | $ | (3 | ) | $ | 22 | $ | (8 | ) | $ | (10 | ) | $ | (17 | ) | $ | 17 | $ | 19 | $ | (1 | ) | $ | 8 | $ | (11 | ) | $ | 45 | $ | (19 | ) | |||||||||||||||||||||||
Ratio Data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss ratio |
41.3 | % | 63.8 | % | 58.6 | % | 48.9 | % | 64.4 | % | 65.1 | % | 70.0 | % | 52.2 | % | 53.8 | % | 61.1 | % | 57.1 | % | 62.4 | % | 53.2 | % | 62.9 | % | |||||||||||||||||||||||||||||||
Allocated loss expense ratio |
1.8 | 1.4 | 1.9 | 1.8 | 1.2 | 1.9 | 2.1 | 1.7 | 1.9 | 1.9 | 1.7 | 2.0 | 1.7 | 1.7 | |||||||||||||||||||||||||||||||||||||||||||||
Unallocated loss expense ratio |
5.5 | 7.3 | 6.2 | 6.6 | 7.8 | 6.6 | 5.8 | 6.2 | 6.4 | 6.0 | 6.7 | 6.1 | 6.4 | 6.6 | |||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expense ratio |
32.8 | 31.1 | 31.9 | 36.2 | 34.3 | 30.4 | 28.5 | 38.0 | 33.7 | 32.6 | 32.8 | 31.8 | 32.8 | 32.4 | |||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
81.4 | % | 103.6 | % | 98.6 | % | 93.5 | % | 107.7 | % | 104.0 | % | 106.4 | % | 98.1 | % | 95.8 | % | 101.6 | % | 98.3 | % | 102.3 | % | 94.1 | % | 103.6 | % | |||||||||||||||||||||||||||||||
Statutory combined ratio excluding
catastrophes |
82.4 | % | 96.6 | % | 95.1 | % | 97.6 | % | 89.8 | % | 97.0 | % | 90.8 | % | 93.1 | % | 96.1 | % | 91.3 | % | 96.2 | % | 93.0 | % | 92.8 | % | 92.3 | % | |||||||||||||||||||||||||||||||
Loss Detail |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
$ | 8 | $ | 6 | $ | 6 | $ | 5 | $ | 4 | $ | 5 | $ | 6 | $ | 8 | $ | 11 | $ | 14 | $ | 17 | $ | 19 | $ | 25 | $ | 23 | |||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
2 | 3 | 3 | 3 | 4 | 4 | 1 | 1 | 6 | 2 | 9 | 6 | 11 | 10 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
2 | 1 | 3 | 1 | | 4 | 3 | 2 | 4 | 5 | 5 | 9 | 7 | 9 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
5 | 1 | 3 | 5 | 4 | 4 | 3 | 2 | 8 | 5 | 9 | 9 | 14 | 13 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
2 | 7 | 4 | | | 5 | 2 | | 4 | 2 | 11 | 7 | 13 | 7 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
8 | 5 | 2 | 4 | 6 | 5 | 7 | 5 | 6 | 12 | 11 | 17 | 19 | 23 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
$ | 27 | $ | 23 | $ | 21 | $ | 18 | $ | 18 | $ | 27 | $ | 22 | $ | 18 | $ | 39 | $ | 40 | $ | 62 | $ | 67 | $ | 89 | $ | 85 | |||||||||||||||||||||||||||||||
IBNR incurred |
(14 | ) | | 1 | | (12 | ) | 1 | 1 | | 1 | 1 | 1 | 1 | (13 | ) | (11 | ) | |||||||||||||||||||||||||||||||||||||||||
Catastrophe losses incurred |
(2 | ) | 12 | 6 | (7 | ) | 33 | 13 | 30 | 10 | (1 | ) | 40 | 11 | 54 | 10 | 86 | ||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
62 | 78 | 78 | 77 | 79 | 82 | 83 | 74 | 155 | 157 | 233 | 239 | 293 | 319 | |||||||||||||||||||||||||||||||||||||||||||||
Total losses incurred |
$ | 73 | $ | 113 | $ | 106 | $ | 88 | $ | 118 | $ | 123 | $ | 136 | $ | 102 | $ | 194 | $ | 238 | $ | 307 | $ | 361 | $ | 379 | $ | 479 | |||||||||||||||||||||||||||||||
Loss Ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
4.5 | % | 3.4 | % | 3.3 | % | 3.0 | % | 2.3 | % | 2.4 | % | 2.7 | % | 4.1 | % | 3.1 | % | 3.6 | % | 3.3 | % | 3.0 | % | 3.6 | % | 2.8 | % | |||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
1.1 | 1.7 | 1.7 | 1.9 | 2.2 | 1.9 | 0.4 | 0.5 | 1.8 | 0.5 | 1.7 | 0.9 | 1.5 | 1.1 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
1.1 | 0.6 | 1.7 | 0.7 | | 2.0 | 1.3 | 1.0 | 1.1 | 1.3 | 0.9 | 1.5 | 1.0 | 1.0 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
2.8 | 0.6 | 1.7 | 3.0 | 2.2 | 2.2 | 2.0 | 1.0 | 2.3 | 1.3 | 1.7 | 1.8 | 2.0 | 2.0 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
1.0 | 4.1 | 2.2 | | | 2.7 | 1.4 | | 1.1 | 0.5 | 2.1 | 1.3 | 1.8 | 1.0 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
4.4 | 2.9 | 1.2 | 2.2 | 3.4 | 2.2 | 3.5 | 2.6 | 1.8 | 3.1 | 2.1 | 2.9 | 2.7 | 3.0 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses subtotal |
15.1 | % | 13.2 | % | 11.8 | % | 10.6 | % | 10.0 | % | 13.6 | % | 11.4 | % | 9.2 | % | 11.2 | % | 10.3 | % | 11.8 | % | 11.4 | % | 12.6 | % | 11.0 | % | |||||||||||||||||||||||||||||||
IBNR incurred |
(7.8 | ) | | 0.4 | | (6.8 | ) | 0.1 | 0.7 | | 0.2 | 0.3 | 0.1 | 0.3 | (1.8 | ) | (1.4 | ) | |||||||||||||||||||||||||||||||||||||||||
Total catastrophe losses incurred |
(1.0 | ) | 7.0 | 3.5 | (4.1 | ) | 17.9 | 7.1 | 15.6 | 5.0 | (0.3 | ) | 10.3 | 2.1 | 9.3 | 1.3 | 11.3 | ||||||||||||||||||||||||||||||||||||||||||
Remaining incurred |
35.0 | 43.6 | 42.9 | 42.4 | 43.3 | 44.3 | 42.3 | 38.0 | 42.7 | 40.2 | 43.1 | 41.4 | 41.1 | 42.0 | |||||||||||||||||||||||||||||||||||||||||||||
Total loss ratio |
41.3 | % | 63.8 | % | 58.6 | % | 48.9 | % | 64.4 | % | 65.1 | % | 70.0 | % | 52.2 | % | 53.8 | % | 61.1 | % | 57.1 | % | 62.4 | % | 53.2 | % | 62.9 | % | |||||||||||||||||||||||||||||||
Loss Claim Count |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New losses $250,000-$500,000 |
24 | 18 | 18 | 15 | 14 | 15 | 16 | 24 | 33 | 40 | 51 | 55 | 75 | 69 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $500,000-$750,000 |
4 | 5 | 5 | 4 | 6 | 6 | 1 | 1 | 9 | 2 | 14 | 8 | 18 | 14 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $750,000-$1,000,000 |
3 | 2 | 4 | 1 | | 4 | 4 | 2 | 5 | 6 | 7 | 10 | 10 | 10 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $1,000,000-$2,000,000 |
4 | 1 | 2 | 4 | 3 | 3 | 2 | 2 | 6 | 4 | 7 | 7 | 11 | 10 | |||||||||||||||||||||||||||||||||||||||||||||
New losses $2,000,000-$4,000,000 |
1 | 2 | 1 | | | 2 | 1 | | 1 | 1 | 3 | 3 | 4 | 3 | |||||||||||||||||||||||||||||||||||||||||||||
New losses greater than $4,000,000 |
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Case reserve development above $250,000 |
16 | 13 | 7 | 8 | 13 | 13 | 12 | 12 | 15 | 24 | 28 | 37 | 44 | 50 | |||||||||||||||||||||||||||||||||||||||||||||
Large losses total |
52 | 41 | 37 | 32 | 36 | 43 | 36 | 41 | 69 | 77 | 110 | 120 | 162 | 156 | |||||||||||||||||||||||||||||||||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 19 |
(Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2007 | 12/31/2006 | Commercial | Personal | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comm | Comm | Comm | Workers | Specialty | Surety & | Mach. & | Pers | Home | Other | Agency | Agency | Change | Change | Change | |||||||||||||||||||||||||||||||||||||||||||||||
Risk State | Casualty | Prop | Auto | Comp | Packages | Exec Risk | Equip | Auto | Owner | Personal | Direct | Direct | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||
AL |
$ | 21.1 | $ | 16.9 | $ | 8.5 | $ | 1.3 | $ | 7.1 | $ | 2.0 | $ | 0.6 | $ | 15.5 | $ | 22.8 | $ | 4.8 | $ | 100.6 | $ | 94.2 | 8.1 | 4.9 | 6.7 | ||||||||||||||||||||||||||||||||||
AZ |
13.6 | 6.1 | 9.6 | 0.3 | 1.0 | 0.8 | 0.6 | 0.0 | 0.2 | 0.1 | 32.3 | 30.1 | 7.1 | (0.5 | ) | 7.0 | |||||||||||||||||||||||||||||||||||||||||||||
AR |
10.5 | 9.6 | 6.0 | 5.2 | 3.6 | 1.3 | 0.4 | 2.6 | 2.9 | 0.8 | 42.9 | 45.3 | (5.6 | ) | (4.5 | ) | (5.4 | ) | |||||||||||||||||||||||||||||||||||||||||||
DE |
1.1 | 0.6 | 0.7 | 1.9 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 4.5 | 3.7 | 23.6 | 183.0 | 23.6 | ||||||||||||||||||||||||||||||||||||||||||||||
FL |
36.3 | 25.5 | 13.4 | 1.8 | 3.1 | 2.7 | 1.0 | 12.4 | 23.4 | 3.6 | 123.2 | 121.5 | (1.5 | ) | 8.4 | 1.4 | |||||||||||||||||||||||||||||||||||||||||||||
GA |
28.7 | 21.6 | 19.3 | 12.4 | 7.0 | 7.1 | 0.8 | 30.7 | 26.0 | 7.0 | 160.7 | 157.2 | 5.0 | (1.7 | ) | 2.2 | |||||||||||||||||||||||||||||||||||||||||||||
ID |
9.4 | 4.4 | 4.9 | 0.2 | 0.9 | 0.9 | 0.3 | 0.0 | 0.0 | 0.0 | 20.9 | 17.0 | 22.7 | (96.2 | ) | 22.6 | |||||||||||||||||||||||||||||||||||||||||||||
IL |
79.5 | 46.3 | 31.0 | 60.9 | 13.4 | 8.2 | 3.1 | 23.9 | 18.9 | 6.2 | 291.5 | 303.3 | (3.9 | ) | (3.9 | ) | (3.9 | ) | |||||||||||||||||||||||||||||||||||||||||||
IN |
51.2 | 38.3 | 25.2 | 30.1 | 7.9 | 7.5 | 2.3 | 27.2 | 25.7 | 6.7 | 222.3 | 229.9 | (2.3 | ) | (5.9 | ) | (3.3 | ) | |||||||||||||||||||||||||||||||||||||||||||
IA |
21.0 | 14.8 | 9.3 | 24.0 | 4.5 | 2.6 | 1.3 | 4.3 | 4.3 | 1.8 | 88.0 | 89.1 | (0.2 | ) | (7.5 | ) | (1.1 | ) | |||||||||||||||||||||||||||||||||||||||||||
KS |
7.6 | 7.6 | 4.4 | 7.1 | 3.2 | 1.4 | 0.4 | 4.8 | 6.2 | 1.3 | 44.0 | 42.4 | 7.3 | (4.5 | ) | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||
KY |
22.1 | 19.3 | 14.3 | 3.8 | 5.1 | 3.2 | 0.9 | 19.3 | 15.0 | 3.9 | 106.9 | 106.2 | 2.2 | (2.2 | ) | 0.6 | |||||||||||||||||||||||||||||||||||||||||||||
MD |
14.6 | 6.4 | 10.6 | 12.6 | 1.0 | 1.8 | 0.3 | (0.0 | ) | 1.4 | 0.5 | 49.2 | 47.1 | 4.4 | 3.8 | 4.4 | |||||||||||||||||||||||||||||||||||||||||||||
MI |
38.3 | 24.2 | 16.7 | 20.2 | 12.5 | 6.1 | 1.7 | 12.5 | 15.5 | 3.3 | 150.9 | 166.3 | (9.1 | ) | (10.0 | ) | (9.3 | ) | |||||||||||||||||||||||||||||||||||||||||||
MN |
25.9 | 17.0 | 10.0 | 8.3 | 3.9 | 2.5 | 1.1 | 6.3 | 5.4 | 2.9 | 83.4 | 84.5 | 0.2 | (8.1 | ) | (1.3 | ) | ||||||||||||||||||||||||||||||||||||||||||||
MO |
27.7 | 20.3 | 12.9 | 19.4 | 5.3 | 2.4 | 1.2 | 2.6 | 4.2 | 0.9 | 96.9 | 92.4 | 7.0 | (14.3 | ) | 4.9 | |||||||||||||||||||||||||||||||||||||||||||||
MT |
14.4 | 7.3 | 7.1 | 0.1 | 0.9 | 0.4 | 0.4 | 0.1 | 0.1 | 0.0 | 30.6 | 28.6 | 7.0 | 4.0 | 7.0 | ||||||||||||||||||||||||||||||||||||||||||||||
NE |
6.8 | 5.5 | 3.5 | 8.6 | 1.4 | 1.0 | 0.4 | 1.0 | 1.2 | 0.3 | 29.7 | 32.0 | (5.9 | ) | (19.2 | ) | (7.2 | ) | |||||||||||||||||||||||||||||||||||||||||||
NH |
2.8 | 1.9 | 1.4 | 2.4 | 0.8 | 0.5 | 0.1 | 0.7 | 0.7 | 0.4 | 11.8 | 12.1 | (1.8 | ) | (8.6 | ) | (2.9 | ) | |||||||||||||||||||||||||||||||||||||||||||
NY |
32.9 | 7.6 | 10.3 | 2.4 | 1.5 | 3.6 | 0.6 | 0.0 | 0.0 | 0.0 | 59.0 | 50.4 | 17.1 | 10.8 | 17.1 | ||||||||||||||||||||||||||||||||||||||||||||||
NC |
44.4 | 30.2 | 23.1 | 28.9 | 12.4 | 7.9 | 1.4 | 1.0 | 1.6 | 2.5 | 153.5 | 149.3 | 3.2 | (7.0 | ) | 2.8 | |||||||||||||||||||||||||||||||||||||||||||||
ND |
5.1 | 3.6 | 2.6 | 0.0 | 0.8 | 0.6 | 0.2 | 0.6 | 0.6 | 0.2 | 14.3 | 12.6 | 16.6 | (12.1 | ) | 13.2 | |||||||||||||||||||||||||||||||||||||||||||||
OH |
160.4 | 93.0 | 70.5 | (0.4 | ) | 21.5 | 25.9 | 4.5 | 132.0 | 92.4 | 30.5 | 630.3 | 668.3 | (6.3 | ) | (4.8 | ) | (5.7 | ) | ||||||||||||||||||||||||||||||||||||||||||
PA |
47.9 | 28.8 | 29.1 | 53.8 | 9.8 | 5.9 | 1.7 | 8.0 | 6.4 | 3.3 | 194.8 | 198.6 | (2.1 | ) | (0.5 | ) | (1.9 | ) | |||||||||||||||||||||||||||||||||||||||||||
SC |
14.6 | 9.7 | 9.1 | 5.6 | 2.4 | 2.9 | 0.4 | 0.0 | 0.1 | 0.2 | 44.9 | 43.7 | 2.8 | 28.1 | 2.9 | ||||||||||||||||||||||||||||||||||||||||||||||
SD |
4.5 | 2.9 | 2.3 | 4.3 | 0.4 | 0.5 | 0.2 | 0.0 | 0.0 | 0.0 | 15.1 | 14.2 | 6.8 | (10.9 | ) | 6.7 | |||||||||||||||||||||||||||||||||||||||||||||
TN |
26.2 | 18.4 | 15.2 | 12.9 | 8.6 | 4.1 | 1.0 | 8.2 | 8.6 | 3.0 | 106.2 | 104.3 | 1.2 | 4.5 | 1.8 | ||||||||||||||||||||||||||||||||||||||||||||||
UT |
11.7 | 4.1 | 5.0 | 0.0 | 0.4 | 1.6 | 0.3 | 0.0 | 0.0 | 0.0 | 23.2 | 18.5 | 25.4 | 12.7 | 25.4 | ||||||||||||||||||||||||||||||||||||||||||||||
VT |
5.4 | 4.3 | 2.9 | 7.5 | 1.1 | 0.8 | 0.3 | 0.8 | 0.9 | 0.3 | 24.2 | 22.8 | 6.9 | (2.8 | ) | 6.0 | |||||||||||||||||||||||||||||||||||||||||||||
VA |
34.0 | 24.9 | 22.5 | 23.3 | 4.9 | 5.4 | 1.1 | 10.0 | 8.3 | 2.9 | 137.2 | 143.3 | (4.4 | ) | (3.6 | ) | (4.3 | ) | |||||||||||||||||||||||||||||||||||||||||||
WV |
8.6 | 6.1 | 5.9 | 0.0 | 2.3 | 1.0 | 0.3 | 0.0 | 0.9 | 0.3 | 25.4 | 26.3 | (3.5 | ) | (6.6 | ) | (3.6 | ) | |||||||||||||||||||||||||||||||||||||||||||
WI |
29.8 | 18.2 | 12.6 | 25.2 | 4.7 | 2.4 | 1.6 | 9.3 | 7.6 | 3.3 | 114.7 | 119.0 | (2.8 | ) | (7.8 | ) | (3.7 | ) | |||||||||||||||||||||||||||||||||||||||||||
All Other |
5.3 | 4.3 | 4.1 | 4.9 | 0.1 | 1.4 | 0.2 | 0.0 | 0.2 | 0.0 | 20.7 | 19.1 | 8.2 | 11.6 | 8.3 | ||||||||||||||||||||||||||||||||||||||||||||||
Total |
$ | 863.2 | $ | 549.9 | $ | 424.1 | $ | 389.1 | $ | 153.7 | $ | 116.4 | $ | 30.9 | $ | 333.9 | $ | 301.5 | $ | 91.0 | $ | 3,253.6 | $ | 3,293.5 | (0.5 | ) | (3.5 | ) | (1.2 | ) | |||||||||||||||||||||||||||||||
Other Direct |
1.0 | 1.5 | 0.8 | 6.7 | 0.4 | 0.0 | 0.0 | 0.9 | 2.6 | 1.8 | 15.7 | 18.6 | (17.9 | ) | 15.7 | (15.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total Direct |
$ | 864.2 | $ | 551.4 | $ | 424.9 | $ | 395.8 | $ | 154.1 | $ | 116.4 | $ | 30.9 | $ | 334.8 | $ | 304.1 | $ | 92.8 | $ | 3,269.3 | $ | 3,312.1 | (0.7 | ) | (3.4 | ) | (1.3 | ) | |||||||||||||||||||||||||||||||
2007 Fourth-Quarter and Full-Year Financial Supplement | 20 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Commercial casualty: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 189 | $ | 179 | $ | 218 | $ | 245 | $ | 204 | $ | 196 | $ | 209 | $ | 228 | $ | 462 | $ | 437 | $ | 641 | $ | 634 | $ | 830 | $ | 838 | |||||||||||||||||||||||||||||||
Earned premiums |
204 | 205 | 209 | 209 | 219 | 207 | 208 | 197 | 418 | 405 | 623 | 613 | 827 | 831 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
32.0 | % | 63.7 | % | 54.6 | % | 53.5 | % | 58.8 | % | 49.4 | % | 51.8 | % | 51.3 | % | 54.2 | % | 51.6 | % | 57.4 | % | 50.8 | % | 51.1 | % | 53.0 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
32.0 | % | 63.7 | % | 54.6 | % | 53.5 | % | 58.8 | % | 49.4 | % | 51.8 | % | 51.3 | % | 54.2 | % | 51.6 | % | 57.4 | % | 50.8 | % | 51.1 | % | 53.0 | % | |||||||||||||||||||||||||||||||
Commercial property: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 116 | $ | 120 | $ | 125 | $ | 138 | $ | 124 | $ | 126 | $ | 122 | $ | 134 | $ | 263 | $ | 256 | $ | 383 | $ | 381 | $ | 499 | $ | 505 | |||||||||||||||||||||||||||||||
Earned premiums |
124 | 125 | 125 | 123 | 123 | 123 | 123 | 121 | 248 | 244 | 373 | 367 | 497 | 491 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
32.9 | % | 61.5 | % | 45.8 | % | 53.6 | % | 47.0 | % | 54.9 | % | 55.8 | % | 72.6 | % | 49.7 | % | 64.2 | % | 53.7 | % | 61.0 | % | 48.5 | % | 57.5 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
| (1.4 | ) | 3.2 | 6.9 | 7.1 | 9.9 | 15.9 | 22.7 | 5.0 | 19.3 | 2.9 | 16.1 | 2.2 | 13.9 | ||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
32.9 | % | 62.9 | % | 42.6 | % | 46.7 | % | 39.9 | % | 45.0 | % | 39.9 | % | 49.9 | % | 44.7 | % | 44.9 | % | 50.8 | % | 44.9 | % | 46.3 | % | 43.6 | % | |||||||||||||||||||||||||||||||
Commercial auto: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 100 | $ | 92 | $ | 112 | $ | 124 | $ | 105 | $ | 105 | $ | 115 | $ | 126 | $ | 236 | $ | 240 | $ | 329 | $ | 345 | $ | 429 | $ | 450 | |||||||||||||||||||||||||||||||
Earned premiums |
110 | 108 | 110 | 113 | 116 | 113 | 112 | 112 | 223 | 224 | 331 | 337 | 440 | 453 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
60.3 | % | 66.9 | % | 62.9 | % | 64.6 | % | 58.5 | % | 72.8 | % | 57.0 | % | 57.7 | % | 63.4 | % | 57.4 | % | 64.5 | % | 62.5 | % | 63.5 | % | 61.5 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
(0.2 | ) | 0.4 | | (0.2 | ) | 0.6 | (0.5 | ) | 3.1 | 0.6 | | 1.9 | 0.1 | 1.0 | | 0.9 | ||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
60.5 | % | 66.5 | % | 62.9 | % | 64.8 | % | 57.9 | % | 73.3 | % | 53.9 | % | 57.1 | % | 63.4 | % | 55.5 | % | 64.4 | % | 61.5 | % | 63.5 | % | 60.6 | % | |||||||||||||||||||||||||||||||
Workers compensation: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 88 | $ | 84 | $ | 92 | $ | 113 | $ | 91 | $ | 85 | $ | 91 | $ | 111 | $ | 206 | $ | 203 | $ | 289 | $ | 288 | $ | 378 | $ | 379 | |||||||||||||||||||||||||||||||
Earned premiums |
93 | 94 | 95 | 92 | 95 | 93 | 90 | 88 | 187 | 178 | 280 | 271 | 373 | 366 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
113.6 | % | 82.0 | % | 66.8 | % | 76.5 | % | 89.3 | % | 90.3 | % | 83.1 | % | 78.6 | % | 71.5 | % | 80.8 | % | 75.0 | % | 84.1 | % | 84.6 | % | 85.4 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
113.6 | % | 82.0 | % | 66.8 | % | 76.5 | % | 89.3 | % | 90.3 | % | 83.1 | % | 78.6 | % | 71.5 | % | 80.8 | % | 75.0 | % | 84.1 | % | 84.6 | % | 85.4 | % | |||||||||||||||||||||||||||||||
Specialty package: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 36 | $ | 34 | $ | 36 | $ | 41 | $ | 35 | $ | 35 | $ | 34 | $ | 40 | $ | 77 | $ | 74 | $ | 111 | $ | 109 | $ | 146 | $ | 144 | |||||||||||||||||||||||||||||||
Earned premiums |
36 | 36 | 37 | 36 | 35 | 35 | 35 | 36 | 73 | 71 | 109 | 106 | 146 | 141 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
41.9 | % | 76.7 | % | 49.9 | % | 69.6 | % | 44.9 | % | 74.2 | % | 82.1 | % | 64.3 | % | 59.6 | % | 73.1 | % | 65.3 | % | 73.5 | % | 59.4 | % | 66.3 | % | |||||||||||||||||||||||||||||||
Less Catastrophe loss ratio |
0.6 | 6.2 | 2.6 | 7.0 | 5.8 | 7.1 | 29.2 | 3.6 | 4.7 | 16.2 | 5.2 | 13.3 | 4.1 | 11.4 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
41.3 | % | 70.5 | % | 47.3 | % | 62.6 | % | 39.1 | % | 67.1 | % | 52.9 | % | 60.7 | % | 54.9 | % | 56.9 | % | 60.1 | % | 60.2 | % | 55.3 | % | 54.9 | % | |||||||||||||||||||||||||||||||
Surety and executive risk: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 26 | $ | 28 | $ | 23 | $ | 25 | $ | 23 | $ | 28 | $ | 24 | $ | 22 | $ | 48 | $ | 46 | $ | 76 | $ | 74 | $ | 102 | $ | 97 | |||||||||||||||||||||||||||||||
Earned premiums |
27 | 25 | 24 | 24 | 24 | 24 | 24 | 21 | 47 | 45 | 73 | 69 | 100 | 93 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
55.7 | % | 36.5 | % | 49.3 | % | 24.0 | % | 36.3 | % | 47.3 | % | 89.6 | % | 26.5 | % | 36.7 | % | 60.1 | % | 36.7 | % | 55.6 | % | 41.8 | % | 50.7 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
55.7 | % | 36.5 | % | 49.3 | % | 24.0 | % | 36.3 | % | 47.3 | % | 89.6 | % | 26.5 | % | 36.7 | % | 60.1 | % | 36.7 | % | 55.6 | % | 41.8 | % | 50.7 | % | |||||||||||||||||||||||||||||||
Machinery and equipment: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 7 | $ | 7 | $ | 7 | $ | 7 | $ | 7 | $ | 7 | $ | 8 | $ | 7 | $ | 14 | $ | 15 | $ | 22 | $ | 22 | $ | 29 | $ | 29 | |||||||||||||||||||||||||||||||
Earned premiums |
7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 14 | 14 | 21 | 20 | 28 | 27 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expense ratio |
27.8 | % | 34.7 | % | 20.4 | % | 28.2 | % | 62.4 | % | 45.2 | % | 27.0 | % | 32.2 | % | 24.3 | % | 29.6 | % | 27.8 | % | 34.8 | % | 27.8 | % | 42.0 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
(0.8 | ) | 1.3 | | (1.6 | ) | (0.5 | ) | 2.1 | | | (0.8 | ) | 0.1 | (0.1 | ) | 0.8 | (0.3 | ) | 0.4 | |||||||||||||||||||||||||||||||||||||||
Loss and loss expense
excluding catastrophe loss ratio |
28.6 | % | 33.4 | % | 20.4 | % | 29.8 | % | 62.9 | % | 43.1 | % | 27.0 | % | 32.2 | % | 25.1 | % | 29.5 | % | 27.9 | % | 34.0 | % | 28.1 | % | 41.6 | % | |||||||||||||||||||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 21 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Personal auto: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 75 | $ | 92 | $ | 93 | $ | 72 | $ | 79 | $ | 96 | $ | 104 | $ | 79 | $ | 164 | $ | 184 | $ | 256 | $ | 279 | $ | 332 | $ | 359 | |||||||||||||||||||||||||||||||
Earned premiums |
83 | 85 | 86 | 88 | 91 | 95 | 98 | 101 | 174 | 199 | 259 | 294 | 342 | 385 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
65.3 | % | 67.7 | % | 67.6 | % | 66.5 | % | 74.3 | % | 60.6 | % | 65.8 | % | 60.1 | % | 67.1 | % | 62.9 | % | 67.3 | % | 62.2 | % | 66.8 | % | 65.0 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
(0.3 | ) | 0.7 | (0.3 | ) | (2.3 | ) | 5.7 | 1.4 | 3.6 | 0.8 | (1.3 | ) | 2.2 | (0.6 | ) | 2.0 | (0.6 | ) | 2.8 | |||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
65.6 | % | 67.0 | % | 67.9 | % | 68.8 | % | 68.6 | % | 59.2 | % | 62.2 | % | 59.3 | % | 68.4 | % | 60.7 | % | 67.9 | % | 60.2 | % | 67.4 | % | 62.2 | % | |||||||||||||||||||||||||||||||
Homeowner: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 66 | $ | 77 | $ | 80 | $ | 61 | $ | 66 | $ | 79 | $ | 83 | $ | 62 | $ | 141 | $ | 144 | $ | 218 | $ | 224 | $ | 284 | $ | 290 | |||||||||||||||||||||||||||||||
Earned premiums |
71 | 70 | 72 | 71 | 70 | 72 | 74 | 73 | 143 | 146 | 214 | 219 | 285 | 289 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
36.6 | % | 82.7 | % | 66.9 | % | 50.0 | % | 80.8 | % | 93.9 | % | 93.1 | % | 64.0 | % | 58.5 | % | 78.6 | % | 66.5 | % | 83.7 | % | 59.0 | % | 83.0 | % | |||||||||||||||||||||||||||||||
Less catastrophe loss ratio |
(2.3 | ) | 15.6 | 8.3 | (7.5 | ) | 36.0 | 15.0 | 33.1 | 11.1 | 0.4 | 22.1 | 5.4 | 19.8 | 3.5 | 23.7 | |||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
38.9 | % | 67.1 | % | 58.6 | % | 57.5 | % | 44.8 | % | 78.9 | % | 60.0 | % | 52.9 | % | 58.1 | % | 56.5 | % | 61.1 | % | 63.9 | % | 55.5 | % | 59.3 | % | |||||||||||||||||||||||||||||||
Other personal: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Written premiums |
$ | 21 | $ | 23 | $ | 24 | $ | 20 | $ | 21 | $ | 23 | $ | 24 | $ | 20 | $ | 44 | $ | 44 | $ | 67 | $ | 67 | $ | 88 | $ | 87 | |||||||||||||||||||||||||||||||
Earned premiums |
22 | 22 | 22 | 22 | 22 | 22 | 22 | 22 | 43 | 45 | 65 | 66 | 87 | 88 | |||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses ratio |
24.1 | % | 57.9 | % | 62.8 | % | 43.4 | % | 45.6 | % | 63.3 | % | 80.9 | % | 47.4 | % | 53.1 | % | 64.2 | % | 54.7 | % | 63.9 | % | 47.0 | % | 59.4 | % | |||||||||||||||||||||||||||||||
Less Catastrophe loss ratio |
0.6 | 3.7 | 3.5 | (0.1 | ) | 9.9 | 5.2 | 10.8 | 3.8 | 1.3 | 7.4 | 2.0 | 6.6 | 1.7 | 7.4 | ||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses
excluding catastrophe loss ratio |
23.5 | % | 54.2 | % | 59.3 | % | 43.5 | % | 35.7 | % | 58.1 | % | 70.1 | % | 43.6 | % | 51.8 | % | 56.8 | % | 52.7 | % | 57.3 | % | 45.3 | % | 52.0 | % | |||||||||||||||||||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 22 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
All Lines |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses current AY |
$ | 515 | $ | 558 | $ | 484 | $ | 472 | $ | 539 | $ | 526 | $ | 468 | $ | 414 | $ | 956 | $ | 882 | $ | 1,515 | $ | 1,407 | $ | 2,029 | $ | 1,947 | |||||||||||||||||||||||||||||||
Loss and loss expenses prior AYs |
(118 | ) | (47 | ) | (40 | ) | (18 | ) | (81 | ) | (37 | ) | (13 | ) | 18 | (58 | ) | 5 | (106 | ) | (32 | ) | (223 | ) | (113 | ) | |||||||||||||||||||||||||||||||||
Catastrophes current AY |
(1 | ) | 15 | 15 | 17 | 42 | 29 | 67 | 38 | 31 | 105 | 48 | 134 | 46 | 176 | ||||||||||||||||||||||||||||||||||||||||||||
Catastrophes prior AYs |
(1 | ) | (2 | ) | (4 | ) | (13 | ) | 2 | (2 | ) | (3 | ) | 1 | (17 | ) | (2 | ) | (20 | ) | (4 | ) | (20 | ) | (2 | ) | |||||||||||||||||||||||||||||||||
Total |
$ | 395 | $ | 524 | $ | 455 | $ | 458 | $ | 502 | $ | 516 | $ | 519 | $ | 471 | $ | 912 | $ | 990 | $ | 1,437 | $ | 1,505 | $ | 1,832 | $ | 2,008 | |||||||||||||||||||||||||||||||
Ratio to Earned Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses : |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses current AY |
66.3 | % | 71.9 | % | 61.6 | % | 60.2 | % | 67.2 | % | 66.4 | % | 59.1 | % | 53.2 | % | 60.9 | % | 56.2 | % | 64.5 | % | 59.7 | % | 64.9 | % | 61.6 | % | |||||||||||||||||||||||||||||||
Loss and loss expenses prior AYs |
(15.2 | ) | (6.2 | ) | (5.1 | ) | (2.3 | ) | (10.1 | ) | (4.7 | ) | (1.7 | ) | 2.4 | (3.7 | ) | 0.3 | (4.5 | ) | (1.3 | ) | (7.1 | ) | (3.6 | ) | |||||||||||||||||||||||||||||||||
Catastrophes current AY |
(0.1 | ) | 2.0 | 1.9 | 2.1 | 5.4 | 3.7 | 8.5 | 4.9 | 2.0 | 6.7 | 2.0 | 5.7 | 1.4 | 5.6 | ||||||||||||||||||||||||||||||||||||||||||||
Catastrophes prior AYs |
(0.1 | ) | (0.3 | ) | (0.5 | ) | (1.7 | ) | 0.2 | (0.2 | ) | (0.5 | ) | 0.2 | (1.1 | ) | (0.2 | ) | (0.9 | ) | (0.2 | ) | (0.6 | ) | (0.1 | ) | |||||||||||||||||||||||||||||||||
Total |
50.9 | % | 67.4 | % | 57.9 | % | 58.3 | % | 62.6 | % | 65.2 | % | 65.3 | % | 60.6 | % | 58.1 | % | 63.0 | % | 61.1 | % | 63.9 | % | 58.6 | % | 63.5 | % | |||||||||||||||||||||||||||||||
Commercial Lines |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses current AY |
$ | 412 | $ | 433 | $ | 370 | $ | 357 | $ | 421 | $ | 396 | $ | 349 | $ | 310 | $ | 727 | $ | 659 | $ | 1,159 | $ | 1,054 | $ | 1,571 | $ | 1,476 | |||||||||||||||||||||||||||||||
Loss and loss expenses prior AYs |
(102 | ) | (38 | ) | (40 | ) | (13 | ) | (64 | ) | (33 | ) | (15 | ) | 14 | (53 | ) | (1 | ) | (91 | ) | (34 | ) | (193 | ) | (98 | ) | ||||||||||||||||||||||||||||||||
Catastrophes current AY |
| 5 | 8 | 13 | 9 | 15 | 35 | 28 | 21 | 63 | 27 | 78 | 26 | 87 | |||||||||||||||||||||||||||||||||||||||||||||
Catastrophes prior AYs |
0 | (4 | ) | (3 | ) | (3 | ) | 2 | (1 | ) | (1 | ) | 1 | (6 | ) | | (10 | ) | (1 | ) | (10 | ) | 1 | ||||||||||||||||||||||||||||||||||||
Total |
$ | 310 | $ | 396 | $ | 335 | $ | 354 | $ | 368 | $ | 377 | $ | 368 | $ | 353 | $ | 689 | $ | 721 | $ | 1,085 | $ | 1,097 | $ | 1,394 | $ | 1,466 | |||||||||||||||||||||||||||||||
Ratio to Earned Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses current AY |
68.5 | % | 72.2 | % | 61.0 | % | 59.0 | % | 67.9 | % | 65.7 | % | 58.3 | % | 53.3 | % | 60.0 | % | 55.8 | % | 64.0 | % | 59.2 | % | 65.2 | % | 61.4 | % | |||||||||||||||||||||||||||||||
Loss and loss expenses prior AYs |
(17.0 | ) | (6.4 | ) | (6.6 | ) | (2.1 | ) | (10.3 | ) | (5.5 | ) | (2.5 | ) | 2.5 | (4.3 | ) | 0.0 | (5.0 | ) | (1.9 | ) | (8.0 | ) | (4.1 | ) | |||||||||||||||||||||||||||||||||
Catastrophes current AY |
0.0 | 0.9 | 1.4 | 2.2 | 1.6 | 2.5 | 5.9 | 4.8 | 1.8 | 5.4 | 1.6 | 4.4 | 1.1 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||
Catastrophes prior AYs |
(0.0 | ) | (0.8 | ) | (0.5 | ) | (0.4 | ) | 0.3 | (0.2 | ) | (0.4 | ) | 0.2 | (0.5 | ) | (0.1 | ) | (0.6 | ) | (0.1 | ) | (0.4 | ) | | ||||||||||||||||||||||||||||||||||
Total |
51.5 | % | 66.0 | % | 55.3 | % | 58.6 | % | 59.5 | % | 62.6 | % | 61.3 | % | 60.8 | % | 57.0 | % | 61.1 | % | 60.0 | % | 61.6 | % | 57.9 | % | 61.0 | % | |||||||||||||||||||||||||||||||
Personal Lines |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses current AY |
$ | 103 | $ | 125 | $ | 114 | $ | 115 | $ | 118 | $ | 130 | $ | 119 | $ | 104 | $ | 229 | $ | 223 | $ | 356 | $ | 353 | $ | 458 | $ | 471 | |||||||||||||||||||||||||||||||
Loss and loss expenses prior AYs |
(16 | ) | (9 | ) | | (5 | ) | (17 | ) | (4 | ) | 2 | 4 | (5 | ) | 6 | (15 | ) | 2 | (30 | ) | (15 | ) | ||||||||||||||||||||||||||||||||||||
Catastrophes current AY |
(1 | ) | 10 | 7 | 4 | 33 | 14 | 32 | 10 | 10 | 42 | 21 | 56 | 20 | 89 | ||||||||||||||||||||||||||||||||||||||||||||
Catastrophes prior AYs |
(1 | ) | 2 | (1 | ) | (10 | ) | | (1 | ) | (2 | ) | | (11 | ) | (2 | ) | (10 | ) | (3 | ) | (10 | ) | (3 | ) | ||||||||||||||||||||||||||||||||||
Total |
$ | 85 | $ | 128 | $ | 120 | $ | 104 | $ | 134 | $ | 139 | $ | 151 | $ | 118 | $ | 223 | $ | 269 | $ | 352 | $ | 408 | $ | 438 | $ | 542 | |||||||||||||||||||||||||||||||
Ratio to Earned Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expenses current AY |
58.5 | % | 70.8 | % | 63.3 | % | 64.4 | % | 64.9 | % | 68.8 | % | 61.5 | % | 53.1 | % | 63.8 | % | 57.3 | % | 66.1 | % | 61.0 | % | 64.2 | % | 61.9 | % | |||||||||||||||||||||||||||||||
Loss and loss expenses prior AYs |
(8.9 | ) | (5.3 | ) | (0.1 | ) | (3.0 | ) | (9.4 | ) | (2.2 | ) | 0.7 | 2.0 | (1.5 | ) | 1.4 | (2.8 | ) | 0.3 | (4.2 | ) | (2.0 | ) | |||||||||||||||||||||||||||||||||||
Catastrophes current AY |
(0.7 | ) | 5.9 | 3.8 | 2.0 | 18.1 | 7.3 | 16.4 | 5.1 | 2.9 | 10.7 | 3.9 | 9.7 | 2.7 | 11.7 | ||||||||||||||||||||||||||||||||||||||||||||
Catastrophes prior AYs |
(0.3 | ) | 1.1 | (0.3 | ) | (6.1 | ) | (0.2 | ) | (0.3 | ) | (0.8 | ) | (0.1 | ) | (3.2 | ) | (0.4 | ) | (1.8 | ) | (0.5 | ) | (1.4 | ) | (0.4 | ) | ||||||||||||||||||||||||||||||||
Total |
48.6 | % | 72.5 | % | 66.7 | % | 57.3 | % | 73.4 | % | 73.7 | % | 77.9 | % | 60.1 | % | 62.0 | % | 69.0 | % | 65.4 | % | 70.5 | % | 61.3 | % | 71.2 | % | |||||||||||||||||||||||||||||||
2007 Fourth-Quarter and Full-Year Financial Supplement | 23 |
(Dollars in millions) | Years ended December 31, | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | |||||||||||||||||||||||||||||||
Premiums |
||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory)* |
$ | 3,149 | $ | 3,172 | $ | 3,097 | $ | 3,026 | $ | 2,789 | $ | 2,496 | $ | 2,188 | $ | 1,936 | $ | 1,681 | $ | 1,558 | ||||||||||||||||||||
Codification |
| | | | | | 402 | (55 | ) | | | |||||||||||||||||||||||||||||
Written premium adjustment statutory only |
(32 | ) | 6 | (21 | ) | (29 | ) | 26 | 117 | | | | | |||||||||||||||||||||||||||
Reported written premiums (statutory)** |
3,117 | 3,178 | 3,076 | 2,997 | 2,815 | 2,613 | 2,590 | 1,881 | 1,681 | 1,558 | ||||||||||||||||||||||||||||||
Unearned premiums change |
8 | (14 | ) | (18 | ) | (78 | ) | (162 | ) | (222 | ) | (517 | ) | (53 | ) | (23 | ) | (15 | ) | |||||||||||||||||||||
Earned premiums (GAAP) |
$ | 3,125 | $ | 3,164 | $ | 3,058 | $ | 2,919 | $ | 2,653 | $ | 2,391 | $ | 2,073 | $ | 1,828 | $ | 1,658 | $ | 1,543 | ||||||||||||||||||||
Year-over-year growth rate: |
||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
(0.7) | % | 2.4 | % | 2.3 | % | 8.5 | % | 11.7 | % | 14.0 | % | 13.0 | % | 15.2 | % | 7.9 | % | 6 | % | ||||||||||||||||||||
Written premiums (statutory) |
(1.9) | % | 3.3 | % | 2.6 | % | 6.5 | % | 7.7 | % | 0.9 | % | 37.7 | % | 11.9 | % | 7.9 | % | 5.8 | % | ||||||||||||||||||||
Earned premiums |
(1.2) | % | 3.5 | % | 4.8 | % | 10.0 | % | 11.0 | % | 15.3 | % | 13.4 | % | 10.3 | % | 7.5 | % | 6.1 | % | ||||||||||||||||||||
Statutory combined ratio |
||||||||||||||||||||||||||||||||||||||||
Reported statutory combined ratio* |
90.3 | % | 93.9 | % | 89.0 | 89.4 | % | 94.2 | % | 98.4 | % | 99.5 | % | 112.5 | % | 100.4 | % | 104.2 | % | |||||||||||||||||||||
Codification |
| | | | | | 4.1 | (0.9 | ) | | | |||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | nm | nm | nm | 1.2 | | | | | ||||||||||||||||||||||||||||||
One-time item |
| | | | 0.8 | | | (1.7 | ) | | | |||||||||||||||||||||||||||||
Statutory combined ratio (adjusted) |
90.3 | % | 93.9 | % | 89.0 | % | 89.4 | % | 95.0 | % | 99.6 | % | 103.6 | % | 109.9 | % | 100.4 | % | 104.2 | % | ||||||||||||||||||||
Less catastrophe losses |
0.8 | 5.5 | 4.1 | 5.1 | 3.6 | 3.6 | 3.1 | 2.7 | 2.5 | 6.1 | ||||||||||||||||||||||||||||||
Statutory combined ratio excluding
catastrophe losses (adjusted) |
89.5 | % | 88.4 | % | 84.9 | % | 84.3 | % | 91.4 | % | 96.0 | % | 100.5 | % | 107.2 | % | 97.9 | % | 98.1 | % | ||||||||||||||||||||
Reported commission expense ratio* |
19.2 | % | 18.7 | % | 19.3 | % | 19.2 | % | 17.6 | % | 15.9 | % | 13.9 | % | 17.4 | % | 17.4 | % | 17.6 | % | ||||||||||||||||||||
Codification |
| | | | | | 2.6 | (0.5 | ) | | | |||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | nm | nm | nm | 0.8 | | | | | ||||||||||||||||||||||||||||||
One-time item |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Commission expense ratio (adjusted) |
19.2 | % | 18.7 | % | 19.3 | % | 19.2 | % | 17.6 | % | 16.7 | % | 16.5 | % | 16.9 | % | 17.4 | % | 17.6 | % | ||||||||||||||||||||
Reported other expense ratio* |
12.5 | % | 11.7 | % | 10.5 | % | 10.1 | % | 8.9 | % | 9.6 | % | 8.7 | % | 12.6 | % | 11.4 | % | 11.9 | % | ||||||||||||||||||||
Codification |
| | | | | | 1.5 | (0.4 | ) | | | |||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | nm | nm | nm | 0.4 | | | | | ||||||||||||||||||||||||||||||
One-time item |
| | | | 0.8 | | | (1.7 | ) | | | |||||||||||||||||||||||||||||
Other expense ratio (adjusted) |
12.5 | % | 11.7 | % | 10.5 | % | 10.1 | % | 9.7 | % | 10.0 | % | 10.2 | % | 10.5 | % | 11.4 | % | 11.9 | % | ||||||||||||||||||||
Reported statutory expense ratio* |
31.7 | % | 30.4 | % | 29.8 | % | 29.3 | % | 26.5 | % | 25.5 | % | 22.6 | % | 30.0 | % | 28.8 | % | 29.5 | % | ||||||||||||||||||||
Codification |
| | | | | | 4.1 | (0.9 | ) | | | |||||||||||||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | nm | nm | nm | 1.2 | | | | | ||||||||||||||||||||||||||||||
One-time item |
| | | | 0.8 | | | (1.7 | ) | | | |||||||||||||||||||||||||||||
Statutory expense ratio (adjusted) |
31.7 | % | 30.4 | % | 29.8 | % | 29.3 | % | 27.3 | % | 26.7 | % | 26.7 | % | 27.4 | % | 28.8 | % | 29.5 | % | ||||||||||||||||||||
GAAP combined ratio |
||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
90.3 | % | 94.3 | % | 89.2 | % | 89.8 | % | 94.7 | % | 99.7 | % | 104.9 | % | 112.8 | % | 100.2 | % | 104.3 | % | ||||||||||||||||||||
One-time item |
| | | | 0.8 | | | (2.1 | ) | | | |||||||||||||||||||||||||||||
GAAP combined ratio before one-time item |
90.3 | % | 94.3 | % | 89.2 | % | 89.8 | % | 95.5 | % | 99.7 | % | 104.9 | % | 110.7 | % | 100.2 | % | 104.3 | % | ||||||||||||||||||||
Written premiums to surplus |
||||||||||||||||||||||||||||||||||||||||
Adjusted premiums to statutory surplus ratio |
0.731 | 0.668 | 0.739 | 0.721 | 1.002 | 1.067 | 0.864 | |||||||||||||||||||||||||||||||||
Written premium adjustment |
(0.007 | ) | 0.001 | (0.005 | ) | (0.007 | ) | 0.010 | 0.050 | 0.159 | ||||||||||||||||||||||||||||||
Reported premiums to statutory surplus ratio |
0.724 | 0.669 | 0.734 | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 24 |
(Dollars in millions) | Years ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||
Premiums |
||||||||||||||||||||||||
Adjusted written premiums (statutory)* |
$ | 2,444 | $ | 2,435 | $ | 2,306 | $ | 2,209 | $ | 2,009 | $ | 1,795 | ||||||||||||
Codification |
| | | | | | ||||||||||||||||||
Written premium adjustment statutory only |
(31 | ) | 7 | (16 | ) | (23 | ) | 22 | 110 | |||||||||||||||
Reported written premiums (statutory) |
$ | 2,413 | $ | 2,442 | $ | 2,290 | $ | 2,186 | $ | 2,031 | $ | 1,905 | ||||||||||||
Unearned premiums change |
(2 | ) | (40 | ) | (36 | ) | (60 | ) | (123 | ) | (184 | ) | ||||||||||||
Earned premiums (GAAP) |
$ | 2,411 | $ | 2,402 | $ | 2,254 | $ | 2,126 | $ | 1,908 | $ | 1,721 | ||||||||||||
Year-over-year growth rate: |
||||||||||||||||||||||||
Adjusted written premiums (statutory) |
0.4 | % | 5.6 | % | 4.4 | % | 10.0 | % | 11.9 | % | 15.8 | % | ||||||||||||
Written premiums (statutory) |
(1.2 | )% | 6.7 | % | 4.7 | % | 7.6 | % | 6.6 | % | 4.2 | % | ||||||||||||
Earned premiums |
0.4 | % | 6.6 | % | 6.0 | % | 11.4 | % | 10.8 | % | 18.6 | % | ||||||||||||
Statutory combined ratio |
||||||||||||||||||||||||
Reported statutory combined ratio* |
89.2 | % | 90.8 | % | 87.1 | % | 83.7 | % | 90.9 | % | 95.3 | % | ||||||||||||
Codification |
| | | | | | ||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | nm | nm | nm | 1.5 | ||||||||||||||||||
One-time item |
| | | | 0.7 | | ||||||||||||||||||
Statutory combined ratio (adjusted) |
89.2 | % | 90.8 | % | 87.1 | % | 83.7 | % | 91.6 | % | 96.8 | % | ||||||||||||
Less catastrophe losses |
0.6 | 3.7 | 3.4 | 3.4 | 2.2 | 2.3 | ||||||||||||||||||
Statutory combined ratio excluding
catastrophe losses (adjusted) |
88.6 | % | 87.1 | % | 83.7 | % | 80.3 | % | 89.4 | % | 94.5 | % | ||||||||||||
GAAP combined ratio |
||||||||||||||||||||||||
GAAP combined ratio |
89.2 | % | 91.3 | % | 87.4 | % | 84.1 | % | 91.3 | % | 96.6 | % | ||||||||||||
One-time item |
| | | | 0.8 | | ||||||||||||||||||
GAAP combined ratio before one-time item |
89.2 | % | 91.3 | % | 87.4 | % | 84.1 | % | 92.1 | % | 96.6 | % | ||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 25 |
(Dollars in millions) | Years ended December 31, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||
Premiums |
||||||||||||||||||||||||
Adjusted written premiums (statutory)* |
$ | 705 | $ | 737 | $ | 791 | $ | 817 | $ | 780 | $ | 701 | ||||||||||||
Codification |
| | | | | | ||||||||||||||||||
Written premium adjustment statutory only |
(1 | ) | (1 | ) | (5 | ) | (6 | ) | 4 | 7 | ||||||||||||||
Reported written premiums (statutory) |
$ | 704 | $ | 736 | $ | 786 | $ | 811 | $ | 784 | $ | 708 | ||||||||||||
Unearned premiums change |
10 | 26 | 18 | (18 | ) | (39 | ) | (38 | ) | |||||||||||||||
Earned premiums (GAAP) |
$ | 714 | $ | 762 | $ | 804 | $ | 793 | $ | 745 | $ | 670 | ||||||||||||
Year-over-year growth rate: |
||||||||||||||||||||||||
Adjusted written premiums (statutory) |
(4.3 | )% | (6.8 | )% | (3.2 | )% | 4.7 | % | 12.0 | % | 9.8 | % | ||||||||||||
Written premiums (statutory) |
(4.4 | )% | (6.4 | )% | (3.1 | )% | 3.4 | % | 10.8 | % | (7.2 | )% | ||||||||||||
Earned premiums |
(6.3 | )% | (5.2 | )% | 1.4 | % | 6.4 | % | 11.2 | % | 8.1 | % | ||||||||||||
Statutory combined ratio |
||||||||||||||||||||||||
Reported statutory combined ratio* |
94.1 | % | 103.6 | % | 94.3 | 104.6 | % | 102.9 | % | 106.5 | % | |||||||||||||
Codification |
| | | | | | ||||||||||||||||||
Written premium adjustment statutory only |
nm | nm | nm | nm | nm | 0.3 | ||||||||||||||||||
One-time item |
| | | | 1.0 | | ||||||||||||||||||
Statutory combined ratio (adjusted) |
94.1 | % | 103.6 | % | 94.3 | % | 104.6 | % | 103.9 | % | 106.8 | % | ||||||||||||
Less catastrophe losses |
1.3 | 11.3 | 6.3 | 9.7 | 7.3 | 7.1 | ||||||||||||||||||
Statutory combined ratio excluding
catastrophe losses (adjusted) |
92.8 | % | 92.3 | % | 88.0 | % | 94.9 | % | 96.6 | % | 99.7 | % | ||||||||||||
GAAP combined ratio |
||||||||||||||||||||||||
GAAP combined ratio |
93.9 | % | 103.6 | % | 94.4 | % | 105.0 | % | 103.6 | % | 107.6 | % | ||||||||||||
One-time item |
| | | | 1.1 | | ||||||||||||||||||
GAAP combined ratio before one-time item |
93.9 | % | 103.6 | % | 94.4 | % | 105.0 | % | 104.7 | % | 107.6 | % | ||||||||||||
* | 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 | |
* | Satutory data prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners and filed with the appropriate regulatory bodies. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 26 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums
(statutory) |
$ | 749 | $ | 779 | $ | 808 | $ | 811 | $ | 785 | $ | 787 | $ | 804 | $ | 796 | $ | 1,619 | $ | 1,600 | $ | 2,398 | $ | 2,387 | $ | 3,149 | $ | 3,172 | |||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
(25 | ) | (43 | ) | 2 | 35 | (30 | ) | (7 | ) | 10 | 33 | 37 | 43 | (6 | ) | 36 | (32 | ) | 6 | |||||||||||||||||||||||||||||||||||||||
Reported written premiums
(statutory)* |
$ | 724 | $ | 736 | $ | 810 | $ | 846 | $ | 755 | $ | 780 | $ | 814 | $ | 829 | $ | 1,656 | $ | 1,643 | $ | 2,392 | $ | 2,423 | $ | 3,117 | $ | 3,178 | |||||||||||||||||||||||||||||||
Unearned premiums change |
53 | 41 | (23 | ) | (61 | ) | 47 | 11 | (21 | ) | (51 | ) | (85 | ) | (72 | ) | (44 | ) | (61 | ) | 8 | (14 | ) | ||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 777 | $ | 777 | $ | 787 | $ | 785 | $ | 802 | $ | 791 | $ | 793 | $ | 778 | $ | 1,571 | $ | 1,571 | $ | 2,348 | $ | 2,362 | $ | 3,125 | $ | 3,164 | |||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
87.8 | % | 98.7 | % | 87.7 | % | 87.7 | % | 95.9 | % | 96.4 | % | 93.7 | % | 89.6 | % | 87.7 | % | 91.7 | % | 91.3 | % | 93.2 | % | 90.3 | % | 93.9 | % | |||||||||||||||||||||||||||||||
Less catastrophe losses |
(0.3 | ) | 1.7 | 1.4 | 0.4 | 5.5 | 3.5 | 8.0 | 5.0 | 0.9 | 6.5 | 1.2 | 5.5 | 0.8 | 5.5 | ||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio
excluding catastrophe losses |
88.1 | % | 97.0 | % | 86.3 | % | 87.3 | % | 90.4 | % | 92.9 | % | 85.7 | % | 84.6 | % | 86.8 | % | 85.2 | % | 90.1 | % | 87.7 | % | 89.5 | % | 88.4 | % | |||||||||||||||||||||||||||||||
Commission expense ratio |
23.1 | % | 18.1 | % | 18.1 | % | 18.0 | % | 19.9 | % | 19.3 | % | 17.6 | % | 18.2 | % | 18.0 | % | 17.9 | % | 18.0 | % | 18.3 | % | 19.2 | % | 18.7 | % | |||||||||||||||||||||||||||||||
Other expense ratio |
13.9 | 13.2 | 11.7 | 11.4 | 13.4 | 11.9 | 10.8 | 10.8 | 11.6 | 10.8 | 12.1 | 11.2 | 12.5 | 11.7 | |||||||||||||||||||||||||||||||||||||||||||||
Statutory expense ratio |
37.0 | % | 31.3 | % | 29.8 | % | 29.4 | % | 33.3 | % | 31.2 | % | 28.4 | % | 29.0 | % | 29.6 | % | 28.7 | % | 30.1 | % | 29.5 | % | 31.7 | % | 30.4 | % | |||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
85.6 | % | 97.3 | % | 88.6 | % | 89.6 | % | 94.5 | % | 96.1 | % | 94.5 | % | 92.0 | % | 89.1 | % | 93.3 | % | 91.8 | % | 94.2 | % | 90.3 | % | 94.3 | % | |||||||||||||||||||||||||||||||
* | 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. | |
*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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 27 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums
(statutory) |
$ | 586 | $ | 587 | $ | 611 | $ | 658 | $ | 618 | $ | 589 | $ | 593 | $ | 635 | $ | 1,269 | $ | 1,228 | $ | 1,857 | $ | 1,817 | $ | 2,444 | $ | 2,435 | |||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
(24 | ) | (43 | ) | 2 | 35 | (29 | ) | (7 | ) | 10 | 33 | 37 | 43 | (6 | ) | 36 | (31 | ) | 7 | |||||||||||||||||||||||||||||||||||||||
Reported written premiums
(statutory)* |
$ | 562 | $ | 544 | $ | 613 | $ | 693 | $ | 589 | $ | 582 | $ | 603 | $ | 668 | $ | 1,306 | $ | 1,271 | $ | 1,851 | $ | 1,853 | $ | 2,413 | $ | 2,442 | |||||||||||||||||||||||||||||||
Unearned premiums change |
39 | 56 | (6 | ) | (89 | ) | 30 | 20 | (4 | ) | (86 | ) | (96 | ) | (90 | ) | (41 | ) | (70 | ) | (2 | ) | (40 | ) | |||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 601 | $ | 600 | $ | 607 | $ | 604 | $ | 619 | $ | 602 | $ | 599 | $ | 582 | $ | 1,210 | $ | 1,181 | $ | 1,810 | $ | 1,783 | $ | 2,411 | $ | 2,402 | |||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
89.7 | % | 97.3 | % | 84.4 | % | 86.5 | % | 92.4 | % | 94.1 | % | 89.6 | % | 87.5 | % | 85.4 | % | 88.6 | % | 89.2 | % | 90.3 | % | 89.2 | % | 90.8 | % | |||||||||||||||||||||||||||||||
Less catastrophe losses |
| 0.2 | 0.8 | 1.8 | 1.9 | 2.3 | 5.6 | 5.1 | 1.3 | 5.3 | 0.9 | 4.3 | 0.6 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio
excluding catastrophe losses |
89.7 | % | 97.1 | % | 83.6 | % | 84.7 | % | 90.5 | % | 91.8 | % | 84.0 | % | 82.4 | % | 84.1 | % | 83.3 | % | 88.3 | % | 86.0 | % | 88.6 | % | 87.1 | % | |||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
87.3 | % | 95.4 | % | 85.2 | % | 88.9 | % | 91.1 | % | 93.4 | % | 90.3 | % | 90.5 | % | 87.0 | % | 90.4 | % | 89.8 | % | 91.4 | % | 89.2 | % | 91.3 | % | |||||||||||||||||||||||||||||||
* | 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. | |
*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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 28 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 9/30/07 | 6/30/07 | 3/31/07 | 12/31/06 | 9/30/06 | 6/30/06 | 3/31/06 | 6/30/07 | 6/30/06 | 9/30/07 | 9/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted written premiums (statutory) |
$ | 163 | $ | 192 | $ | 197 | $ | 153 | $ | 167 | $ | 198 | $ | 211 | $ | 161 | $ | 350 | $ | 372 | $ | 541 | $ | 570 | $ | 705 | $ | 737 | |||||||||||||||||||||||||||||||
Written premium adjustment
statutory only |
(1 | ) | | | | (1 | ) | | | | | | | | (1 | ) | (1 | ) | |||||||||||||||||||||||||||||||||||||||||
Reported written premiums (statutory)* |
$ | 162 | $ | 192 | $ | 197 | $ | 153 | $ | 166 | $ | 198 | $ | 211 | $ | 161 | $ | 350 | $ | 372 | $ | 541 | $ | 570 | $ | 704 | $ | 736 | |||||||||||||||||||||||||||||||
Unearned premiums change |
14 | (15 | ) | (17 | ) | 28 | 17 | (9 | ) | (17 | ) | 35 | 11 | 18 | (3 | ) | 9 | 10 | 26 | ||||||||||||||||||||||||||||||||||||||||
Earned premiums |
$ | 176 | $ | 177 | $ | 180 | $ | 181 | $ | 183 | $ | 189 | $ | 194 | $ | 196 | $ | 361 | $ | 390 | $ | 538 | $ | 579 | $ | 714 | $ | 762 | |||||||||||||||||||||||||||||||
Statutory combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio |
81.4 | % | 103.6 | % | 98.6 | % | 93.5 | % | 107.7 | % | 104.0 | % | 106.4 | % | 98.1 | % | 95.8 | % | 101.6 | % | 98.3 | % | 102.3 | % | 94.1 | % | 103.6 | % | |||||||||||||||||||||||||||||||
Less catastrophe losses |
(1.0 | ) | 7.0 | 3.5 | (4.1 | ) | 17.9 | 7.1 | 15.6 | 5.0 | (0.3 | ) | 10.3 | 2.1 | 9.2 | 1.3 | 11.3 | ||||||||||||||||||||||||||||||||||||||||||
Statutory combined ratio
excluding catastrophe losses |
82.4 | % | 96.6 | % | 95.1 | % | 97.6 | % | 89.8 | % | 96.9 | % | 90.8 | % | 93.1 | % | 96.1 | % | 91.3 | % | 96.2 | % | 93.1 | % | 92.8 | % | 92.3 | % | |||||||||||||||||||||||||||||||
GAAP combined ratio |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP combined ratio |
79.7 | % | 103.8 | % | 99.9 | % | 92.0 | % | 106.0 | % | 104.4 | % | 107.6 | % | 96.4 | % | 96.0 | % | 102.0 | % | 98.6 | % | 102.8 | % | 93.9 | % | 103.6 | % | |||||||||||||||||||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 29 |
For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||||||||||||||||||||||
2007 | 2006 | Change | % Change | 2007 | 2006 | Change | % Change | ||||||||||||||||||||||||||
Revenues: |
|||||||||||||||||||||||||||||||||
Premiums earned: |
|||||||||||||||||||||||||||||||||
Property casualty |
$ | | $ | | $ | | | $ | | $ | | $ | | | |||||||||||||||||||
Life |
46,505,810 | 43,271,070 | 3,234,740 | 7.48 | 171,169,598 | 152,590,039 | 18,579,559 | 12.18 | |||||||||||||||||||||||||
Accident health |
1,836,071 | 1,703,987 | 132,084 | 7.75 | 6,977,193 | 6,652,508 | 324,685 | 4.88 | |||||||||||||||||||||||||
Premiums ceded |
(16,517,832 | ) | (16,299,863 | ) | (217,969 | ) | 1.34 | (53,116,719 | ) | (52,765,624 | ) | (351,095 | ) | 0.67 | |||||||||||||||||||
Total premiums earned |
31,824,049 | 28,675,194 | 3,148,855 | 10.98 | 125,030,072 | 106,476,923 | 18,553,149 | 17.42 | |||||||||||||||||||||||||
Investment income |
29,822,571 | 27,053,035 | 2,769,536 | 10.24 | 114,416,869 | 107,656,860 | 6,760,009 | 6.28 | |||||||||||||||||||||||||
Realized investment gains and losses |
(11,519,842 | ) | 2,533,775 | (14,053,617 | ) | (554.65 | ) | 40,231,015 | 44,861,000 | (4,629,985 | ) | (10.32 | ) | ||||||||||||||||||||
Other income |
982,465 | 992,375 | (9,910 | ) | (1.00 | ) | 4,444,171 | 3,552,294 | 891,877 | 25.11 | |||||||||||||||||||||||
Total revenues |
$ | 51,109,243 | $ | 59,254,379 | $ | (8,145,136 | ) | (13.75 | ) | $ | 284,122,127 | $ | 262,547,077 | $ | 21,575,050 | 8.22 | |||||||||||||||||
Benefits & expenses: |
|||||||||||||||||||||||||||||||||
Losses & policy benefits |
$ | 45,653,794 | $ | 43,696,578 | $ | 1,957,216 | 4.48 | $ | 173,523,103 | $ | 161,984,990 | $ | 11,538,113 | 7.12 | |||||||||||||||||||
Reinsurance recoveries |
(10,639,102 | ) | (13,247,792 | ) | 2,608,690 | (19.69 | ) | (40,293,602 | ) | (39,953,090 | ) | (340,512 | ) | 0.85 | |||||||||||||||||||
Commissions |
5,260,123 | 5,925,823 | (665,700 | ) | (11.23 | ) | 25,196,794 | 25,819,712 | (622,918 | ) | (2.41 | ) | |||||||||||||||||||||
Other operating expenses |
11,284,880 | 12,192,870 | (907,990 | ) | (7.45 | ) | 34,666,846 | 31,977,077 | 2,689,769 | 8.41 | |||||||||||||||||||||||
Interest expense |
| 98,000 | (98,000 | ) | | | 98,000 | (98,000 | ) | | |||||||||||||||||||||||
Taxes, licenses & fees |
848,388 | 935,887 | (87,499 | ) | (9.35 | ) | 3,605,001 | 3,080,836 | 524,165 | 17.01 | |||||||||||||||||||||||
Incr deferred acq expense |
(2,790,742 | ) | (3,479,444 | ) | 688,702 | (19.79 | ) | (11,521,719 | ) | (17,717,144 | ) | 6,195,425 | (34.97 | ) | |||||||||||||||||||
Other expenses |
| 1 | (1 | ) | | 108 | 109 | (1 | ) | (0.92 | ) | ||||||||||||||||||||||
Total expenses |
$ | 49,617,341 | $ | 46,121,923 | $ | 3,495,418 | 7.58 | $ | 185,176,531 | $ | 165,290,490 | $ | 19,886,041 | 12.03 | |||||||||||||||||||
Income before income taxes |
$ | 1,491,902 | $ | 13,132,456 | $ | (11,640,554 | ) | (88.64 | ) | $ | 98,945,596 | $ | 97,256,587 | $ | 1,689,009 | 1.74 | |||||||||||||||||
Provision for income taxes: |
|||||||||||||||||||||||||||||||||
Current |
$ | 3,120,097 | $ | 953,701 | $ | 2,166,396 | 227.16 | $ | 7,629,012 | $ | 6,273,558 | $ | 1,355,454 | 21.61 | |||||||||||||||||||
Current capital gains/losses |
(4,026,945 | ) | 947,821 | (4,974,766 | ) | (524.86 | ) | 14,230,855 | 15,879,350 | (1,648,495 | ) | (10.38 | ) | ||||||||||||||||||||
Deferred |
1,103,621 | 2,628,721 | (1,525,100 | ) | (58.02 | ) | 12,018,148 | 12,406,344 | (388,196 | ) | (3.13 | ) | |||||||||||||||||||||
Total income taxes |
$ | 196,773 | $ | 4,530,243 | $ | (4,333,470 | ) | (95.66 | ) | $ | 33,878,015 | $ | 34,559,252 | $ | (681,237 | ) | (1.97 | ) | |||||||||||||||
Net income |
$ | 1,295,129 | $ | 8,602,213 | $ | (7,307,084 | ) | (84.94 | ) | $ | 65,067,581 | $ | 62,697,335 | $ | 2,370,246 | 3.78 |
2007 Fourth-Quarter and Full-Year Financial Supplement | 30 |
For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||
Net premiums written |
$ | 38,097,174 | $ | 38,109,979 | (0.03 | ) | $ | 157,997,206 | $ | 153,442,227 | 2.97 | ||||||||||||||
Net investment income |
29,823,157 | 27,053,035 | 10.24 | 114,430,186 | 107,656,860 | 6.29 | |||||||||||||||||||
Amortization of interest maintenance reserve |
(306,167 | ) | 59,928 | (610.89 | ) | (1,034,092 | ) | 160,205 | (745.48 | ) | |||||||||||||||
Commissions and expense allowances on reinsurance ceded |
2,514,434 | 2,482,659 | 1.28 | 8,979,277 | 8,261,423 | 8.69 | |||||||||||||||||||
Income from fees associated with Separate Accounts |
982,464 | 992,375 | (1.00 | ) | 4,444,171 | 3,552,294 | 25.11 | ||||||||||||||||||
Total revenues |
$ | 71,111,062 | $ | 68,697,977 | 3.51 | $ | 284,816,748 | $ | 273,073,009 | 4.30 | |||||||||||||||
Death benefits and matured endowments |
$ | 8,229,655 | $ | 8,866,654 | (7.18 | ) | $ | 35,482,168 | $ | 38,964,236 | (8.94 | ) | |||||||||||||
Annuity benefits |
7,791,125 | 8,580,838 | (9.20 | ) | 36,619,626 | 35,200,488 | 4.03 | ||||||||||||||||||
Disability benefits and benefits under accident and health contracts |
463,903 | 415,184 | 11.73 | 2,095,255 | 1,630,523 | 28.50 | |||||||||||||||||||
Surrender benefits and group conversions |
5,907,638 | 5,991,218 | (1.40 | ) | 23,386,683 | 22,251,863 | 5.10 | ||||||||||||||||||
Interest and adjustments on deposit-type contract funds |
2,867,654 | 2,380,022 | 20.49 | 9,589,747 | 9,394,586 | 2.08 | |||||||||||||||||||
Increase in aggregate reserves for life and accident and health contracts |
24,127,339 | 23,436,742 | 2.95 | 95,838,523 | 95,336,456 | 0.53 | |||||||||||||||||||
Payments on supplementary contracts with life contingencies |
85,404 | 77,083 | 10.79 | 344,229 | 308,744 | 11.49 | |||||||||||||||||||
Total benefit expenses |
$ | 49,472,718 | $ | 49,747,741 | (0.55 | ) | $ | 203,356,231 | $ | 203,086,897 | 0.13 | ||||||||||||||
Commissions |
$ | 7,956,702 | $ | 8,344,872 | (4.65 | ) | $ | 33,973,217 | $ | 33,700,524 | 0.81 | ||||||||||||||
General insurance expenses and taxes |
9,984,268 | 11,073,587 | (9.84 | ) | 39,262,688 | 35,288,388 | 11.26 | ||||||||||||||||||
Increase in loading on deferred and uncollected premiums |
(528,755 | ) | 200,324 | (363.95 | ) | (5,865,915 | ) | (4,278,539 | ) | (37.10 | ) | ||||||||||||||
Net transfers to or (from) Separate Accounts |
| | | (215,913 | ) | (211,220 | ) | (2.22 | ) | ||||||||||||||||
Other deductions |
| | | 108 | 109 | (0.59 | ) | ||||||||||||||||||
Total operating expenses |
$ | 17,412,215 | $ | 19,618,783 | (11.25 | ) | $ | 67,154,185 | $ | 64,499,261 | 4.12 | ||||||||||||||
Federal and Foreign Income Taxes Incurred |
2,975,587 | 950,983 | 212.90 | 7,422,682 | 5,973,699 | 24.26 | |||||||||||||||||||
Net gain from operations before realized capital gains or (losses) |
$ | 1,250,542 | $ | (1,619,530 | ) | 177.22 | $ | 6,883,650 | $ | (486,849 | ) | 1,513.92 | |||||||||||||
Net realized gains or (losses) net of capital gains tax |
(4,931,609 | ) | 1,306,320 | (477.52 | ) | 32,400,952 | 28,946,326 | 11.93 | |||||||||||||||||
Net Income (Statutory) |
$ | (3,681,067 | ) | $ | (313,210 | ) | (1,075.27 | ) | $ | 39,284,602 | $ | 28,459,477 | 38.04 |
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 31 |
(Dollars in millions) | Three months ended | Six months ended | Nine months ended | Twelve months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/07 | 09/30/07 | 06/30/07 | 03/31/07 | 12/31/06 | 09/30/06 | 06/30/06 | 03/31/06 | 06/30/07 | 06/30/06 | 09/30/07 | 09/30/06 | 12/31/07 | 12/31/06 | ||||||||||||||||||||||||||||||||||||||||||||||
Gross Written Premiums |
$ | 55 | $ | 49 | $ | 54 | $ | 53 | $ | 54 | $ | 50 | $ | 51 | $ | 50 | $ | 107 | $ | 101 | $ | 156 | $ | 152 | $ | 211 | $ | 206 | |||||||||||||||||||||||||||||||
Bank Owned Life Insurance (BOLI)
Adjustment |
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Adjusted Gross Written Premiums |
$ | 55 | $ | 49 | $ | 54 | $ | 53 | $ | 54 | $ | 50 | $ | 51 | $ | 50 | $ | 107 | $ | 101 | $ | 156 | $ | 152 | $ | 211 | $ | 206 | |||||||||||||||||||||||||||||||
Insurance Expense |
$ | 8 | $ | 8 | $ | 9 | $ | 9 | $ | 10 | $ | 7 | $ | 7 | $ | 7 | $ | 18 | $ | 14 | $ | 26 | $ | 21 | $ | 34 | $ | 31 | |||||||||||||||||||||||||||||||
Expense Ratio |
14.5 | % | 16.3 | % | 16.7 | % | 17.7 | % | 17.8 | % | 14.7 | % | 13.5 | % | 14.5 | % | 16.8 | % | 14.0 | % | 16.7 | % | 14.0 | % | 16.1 | % | 15.0 | % | |||||||||||||||||||||||||||||||
Expense Ratio based on Adjusted
Gross Written Premium |
14.5 | % | 16.3 | % | 16.7 | % | 17.7 | % | 17.8 | % | 14.7 | % | 13.5 | % | 14.5 | % | 16.8 | % | 14.0 | % | 16.7 | % | 14.0 | % | 16.1 | % | 15.0 | % | |||||||||||||||||||||||||||||||
(Dollars in millions) | Years ended December 31, | |||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||||||||
Gross Written Premiums |
$ | 211 | $ | 206 | $ | 249 | $ | 230 | $ | 173 | $ | 244 | $ | 122 | $ | 157 | ||||||||||||||||
Bank Owned Life Insurance (BOLI)
Adjustment |
| | | (10 | ) | | (34 | ) | | (20 | ) | |||||||||||||||||||||
Adjusted Gross Written Premiums |
$ | 211 | $ | 206 | $ | 249 | $ | 220 | $ | 173 | $ | 210 | $ | 122 | $ | 137 | ||||||||||||||||
Insurance Expense |
$ | 34 | $ | 31 | $ | 29 | $ | 25 | $ | 25 | $ | 27 | $ | 25 | $ | 20 | ||||||||||||||||
Expense Ratio |
16.1 | % | 15.0 | % | 11.7 | % | 11.1 | % | 14.8 | % | 10.9 | % | 20.6 | % | 12.9 | % | ||||||||||||||||
Expense Ratio based on Adjusted
Gross Written Premium |
16.1 | % | 15.0 | % | 11.7 | % | 11.6 | % | 14.8 | % | 12.6 | % | 20.6 | % | 14.8 | % | ||||||||||||||||
* | 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. |
2007 Fourth-Quarter and Full-Year Financial Supplement | 32 |
CINCINNATI FINANCIAL CORPORATION Investor Contact: Heather J. Wietzel 513-870-2768 CINF-IR@cinfin.com |
||
Media Contact: Joan O. Shevchik 513-603-5323 Media_Inquiries@cinfin.com |
Mailing Address: | Street Address: | |||
P. O. Box 145496 | 6200 South Gilmore Road | |||
Cincinnati, Ohio 45250-5496 | Fairfield, Ohio 45014-5141 |
CINCINNATI FINANCIAL CORPORATION Investor Contact: Heather J. Wietzel 513-870-2768 CINF-IR@cinfin.com |
||
Media Contact: Joan O. Shevchik 513-603-5323 Media_Inquiries@cinfin.com |
* | Title as listed above |
Mailing Address: | Street Address: | |||
P.O. Box 145496 | 6200 South Gilmore Road | |||
Cincinnati, Ohio 45250-5496 | Fairfield, Ohio 45014-5141 |
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