21st Century Insurance Group Announces Improved Third Quarter Results.WOODLAND HILLS, Calif. -- 21st Century Insurance Group (NYSE NYSE See: New York Stock Exchange :TW) today reported a 93% increase in net income to $24.6 million, or $0.29 per share, for the quarter ended September September: see month. 30, 2004, compared to net income of $12.7 million, or $0.15 per share, for the quarter ended September 30, 2003. Current quarter net income was increased by $4.9 million ($0.06 per share) due to the effect of recent California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). legislation (AB 263) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc holding company taxes on dividends from insurance subsidiaries. For the nine months ended September 30, 2004, net income increased by 87% to $65.8 million, or $0.77 per share, compared to $35.1 million, or $0.41 per share, for the same period in 2003. The results for the nine months ended September 30, 2003 include second quarter nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. nonoperational Adj. 1. nonoperational - (military) not involved in military operations inactive armed forces, armed services, military, military machine, war machine - the military forces of a nation; "their military is the largest in the region"; "the military machine is income items of $9.1 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , or $0.11 per share, and a first quarter after-tax charge of $24.1 million, or $0.28 per share, to strengthen reserves on the 1994 Northridge earthquake The Northridge earthquake occurred on January 17, 1994 at 4:31 AM Pacific Standard Time in the city of Los Angeles, California. The earthquake had a "strong" moment magnitude of 6. claims. The Company also reported solid performance in its personal auto lines: --Direct premiums written increased 6.8% to $346.1 million in the third quarter ended September 30, 2004, compared to $324.2 million in the third quarter of 2003. For the nine months ended September 30, 2004, direct premiums written increased 10.1% to $1.011 billion compared to $918.7 million for the same period in 2003. --The combined ratio improved to 95.0% in the third quarter of 2004 compared to 97.1% for the same quarter a year ago. For the nine months ended September 30, 2004, the combined ratio improved to 95.3% from 96.8% in 2003. --Underwriting profit increased 89.6% for the three months ended September 30, 2004 to $16.7 million from $8.8 million in the third quarter of 2003. For the nine months ended September 30, 2004, underwriting profit Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. was $45.6 million, an increase of 64.3% over underwriting profit of $27.7 million for same period in 2003. "Company operations were sound in the third quarter. Our entry into new markets is proceeding as planned. An important milestone was reached with the successful implementation of the company's new claims computer system. The policy component of the system is planned for introduction into California in 2005," said CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Marlow Marlow is the name of: Places United Kingdom
Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. at September 30, 2004 increased by $53.7 million to $754.4 million from $700.7 million at December December: see month. 31, 2003. Total assets increased to $1.86 billion at September 30, 2004 from $1.74 billion at December 31, 2003. Book value per share increased by $0.63 to $8.83 from $8.20 in the same period. Statutory surplus increased by $64.5 million, or 12.1%, to $599.5 million at September 30, 2004 from $535.0 million at December 31, 2003. The net premiums written to statutory surplus ratio improved to 2.2 at September 30, 2004 from 2.3 at December 31, 2003. About 21st Founded in 1958, 21st Century Insurance Group is a low cost direct to consumer provider of personal auto insurance in California and seven other Western and Midwestern Mid·west or Middle West A region of the north-central United States around the Great Lakes and the upper Mississippi Valley. It is generally considered to include Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, Missouri, Kansas, and states. 21st provides a superior combination of policy features and customer service at a competitive price. Twenty-four-hours-a-day, 365 days a year, customers have the option to purchase insurance, service their policy or report a claim over the phone directly through our centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. licensed insurance agents at 1-800-211-SAVE or through the Company's full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. website at www.21st.com. 21st Century Insurance Company is rated A+ (Superior) by A.M. Best and A+ by Standard & Poor's. 21st Century Insurance Group is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the trading symbol Trading symbol See: Ticker symbol TW and is headquartered at 21st Century Plaza For the hotel in New York City, see . Plaza (IPA /'plaθa/ or /'plasa/ , 6301 Owensmouth Avenue, Woodland Hills, CA 91367. Cautionary Statement: Statements contained herein and within other publicly available documents may include, and the Company's officers and representatives may from time to time make statements which may constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are not historical facts but instead represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. These statements may address, among other things, the Company's strategy for growth, underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results, expected combined ratio and growth of written premiums, product development, computer systems, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals, market position, financial results, dividend policy and reserves. It is possible that the Company's actual results, actions and financial condition may differ, possibly materially, from the anticipated results, actions and financial condition indicated in these forward-looking statements. Important factors that could cause the Company's actual results and actions to differ, possibly materially, from those in the specific forward-looking statements include the effects of competition and competitors' pricing actions; adverse underwriting and claims experience, including as a result of revived re·vive v. re·vived, re·viv·ing, re·vives v.tr. 1. To bring back to life or consciousness; resuscitate. 2. To impart new health, vigor, or spirit to. 3. earthquake earthquake, trembling or shaking movement of the earth's surface. Most earthquakes are minor tremors. Larger earthquakes usually begin with slight tremors but rapidly take the form of one or more violent shocks, and end in vibrations of gradually diminishing force claims under SB 1899; customer service problems; the impact on Company operations of natural disasters, principally earthquake, or civil disturbance Group acts of violence and disorder prejudicial to public law and order. See also domestic emergencies. , due to the concentration of Company facilities and employees in Woodland Hills, California; information systems problems, including failures to implement information technology projects on time and within budget; internal control failures; adverse developments in financial markets or interest rates; results of legislative, regulatory or legal actions, including the inability to obtain approval for rate increases and product changes and adverse actions taken by state regulators in market conduct examinations; and the Company's ability to service its debt, including its ability to receive dividends and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. sufficient payments from its subsidiaries to service its obligations. The Company is not under any obligation to (and expressly disclaims any such obligations to) update or alter any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. Additional financial information is available on the Company's website at www.21st.com (which shall not be deemed to be incorporated in or a part of this release) or by request to the Investor Relations Investor relations The process by which the corporation communicates with its investors. Department. (C) 2004 by 21st Century Insurance Group. All rights reserved.
Exhibit
A
21st Century Insurance Group and Subsidiaries
Condensed Financial Data - Personal Auto (GAAP)
(amounts in thousands, except share data)
(Unaudited)
Third Quarter YTD September 30,
------------------ ---------------------
2004 2003 2004 2003
------------------ ---------------------
Personal Auto Lines
Direct premiums written $346,087 $324,190 $1,011,430 $918,730
================== =====================
Net premiums written $344,823 $322,889 $1,007,840 $915,112
================== =====================
Net premiums earned $333,443 $303,588 $978,573 $862,259
Loss and loss adjustment
expenses incurred 251,926 237,683 743,497 682,207
Underwriting expenses incurred 64,808 57,091 189,524 152,334
------------------ ---------------------
Underwriting profit $16,709 $8,814 $45,552 $27,718
================== =====================
Loss and loss adjustment
expense ratio 75.6% 78.3% 75.9% 79.1%
Underwriting expenses ratio 19.4% 18.8% 19.4% 17.7%
------------------ ---------------------
Combined ratio 95.0% 97.1% 95.3% 96.8%
================== =====================
Supplemental Reconciliation of Personal Auto Lines GAAP Underwriting
Profit to Net Income
Personal auto lines underwriting
profit $16,709 $8,814 $45,552 $27,718
Underwriting loss on homeowner
and earthquake lines (436) (3,156) (824) (40,157)
Net investment income 15,118 11,350 42,579 34,660
Other income - - - 14,065
Realized investment (losses)
gains (162) 836 8,821 13,116
Interest and fees expense (2,116) (797) (6,527) (2,337)
Provision for income tax expense (4,554) (4,338) (23,843) (11,918)
---------------- -----------------
Net income $24,559 $12,709 $65,758 $35,147
================ =================
Exhibit
B
21st Century Insurance Group and Subsidiaries
Condensed Financial Data - All Lines (GAAP)
(amounts in thousands, except share data)
(Unaudited)
Third Quarter YTD September 30,
------------------ --------------------
2004 2003 2004 2003
------------------ --------------------
Total All Lines
Direct premiums written $345,982 $324,284 $1,011,435 $918,812
================== ====================
Net premiums written $344,718 $322,983 $1,007,845 $915,197
================== ====================
Net premiums earned $333,440 $303,675 $978,681 $862,347
Loss and loss adjustment
expenses incurred 252,359 240,926 744,429 722,452
Underwriting expenses
incurred 64,808 57,091 189,524 152,334
------------------ --------------------
Underwriting profit
(loss) 16,273 5,658 44,728 (12,439)
Net investment income 15,118 11,350 42,579 34,660
Other income - - - 14,065
Realized investment (losses)
gains (162) 836 8,821 13,116
Interest and fees expense (2,116) (797) (6,527) (2,337)
Provision for income tax
expense (4,554) (4,338) (23,843) (11,918)
------------------ --------------------
Net income $24,559 $12,709 $65,758 $35,147
================== ====================
Net income per common share
- basic and diluted $0.29 $0.15 $0.77 $0.41
================== ====================
Loss and loss adjustment
expense ratio 75.7% 79.3% 76.0% 83.7%
Underwriting expense ratio 19.4% 18.8% 19.4% 17.7%
------------------ --------------------
Combined ratio 95.1% 98.1% 95.4% 101.4%
================== ====================
Cash Flow from Operations $53,178 $60,045 $169,211 $145,265
-------------------------------------------------
As of As of
September December
30, 2004 31, 2003
Balance Sheet Data
-------------------------
Cash and investments $1,404,043 $1,284,686
Total assets $1,857,847 $1,738,132
Net unrealized gain on investments $15,725 $23,497
Stockholders' equity $754,356 $700,690
Number of common shares outstanding 85,478,962 85,435,505
Book value per share $8.83 $8.20
Additional Information
Statutory surplus $599,511 $535,026
Net premiums written to statutory surplus
ratio 2.2 2.3
Cash and investments at holding company $18,560 $24,361
Auto units in force 1,519 1,403
Auto renewal ratio 92% 92%
After-tax yield on investments 3.3% 3.6%
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