21st Century Insurance Group Reports 2002 Second Quarter Results.Business Editors WOODLAND HILLS, Calif.--(BUSINESS WIRE)--July 24, 2002 21st Century Insurance Group (NYSE NYSE See: New York Stock Exchange :TW) today reported net income for the quarter ended June June: see month. 30, 2002, of $9.9 million, or $0.11 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , compared to net income of $5.8 million, or $0.07 diluted earnings per share, for the quarter ended June 30, 2001. For the six months ended June 30, 2002, the Company earned $18.2 million, or $0.21 diluted earnings per share, compared to $10.7 million, or $0.13 diluted earnings per share for the first six months of 2001. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (i.e., net income before realized investment gains or losses and excluding results of the homeowner and earthquake lines of business, which are in runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. ) for the three months ended June 30, 2002, was $11.8 million, or $0.14 diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. per share. This compares to 2001 second quarter operating income of $10.5 million, or $0.12 diluted per share. For the six months ended June 30, 2002 operating income and diluted per share were $23.7 million and $0.28, respectively, compared to $18.5 million and $0.22, respectively, for the first six months of 2001. Direct premiums written for the personal auto lines increased 7.5% to $238.5 million in the second quarter of 2002 compared to $221.7 million for the second quarter of 2001. For the six months ended June 30, 2002 and 2001, direct premiums written for the personal auto lines were $469.0 million and $450.2 million, respectively. The combined ratio was 98.9 for the personal auto lines in the second quarter 2002 compared to 100.1 for the same quarter a year ago. For the six months ended June 30, 2002 and 2001, the combined ratio was 98.7 and 101.0, respectively. The Company increased rates by 5.7% in its 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). personal auto business (96% of total direct premiums written) on May 6, 2002. Loss costs are increasing at between 3.5% and 4.0% per year. "Operational results are improving. June was the biggest month for new customer acquisition in the 44-year history of the Company. Volume is increasing in response to the success of our `Get More' marketing campaign (launched in May) which highlights how 21st Century customers `Get More: Coverage, Service and Savings' than with any other leading carrier. Most consumers can pay less only by getting a lot less in coverage and service," said 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. W. Marlow Marlow is the name of: Places United Kingdom
The Company continues to work on the resolution of claims arising from California SB 1899, which allowed the reopening Reopening Treasury offerings of additional amounts of outstanding issues, rather than an entirely new issue. A reopened issue will always have the same maturity date, CUSIP number, and interest rate as the original issue. of claims arising from 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. that were previously closed. This law was intended to assist homeowners who had a claim denied because of contractual requirements for timely reporting of claims, a requirement that is necessary to properly determine the origin of any alleged damage. The Company's review of SB 1899 claims suggests that more than 75% did not involve the denial of a claim submitted by a policyholder Policyholder An individual who owns an insurance policy. because the contractual limitations period had expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. . Nevertheless, the Company must address these claims as well under the law. The lawsuits for the Company have been consolidated under and assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to a single judge who is pursuing an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. process for resolution of these claims. This process is being followed for each company with SB 1899 lawsuits in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Superior Court. Given the highly unusual nature of these claims and of the legal process, it is not possible for the Company to reasonably estimate total legal defense costs at this time. The Company recorded a charge to earnings of $3.2 million after tax in the second quarter of 2002 for ongoing legal defense costs. The Company will continue to investigate all claims, pay legitimate claims and vigorously defend its legal rights. About 21st Century Founded in 1958, 21st Century Insurance Group is a pioneer in the direct-to-consumer marketing of personal automobile insurance serving customers in California, Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). , Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. and Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. . The Company provides full service 24 hours a day, 365 days a year at 1-800-211-SAVE and its website, www.i21.com. 21st Century 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, 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, product development, regulatory approvals, market position, financial results and reserves. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Important factors that could cause the Company's actual results to differ, possibly materially, from those in the specific forward-looking statements include the effects of competition and competitors' pricing actions; unanticipated adverse underwriting and claims experience, including 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. claims under SB 1899; systems and customer service problems, including potential negative effects of power shortages in California; adverse developments in financial markets or interest rates; and unanticipated results of legislative, regulatory or legal actions, including the inability to obtain approval for rate increases and product changes. 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 at the Company's website at www.i21.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.
Exhibit A
21st Century Insurance Group and Subsidiaries
Condensed Financial Data - Personal Auto
(amounts in thousands, except share data)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Personal Auto Lines
Direct premiums written $ 238,535 $ 221,691 $ 468,954 $ 450,204
========== ========== ========== ==========
Net premiums written $ 228,452 $ 207,754 $ 449,151 $ 422,176
========== ========== ========== ==========
Net premiums earned $ 220,191 $ 211,076 $ 435,302 $ 418,966
Loss and loss adjustment
expenses incurred 184,947 180,671 366,724 364,109
Underwriting expenses
incurred 32,828 30,623 63,196 58,898
---------- ---------- ---------- ----------
Underwriting profit
(loss) 2,416 (218) 5,382 (4,041)
Net investment income 11,384 11,352 22,649 23,078
Federal income tax
expense (1,966) (593) (4,375) (557)
---------- ---------- ---------- ----------
Operating income $ 11,834 $ 10,541 $ 23,656 $ 18,480
========== ========== ========== ==========
Operating income per
common share (1) $ 0.14 $ 0.12 $ 0.28 $ 0.22
========== ========== ========== ==========
Loss and loss adjustment
expense ratio 84.0% 85.6% 84.2% 86.9%
Underwriting expense
ratio 14.9% 14.5% 14.5% 14.1%
---------- ---------- ---------- ----------
GAAP combined ratio 98.9% 100.1% 98.7% 101.0%
========== ========== ========== ==========
(1) Basic and diluted amounts per common share are the same for all
periods shown.
Exhibit B
21st Century Insurance Group and Subsidiaries
Condensed Financial Data - All Lines
(amounts in thousands, except share data)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Total All Lines
Direct premiums written $ 238,441 $ 235,951 $ 471,456 $ 472,864
========== ========== ========== ==========
Net premiums written $ 228,452 $ 220,419 $ 437,560 $ 442,622
========== ========== ========== ==========
Net premiums earned $ 220,191 $ 217,366 $ 435,302 $ 431,977
Loss and loss adjustment
expenses incurred 189,903 192,471 378,538 387,107
Underwriting expenses
incurred 32,828 32,067 63,287 61,681
---------- ---------- ---------- ----------
Underwriting loss (2,540) (7,172) (6,523) (16,811)
Net investment income 11,384 11,352 22,649 23,078
Realized gains 2,635 434 4,298 1,550
Federal income tax
(expense) benefit (1,620) 1,183 (2,242) 2,902
---------- ---------- ---------- ----------
$ 9,859 $ 5,797 $ 18,182 $ 10,719
========== ========== ========== ==========
Net income per common
share (1) $ 0.11 $ 0.07 $ 0.21 $ 0.13
========== ========== ========== ==========
Loss and loss adjustment
expense ratio 86.3% 88.6% 86.9% 89.6%
Underwriting expense
ratio 14.9% 14.8% 14.5% 14.3%
---------- ---------- ---------- ----------
GAAP combined ratio 101.2% 103.4% 101.4% 103.9%
========== ========== ========== ==========
----------------------------------------------------------------------
June 30, December 31, June 30,
Balance Sheet Data 2002 2001 2001
-------------- ------------ ------------
Invested assets $ 929,015 $ 884,633 $ 897,324
Total assets $ 1,377,394 $ 1,352,016 $ 1,360,457
Stockholders' equity $ 675,210 $ 659,306 $ 717,157
Number of common shares
outstanding 85,445,389 85,361,848 85,187,340
Book value per share $ 7.90 $ 7.72 $ 8.42
Additional Information
Statutory surplus $ 376,559 $ 393,119 $ 438,856
Net premiums written
to statutory surplus
ratio 2.3 2.2 1.9
Cash and investments
at holding company $ 23,898 $ 52,847 $ 1,239
Auto units in force 1,108 1,075 1,110
Homeowner units in force
(in runoff) 25 74 74
California auto renewal
ratio 93% 93% 92%
After-tax yield on
investments 4.4% 4.5% 5.1%
(1) Basic and diluted amounts per common share are the same for all
periods shown.
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