21st Century Insurance Group Reports 35% Increase in Third Quarter Net Income as Non-California Premium Climbs 79%.October 2006 Entry into New Jersey a Significant Milestone as 21st Now Writes Business in over Half of the U.S. Private Passenger Auto Market WOODLAND HILLS, Calif. -- 21st Century Insurance Group (NYSE NYSE See: New York Stock Exchange : TW) today reported net income of $28.4 million ($0.33 per basic share) for the third quarter of 2006, compared to $21.1 million ($0.25 per basic share) for the same period in 2005. The third quarter results include decreases to reserves for prior accident year losses and loss adjustment expenses ("LAE") totaling $14.4 million, versus decreases of $1.2 million in the third quarter of 2005. The third quarter results also include $0.2 million of net realized investment gains, compared to net realized investment losses of $0.9 million in the third quarter of 2005. In October 2006, the Company announced its entry into the New Jersey private passenger automobile insurance market. Other third quarter financial highlights: * Direct premiums written of $337.2 million, versus $349.1 million in the third quarter of 2005 (3.4% decrease) * 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). direct premiums written of $295.8 million, versus $326.0 million in the third quarter of 2005 (9.3% decrease) * Non-California direct premiums written of $41.4 million, versus $23.1 million in the third quarter of 2005 (79.6% increase) * GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio of 91.7% versus 95.2% for the third quarter of 2005. 2006 was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by 4.4 points of prior accident year loss and LAE reserve decreases, versus 0.3 points in 2005 "We are turning 21st into a national competitor. As a direct-to-consumer company, having more markets and more consumers to target increases our opportunities and operating flexibility. In the third quarter, we continued to expand into new markets and maintained our profitability," said President and Chief Executive Officer 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. For the nine months ended September 30, 2006, net income was $78.0 million ($0.91 per basic share), compared to $61.0 million ($0.71 per basic share) for the same nine-month period in 2005. The 2006 nine-month results include decreases to prior accident year loss and LAE reserves totaling $39.5 million, versus decreases of $20.8 million for the same nine-month period in 2005. The 2006 nine-month results also include net realized investment losses of $0.9 million, compared to net realized investment losses of $2.7 million for the same nine-month period in 2005. Other nine-month financial highlights: * Direct premiums written of $992.6 million, versus $1,029.9 million for the same nine-month period in 2005 (3.6% decrease) * California direct premiums written of $895.0 million, versus $967.8 million for the same nine-month period in 2005 (7.5% decrease) * Non-California direct premiums written of $97.6 million, versus $62.1 million for the same nine-month period in 2005 (57.2% increase) * GAAP combined ratio of 92.6% versus 95.5% for the same nine-month period in 2005. 2006 was favorably impacted by 4.0 points of prior accident year loss and LAE reserve decreases, versus 2.0 points in 2005 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, 2006 increased to $897.6 million, compared to $813.0 million at September 30, 2005. Book value per share at September 30, 2006 improved to $10.39 per share from $9.47 per share at September 30, 2005. Operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the third quarter of 2006 were $19.8 million, compared to $52.1 million in the same period of 2005. Operating cash flows for the nine months ended September 30, 2006 were $84.3 million, compared to $122.4 million for the same period of 2005. The addition of New Jersey means more than 50 percent of the national auto insurance market has access to 21st's low prices, superior policy features and great customer service. At $6.3 billion of Direct Written Premium, New Jersey is the 7th largest market for personal auto insurance in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Regulatory reforms Regulatory Reform concerns improvements to the quality of government regulation. At the international level, the "OECD Regulatory Reform Programme is aimed at helping governments improve regulatory quality -- that is, reforming regulations that raise unnecessary obstacles to in 2003 have made the state more attractive for new entrants. New Jersey is the latest step in the company's geographic expansion strategy, as 21st entered the Midwest in 2004, Texas in 2005 and three Eastern states Eastern States can refer to several locations:
Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. & Pennsylvania - during the second quarter of 2006. During the first ten months of 2006, the Company has increased the percentage of the U.S. personal auto market in which it operates from 34% to 53%. "Over the last few years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Company has consistently invested in the capability to execute its national expansion strategy. We are seeing the results of this focused effort, as the percent of our premium that is written outside California has grown steadily. We wrote 12.3% of the current quarter's premium outside California, versus 6.6% during the same quarter last year," said the Company's Senior Vice President and Chief Financial Officer, Steve Erwin. "These investments and our consistent profitability show the strength and focus of our business model. We have a conservative balance sheet and a strong capital position which strongly support our national expansion strategy," added Erwin. About 21st Founded in 1958, 21st Century Insurance Group is a direct-to-consumer provider of personal auto insurance. With $1.4 billion of revenue in 2005, the Company insures over 1.5 million vehicles in Arizona, California, Florida, Georgia, Illinois, Indiana, Nevada, New Jersey, Ohio, Oregon, Pennsylvania, Texas and Washington. 21st provides superior policy features and 24/7 customer service at a competitive price. Customers can purchase insurance, service their policy or report a claim at www.21st.com or on the phone with our licensed insurance professionals at 1-800-211-SAVE, 24 hours a day, 365 days a year. Service is offered in English and Spanish, both on the phone and on the web. 21st Century Insurance Company, 21st Century Casualty Company, and 21st Century Insurance Company of the Southwest are rated A+ by A. M. Best, Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. and 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. 21st Century Insurance Group (NYSE: TW) will hold an earnings teleconference for investors on Thursday, November 2nd, 2006 at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The public can find information about the call in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of www.21st.com. The call and its accompanying slides will be broadcast over the Internet via a webcast, as well. Teleconference Details: Dial in number - 1-800-599-9795 International dial in number - 1-617-786-2905 Passcode - 877-353-08 Teleconference Replay Details: Available from 1 p.m. (EST) on November 2nd, 2006 until 1 p.m. (EST) on November 16th, 2006 Dial in number - 1-888-286-8010 International dial in number - 1-617-801-6888 Passcode - 326-759-67 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 that 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, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , regulatory environment and 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. Other 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; changes in consumer preferences or buying habits; adverse underwriting and claims experience; 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 Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, ; information system problems; control environment failures; adverse developments in financial markets or interest rates; results of legislative, regulatory or legal actions, including the inability to obtain regulatory approval for necessary licenses, rate changes and product changes and possible adverse actions by state regulators in market conduct examinations and rate proceedings; and the Company's ability to service its debt, including its ability to receive dividends and/or sufficient payments from its subsidiaries to service its obligations. The Company is not under any obligation (and expressly disclaims any such obligation) 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 Department. Disclosure of Non-GAAP Measures: The Company may have included financial measures and other information in this document that may not be presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP"). Management believes these financial measures and other information may enhance investors' understanding of the Company's operations or enhance their understanding of the industry, in general. However, these financial measures and other information are not intended to replace, and should be read in conjunction with, the GAAP financial results. When possible, the Company has made efforts to reconcile these financial measures and other information to the most directly comparable GAAP financial measures available. (1) Premiums Written: Premiums written represent the premiums charged on policies issued and in effect during a fiscal period. Premiums Earned, the most directly comparable GAAP measure, represents the portion of premiums written that is recognized as income in the financial statements for the periods presented and earned on a pro-rata basis over the terms of the policies. Premiums Written are meant as supplemental information and are not intended to replace Premiums Earned. (2) Statutory Surplus: Statutory surplus represents equity as of the end of a fiscal period for the Company's insurance entities, determined in accordance with Statutory Accounting Principles The Statutory Accounting Principles are a set of accounting rules for insurance companies set forth by the National Association of Insurance Commissioners. They are used to prepare the statutory financial statements of insurance companies. , as prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by insurance regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . Stockholders' Equity is the most directly comparable GAAP measure. Statutory Surplus is presented as supplemental information and is not intended to replace Stockholders' Equity. (3) 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. (Losses): Underwriting profit (loss) consists of net premiums earned less losses from claims, loss adjustment expenses and underwriting expenses. 21st believes that underwriting profit (loss) provides investors with financial information that is not only meaningful, but critically important to understanding the results of property and casualty insurance operations. The results of operations of a property and casualty insurance company include three components: underwriting profit (loss), net investment income and realized capital gains (losses). Without disclosure of underwriting profit (loss), it is difficult to determine how successful an insurance company is in its core business activity of assessing and underwriting risk, as including investment income and realized capital gains (losses) in the results of operations without disclosing underwriting profit (loss) can mask underwriting losses. Underwriting profit (loss) is presented as supplemental information and is not intended to replace Net Income. These non-GAAP, financial measures should be read in conjunction with the GAAP financial results. The Company has reconciled these financial measures with the most directly comparable GAAP financial measures in the supplemental schedules. [c] 2006 by 21st Century Insurance Group. All rights reserved [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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