21st Century Insurance Group Reports Excellent Results for 2004.WOODLAND HILLS, Calif. -- 21st Century Insurance Group (NYSE NYSE See: New York Stock Exchange :TW) today reported a 36% increase in pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings to $32.7 million for the fourth quarter of 2004, compared to pre-tax earnings of $24.1 million for the same period in 2003. Net Income for the fourth quarter of 2004 was $22.5 million ($0.26 per share), compared to $18.4 million ($0.22 per share) for the same period in 2003. For the year ended December December: see month. 31, 2004, pre-tax earnings increased 72% to $122.3 million, compared to pre-tax earnings of $71.1 million for 2003. Net Income for the year ended December 31, 2004 was $88.2 million ($1.03 per share), compared to $53.6 million ($0.63 per share) for 2003. 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 subsidiaries increased the 2004 full year net income by $4.9 million ($0.06 per share). The 2003 full year results include an 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. charge of $24.1 million to strengthen earthquake reserves and certain 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 items that increased net income by $9.6 million. The Company also reported improved performance in its personal auto lines: --Direct premiums written increased 6.9% to $325.8 million in the fourth quarter of 2004 compared to $304.6 million for the same period in 2003. For the year ended December 31, 2004, direct premiums written increased 9.3% to $1,337.2 million from $1,223.4 million in 2003. --The GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio for the personal auto lines improved to 94.5% in the fourth quarter of 2004 from 95.7% for the same quarter in 2003. For the year ended December 31, 2004, the GAAP combined ratio for the personal auto lines improved to 95.1% compared to 96.5% in 2003. --Underwriting profit increased 39% to $18.4 million for the fourth quarter of 2004, compared to $13.3 million for the fourth quarter of 2003. For the year ended December 31, 2004, personal auto lines 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. increased 56% to $64.0 million, compared to $41.0 million for 2003. "The financial condition of the Company continued to improve in 2004. The top line showed solid growth in a challenging market environment, the loss experience was very positive and we continued to improve the combined ratio. We are well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. , which will support our expansion into Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Ohio, Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). and most recently, Texas, as well as our technology upgrade efforts. These initiatives will help grow and diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our revenue, as well as create operational efficiencies in our core 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. functions," 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. Marlow Marlow is the name of: Places United Kingdom
For the year ended December 31, 2004, cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $203.4 million compared to $188.5 million for 2003. Total invested assets increased 11% from $1.28 billion at December 31, 2003 to $1.42 billion at December 31, 2004. 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 December 31, 2004 increased 11% to $774.4 million, compared to $700.7 million at December 31, 2003. Book value per share increased 11% from $8.20 per share at December 31, 2003 to $9.06 per share at December 31, 2004. Statutory surplus increased 15% to $614.9 million at December 31, 2004 from $535.0 million at December 31, 2003. The net premiums written to statutory surplus improved to 2.2 at the end of 2004 compared to 2.3 a year earlier. "The fourth quarter operating results add to the Company's already strong capital structure," said Lawrence Lawrence. 1 City (1990 pop. 26,763), Marion co., central Ind., a residential suburb of Indianapolis, on the West Fork of the White River. It has light manufacturing. 2 City (1990 pop. 65,608), seat of Douglas co., NE Kans. Bascom, Senior Vice President and Chief Financial Officer of 21st Century Insurance. "It also affirms the upgraded outlook we recently received from Standard & Poor's," added Bascom. 21st Century Insurance: Good people to call Founded in 1958, 21st Century Insurance Group is a direct-to-consumer provider of personal auto insurance covering over 1.5 million vehicles and with $1.3 billion of premiums in California and eight other Western, Southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. 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 superior policy features and customer service at a competitive price. 24/7, customers have the option to purchase insurance, service their policy or report a claim over the phone with our licensed insurance professionals at 1-800-211-SAVE (English 1. English - (Obsolete) The source code for a program, which may be in any language, as opposed to the linkable or executable binary produced from it by a compiler. The idea behind the term is that to a real hacker, a program written in his favourite programming language is ) or 1-888-920-2121 (Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. ) or through the Company's full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. bilingual bi·lin·gual adj. 1. a. Using or able to use two languages, especially with equal or nearly equal fluency. b. Web site at 21st.com. 21st Century Insurance Company and 21st Century Insurance Company of the Southwest are rated A+ by A.M. Best. 21st Century Insurance Company is rated 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 results, expected combined ratio and growth of written premiums, product development, computer systems, regulatory 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 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 regulatory approval for rate increases and product changes and possible adverse actions 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. 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 Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("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. Premiums Written represent the premiums charged on policies issued 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 Pro-rata Used to describe a proportionate allocation. Notes: For example, a pro-rata dividend means that every shareholder gets an equal proportion for each share they own. See also: Dividend basis over the term of the policies. Premiums Written are meant as supplemental information and are not intended to replace Premiums Earned. Statutory Surplus represents equity as of the end of a fiscal period, 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. (SAP), 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 meant as supplemental information and is not intended to replace Stockholders' Equity. 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 supplemental schedules. (C) 2005 by 21st Century Insurance Group. All rights reserved.
Exhibit A
21st Century Insurance Group and Subsidiaries
Condensed Operating Results - All Lines
(amounts in thousands, except share data)
(Unaudited)
QTD December 31, YTD December 31,
------------------- -----------------------
2004 2003 2004 2003
--------- --------- ----------- -----------
Total All Lines
Direct premiums written $325,763 $304,672 $1,337,198 $1,223,484
========= ========= =========== ===========
Net premiums written $324,539 $303,433 $1,332,384 $1,218,630
========= ========= =========== ===========
Net premiums earned $334,989 $310,330 $1,313,670 $1,172,677
Loss and loss
adjustment expenses 249,412 239,859 993,841 962,311
Underwriting expenses 69,047 57,201 258,571 209,535
--------- --------- ----------- -----------
Underwriting profit 16,530 13,270 61,258 831
Net investment income 16,252 11,173 58,831 45,833
Other income - 711 - 14,777
Realized investment
gains 2,010 61 10,831 13,177
Interest and fees
expense (2,100) (1,135) (8,627) (3,471)
--------- --------- ----------- -----------
Income before
income tax 32,692 24,080 122,293 71,147
Provision for income
tax expense (10,225) (5,654) (34,068) (17,572)
--------- --------- ----------- -----------
Net income $22,467 $18,426 $88,225 $53,575
========= ========= =========== ===========
Net income per common
share - basic &
diluted $0.26 $0.22 $1.03 $0.63
========= ========= =========== ===========
Loss and loss adjustment
expense ratio 74.5% 77.3% 75.6% 82.0%
Underwriting expense ratio 20.6% 18.4% 19.7% 17.9%
--------- --------- ----------- -----------
Combined ratio 95.1% 95.7% 95.3% 99.9%
========= ========= =========== ===========
Cash Flow from Operations 34,145 43,195 203,356 188,460
Reconciliation of net premiums written to net premiums earned
Direct premiums written $325,763 $304,672 $1,337,198 $1,223,484
Ceded premiums written (1,224) (1,239) (4,814) (4,854)
--------- --------- ----------- -----------
Net premiums
written 324,539 303,433 1,332,384 1,218,630
Net change in unearned
premiums 10,450 6,897 (18,714) (45,953)
--------- --------- ----------- -----------
Net earned
premiums $334,989 $310,330 $1,313,670 $1,172,677
========= ========= =========== ===========
Exhibit B
21st Century Insurance Group and Subsidiaries
Condensed Operating Results - Personal Auto
(amounts in thousands, except share data)
(Unaudited)
QTD December 31, YTD December 31,
------------------- -----------------------
2004 2003 2004 2003
--------- --------- ----------- -----------
Personal Auto Lines
Direct premiums written $325,760 $304,647 $1,337,190 $1,223,377
========= ========= =========== ===========
Net premiums written $324,535 $303,408 $1,332,375 $1,218,519
========= ========= =========== ===========
Net premiums earned $334,978 $310,419 $1,313,551 $1,172,679
Losses and loss adjustment
expenses 247,511 239,914 991,008 922,122
Underwriting expenses 69,047 57,217 258,571 209,551
--------- --------- ----------- -----------
Underwriting profit $18,420 $13,288 $63,972 $41,006
========= ========= =========== ===========
Loss and loss adjustment
expense ratio 73.9% 77.3% 75.4% 78.6%
Underwriting expense ratio 20.6% 18.4% 19.7% 17.9%
--------- --------- ----------- -----------
Combined ratio 94.5% 95.7% 95.1% 96.5%
========= ========= =========== ===========
Reconciliation of personal auto lines underwriting profit to
consolidated net income
Personal auto lines
underwriting profit $18,420 $13,288 $63,972 $41,006
Underwriting loss on
homeowner and
earthquake lines in
runoff (1,890) (18) (2,714) (40,175)
Net investment income 16,252 11,173 58,831 45,833
Other income - 711 - 14,777
Realized investment
gains 2,010 61 10,831 13,177
Interest and fees
expense (2,100) (1,135) (8,627) (3,471)
Provision for income
tax expense (10,225) (5,654) (34,068) (17,572)
--------- --------- ----------- -----------
Net income $22,467 $18,426 $88,225 $53,575
========= ========= =========== ===========
Reconciliation of net premiums written to net premiums earned
Direct premiums written $325,760 $304,647 $1,337,190 $1,223,377
Ceded premiums written (1,225) (1,239) (4,815) (4,858)
--------- --------- ----------- -----------
Net premiums
written 324,535 303,408 1,332,375 1,218,519
Net change in unearned
premiums 10,443 7,011 (18,824) (45,840)
--------- --------- ----------- -----------
Net earned
premiums $334,978 $310,419 $1,313,551 $1,172,679
========= ========= =========== ===========
Exhibit C
21st Century Insurance Group and Subsidiaries
Selected Other Information - All Lines
(amounts in thousands, except share data)
(Unaudited)
As of As of
December 31, December 31,
2004 2003
--------------- ----------------
Balance Sheet Data
Total investments $1,384,215 $1,219,676
Total assets $1,864,314 $1,738,132
Net unrealized gain $14,412 $23,497
Stockholders' equity $774,401 $700,690
Number of common shares
outstanding 85,489,061 85,435,505
Book value per share $9.06 $8.20
Additional Information
Statutory surplus $614,893 $535,026
Net premiums written to statutory
surplus ratio 2.2 2.3
Auto units in force 1,526 1,403
Auto renewal ratio 92% 92%
Reconciliation of statutory surplus to stockholders' equity
Stockholders' equity - GAAP $774,401 $700,690
Condensed adjustments to
reconcile GAAP equity to
statutory surplus:
Equity in non-insurance
subsidiaries 8,082 1,680
Net difference due to capital
lease obligation 2,961 2,278
Difference in net unrealized
gains on investments (21,709) (35,690)
Deferred policy acquisition
costs (58,759) (53,079)
Difference in net deferred tax
assets 50,712 53,309
Assets nonadmitted for
statutory purposes (140,795) (134,162)
--------------- ----------------
Statutory surplus $614,893 $535,026
=============== ================
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