21st Century Insurance Group Reports Fourth Quarter Results.WOODLAND HILLS, Calif. -- 21st Century Insurance Group (NYSE NYSE See: New York Stock Exchange :TW) today reported net income of $26.4 million ($0.31 per basic share) for the fourth quarter of 2005, compared to $22.5 million ($0.26 per basic share) for the same period in 2004. The 2005 results include net realized capital losses of $0.6 million, compared to net realized capital gains of $2.0 million for the same three-month period in 2004. For the twelve months ended December December: see month. 31, 2005, net income was $87.4 million ($1.02 per basic share), compared to $88.2 million ($1.03 per basic share) for the same period in 2004. The 2005 results include net realized capital losses of $3.3 million, compared to net realized capital gains of $10.8 million for the same twelve-month period in 2004. The GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio was 93.0% in the fourth quarter of 2005, compared to 95.1% for the same period in 2004. For the twelve-month period ending on December 31, 2005, the Company's GAAP combined ratio was 94.9%, compared to 95.3% for the same period in 2004. In the fourth quarter of 2005, direct premiums written of $316.5 million represented a 2.9% decrease compared to the $325.8 million written in the same period of 2004. 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 in the fourth quarter of 2005 decreased by 5.7% to $294.5 million compared to $312.4 million for the same period in 2004. Direct premiums written outside of California increased 64.2% to $22.0 million, compared to $13.4 million in the fourth quarter of 2004. For the twelve months ended December 31, 2005, direct premiums written of $1,346.4 million represented a 0.7% increase, compared to the $1,337.2 million written in the same period of 2004. California direct premiums written decreased by 2.2% to $1,262.3 million for 2005 when compared to the $1,290.9 million written in the same period of 2004. Direct premiums written outside of California increased 81.6% to $84.1 million for 2005, compared to $46.3 million in the same period of 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, 2005 increased 7.2% to $830.0 million, compared to $774.4 million at December 31, 2004. Book value per share at December 31, 2005 improved 6.6% to $9.66 per share from $9.06 per share at December 31, 2004. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the fourth quarter of 2005 was $37.9 million, compared to $34.2 million for the same period in 2004. For the twelve months ended December 31, 2005, operating cash flow was $160.3 million, compared to $203.4 million for the same period in 2004. "We ended 2005 in very strong financial condition and with our best quarterly and full year combined operating ratios Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: in 5 years," said President & 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 Marlow is the name of: Places United Kingdom
UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. and marketer. In California, our opportunities for profitable growth currently are limited, due to the lack of rate increases by competitors. Outside of California, we have found good opportunities for growth. In 2005, we increased our non-California business by over 80%. "Our plans for entering three states in the second quarter and an additional three states in the third quarter of 2006 are on track. Currently, we are actively marketing in states with 30% of U.S. households. Our objective is to be actively marketing in states with 60% of U.S. households by the first quarter of 2007. Geographic expansion is a key strategy for achieving our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth goal. This increase in scope creates more marketing opportunities for us, including the shift from a regional to a national advertising model," added Marlow. About 21st: Good people to call 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 California, Texas, 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. , and six other states. 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 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 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 and 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. both on the phone and on the web. 21st Century Insurance Company, 21st Century Casualty Company, and 21st Century Insurance Company of the Southwest Southwest or south west is the ordinal direction halfway between south and west, the opposite of northeast. Southwest or south west may also refer to:
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 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 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, 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. 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 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 , 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 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 (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 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 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. 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 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 terms 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 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. 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) 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)
Quarter Ended 12 Months Ended
December 31, December 31,
-------------------------------------------
2005 2004 2005 2004
-------- -------- ---------- ----------
Direct premiums written $316,466 $325,763 $1,346,370 $1,337,198
======== ======== ========== ==========
Net premiums written $315,172 $324,539 $1,341,418 $1,332,384
======== ======== ========== ==========
Net premiums earned $335,626 $334,989 $1,352,937 $1,313,670
Net losses and loss
adjustment expenses 241,513 249,412 998,933 993,841
Underwriting expenses 70,495 69,047 284,334 258,571
-------- -------- ---------- ----------
Underwriting profit 23,618 16,530 69,670 61,258
Net investment income 18,011 16,252 69,096 58,831
Other income 3 - 367 -
Net realized investment
(losses) gains (606) 2,010 (3,272) 10,831
Interest and fees expense (1,943) (2,100) (8,019) (8,627)
Other expenses (410) - (410) -
-------- -------- ---------- ----------
Income before provision
for income taxes 38,673 32,692 127,432 122,293
Provision for income taxes (12,281) (10,225) (40,006) (34,068)
-------- -------- ---------- ----------
Net income $ 26,392 $ 22,467 $ 87,426 $ 88,225
======== ======== ========== ==========
Net income per common
share - basic & diluted $ 0.31 $ 0.26 $ 1.02 $ 1.03
======== ======== ========== ==========
Loss and loss adjustment
expense ratio 72.0% 74.5% 73.8% 75.6%
Underwriting expense ratio 21.0% 20.6% 21.1% 19.7%
-------- -------- ---------- ----------
Combined ratio 93.0% 95.1% 94.9% 95.3%
======== ======== ========== ==========
Reconciliation of direct
premiums written to net
premiums earned
Direct premiums written $316,466 $325,763 $1,346,370 $1,337,198
Ceded premiums written (1,294) (1,224) (4,952) (4,814)
-------- -------- ---------- ----------
Net premiums written 315,172 324,539 1,341,418 1,332,384
Net change in unearned
premiums 20,454 10,450 11,519 (18,714)
-------- -------- ---------- ----------
Net premiums earned $335,626 $334,989 $1,352,937 $1,313,670
======== ======== ========== ==========
Net losses and loss
adjustment expenses
Current accident year $245,870 $246,620 $1,024,073 $ 993,946
Prior accident years (4,357) 2,792 (25,140) (105)
-------- -------- ---------- ----------
Net losses and loss
adjustment expenses $241,513 $249,412 $ 998,933 $ 993,841
======== ======== ========== ==========
Exhibit B
21st Century Insurance Group and Subsidiaries
Selected Other Information - All Lines
(amounts in thousands, except ratio and share data)
(Unaudited)
As of As of
December 31, December 31,
Balance Sheet Data 2005 2004
--------------- --------------
Total investments $ 1,402,074 $ 1,384,215
Deferred policy acquisition costs $ 59,939 $ 58,759
Total assets $ 1,920,229 $ 1,864,314
Unpaid losses and loss adjustment
expenses $ 523,835 $ 495,542
Unrealized (loss) gain, net of taxes $ (8,504) $ 14,412
Stockholders' equity $ 829,972 $ 774,401
Number of common shares outstanding 85,933,960 85,489,061
Book value per share $ 9.66 $ 9.06
Additional Information
Statutory surplus $ 704,671 $ 614,893
Ratio of net premiums written to
statutory surplus ratio 1.9 2.2
California vehicles in force 1,414 1,461
Non-California vehicles in force 127 65
--------------- --------------
Total vehicles in force 1,541 1,526
Auto renewal ratio - Quarter ended
12/31/05 & 12/31/04 91% 92%
Reconciliation of stockholders'
equity to statutory surplus
Stockholders' equity - GAAP $ 829,972 $ 774,401
Condensed adjustments to reconcile
GAAP stockholders' equity to
statutory surplus:
Equity in non-insurance entities 26,798 8,082
Net difference due to capital lease
obligation 2,975 2,961
Difference in net unrealized losses
(gains) on investments 10,788 (21,709)
Deferred policy acquisition costs (59,939) (58,759)
Difference in net deferred tax
assets 38,544 50,712
Assets nonadmitted for statutory
purposes (144,467) (140,795)
--------------- --------------
Statutory surplus $ 704,671 $ 614,893
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