21st Century Insurance Group Reports Second Quarter Results.WOODLAND HILLS, Calif. -- 21st Century Insurance Group (NYSE NYSE See: New York Stock Exchange :TW) today reported net income of $20.5 million ($0.24 per share) for the second quarter of 2005, compared to $21.4 million ($0.25 per share) for the same period in 2004. The 2005 results include net realized capital losses of $1.3 million, compared to net realized capital gains of $1.3 million for the same period in 2004. For the six months ended June June: see month. 30, 2005, net income was $39.9 million ($0.47 per share), compared to $41.2 million ($0.48 per share) for the same period in 2004. The 2005 results include a net realized capital loss of $1.7 million, compared to net realized capital gains of $9.0 million for the same period in 2004. The GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio was 95.2% in the second quarter of 2005, compared to 94.5% for the same period in 2004. For both six month periods ending on June 30, 2005 and June 30, 2004, the Company's GAAP combined ratio was 95.6%. In the second quarter of 2005, direct premiums written of $328.7 million represented a 1.2% increase over the $324.8 million written in the same period of 2004. Non-California direct premiums written increased 81% to $19.5 million compared to $10.7 million in the second quarter 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 second quarter of 2005 decreased by 1.6% to $309.2 million, compared to $314.2 million for the same period in 2004. "We found better opportunities for growth outside of California. In 2005, we are investing in the state expansion strategy, the conversion to our new technology platform (which currently services approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 85% of outstanding claims and 65% of California policies) and the build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. of our Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. service center. Loss trends currently are favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. ," 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
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 June 30, 2005 increased 4.6% to $810.0 million, compared to $774.4 million at December December: see month. 31, 2004. Book value per share at June 30, 2005 improved 4.3% to $9.45 per share from $9.06 per share at December 31, 2004. Statutory surplus increased 3.7% to $637.5 million at June 30, 2005 from $614.9 million at December 31, 2004. The ratio of net premiums written to statutory surplus improved from 2.2 at December 31, 2004 to 2.1 at June 30, 2005. About 21st: Good people to call Founded in 1958, 21st Century Insurance Group is a direct-to-consumer provider of personal auto insurance. With $1.3 billion of revenue in 2004, 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. 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, 24 hours a day, 365 days a year. 21st Century Insurance Company and 21st Century Casualty Company are rated A+ by Standard & Poor's. 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. . 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; adverse underwriting and claims experience, including experience 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 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, including failures to implement information technology projects on time and within budget; 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 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 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 conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. 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. ("SAP sap, fluid in plants consisting of water and dissolved substances. Cell sap refers to this fluid present in the large vacuole, or cell cavity, that occupies most of the central portion of mature plant cells. "), 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 rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. 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 6 Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Total All Lines
Direct premiums written $328,669 $324,806 $680,786 $665,453
========= ========= ========= =========
Net premiums written $327,479 $323,668 $678,419 $663,127
========= ========= ========= =========
Net premiums earned $336,845 $327,021 $673,209 $645,241
Net losses and loss adjustment
expenses 248,284 244,556 499,315 492,070
Underwriting expenses 72,520 64,626 144,201 124,716
--------- --------- --------- ---------
Underwriting profit 16,041 17,839 29,693 28,455
Net investment income 17,006 14,315 34,043 27,461
Other income 367 - 367 -
Realized investment (losses)
gains (1,267) 1,337 (1,727) 8,983
Interest and fees expense (2,031) (2,185) (4,088) (4,411)
--------- --------- --------- ---------
Income before provision for
income taxes 30,116 31,306 58,288 60,488
Provision for income taxes (9,621) (9,932) (18,356) (19,289)
--------- --------- --------- ---------
Net income $20,495 $21,374 $39,932 $41,199
========= ========= ========= =========
Net income per common share -
basic & diluted $0.24 $0.25 $0.47 $0.48
========= ========= ========= =========
Loss and loss adjustment
expense ratio 73.7% 74.7% 74.2% 76.3%
Underwriting expense ratio 21.5% 19.8% 21.4% 19.3%
--------- --------- --------- ---------
Combined ratio 95.2% 94.5% 95.6% 95.6%
========= ========= ========= =========
Reconciliation of direct premiums
written to net premiums earned
Direct premiums written $328,669 $324,806 $680,786 $665,453
Ceded premiums written (1,190) (1,138) (2,367) (2,326)
--------- --------- --------- ---------
Net premiums written 327,479 323,668 678,419 663,127
Net change in unearned
premiums 9,366 3,353 (5,210) (17,886)
--------- --------- --------- ---------
Net premiums earned $336,845 $327,021 $673,209 $645,241
========= ========= ========= =========
Net losses and loss adjustment
expenses
Current accident year $260,200 $244,406 $518,902 $491,540
Prior accident years (11,916) 150 (19,587) 530
--------- --------- --------- ---------
Net losses and loss adjustment
expenses $248,284 $244,556 $499,315 $492,070
========= ========= ========= =========
Exhibit B
21st Century Insurance Group and Subsidiaries
Selected Other Information - All Lines
(amounts in thousands, except share & ratio data)
(Unaudited)
As of As of
June 30, December 31,
Balance Sheet Data 2005 2004
------------- -------------
Total investments $1,418,700 $1,384,215
Total assets $1,892,417 $1,864,314
Unrealized gain $14,839 $14,412
Stockholders' equity $810,003 $774,401
Number of common shares outstanding 85,744,970 85,489,061
Book value per share $9.45 $9.06
Additional Information
Statutory surplus $637,462 $614,893
Ratio of net premiums written to
statutory surplus 2.1 2.2
California vehicles in force 1,463 1,461
Non-California vehicles in force 103 65
------------- -------------
Total vehicles in force 1,566 1,526
============= =============
Auto renewal ratio - Quarter ended 6/30/05
& 12/31/04 92% 92%
Auto renewal ratio - 6 months ended 6/30/05
and 12 months ended 12/31/04 93% 92%
Reconciliation of stockholders' equity to
statutory surplus
Stockholders' equity - GAAP $810,003 $774,401
Condensed adjustments to reconcile GAAP
stockholders' equity to statutory surplus:
Equity in non-insurance subsidiaries 17,597 8,082
Net difference due to capital lease
obligation 3,171 2,961
Difference in net unrealized gain on
investments (23,304) (21,709)
Deferred policy acquisition costs (62,205) (58,759)
Difference in net deferred tax assets 47,401 50,712
Assets nonadmitted for statutory
purposes (155,201) (140,795)
------------- -------------
Statutory surplus $637,462 $614,893
============= =============
Exhibit C
21st Century Insurance Group and Subsidiaries
Condensed Consolidated Statement of Cash Flows - All Lines
(amounts in thousands)
(Unaudited)
Quarter Ended 6 Months Ended
June 30, June 30,
------------------- -------------------
Operating activities 2005 2004 2005 2004
--------- --------- --------- ---------
Direct premiums collected $333,228 $330,583 $679,815 $663,079
Investment income collected 19,032 15,292 38,609 30,396
Ceded losses and LAE collected 338 1,701 2,171 3,763
Ceded premiums paid (327) (337) (653) (842)
Direct losses and LAE paid (243,176) (230,040) (497,585) (467,866)
Underwriting expenses paid (72,178) (66,847) (138,665) (118,538)
Income taxes paid (2,650) 11,757 (9,434) 10,480
Interest paid (3,470) (3,652) (4,017) (4,439)
--------- --------- --------- ---------
Net cash provided by operating
activities 30,797 58,457 70,241 116,033
--------- --------- --------- ---------
Investing activities
Investments available-for-sale
Purchases (134,644) (116,560) (237,305) (693,343)
Calls or maturities 6,450 15,927 17,225 27,524
Sales 108,145 96,788 179,880 612,776
Purchases of property and
equipment (4,962) (10,896) (12,591) (18,978)
--------- --------- --------- ---------
Net cash used in investing
activities (25,011) (14,741) (52,791) (72,021)
--------- --------- --------- ---------
Financing activities
Repayment of debt (2,999) (2,885) (5,953) (5,617)
Dividends paid (per share:
$0.08 and $0.06) (3,424) (1,709) (6,846) (5,126)
Proceeds from the exercise of
stock options 666 168 1,974 407
--------- --------- --------- ---------
Net cash used in financing
activities (5,757) (4,426) (10,825) (10,336)
--------- --------- --------- ---------
Net increase in cash and cash
equivalents 29 39,290 6,625 33,676
Cash and cash equivalents,
beginning of period 41,293 59,396 34,697 65,010
--------- --------- --------- ---------
Cash and cash equivalents, end
of period $41,322 $98,686 $41,322 $98,686
========= ========= ========= =========
Reconciliation of net income to net cash provided
by operating activities:
Operating activities
Net income $20,495 $21,374 $39,932 $41,199
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 7,825 5,450 14,995 10,682
Net amortization of investment
premiums and discounts 3,037 1,748 4,840 2,921
Amortization of restricted
stock grants 104 99 138 198
Provision for deferred income
taxes 2,444 6,271 5,903 14,276
Realized losses (gains) on
sale of investments 1,263 (1,345) 1,717 (8,983)
Changes in assets and
liabilities:
Reinsurance balances 196 1,810 1,377 3,633
Federal income taxes (10,476) 6,407 (69) 5,851
Other assets 16,272 8,036 2,029 (3,700)
Unpaid losses and loss
adjustment expenses 5,351 14,641 (20) 23,626
Unearned premiums (9,372) (3,364) 5,207 17,873
Claims checks payable (1,447) (2,364) (170) (3,578)
Other liabilities (4,895) (306) (5,638) 12,035
--------- --------- --------- ---------
Net cash provided by operating
activities $30,797 $58,457 $70,241 $116,033
========= ========= ========= =========
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