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ALLMERICA PROPERTY & CASUALTY ANNOUNCES SECOND QUARTER EARNINGS

 WORCESTER, Mass., July 22 /PRNewswire/ -- Allmerica Property & Casualty Companies, Inc. (Allmerica P & C) (NYSE: APY), a national property and casualty insurance holding company whose most significant business holdings are The Hanover Insurance Company (Hanover) and Citizens Corporation (Citizens), today reported net income for the first six months of 1993 of $178.4 million, or $8.65 per share compared to $73.2 million, or $3.55 per share, in 1992. Net income for the second quarter of 1993 was $51.2 million, or $2.49 per share, compared to net income of $36.7 million, or $1.78 per share, in the second quarter of 1992.
 Allmerica P & C's net income for the first six months included a gain of $20.7 million, net of tax, on the February, 1993 sale of Beacon Insurance Company of America (Beacon) and its wholly- owned subsidiary American Select Insurance Company; a non-taxable gain of $62.9 million from the March 19, 1993 initial public offering of 17.7 percent of Citizens' common stock and the April 19, 1993 exercise of the underwriters "over allotment" option which resulted in the issuance of an additional 731,600 shares; and income of $4.1 million from the cumulative effect of changes in accounting principles including the implementation of SFAS 106, "Employers' Accounting for Postretirement Benefits other than Pensions," and SFAS 109, "Accounting for Income Taxes."
 Allmerica P & C's consolidated net premiums written increased 2.0 percent to $876.9 million in 1993 from $860.0 million in 1992. Adjusting for the sale of Beacon, net premiums written increased 5.4 percent over 1992. Citizens' net premiums written increased 9.2 percent to $370.0 million in 1993 from $338.8 million in 1992. Approximately $14.4 million of this increase resulted from a change in personal lines policies from a three month minimum term to a six month minimum term for policies effective June 1, 1993. The remainder of the growth in Citizens' net premiums written was due to price increases in both commercial and personal lines as well as continued growth in policies in force in certain personal lines products. Hanover's net premiums written increased 2.7 percent to $506.9 million in 1993 from $493.4 million in 1992, primarily as a result of increased involuntary pool participation.
 Consolidated net income from operations, excluding net realized capital gains and the cumulative effect of changes in accounting principles, was $59.8 million, or $2.90 per share for 1993 compared to $66.8 million, or $3.24 per share for 1992. Hanover contributed net income from operations, excluding net realized capital gains and the cumulative effect of changes in accounting principles, of $35.8 million compared to $23.7 million in 1992. Improved results at Hanover are due to a combination of increased after tax investment income and improved underwriting results. Citizens' net income from operations, excluding net realized capital gains and the cumulative effect of changes in accounting principles, was $28.6 million compared to $40.4 million in 1992. The 1992 results were favorably impacted by exceptionally mild weather in Michigan which resulted in better than expected earnings for Citizens. Allmerica P & C's net income from operations for the first six months of 1993 was reduced by $4.1 million for the minority interest in the earnings of Citizens Corporation.
 Consolidated net investment income before taxes for Allmerica P & C decreased 2.9 percent to $102.0 million in 1993 from $105.1 million in 1992, due primarily to increased investment in lower yielding tax-exempt securities. Net investment income after taxes increased 5%. Net realized gains, net of tax, were $30.9 million in 1993 compared with $6.4 million in 1992. The increase in net realized gains was due to a continued shift towards a higher level of tax- exempt investments in the portfolio in accordance with the current tax strategy.
 Allmerica P & C's statutory combined ratio, including policyholders' dividends, was 103.3 percent in the first six months of 1993 compared to 100.9 percent in the first six months of 1992. Net weather related catastrophes represented 1.8 points and 2.3 points of the combined ratios in the first six months of 1993 and 1992, respectively. Citizens' statutory combined ratio, including policyholders' dividends, was 99.8 percent in 1993 compared to 92.1 percent in 1992, reflecting the return of more normal weather conditions in Michigan in 1993. Hanover's statutory combined ratio, including policyholders' dividends, improved to 105.9 percent in 1993 from 107.1 percent in 1992 in spite of the increased catastrophe activity experienced in the first quarter of 1993. The improvement at Hanover resulted from a combination of favorable loss development in the automobile lines and rate increases in the workers' compensation line.
 Allmerica P & C's consolidated net premiums written increased 6.5 percent to $457.2 million in the second quarter of 1993 from $429.3 million in the same period of 1992. Adjusting for the sale of Beacon, net premiums written increased 10.4 percent over the same period in 1992. Citizens' net premiums written increased 14.9 percent to $198.5 million in 1993 from $172.7 million in 1992, primarily as a result of the change in personal lines policies from a minimum three month term to a minimum six month term, which resulted in increased written premiums of $14.4 million. Hanover's net premiums written increased 7.2 percent to $258.7 million in 1993 from $241.4 million in 1992. Adjusting for increased involuntary writings of $19.9 million, Hanover's writings decreased 1.1 percent, due to decreases in the homeowners and commercial multiple peril lines.
 Consolidated net income from operations, excluding net realized capital gains, was $28.2 million, or $1.37 per share for 1993 compared to $30.6 million, or $1.48 per share for 1992. Hanover contributed net income from operations, excluding net realized capital gains and the cumulative effect of changes in accounting principles, of $17.6 million compared to $13.7 million in 1992, primarily due to improved underwriting results. Citizens' net income from operations, excluding net realized capital gains and the cumulative effect of changes in accounting principles, was $14.6 million compared to $15.2 million in 1992. Allmerica P & C's income from operations for the quarter ended June 30, 1993 was reduced by $3.5 million for the minority interest in the earnings of Citizens Corporation.
 Consolidated net investment income before taxes for Allmerica P & C decreased 2.3 percent to $51.4 million in 1993 from $52.6 million in 1992. Net investment income was impacted by the increased investment in lower yielding tax-exempt securities. Net investment income after taxes increased 7.0 percent. Net realized gains, net of tax, were $17.6 million in 1993 compared with $6.1 million in 1992. The increase in net realized gains is due to a continued shift towards a higher level of tax-exempt investments in the portfolio in accordance with the current tax strategy.
 Allmerica P & C's statutory combined ratio, including policyholders' dividends, was 104.0 percent in the second quarter of 1993 compared to 102.3 percent in the second quarter of 1992. Net weather related catastrophes represented 1.2 points and 4.3 points of the combined ratios in the second quarters of 1993 and 1992, respectively. Citizens' statutory combined ratio, including policyholders' dividends, was 99.8 percent in 1993 compared to 94.1 percent in 1992, reflecting underwriting results which are more in line with historical trends. Hanover's statutory combined ratio, including policyholders' dividends improved to 107.5 percent in 1993 from 108.6 percent in 1992. The improvement at Hanover resulted from a combination of favorable loss development in the automobile lines and rate increases in the workers' compensation line.


A Review of the Balance Sheet
 Consolidated fixed maturity investments represented 94.5 percent of total invested assets of $3.2 billion at June 30, 1993. Investment grade or above investments represent 98 percent of the fixed maturity portfolio. There are no significant investments in real estate or mortgages secured by real estate.
 Shareholders' equity increased $39.7 million in the second quarter of 1993 from $1,094.5 million ($53.11 per share) at March 31, 1993, to $1,134.2 million ($55.00 per share) at June 30, 1993.
 All interim information is unaudited, and all results are reported in accordance with generally accepted accounting principles (GAAP) with the exception of the combined ratio which is reported on a statutory basis.
 Allmerica P & C is a member of Allmerica Financial, a diversified group of insurance and financial services companies based in Worcester, Massachusetts.
 DOW JONES
 ALLMERICA PROPERTY & CASUALTY COMPANIES, INC. (0)
 Quarter June 30: 1993 1992
 Net income $ 51,269,000 $ 36,670,000
 Earnings Per Shares (a) $2.49 $1.78
 Average No. Shares 20,612,000 20,632,000
 Six months June 30: 1993 1992
 Net income $178,420,000 $73,156,000
 Earnings Per Shares (a) $8.65 $3.55
 Average No. Shares 20,622,000 20,632,000
 All figures are reported in accordance with generally accepted accounting principles (GAAP). ----
 NOTE (a): Includes the cumulative effect of accounting changes, net realized gains on investments, issuance of subsidiary common stock and the sale of subsidiary, net of federal income taxes at the statutory rate of 34 percent as follows:
 Y-T-D 2nd Qtr
 1993 1992 1993 1992
 Net realized gain on investments,
 net of applicable federal income
 taxes............................ $1.50 $ .31 $ .86 $ .30
 Non-taxable realized gain on
 issuance of subsidiary common
 stock............................ $3.05 -- $ .26 --
 Realized gain on sale of sub-
 sidiary, net of applicable
 federal income tax............... $1.00 -- -- --
 Cumulative effect of accounting
 changes, net of applicable
 federal income taxes............. $ .20 -- -- --
 -0- 7/22/93
 /CONTACT: Edward J. Parry, III, vice president and treasurer, 508-855-4600; or Mark C. McGivney, investor relations, 508-855-4019; or (media) Michael F. Buckley, director, public information, 508-855-3099, all of Allmerica/


CO: Allmerica Property & Casualty Companies, Inc. ST: Massachusetts IN: FIN SU: ERN

DD -- NE015 -- 4801 07/22/93 17:15 EDT
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Date:Jul 22, 1993
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