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ALLMERICA PROPERTY & CASUALTY ANNOUNCES THIRD QUARTER EARNINGS

 WORCESTER, Mass., Oct. 26 /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 nine months of 1993 of $225.4 million, or $10.93 per share compared to $107.7 million, or $5.22 per share, in 1992. Net income for the third quarter of 1993 was $47.0 million, or $2.28 per share, compared to net income of $34.5 million, or $1.67 per share, in the third quarter of 1992.
 "We are pleased with our third quarter results," said Eric A. Simonsen, Chief Financial Officer at Allmerica P & C. "Net income from operations is up considerably at Hanover for the third quarter and for the year," Simonsen said. "Citizens' results through nine months are approaching the record levels generated during 1992, due largely to a strong third quarter."


Third Quarter Results
 Allmerica P & C's consolidated net premiums written increased 6.0 percent to $443.0 million in the third quarter of 1993 from $417.9 million in the same period of 1992. Adjusting for the February 1993 sale of The Beacon Insurance Company of America (Beacon) and its wholly-owned subsidiary, American Select Insurance Company, net premiums written increased 10.1 percent over the same period of 1992. Citizens' net premiums written increased 9.5 percent to $206.4 million in 1993 from $188.5 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 premiums written of $15.7 million. Hanover's net premiums written increased 10.7 percent to $236.6 million in 1993 from $213.8 million in 1992, primarily as a result of growth in the personal automobile and workers' compensation lines.
 Consolidated net income from operations, excluding net realized capital gains and the cumulative effect of changes in accounting principles, was $35.6 million, or $1.72 per share for 1993 compared to $28.5 million, or $1.38 per share for 1992. Hanover contributed net income from operations of $21.3 million compared to $15.8 million in 1992, primarily due to improved underwriting results and decreased catastrophe losses. Citizens' net income from operations was $19.5 million compared to $12.9 million in 1992. This increase was primarily due to improved underwriting results in the workers' compensation line. Allmerica P & C's net income from operations for the quarter was reduced by $3.8 million for the minority interest in the earnings of Citizens.
 Consolidated net investment income before taxes for Allmerica P & C decreased 7.8 percent to $48.8 million in 1993 from $52.9 million in 1992. Net realized gains, net of tax, were $11.4 million in 1993 compared with $6.0 million in 1992. The decrease in net investment income before taxes and the increase in net realized gains are due to a continued shift towards a higher level of tax-exempt investments in the portfolio in accordance with the current tax strategy, which is aimed at maximizing after-tax net investment income.
 Allmerica P & C's statutory combined ratio, including policyholders' dividends, was 101.7 percent in the third quarter of 1993 compared to 106.3 percent in the third quarter of 1992. Citizens' statutory combined ratio, including policyholders' dividends, was 96.9 percent in 1993 compared to 102.9 percent in 1992, reflecting the improvement in the workers' compensation underwriting results. Hanover's statutory combined ratio, including policyholders' dividends improved to 105.6 percent in 1993 from 109.3 percent in 1992. The improvement at Hanover resulted primarily from favorable claims activity in the personal automobile line and decreased catastrophe losses.


Year-to-date Results
 Allmerica P & C's net income for the first nine months included a gain of $20.7 million, net of tax, on the sale of Beacon; 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 3.3 percent to $1,319.9 million in 1993 from $1,277.9 million in 1992. Adjusting for the sale of Beacon, net premiums written increased 6.9 percent over 1992. Citizens' net premiums written increased 9.3 percent to $576.4 million in 1993 from $527.3 million in 1992. Approximately $30.1 million of the increase at Citizens 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 commercial lines as well as continued growth in policies in force in certain personal and commercial lines products. Hanover's net premiums written increased 5.1 percent to $743.5 million in 1993 from $707.2 million in 1992, primarily as a result of continued growth in the personal automobile and workers' compensation lines and increased involuntary pool participation.
 Consolidated net income from operations, excluding net realized capital gains and the cumulative effect of changes in accounting principles, was $95.9 million, or $4.65 per share for 1993 compared to $95.3 million, or $4.62 per share for 1992. Hanover contributed net income from operations of $57.1 million compared to $40.3 million in 1992. Favorable loss development in the personal auto and workers' compensation lines and decreased catastrophe losses have lead to improved underwriting results at Hanover. Citizens' net income from operations was $48.1 million compared to $53.3 million in 1992. The 1992 results were favorably impacted by exceptionally mild winter weather in Michigan which resulted in better than expected earnings for Citizens. Allmerica P & C's net income from operations for the first nine months of 1993 was reduced by $8.5 million for the minority interest in the earnings of Citizens.
 Consolidated net investment income before taxes for Allmerica P & C decreased 4.5 percent to $150.8 million in 1993 from $158.0 million in 1992. Net realized gains, net of tax, were $41.8 million in 1993 compared with $12.4 million in 1992. The decrease in net investment income before taxes and the increase in net realized gains are due to a continued shift towards a higher level of tax-exempt investments in the portfolio in accordance with the current tax strategy, which is aimed at maximizing after-tax net investment income. Net investment income after taxes increased 2.8 percent, primarily as a result of the investment income earned on the proceeds of the Citizens initial public offering.
 Allmerica P & C's statutory combined ratio, including policyholders' dividends, was 102.7 percent in the first nine months of 1993 and 1992. Net weather related catastrophes represented 1.4 points and 2.5 points of the combined ratios in the first nine months of 1993 and 1992, respectively. Citizens' statutory combined ratio, including policyholders' dividends, was 98.8 percent in 1993 compared to 95.7 percent in 1992, reflecting more normal weather conditions in Michigan in 1993 than in 1992. Hanover's statutory combined ratio, including policyholders' dividends, improved to 105.8 percent in 1993 from 107.8 percent in 1992. The improvement at Hanover resulted from a combination of favorable loss development in the personal automobile and workers' compensation lines, decreased catastrophe losses and improved results from involuntary business.


A Review of the Balance Sheet
 Consolidated fixed maturity investments represented 94.5 percent of total invested assets of $3.3 billion at September 30, 1993. Of the total fixed maturity investments, 96.8 percent were rated investment grade or above. There are no significant investments in real estate or mortgages secured by real estate.
 Shareholders' equity increased $40.9 million in the third quarter of 1993 from $1,134.2 million ($55.00 per share) at June 30, 1993, to $1,175.1 million ($57.00 per share) at September 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, Mass.
 DOW JONES
 ALLMERICA PROPERTY & CASUALTY COMPANIES, INC. (0)
 Quarter September 30: 1993 1992
 Net income $ 47,023,000 $ 34,506,000
 Earnings Per Share (a) $2.28 $1.67
 Average No. Shares 20,600,000 20,632,000
 Nine months September 30: 1993 1992
 Net income $225,443,000 $107,662,000
 Earnings Per Share (a) $10.93 $5.22
 Average No. Shares 20,615,000 20,632,000
 All figures are reported in accordance with generally accepted accounting principles (GAAP).


(a) Includes the cumulative effect of accounting changes, issuance
 of subsidiary common stock and the sale of subsidiary, net of
 federal income taxes at the prior statutory rate of 34 percent and
 net realized gains on investments net of federal income taxes at
 the current statutory rate of 35 percent, as follows:
 Y-T-D 3rd Qtr
 1993 1992 1993 1992
 Net realized gain on investments,
 net of applicable federal income
 taxes $2.03 $ .60 $ .56 $ .29
 Non-taxable realized gain on
 issuance of subsidiary common
 stock $3.05 -- $ -- --
 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- 10/26/93
 /CONTACT: (Investors) 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/
 (APY)


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

DD -- NE004 -- 6730 10/26/93 08:54 EDT
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