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AMERICAN RE CORP. REPORTS SECOND QUARTER NET INCOME OF $26.9 MILLION, OR $.54 PER SHARE, ON 18 PERCENT INCREASE IN NET PREMIUMS WRITTEN

 PRINCETON, N.J., Aug. 10 /PRNewswire/ -- American Re Corporation (ARC) (NYSE: ARN) reported second quarter net income of $26.9 million or $.54 per share.
 Net operating income (excluding realized capital gains) was $24.8 million or $.50 per share. Realized capital gains, net of tax, were $2.1 million or $.04 per share. Cash flow from operations was $96.9 million. Per share amounts were computed using 49.4 million common shares and equivalents outstanding on a weighted average basis during the second quarter of 1993.
 Statutory gross premiums written by ARC's reinsurance subsidiary, American Re-Insurance Company (American Re-Insurance), increased 37.8 percent to $370.7 million for the second quarter of 1993, compared to $269.0 million for the same period in 1992, and net premiums written increased 18.8 percent to $300.0 million, versus $252.5 million in the second quarter of 1992. American Re-Insurance's statutory combined ratio improved by 1.8 points, to 99.7 percent for the second quarter of 1993, compared to 101.5 percent for the same period in 1992. Catastrophe losses had no material impact on the 1993 second quarter statutory combined ratio.
 Edward B. Jobe, Chairman and Chief Executive Officer, said, "We are pleased to report that, despite a continuing mixed pricing environment, the Company posted a 70 percent improvement in operating earnings for the second quarter of 1993, compared to the pro forma figure for the same period a year ago. Premium writings were up substantially over the year ago quarter, largely due to increased demand for our products on which we have been able to capitalize. This has been facilitated by the wide acceptance of our Whole Account Concept, which cross-markets our treaty and facultative capabilities."
 Year-To-Date Results and 6/30/93 Financial Condition
 For the six months ended June 30, 1993, ARC reported net income to common stockholders of $21.8 million or $.46 per share, after realized capital gains, preferred stock dividends and an extraordinary loss. Net operating income to common stockholders (excluding realized capital gains) was $46.1 million or $.97 per share. Realized capital gains, net of tax, were $1.4 million or $.03 per share. The extraordinary, non- cash charge of $24.8 million, net of tax, or $.52 per share for the six- month period, was due to the write-off of capitalized financing fees relating to ARC's predecessor bank credit facility, which was repaid as part of its January, 1993 initial public offering and capital enhancement program. This charge was previously reported as part of ARC's first quarter results. For the first six months of 1993, cash flow from operations was $82.0 million. Per share amounts were computed using 47.3 million common shares and equivalents outstanding on a weighted average basis during the first six months of 1993.
 For the first six months of 1993, American Re-Insurance's statutory gross written premiums written increased 42.9 percent to $805.1 million, compared to $563.3 million for the same period of 1992, and net premiums written increased 24.7 percent to $627.7 million, versus $503.2 million in 1992. American Re-Insurance's statutory combined ratio improved by 1.0 point to 100.2 percent for the first six months of 1993, compared to 101.2 percent for the same period in 1992. Catastrophe losses had no material impact on the statutory combined ratio for the first six months of 1993.
 At June 30, 1993, ARC's consolidated total assets were $6.2 billion and consolidated stockholders' equity totaled $721.8 million or $15.34 per share, based on the 47.1 million common shares outstanding. Statutory surplus of American Re-Insurance was $1.031 billion at June 30, 1993.
 ARC is, through its wholly-owned subsidiary, American Re-Insurance, a direct writer of treaty and facultative reinsurance and related services, with approximately 1,200 employees in 13 domestic and 14 international offices.
 Pro Forma Results
 ARC began operations upon acquiring American Re-Insurance on September 30, 1992, and completed an initial public stock offering and capital enhancement program during the first quarter of 1993.
 The following pro forma results of ARC are provided for comparison purposes. They assume that ARC's acquisition of American Re-Insurance, initial public stock offering, and capital enhancement program took place on January 1 of the respective years (that is, on January 1, 1992, in the case of pro forma results for 1992, and on January 1, 1993, in the case of pro forma results for 1993).
 For the first six months of 1993, pro forma net operating income (excluding realized capital gains) would have been $49.1 million or $.99 per share, an increase of over 54 percent compared with pro forma net operating income of $31.7 million or $.64 per share for the first six months of 1992. Net income (including realized capital gains) would have been $50.5 million or $1.02 per share and after-tax realized capital gains would have been $1.4 million or $.03 per share for the first six months of 1993, compared to net income of $31.8 million or $.64 per share and realized capital gains of $67,000 or less than $.01 per share for the same period of 1992. Per share amounts were computed using 49.4 million common shares and equivalents outstanding on a weighted average basis for the first six months of both 1992 and 1993.
 For the second quarter of 1993, pro forma information was not calculated, as there were no pro forma events occurring in the quarter. Actual net operating income (excluding realized capital gains) was $24.8 million or $.50 per share, an increase of over 70 percent compared with pro forma net operating income of $14.5 million or $.29 per share for the second quarter of 1992. Actual net income (including realized capital gains/losses) was $26.9 million or $.54 per share and actual after-tax realized capital gains were $2.1 million or $.04 per share for the second quarter of 1993, compared to pro forma net income of $14.4 million or $.29 per share and a pro forma realized capital loss of $132,000 or less than $.01 per share for the same quarter of 1992. Per share amounts were computed using 49.4 million common shares and equivalents outstanding on a weighted average basis for the second quarter of both 1992 and 1993.
 AMERICAN RE CORPORATION
 JUNE 30, 1993 FINANCIAL HIGHLIGHTS
 (Dollars in millions, except per share data)
 Three month period ended June 30,
 Reported Pro Forma
 1993 1992
 CONSOLIDATED STATEMENT OF INCOME:
 Revenue:
 Gross premiums written $376.0 $274.9
 Net premiums written 302.2 255.6
 Net premiums earned (net of
 premiums ceded of $57.7
 and $24.8 for June 30, 1993 and
 1992, respectively) 314.1 265.5
 Net investment income 44.7 51.7
 Realized capital gains 3.4 (0.0)
 Other income 3.7 3.0
 Total revenue 365.9 320.2
 Losses and expenses:
 Loss & loss adjustment expenses
 (net of reinsurance
 recoveries of $36.4 and $37.4
 for June 30, 1993 and
 1992, respectively) 205.0 182.9
 Underwriting expenses 97.8 91.4
 Interest expense 15.4 16.2
 Other expenses 10.6 12.2
 Total losses and expenses 328.8 302.7
 Income before income taxes 37.1 17.5
 Federal & foreign income taxes 10.2 3.1
 Net income to common stockholders $26.9 $14.4
 EARNINGS PER SHARE AND COMMON STOCK EQUIVALENTS:
 Weighted average shares
 and common stock equivalents
 outstanding (in millions) 49.4 49.4
 Primary earnings per share:
 Operating, excluding realized
 capital gains $0.50 $0.29
 Realized capital gains, net of tax 0.04 0.00
 Net income per common share $0.54 $0.29
 CASH FLOW DATA:
 Cash provided by operations $96.9 ---
 Note: See note at end of release for explanation regarding pro forma assumptions.
 AMERICAN RE CORPORATION
 JUNE 30, 1993 FINANCIAL HIGHLIGHTS
 (Dollars in millions)
 Three months period ended June 30 1993 1992
 AMERICAN RE-INSURANCE COMPANY:
 Statutory combined ratio (percent): 99.7 101.5
 Note: See note at end of release for explanation regarding pro forma assumptions.
 AMERICAN RE CORPORATION
 JUNE 30, 1993 FINANCIAL HIGHLIGHTS
 (Dollars in millions, except per share data)
 Six month period ended June 30,
 Reported Pro Pro
 Forma Forma
 1993 1993 1992
 CONSOLIDATED STATEMENT OF INCOME:
 Revenue:
 Gross premiums written $816.4 $816.4 $574.4
 Net premiums written 662.6 662.6 509.0
 Net premiums earned (net of premiums
 ceded of $144.6 and $72.6
 for June 30, 1993 and 1992,
 respectively) 603.8 603.8 474.0
 Net investment income 89.4 89.4 100.0
 Realized capital gains 2.1 2.1 0.1
 Other income 9.7 9.7 6.6
 Total revenue 705.0 705.0 580.7
 Losses and expenses:
 Loss & loss adjustment expenses (net
 of reinsurance recoveries
 of $110.4 and $64.7 for June 30,
 1993, and 1992, respectively) 392.0 392.0 326.2
 Underwriting expenses 200.8 200.8 161.8
 Interest expense 35.4 30.8 32.3
 Other expenses 13.5 13.5 22.6
 Total losses and expenses 641.7 637.1 542.9
 Income before income taxes 63.3 67.9 37.8
 Federal & foreign income taxes 15.8 17.4 6.0
 Income before extraordinary loss and
 paid-in-kind preferred dividend 47.5 50.5 31.8
 Extraordinary loss on early
 extinguishment of debt,
 net of tax of $12.8 (24.8) 0.0 0.0
 Net income before preferred dividend 22.7 50.5 31.8
 Paid-in-kind preferred dividend 0.9 0.0 0.0
 Net income to common stockholders $21.8 $50.5 $31.8
 EARNINGS PER SHARE AND COMMON STOCK
 EQUIVALENTS:
 Weighted average shares and common
 stock equivalents outstanding
 (in millions) 47.3 49.4 49.4
 Primary earnings per share:
 Operating, excluding realized
 capital gains $0.97 $0.99 $0.64
 Realized capital gains, net of taxes 0.03 0.03 0.00
 Income before extraordinary loss 1.00 1.02 0.64
 Extraordinary loss, net of applicable
 income tax effects (0.52) ---- ----
 Net income before preferred dividend 0.48 1.02 0.64
 Paid-in-kind preferred dividend (0.02) ---- ----
 Net income per common share $0.46 $1.02 $0.64
 CASH FLOW DATA:
 Cash provided by operations $82.0
 AMERICAN RE CORPORATION
 JUNE 30,1993 FINANCIAL HIGHLIGHTS
 (Dollars in millions)
 Six month period ended June 30 1993 1992
 AMERICAN RE-INSURANCE COMPANY:
 Statutory combined ratio (percent): 100.2 101.2
 June 30, Dec. 31,
 BALANCE SHEET DATA: 1993 1992
 Cash and invested assets $2,981.2 $2,833.8
 Long-term debt 775.0 1,025.0
 Stockholders' equity 721.8 386.3
 American Re-Insurance Company's
 statutory surplus 1,030.6 875.8
 Note: For American Re Corporation, comparisons to dates and periods prior to October 1, 1992 are pro forma, since American Re Corporation did not purchase American Re-Insurance Company until September 30, 1992. Pro forma data reflect adjustments necessary to give effect to the Capital Enhancement Program transactions entered into in connection with the initial public offering that occurred on January 29, 1993 and the subsequent pay down of $100 million in bank debt that occurred on February 23, 1993 as if those transactions had occurred on January 1 of the respective year (i.e., on January 1, 1992 in the case of 1992 pro forma data and on January 1, 1993 in the case of 1993 pro forma data.) Pro forma data for the three month period ended June 30,1993 are not displayed as there were no pro forma adjustments in the second quarter 1993 (i.e., no difference from reported information).
 Additional information regarding results is available on request from Nancy Columbia, investor relations, at 609-243-4684.
 /delval/
 -0- 8/10/93
 /CONTACT: James R. Fisher, 609-243-4602, or Thomas H. Walker Jr., 609-243-4679, both of American Re Corporation/
 (ARN)


CO: American Re Corporation; American Re-Insurance Company ST: New Jersey IN: INS SU: ERN

CC -- PH028 -- 1433 08/10/93 19:37 EDT
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Date:Aug 10, 1993
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