Acceptance Insurance Companies Inc. Announces First Quarter 2002 Results.Business Editors COUNCIL BLUFFS Council Bluffs, city (1990 pop. 54,315), seat of Pottawattamie co., SW Iowa, on and below bluffs overlooking the Missouri River, opposite Omaha, Nebr.; inc. 1853. , Iowa--(BUSINESS WIRE)--May 6, 2002 Acceptance Insurance Companies Inc. (NYSE NYSE See: New York Stock Exchange :AIF AIF Annual Information Form AIF Apoptosis-Inducing Factor AIF Agence Intergouvernementale de la Francophonie (French: Intergovernmental Agency for Francophony) AIF Australian Imperial Force ) announced today that the Company had a net after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. loss of $4.3 million, or $0.30 per share, for the three months ended March 31, 2002. This compares with a net after-tax loss of $3.8 million, or $0.27 per share, for the three months ended March 31, 2001. The Company's agricultural segment experienced a net after-tax 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. loss for the first quarter of 2002 of $2.5 million, or $0.17 per share, compared with a net after-tax underwriting loss of $521,000, or $0.04 per share, for the three-month period ended March 31, 2001. The Company's property and casualty segment had a net after-tax underwriting loss of $1.2 million, or $0.08 per share, for the three month period ended March 31, 2002, compared with a net after-tax underwriting loss of $5.2 million, or $0.36 per share, for the same period in 2001. The primary factor in the agricultural segment underwriting loss was excessive rain in cotton producing areas in the Southeastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , which delayed processing of the 2001 cotton harvest into 2002 and damaged the cotton before it could be processed, combined with lower commodity prices for cotton. Because of the increased indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. payments, the Company reduced the underwriting profit Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. share it expects to receive for the 2001 crop year under its primary reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. contract with the Federal Crop Insurance Corporation. The Company will include estimated results from its 2002 multiple peril The designated contingency, risk, or hazard against which an insured seeks to protect himself or herself when purchasing a policy of insurance. Among the various types of perils for which insurance coverage is available are fire, theft, illness, and death. PERIL. crop insurance operations in its financial statements for the fourth quarter of this year. Those results are not reflected in the first quarter earnings released today. The Company said it also increased reserves, primarily for general liability claims, in its property and casualty segment by an after-tax amount of $540,000 as a result of its regular quarterly review of reserves. In the three-month period ending March 31, 2001, the Company increased reserves for its property and casualty segment by an after-tax amount of $315,000 and also recognized an after-tax charge of approximately $910,000 for a contractually required minimum ceded reinsurance premium and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs in an after-tax amount of approximately $830,000. "Our indemnity payments to insured cotton producers this quarter resulted from an unusual combination of events, including too much rain at the wrong time and historically low prices for cotton," said Company Chief Executive Officer John E. Martin. "Situations like this demonstrate again why agricultural producers need and value the insurance products and services AmAg provides. Our Company's losses this quarter resulted directly from keeping our promise to insured producers and their agents to pay claims resulting from uncontrollable events." The Company will hold a conference call for interested parties to discuss its first quarter results at 9:30 a.m. (Central) Tuesday Tuesday: see week. , May 7, 2002. Interested parties may access the Company's conference call at 212.346.6475 five minutes before the call to insure Insure can mean:
Acceptance Insurance Companies Inc. is an insurance holding company providing agricultural risk management products and services throughout the United States. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Agrisurance, Inc. and American Growers Insurance Company are wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of the Company. This release includes 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. with respect to the expected future financial results of the Company's agricultural and property and casualty segments. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements, including factors noted in Acceptance's Form 10K for the year ended December 31, 2001, which are incorporated herein by this reference. The Company will not update or revise the forward-looking statements in this release even though the conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or currently underlying those statements may materially change.
ACCEPTANCE INSURANCE COMPANIES INC.
Three Months Ended March 31, 2002 and 2001
(in thousands except per share data)
2002 2001
Net premiums written $ (761) $ 3,062
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Revenues:
Insurance premiums earned $ (291) $ 12,796
Net investment income 1,702 5,147
Net realized capital gains (losses) (103) 125
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1,308 18,068
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Costs and expenses:
Insurance losses and loss adjustment expenses 4,611 15,264
Insurance underwriting expenses 675 6,316
General and administrative expenses 386 223
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5,672 21,803
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Operating loss (4,364) (3,735)
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Interest expense (2,171) (2,169)
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Loss before income taxes (6,535) (5,904)
Income tax benefit (2,235) (2,085)
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Net loss $ (4,300) $ (3,819)
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Loss per share:
Basic $ (0.30) $ (0.27)
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Diluted $ (0.30) $ (0.27)
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Shares:
Basic 14,437 14,319
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Diluted 14,437 14,319
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March 31, Dec. 31,
2002 2001
Total investments $280,000 $212,365
Net reserves for losses and loss adjustment
expenses 156,439 168,544
Total equity 150,579 155,275
Book value per share $ 10.43 $ 10.76
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