Allcity Insurance Company Announced Its Operating Results for the Six Month Period Ended June 30, 2000.Business Editors BROOKLYN Brooklyn (br  k`lĭn), borough of New York City (1990 pop. 2,300,664), 71 sq mi (184 sq km), coextensive with Kings co., SE N.Y. , N.Y.--(BUSINESS WIRE)--Aug. 15, 2000Allcity Insurance Company (ALCI-NASDAQ) announced its operating results for the six months ended June 30, 2000 and reported a net loss of $277,000 or $0.04 per share for the six months ended June 30, 2000 compared to a net loss of $339,000 or $0.05 per share for the comparable 1999 period. Results for 2000 included $588,000 of net securities losses compared to $472,000 of net securities losses for the comparable 1999 period. Net earned premium Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. revenues were $16,031,000 and $24,978,000 for the six month periods ended June 30, 2000 and 1999, respectively. While earned premiums declined in almost all lines of business, the most significant reductions were in assigned risk A danger or hazard of loss or injury that an insurer will not normally accept for coverage under a policy issued by the insurer, but that the insurance company is required by state law to offer protection against by participating in a pool of insurers who are also compelled to provide automobile, voluntary private passenger automobile, commercial package policies, homeowners and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. . As discussed in the 1999 10-K, as a result of poor operating results, the Company is no longer entering into new assigned risk contracts. Effective January 1, 2000, all policy renewal obligations have been assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to another insurance company. However, the Company remains liable for the claim settlement costs for assigned risk claims that occurred during the policy term. The decline in voluntary private passenger automobile resulted from tighter 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. standards, increased competition and the Company's decision to no longer accept new policies from those agents who historically have had poor underwriting results. The Company's termination of certain unprofitable agents has also adversely affected premium volume in other lines of business. On a SAP (statutory accounting principle) and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). (generally accepted accounting principle) basis, the Company's combined ratios for the six month period ended June 30, 2000 were 139.4% and 143.9%, respectively, compared to 126.9% and 125.8%, respectively, for the six month period ended June 30, 1999. The loss ratios for the 2000 period increased as compared to the 1999 period due to reserve strengthening recorded for 1999 and prior accident years and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. expenses for claims handling. Although the dollar amount of reserve strengthening was the same for the 2000 period as compared to the 1999 period, the reduction in earned premiums in 2000 resulted in higher loss ratios on a percentage basis. The current accident year loss ratios declined from the prior year due to product mix and the expected benefits to be derived from the Company's changes to underwriting and claims handling procedures. Expense ratios for the 2000 period increased as compared to the 1999 period due to reduced service fees, higher 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 and overhead costs overhead costs see fixed costs. which, although lower, have not declined proportionally pro·por·tion·al adj. 1. Forming a relationship with other parts or quantities; being in proportion. 2. Properly related in size, degree, or other measurable characteristics; corresponding: with premiums. The Empire Group, which includes the Company and its parent Empire Insurance Company, continued its expense reduction program to more closely align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. its expenses with its current volume of business. Through June 30, 2000, staff reductions have resulted in the elimination of 150 job positions, representing approximately 29% of the Empire Group's December 31, 1999 workforce. In certain instances, particularly in the claims department, the cost savings from the reductions will be partially offset by increased outsourcing expenses. The Empire Group will continue to examine its overhead costs and additional reductions are likely to occur in 2000. Income taxes for the six months ended June 30, 2000 reflect a benefit of $358,000 for a change in the Company's estimated prior year's federal tax liability.
Results of operations for the six and three month periods ended June
30, 2000 and 1999 are as follows (in thousands, except per share
amounts):
Six Months Ended Three Months Ended
June 30, June 30,
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2000 1999 2000 1999
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Total Revenues $ 22,206 $ 32,072 $ 10,907 $ 14,682
Net Securities Losses $ (588) $ (472) $ (367) $ (264)
Net Loss $ (277) $ (339) $ (564) $ (426)
Per Share Data:
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Basic and Diluted Loss $ (0.04) $ (0.05) $ (0.08) $ (0.06)
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