Allcity Insurance Company Announces 2001 Operating Results.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)--April 1, 2002Allcity Insurance Company (ALCI-NASDAQ) announced its operating results for the year ended December 31, 2001 and reported a net loss of $18,048,000 or $2.55 per share for the year ended December 31, 2001 compared to a net loss of $30,800,000 or $4.35 per share for the comparable 2000 period. Results for 2001 included $1,870,000 of net securities gains compared to $213,000 of net securities losses for the comparable 2000 period. 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 year ended December 31, 2001 were 304.4% and 261.7%, respectively, compared to 192.3% and 193.1%, respectively, for the year ended December 31, 2000. The Company's combined ratios increased in 2001 primarily due to lower premium volume coupled with unfavorable loss development from prior accident years and an increase in the reserve for loss adjustment expenses as a result of the increases to its loss reserves and an increase in future overhead costs overhead costs see fixed costs. that will be allocated to settle claims currently incurred. Net earned premiums 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. were $18,258,000 and $30,855,000 for the years ended December 31, 2001 and 2000, respectively. The Company's earned premiums declined in all lines of business during 2001 as a result of actions announced during late 2000 and the first quarter of 2001. During 2001, the Group (which includes the Company and its parent, Empire Insurance Company ("Empire")) explored its options for developing a new business model and strategy. After evaluating these options, the Group announced in December 2001 that it had determined that it was in the best interest of its shareholders and policyholders to commence an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of all of its operations. The Group will only accept business that it is obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to accept by contract or New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of insurance law; it will not engage in any other business activities except for its claims runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. operations. The voluntary liquidation Voluntary liquidation Liquidation proceedings that are supported by a company's shareholders. of its operations is expected to be substantially complete by 2005. Given the Group's and the Company's current financial condition, the expected costs to be incurred during the claims runoff period, and the inherent uncertainty over ultimate claim settlement values, no assurance can be given that the Company's shareholders will be able to receive any value at the conclusion of the voluntary liquidation of its operations. Empire has reported limited statutory surplus in its December 31, 2001 statutory basis financial statements and further decreases in its statutory surplus may allow the New York Insurance Department the ability to take material adverse regulatory actions against Empire and the Company. Results of operations for the twelve and three month periods ended December 31, 2001 and 2000 are as follows (in thousands, except per share amounts):
Year Ended Three Months Ended
December 31, December 31,
2001 2000 2001 2000
Total Revenues $ 29,728 $ 42,303 $ 6,074 $ 9,172
Net Securities Gains
(Losses) $ 1,870 $ (213) $ 407 $ 85
Net (Loss) Income $(18,048) $(30,800) $ 865 $(27,403)
Per Share Data:
Basic and Diluted
(Loss) Income $ (2.55) $ (4.35) $ 0.12 $ (3.87)
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