Allcity Insurance Company Announces 2002 Results.Business Editors BROOKLYN, N.Y.--(BUSINESS WIRE)--March 28, 2003 Allcity Insurance Company (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ALCI ALCI Appliance Leakage Circuit Interrupter ALCI American Council of Life Insurers ALCI Airlines Line Control Interface ) announced its operating results for the year ended December 31, 2002 and reported a net loss of $3,748,000 or $0.53 per share for the year ended December 31, 2002 compared to a net loss of $18,048,000 or $2.55 per share for the comparable 2001 period. Results for 2002 and 2001 included $1,408,000 and $1,870,000 of net securities gains, respectively. 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, 2002 were 353.4% and 296.8%, respectively, compared to 304.4% and 261.7%, respectively, for the year ended December 31, 2001. The Company's combined ratios increased in 2002 primarily due to higher expense ratios due to lower premium volume. Net earned premiums were $4,158,000 and $18,258,000 for the years ended December 31, 2002 and 2001, respectively. The Company's earned premiums declined in all lines of business during 2002 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) 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 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 only accepts 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 does not engage in any other business activities except for its claims runoff operations. By the end of 2005, the Company expects that its voluntary liquidation Voluntary liquidation Liquidation proceedings that are supported by a company's shareholders. will be substantially complete, premium revenue will be immaterial, infrastructure and overhead costs overhead costs see fixed costs. will be substantially reduced, and all that it expects to remain will be the administration and settlement of claims with long tail settlement characteristics, principally 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. and certain liability claims. 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. This news release contains forward-looking statements such as predictions or forecasts. The Company assumes no obligation to update those statements to reflect actual results, changes in assumptions and other factors. The forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those that are projected. Those factors include the taking of adverse regulatory action against the Company and Empire Insurance Company, developments in claims handling, including adverse litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. developments, that could adversely affect the liquidation plan of the Group, the Group's ability to manage the claims runoff, increased loss adjustment expenses resulting from an extended claims run-off and the other risks detailed in the Company's SEC reports, including the Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002.
Results of operations for the twelve and three month periods ended
December 31, 2002 and 2001 are as follows
(in thousands, except per share amounts):
Year Ended Dec. 31, Three Months Ended Dec. 31,
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2002 2001 2002 2001
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Total Revenues $ 8,593 $ 29,728 $ 1,102 $ 6,074
Net Securities Gains $ 1,408 $ 1,870 $ 23 $ 407
Net (Loss) Income $ (3,748) $(18,048) $ (1,328) $ 865
Per Share Data:
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Basic and Diluted
(Loss) Income $ (0.53) $ (2.55) $ (0.19) $ 0.12
Cash Dividend $ 0.335 - - -
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