American Eagle Group Inc. Reports First Quarter 1996 Results.DALLAS--(BUSINESS WIRE)--May 3, 1996--American Eagle Group, Inc. reported a net loss of $2.8 million in the first quarter of 1996 as compared to net income of $1.0 million in the first quarter of 1995. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss), which excludes realized investment gains or losses, was approximately equal to net income (loss) as there were no significant realized investment gains or losses in the first quarter of 1996 or 1995. 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. , net of 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. , increased 59% to $32.8 million in the first quarter of 1996 from $20.6 million in the first quarter of 1995. The first quarter combined ratio was 116.6% in 1996, up 17.0 points over the 99.6% in 1995. The net loss available for common stockholders was ($0.39) per share for the first quarter of 1996 compared to net income of $0.14 per share in the first quarter of 1995. M. Philip Guthrie, Chairman and Chief Executive Officer stated, "The first quarter results are mixed. While we are disappointed with the financial results in the quarter, the results were largely driven by an increase in reported claims for the transportation portion of the Property and Casualty Division. In addition, weather-related losses in both aviation and property and casualty negatively affected the quarter's results, with catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). storm losses alone accounting for losses of $511,000, net of reinsurance. The first quarter results in both the Aviation and Property and Casualty Divisions, historically, have been impacted by higher levels of losses than those in subsequent quarters. We are pleased, however, that the actions taken in 1995 to deal with the under-performing segments of the commercial aviation portion of the Aviation Division appear to be having the desired results, based on indications in the first quarter. The first quarter aviation results are consistent with historical first quarter loss levels and with our expectations for the quarter. We had previously begun an indepth review of each of the segments of the Property and Casualty Division similar to that performed in commercial aviation in the latter part of 1995. As a result of the increase in reported claims in transportation, we have accelerated this review and have already instituted a number of 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. actions to enhance risk selection, pricing, and underwriting control in those segments of the transportation book that have been unprofitable." The net book value per share of common stock decreased during the first quarter to $7.01, a decrease of $0.57 per share. Of this decrease, $0.14 per share results from increased interest rates in the first quarter which caused the unrealized gain Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on fixed income securities carried at market value to decline $1.0 million, net of tax. The common stock of American Eagle Group, Inc. trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "FLI FLI - Flash Lights Impressively. ." American Eagle Group, Inc. is an insurance holding company that, through its subsidiaries, markets and underwrites specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. property and casualty coverages in selected niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . These markets include general aviation, local and intermediate haul trucking, selected artisan contractors, and yachts. The company's business is organized in three divisions, the Aviation Division headquartered in Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. ; the Property & Casualty Division headquartered in Sacramento, California “Sacramento” redirects here. For other uses, see Sacramento (disambiguation). Sacramento is the capital of the State of California and the county seat of Sacramento County. ; and the Marine Division headquartered in Baltimore, Maryland "Baltimore" redirects here. For the surrounding county, see Baltimore County, Maryland. For other uses, see Baltimore (disambiguation). Baltimore is an independent city located in the state of Maryland in the United States. . -0-
American Eagle Group, Inc.
First Quarter 1996 Earnings
(In thousands, except per share data)
Three Months ended
March 31,
1996 1995
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Earned premiums $ 32,834 $ 20,649 Operating income (loss) $ (2,853) $ 983 Net realized investment gains, after federal income tax (AFIT) $ 101 $ 4 Net income (loss) $ (2,752) $ 987 Preferred stock dividends $ 24 $ 24 Net income (loss) available for common stockholders $ (2,776) $ 963 Per share data: -------------- Operating income (loss) $ (0.40) $ 0.14 Net income (loss) $ (0.39) $ 0.14 Net income (loss) available for common stockholders $ (0.39) $ 0.14 Weighted average shares 7,051 7,055
Underwriting ratios (GAAP)
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Losses and LAE ratio 83.8% 65.9%
Expense ratio 32.8 33.7
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Combined ratio 116.6% 99.6%
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-0- CONTACT: American Eagle Group Inc. M. Philip Guthrie, 214/448-1460 Richard M. Kurz, 214/448-1477 |
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