American Re Corporation Reports First Quarter Net Income of $57.0 Million.PRINCETON Princeton, borough (1990 pop. 12,016) and surrounding township (1990 pop. 13,198), Mercer co., W central N.J.; settled late 1600s, borough inc. 1813, township est. 1838. A leading education center, it is the seat of Princeton Univ. , N.J.--(BUSINESS WIRE)--May 14, 1999-- 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 Re Corporation reported net income to common stockholders of $57.0 million for the quarter ended March 31, 1999, including net realized capital gains of $13.5 million 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. . In the first quarter of 1998, the Company's net income was $82.9 million, which included net realized capital gains of $20.7 million after-tax. The Company attributes the decrease in net income to a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in its 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. result, as reflected in a 5.2 point increase in its GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio, in addition to the decrease in its after-tax realized capital gains. Net premiums written by the Company's 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. and insurance subsidiaries during the quarter ended March 31, 1999 increased 11.0% to $757.5 million, versus $682.3 million in 1998. The Company attributes this increase primarily to increased facultative facultative /fac·ul·ta·tive/ (fak´ul-ta?tiv) not obligatory; pertaining to the ability to adjust to particular circumstances or to assume a particular role. fac·ul·ta·tive adj. 1. business in its alternative market operations and the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the Company's retrocessional programs, offset in part by continuing adverse market conditions. The GAAP combined ratio of the Company's reinsurance and insurance subsidiaries was 104.6% for the first quarter of 1999, which included no material catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses, compared to 99.4% for 1998, which included 0.5 points of catastrophe losses. Among the factors to which the Company attributes the increase in its combined ratio are increases in the Company's accident year loss ratios for certain types of business; a change in the Company's mix of business to include proportionately pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. more quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). treaty business (which typically carries a higher than average commission ratio); and increased overhead costs overhead costs see fixed costs. which include increased information technology costs and increased state and premium taxes due to the growth in the Company's insurance operations. The Company's after-tax net investment income for the first quarter was $79.0 million, compared to $78.7 million for the same period of 1998. The combined statutory surplus of the Company's subsidiaries was $2.583 billion at March 31, 1999, while the Company's GAAP consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: total assets were $13.721 billion and its shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $2.832 billion. The decrease in shareholders' equity from December December: see month. 31, 1998, is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to decreases in the unrealized gains 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. in the Company's investment portfolio. Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide J. Noonan The term Noonan might refer to: People
American Re, a member of the Munich Re Group, is a direct writer of treaty and facultative reinsurance and provider of related services and is one of the largest writers of property and casualty reinsurance in the 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. . It has received the highest ratings from A.M. Best, Moody's Moody's Corporation (NYSE: MCO) is the holding company for Moody's Investors Service which performs financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized ratings scale. and Standard & Poor's. The Munich Re Group is the leading reinsurance group in the world. It is headed by Munich Munich (my  `nĭk), Ger. München (mün`khən), city (1994 pop. 1,255,623), capital of Bavaria, S Germany, on the Isar River near the Bavarian Alps. Reinsurance Company of Munich, Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , and includes reinsurance
subsidiaries, branches, service companies and liaison Liaison may refer to:
Statements in this press release that do not relate to historical financial information may constitute "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. ." Generally, statements expressed with words such as "believes", "estimates", "expects", "anticipates", "plans, "projects", "forecasts", "goals", "could have", "may have" or similar expressions, or describing on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" trends or activities, are forward-looking statements. Such statements are inherently subject to uncertainties and assumptions that could cause actual results to differ materially from stated expectations. Certain uncertainties and assumptions that could affect American Re's results are further described in the Company's 1998 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. , available on request from the Company or from its internet site at http://www.amre.com. -0-
AMERICAN RE CORPORATION
March 31, 1999 FINANCIAL HIGHLIGHTS
(Dollars in millions)
Three-month period ended
March 31,
1999 1998 % Chg
----------- ----------- ----------
Summary Performance Data
(GAAP BASIS)
Gross premiums written $ 914.7 $ 843.7 8.4 %
Net premiums written 757.5 682.3 11.0
Pre-tax net investment income 107.0 110.6 (3.3)
After-tax net investment income 79.0 78.7 0.3
Income Statement Data
Operating income, excluding
realized capital gains $ 43.5 $ 62.2
Net realized capital gains,
net of taxes 13.5 20.7
----------- -----------
Net income to common
stockholders $ 57.0 $ 82.9
=========== ===========
March 31, December 31,
BALANCE SHEET DATA 1999 1998
------------------
------------- --------------
Cash and invested assets $7,715.3 $7,801.3
Total assets 13,720.8 13,544.0
Loss and loss adjustment
expense reserves 7,384.6 7,334.1
Senior bank debt 75.0 75.0
Senior notes 498.5 498.5
Company-obligated mandatorily
redeemable preferred securities
of subsidiary trust 237.5 237.5
Common stockholders' equity 2,832.4 2,853.1
AMERICAN RE CORPORATION
March 31, 1999 FINANCIAL HIGHLIGHTS
(Dollars in millions)
Three-month period ended
March 31,
1999 1998
------------- --------------
GAAP Combined Ratios
Loss ratio 68.4 % 66.7 %
Commission ratio 26.0 23.4
Other underwriting
expense ratio 10.2 9.3
------------- --------------
Combined ratio 104.6 % 99.4 %
============= ==============
March 31, December 31,
1999 1998
-------------- --------------
Statutory surplus $ 2,582.7 $ 2,631.1
Premiums/surplus ratio 0.91 to 1 0.87 to 1
Reserves/surplus ratio 1.92 to 1 1.92 to 1
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions)
GAAP Basis Three-month period ended
March 31,
1999 1998
------------- -------------
Gross premiums written $ 914.7 $ 843.7
Revenue:
Net premiums written $ 757.5 $ 682.3
Change in unearned premiums (177.7) (89.4)
------------- -------------
Premiums earned 579.8 592.9
Net investment income 107.0 110.6
Net realized capital gains 20.7 31.9
Other income 14.5 11.4
------------- -------------
Total revenue 722.0 746.8
------------- -------------
Losses and expenses:
Losses and loss adjustment
expense 396.7 395.4
Commission expense 150.9 138.7
Operating expense 59.2 55.2
Interest expense 10.5 10.5
Other expense 25.5 23.8
------------- -------------
Total losses and expenses 642.8 623.6
------------- -------------
Income before income taxes and
distributions on preferred
securities of subsidiary trust 79.2 123.2
Federal and foreign income taxes 18.9 37.0
------------- -------------
Income before distributions
on preferred securities
of subsidiary trust 60.3 86.2
Distributions on preferred
securities of subsidiary trust,
net of applicable income taxes (3.3) (3.3)
------------- -------------
Net income to common
stockholders $ 57.0 $ 82.9
============= =============
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
GAAP Basis
Assets March 31, December 31,
Investments 1999 1998
Fixed Maturities
Bonds available for sale,
at fair value (amortized cost:
March 31, 1999 - $6,629.4,
December 31, 1998 - $6,688.6) $ 6,723.5 $ 6,876.0
Preferred stock available for
sale, at fair value (amortized cost:
March 31, 1999 - $76.8,
December 31, 1998 - $76.7) 77.4 77.3
Equity securities available for sale,
at fair value (cost:
March 31, 1999 - $511.2,
December 31, 1998 - $488.7) 548.6 545.2
Other invested assets 27.2 27.9
Cash and cash equivalents 338.6 274.9
-------------- --------------
Total investments and cash 7,715.3 7,801.3
Accrued investment income 89.5 85.4
Premiums due and other receivables 1,298.5 1,315.5
Deferred policy acquisition costs 399.0 357.7
Reinsurance recoverable on paid
and unpaid losses 2,558.6 2,343.1
Funds held by ceding companies 427.5 408.9
Prepaid reinsurance premiums 145.5 148.2
Deferred federal income taxes 190.8 142.6
Other assets 896.1 941.3
-------------- --------------
Total assets $ 13,720.8 $ 13,544.0
============== ==============
Liabilities
Loss and loss adjustment
expense reserves $ 7,384.6 $ 7,334.1
Unearned premium reserve 1,451.6 1,280.5
-------------- --------------
Total insurance reserves 8,836.2 8,614.6
Loss balances payable 338.4 412.1
Funds held under reinsurance
treaties 326.8 273.7
Senior bank debt 75.0 75.0
Senior notes 498.5 498.5
Other liabilities 576.0 579.5
-------------- --------------
Total liabilities 10,650.9 10,453.4
-------------- --------------
Company-obligated mandatorily
redeemable preferred securities
of subsidiary trust 237.5 237.5
-------------- --------------
Stockholders' Equity
Common stock, par value $.01 per share;
authorized: 1,000 shares; issued
and outstanding: March 31, 1999, and
December 31 1998 - 149.49712 shares --- ---
Additional paid-in capital 1,332.4 1,332.4
Retained earnings 1,454.6 1,397.6
Accumulated other comprehensive income 45.4 123.1
-------------- --------------
Total stockholders' equity 2,832.4 2,853.1
-------------- --------------
Total liabilities, Company-obligated
mandatorily redeemable preferred
securities of subsidiary trust
and stockholders' equity $ 13,720.8 $ 13,544.0
============== ==============
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