American Re Corporation Reports First Quarter Results.Business Editors 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 12, 2000 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 a net loss to its common stockholder of $58.9 million for the quarter ended March 31, 2000. In the comparable period of 1999, the Company's net income was $57.0 million. The result for the first quarter of 2000 includes a substantially larger 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. loss than in 1999, reflecting higher provisions for losses in the current accident year than in the comparable period last year due to still weak conditions in the U.S. market. In addition, the first quarter of 2000 includes $30.6 million of 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. losses from natural catastrophes, including the December December: see month. 1999 storms in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . It also includes $31.5 million of after-tax losses on
several finite finite - compact risk insurance/reinsurance contracts. In contrast, the
1999 first quarter result included no catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses. The
Company's net investment income was $107.3 million pre-tax pre-tax adj → anterior al impuestopre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta for the first three months of 2000 compared to $107.0 million for 1999. 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 first quarter of 2000 were $747.7 million, versus $757.5 million in 1999. The Company attributes the decrease in net premiums written to the substantial decrease in its gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. which was due primarily to the Company's non-renewal of inadequately priced U.S. business. A large part of this decrease in gross premiums written was offset by decreased ceded premiums as a result of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. changes in the Company's retrocessional programs. The GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio of the Company's reinsurance and insurance subsidiaries was 125.8% for the first quarter of 2000, compared to 104.6% for 1999. The increased combined ratio reflects the Company's higher provisions for current accident year losses than in the comparable period of last year. It also includes 6.3 points attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to catastrophe losses in 1999 and 2000 and 6.5 points due to finite risk losses primarily related to clients' 1998 and 1999 accident years. 1999's combined ratio included no impact from catastrophe losses. 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
A type of reinsurance that transfers over only a finite or limited amount of risk. Risk is reduced through accounting or financial methods, along with the actual transfer of economic risk. programs. These actions and those of other marketplace participants are having some ameliorative a·mel·io·rate tr. & intr.v. a·me·lio·rat·ed, a·me·lio·rat·ing, a·me·lio·rates To make or become better; improve. See Synonyms at improve. [Alteration of meliorate. effect on the market, where prices for property coverages are firming and those for casualty coverages are beginning to show modest gains. It will take time before these improvements filter through to American Re's results, but the trends are now in better directions. "In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , American Re continues the strong corrective cor·rec·tive adj. Counteracting or modifying what is malfunctioning, undesirable, or injurious. n. An agent that corrects. corrective, n steps it began in the second half of 1999, increasing prices and non-renewing inadequately priced business. We will continue this action until rates reach acceptable levels again." 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 grew to $14.5 billion at March 31, 2000, and its common stockholder's equity Stockholder's equity The residual claims that stockholders have against a firm's assets, calculated by subtracting all current liabilities and debt liabilities from total assets. was $2.5 billion. American Re, a member of the Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. Group, is one of the leading writers of 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. . Through its subsidiaries, it provides treaty and 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. reinsurance, insurance, and related services to insurance companies, other large businesses, government agencies, pools and other self-insurers, in the United States and abroad. It has received the highest insurance 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, whose business also includes primary insurance and asset management, has a preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae position in the global reinsurance industry. 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 offices in more
than 60 locations worldwide, serving insurers in more than 150
countries.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 most recent 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.
AMERICAN RE CORPORATION
March 31, 2000 FINANCIAL HIGHLIGHTS
(Dollars in millions)
Three-month period ended
March 31,
2000 1999 % Chg
---------- --------- --------
SUMMARY PERFORMANCE DATA
------------------------
(GAAP BASIS)
Gross premiums written $ 811.3 $ 914.7 (11.3) %
Net premiums written 747.7 757.5 (1.3)
Pre-tax net investment income 107.3 107.0 0.3
After-tax net investment income 76.8 79.0 (2.8)
INCOME STATEMENT DATA
---------------------
Operating income, excluding
realized capital gains $ (67.8) $ 43.5
Net realized capital gains, net
of taxes 8.9 13.5
--------- ---------
Net income (loss) to common
stockholder (1) $ (58.9) $ 57.0
========== ==========
(1) Includes effect of
catastrophes $ 30.6 $ ---
========== =========
GAAP COMBINED RATIO
-------------------
Loss ratio 91.4% 68.4%
Commission ratio 26.8 26.0
Other underwriting
expense ratio 7.6 10.2
---------- ---------
Combined ratio 125.8% 104.6%
---------- ---------
March 31, December 31,
BALANCE SHEET DATA 2000 1999
------------------
------------ ------------
Cash and invested assets $ 7,632.3 $ 7,439.9
Total assets 14,514.8 14,278.8
Loss and loss adjustment
expense reserves 8,558.8 8,369.0
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 stockholder's equity 2,459.7 2,489.0
STATUTORY DATA
--------------
Statutory surplus $ 2,063.6 $ 2,166.0
Premiums/surplus ratio 1.38 to 1 1.31 to 1
Reserves/surplus ratio 2.65 to 1 2.47 to 1
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions)
GAAP Basis Three-month period
ended
March 31,
2000 1999
---------- ----------
Gross premiums written $ 811.3 $ 914.7
========== ==========
Revenue:
Net premiums written $ 747.7 $ 757.5
Change in unearned premiums 2.8 (177.7)
---------- ----------
Premiums earned 750.5 579.8
Net investment income 107.3 107.0
Net realized capital gains 13.7 20.7
Other income 9.6 14.5
---------- ----------
Total revenue 881.1 722.0
---------- ----------
Losses and expenses:
Losses and loss adjustment expense 686.3 396.7
Commission expense 201.3 150.9
Operating expense 56.6 59.2
Interest expense 10.6 10.5
Other expense 21.7 25.5
---------- ----------
Total losses and expenses 976.5 642.8
---------- ----------
Income (loss) before
income taxes and distributions
on preferred securities
of subsidiary trust (95.4) 79.2
Federal and foreign income taxes (39.8) 18.9
---------- ----------
Income (loss) before distributions
on preferred securities of
subsidiary trust (55.6) 60.3
Distributions on preferred
securities of subsidiary trust,
net of applicable income taxes (3.3) (3.3)
---------- ----------
Net income (loss)
to common stockholder $ (58.9)$ 57.0
========== ==========
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
GAAP Basis
Assets
------ March 31, December 31,
Investments 2000 1999
Fixed Maturities ---------- ----------
Bonds available
for sale, at fair value
(amortized cost:
March 31, 2000-$6,174.5,
December 31, 1999-$6,511.6) $ 6,021.4 $ 6,315.2
Preferred stock available
for sale, at fair value
(amortized cost:
March 31, 2000-$84.4,
December 31, 1999-$84.4) 83.4 84.6
Equity securities available
for sale, at fair value
(cost: March 31, 2000-$397.0,
December 31, 1999-$367.1) 415.5 402.1
Other invested assets 12.0 40.5
Cash and cash equivalents 1,100.0 597.5
----------- -----------
Total investments and cash 7,632.3 7,439.9
Accrued investment income 81.4 83.5
Premiums due and other receivables 1,206.1 1,181.2
Deferred policy acquisition costs 311.4 324.5
Reinsurance recoverable
on paid and unpaid losses 3,119.6 3,034.9
Funds held by ceding companies 611.5 609.7
Prepaid reinsurance premiums 125.8 138.8
Deferred federal income taxes 411.7 376.0
Other assets 1,015.0 1,090.3
----------- -----------
Total assets $ 14,514.8 $ 14,278.8
=========== ===========
Liabilities
-----------
Loss and loss adjustment
expense reserves $ 8,558.8 $ 8,369.0
Unearned premium reserve 1,230.1 1,223.4
----------- -----------
Total insurance reserves 9,788.9 9,592.4
Loss balances payable 426.3 421.3
Funds held under
reinsurance treaties 371.8 322.6
Senior bank debt 75.0 75.0
Senior notes 498.5 498.5
Other liabilities 657.1 642.5
----------- -----------
Total liabilities 11,817.6 11,552.3
----------- -----------
Company-obligated mandatorily
redeemable preferred securities of
subsidiary trust 237.5 237.5
----------- -----------
Stockholder's Equity
---------------------
Common stock, par value
$.01 per share; authorized:
1,000 shares; issued
and outstanding: March 31, 2000,
and December 31 1999 - 149.49712 shares --- ---
Additional paid-in capital 1,332.4 1,332.4
Retained earnings 1,237.7 1,296.6
Accumulated other
comprehensive income (110.4) (140.0)
----------- -----------
Total stockholder's equity 2,459.7 2,489.0
----------- -----------
Total liabilities,
Company-obligated
mandatorily redeemable
preferred securities of
subsidiary trust and
stockholder's equity $ 14,514.8 $ 14,278.8
=========== ===========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion