American Re Corporation Reports Second Quarter Net Income of $45.7 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. , NJ--(BUSINESS WIRE)--Aug. 13, 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 $45.7 million for the quarter ended June June: see month. 30, 1999, including net realized capital gains of $24.4 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 same quarter of 1998, the Company's net income was $64.2 million, which included net realized capital gains of $18.1 million after-tax. The Company attributes the decrease in net income primarily to $27.5 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta of catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses incurred during the second quarter of 1999 (primarily from the Sydney Sydney, city, Australia Sydney, city (1991 pop. 3,097,956), capital of New South Wales, SE Australia, surrounding Port Jackson inlet on the Pacific Ocean. Sydney is Australia's largest city, chief port, and main cultural and industrial center. , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. hailstorms and the tornadoes in the Midwestern Mid·west or Middle West A region of the north-central United States around the Great Lakes and the upper Mississippi Valley. It is generally considered to include Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, Missouri, Kansas, and U.S.), compared to $9.0 million pre-tax of catastrophe losses in the same period of 1998. 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 June 30, 1999 increased 18.3% to $667.2 million, versus $564.0 million in 1998. The Company attributes this increase primarily to increased traditional treaty writings in several of its business segments. 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 107.1% for the second quarter of 1999, which included 4.0 points ($17.9 million after-tax) due to catastrophe losses, compared to 102.2% for 1998, which included 1.5 points ($5.9 million after-tax) of catastrophe losses. The Company attributes the increase in its combined ratio exclusive of catastrophe losses primarily to increases in the Company's current accident year loss ratios for certain types of business. The Company's after-tax net investment income for the second quarter was $75.1 million, compared to $77.2 million for the same period of 1998. The combined statutory surplus of the Company's subsidiaries was $2.6 billion at June 30, 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 $13.6 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 $2.8 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
v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from our initiatives with healthcare providers and reinsurance intermediaries. Although larger catastrophe losses reduced the Company's net income this quarter, they were within our normal expectations and are a natural risk of the business we are in." Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Results For the six months ended June 30, 1999, American Re reported net income to common stockholders of $102.7 million, including net realized capital gains of $37.8 million after-tax. In the same period of 1998, American Re posted net income to common stockholders of $147.1 million, including net realized capital gains of $38.9 million after-tax. Net premiums written by the Company's subsidiaries were $1,424.7 million, versus $1,246.3 million in the first half of 1998. The Company attributes this increase primarily to increased traditional treaty writings from several of its business segments. The subsidiaries' GAAP combined ratio was 106.0% for the six months ended June 30, 1999, which included 2.2 points ($17.9 million after-tax) due to catastrophe losses, compared to 100.8% for the same period in 1998, which included 1.0 points ($7.8 million after-tax) of catastrophe losses. Among the factors to which the Company attributes the increase in its combined ratio are the increase in catastrophe losses (primarily from the Sydney, Australia hailstorms and the tornadoes in the Midwestern U.S.) and increases in the Company's accident year loss ratios for certain types of business. The Company's after-tax net investment income for the first six months of 1999 was $154.3 million, compared to $156.0 million for the same period last year. 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 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. . 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 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
June 30, 1999 FINANCIAL HIGHLIGHTS
(Dollars in millions)
Three-month period ended
June 30,
1999 1998 % Chg
---------------------------------
Summary Performance Data
(GAAP BASIS)
Gross premiums written $858.1 $726.3 18.1%
Net premiums written 667.2 564.0 18.3
Pre-tax net investment
income 101.7 105.5 (3.6)
After-tax net investment
income 75.1 77.2 (2.7)
Income Statement Data
Operating income, excluding
realized capital gains $21.3 $46.1
Net realized capital gains,
net of taxes 24.4 18.1
--------------------
Net income to common
stockholders (1) $45.7 $64.2
--------------------
(1) Includes effect of
catastrophes $17.9 $5.9
--------------------
Six-month period ended
June 30,
1999 1998 % Chg
---------------------------------
Summary Performance Data
(GAAP BASIS)
Gross premiums written $1,772.8 $1,570.0 12.9%
Net premiums written 1,424.7 1,246.3 14.3
Pre-tax net investment
income 208.7 216.1 (3.4)
After-tax net investment
income 154.3 156.0 (1.1)
Income Statement Data
Operating income, excluding
realized capital gains $64.9 $108.2
Net realized capital gains,
net of taxes 37.8 38.9
--------------------
Net income to common
stockholders (1) $102.7 $147.1
--------------------
(1) Includes effect
of catastrophes $17.9 $7.8
--------------------
June 30, December 31,
1999 1998
BALANCE SHEET DATA
Cash and invested assets $7,604.0 $7,801.3
Total assets 13,649.6 13,544.0
Loss and loss adjustment
expense reserves 7,336.2 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 2,786.7 2,853.1
AMERICAN RE CORPORATION
June 30, 1999 FINANCIAL HIGHLIGHTS
(Dollars in millions)
Three-month Six-month
period ended period ended
June 30, June 30,
1999 1998 1999 1998
------------- -------------
GAAP Combined Ratio
Loss ratio (1) 75.5% 68.5% 72.3% 67.6%
Commission ratio 21.9 24.1 23.8 23.7
Other underwriting
expense ratio 9.7 9.6 9.9 9.5
------------- -------------
Combined ratio 107.1% 102.2% 106.0% 100.8%
------------- -------------
(1) Includes effect
of catastrophes 4.0% 1.5% 2.2% 1.0%
------------- -------------
June 30, December 31,
1999 1998
---- ----
Statutory surplus $2,560.8 $2,631.1
Premiums/surplus ratio 0.96 to 1 0.87 to 1
Reserves/surplus ratio 1.93 to 1 1.92 to 1
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions)
GAAP Basis Three-month Six-month
period ended period ended
June 30, June 30,
1999 1998 1999 1998
-------------------------------------
Gross premiums written $858.1 $726.3 $1,772.8 $1,570.0
-------------------------------------
Revenue:
Net premiums written $667.2 $564.0 $1,424.7 $1,246.3
Change in unearned premiums 9.6 12.1 (168.1) (77.3)
-------------------------------------
Premiums earned 676.8 576.1 1,256.6 1,169.0
Net investment income 101.7 105.5 208.7 216.1
Net realized capital gains 37.5 27.9 58.2 59.8
Other income 2.3 7.0 16.8 18.4
-------------------------------------
Total revenue 818.3 716.5 1,540.3 1,463.3
-------------------------------------
Losses and expenses:
Losses and loss
adjustment expense 511.3 394.9 908.0 790.3
Commission expense 148.3 138.6 299.2 277.3
Operating expense 65.7 55.4 124.9 110.6
Interest expense 10.0 10.6 20.5 21.1
Other expense 16.5 25.2 42.0 49.0
-------------------------------------
Total losses and expenses 751.8 624.7 1,394.6 1,248.3
-------------------------------------
Income before income taxes,
and distributions
on preferred securities
of subsidiary trust 66.5 91.8 145.7 215.0
Federal and foreign income taxes 17.5 24.3 36.4 61.3
-------------------------------------
Income before distributions
on preferred securities of
subsidiary trust 49.0 67.5 109.3 153.7
Distributions on preferred
securities of subsidiary trust,
net of applicable income taxes (3.3) (3.3) (6.6) (6.6)
-------------------------------------
Net income to common
stockholders $45.7 $64.2 $102.7 $147.1
-------------------------------------
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
GAAP Basis June 30, December 31,
1999 1998
Assets
Investments
Fixed Maturities
Bonds available for sale,
at fair value (amortized cost:
June 30, 1999 - $6,564.6,
December 31, 1998 - $6,688.6) $6,495.0 $6,876.0
Preferred stock available for sale,
at fair value (amortized cost:
June 30, 1999 - $76.9,
December 31, 1998 - $76.7) 77.3 77.3
Equity securities available for sale,
at fair value (cost:
June 30, 1999 - $342.6,
December 31, 1998 - $488.7) 393.1 545.2
Other invested assets 37.4 27.9
Cash and cash equivalents 601.2 274.9
--------------------------------
Total investments and cash 7,604.0 7,801.3
Accrued investment income 86.5 85.4
Premiums due and
other receivables 1,245.8 1,315.5
Deferred policy
acquisition costs 399.9 357.7
Reinsurance recoverable on
paid and unpaid losses 2,543.5 2,343.1
Funds held by ceding companies 448.8 408.9
Prepaid reinsurance premiums 155.6 148.2
Deferred federal income taxes 237.3 142.6
Other assets 928.2 941.3
--------------------------------
Total assets $13,649.6 $13,544.0
--------------------------------
Liabilities
Loss and loss adjustment
expense reserves $7,336.2 $7,334.1
Unearned premium reserve 1,450.7 1,280.5
--------------------------------
Total insurance reserves 8,786.9 8,614.6
Loss balances payable 320.0 412.1
Funds held under reinsurance
treaties 342.1 273.7
Senior bank debt 75.0 75.0
Senior notes 498.5 498.5
Other liabilities 602.9 579.5
--------------------------------
Total liabilities 10,625.4 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: June 30, 1999,
and December 31, 1998 -
149.49712 shares --- ---
Additional paid-in capital 1,332.4 1,332.4
Retained earnings 1,500.3 1,397.6
Accumulated other
comprehensive income (46.0) 123.1
--------------------------------
Total stockholders' equity 2,786.7 2,853.1
--------------------------------
Total liabilities,
Company-obligated
mandatorily redeemable preferred
securities of subsidiary trust
and stockholders' equity $13,649.6 $13,544.0
--------------------------------
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