American Re Corporation Reports Second Quarter and Year-to-Date 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)--Aug. 10, 2001 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 its common stockholder of $8.1 million for the quarter ended June June: see month. 30, 2001, compared to $22.2 million in the comparable period of 2000. Despite the decline in net income, which was in part the result of higher catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses, the Company's results benefited from substantially increased prices on much of the business earned in 2001. Contributing to the decline in net income were increased catastrophe losses, primarily from tropical storm Allison This article is about the Atlantic tropical storm of 2001. For other storms of the same name, see Tropical Storm Allison (disambiguation). Tropical Storm Allison was a tropical storm that devastated southeast Texas in June of the 2001 Atlantic hurricane season. , which were $29.3 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 second quarter of 2001, compared to $3.1 million in the same period of 2000; and fewer net realized capital gains, which were $3.4 million after-tax in the second quarter of 2001, compared to $11.4 million in 2000. Excluding catastrophe losses and capital gains, American Re's adjusted net income for the second quarter of 2001 would have been $34.0 million, compared to $13.9 million for the comparable period of 2000. Excluding catastrophe losses, the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio of 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 improved to 102.7% for the second quarter of 2001, compared to 108.8% for the comparable period of 2000. Including catastrophe losses, the GAAP combined ratio was 108.0%, compared to 109.5% for the same period of 2000. 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
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. , are yielding improved results at American Re, particularly when viewed over the longer year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period. Increased rates, as well as improved terms and conditions, continue to characterize renewals with no sign of tapering off tapering off Sports medicine A format for competition training, where a world-class athlete ↓ frequency and intensity of training in the wks before an Olympic or other sport event of importance, with the hope that perfomance in the key event will be medal-worthy ." 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. by the Company's reinsurance and insurance subsidiaries during the second quarter of 2001 were $1.064 billion, versus $914.0 million in 2000. The 16.4% increase in gross premiums written was due primarily to increased prices in most lines of business and increased writings in 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 of property/casualty risks and healthcare reinsurance. Net premiums written in the second quarter of 2001 increased 12.6% over the second quarter of 2000, primarily due to the growth in gross premiums written, offset in part by additional cessions to the Company's retrocessional programs. The Company's after-tax net investment income for the second quarter decreased 1.7% to $75.9 million in 2001, compared to $77.2 million for the same period of 2000, due primarily to the effect of declining interest rates, offset in part by the increase in the Company's base of invested assets. However, the Company's pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta net investment income rose 2.2%, to $113.8 million, due primarily to the higher proportion of its portfolio invested in taxable investments. 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 $15.4 billion at June 30, 2001, 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 $2.4 billion. Year-To-Date Results For the six-month period ended June 30, 2001, the Company reported net income to its common stockholder of $10.4 million, compared to a net loss of $36.7 million in the comparable period of 2000. As with the second quarter's results, increased catastrophe losses and other factors mask mask, cover or partial cover for the face or head used as a disguise or protection. Masks have been worn from time immemorial throughout the world. They are used by primitive peoples chiefly to impersonate supernatural beings or animals in religious and magical the substantial improvement in prices for much of the business earned this year. Catastrophe losses were $44.9 million after-tax in the first six months of 2001 and net realized capital gains were $1.1 million after-tax, compared to $33.7 million and $20.3 million respectively in the same period of 2000. Excluding catastrophe losses and capital gains, adjusted net income for the first six months of 2001 would have been $54.2 million, compared to an adjusted net loss of $23.3 million last year. Gross premiums written by the Company's reinsurance and insurance subsidiaries during the first half of 2001 were $2.080 billion, versus $1.725 billion in 2000. The 20.6% increase in gross premiums written was primarily due to increased prices in most lines of business and increased writings in facultative and international treaty reinsurance of property/casualty risks and health care reinsurance. Net premiums written in the first half of 2001 rose 15.2% compared to the first half of 2000, primarily due to the growth in gross premiums written, offset in part by additional cessions to the Company's retrocessional programs. The GAAP combined ratio of the Company's reinsurance and insurance subsidiaries was 109.1% for the first half of 2001, compared to 117.6% for the same period of 2000. Excluding catastrophe losses, the GAAP combined ratio for the first six months of 2001 improved to 105.0%, compared to 114.1% for the comparable period of 2000. The Company's after-tax net investment income for the first six months increased 1.0% to $155.6 million in 2001, compared to $154.0 million for the same period of 2000, due primarily to the growth of the Company's investment assets, offset in part by the effect of declining interest rates. The Company's pre-tax net investment income rose 8.0%, to $236.1 million, due primarily to the higher proportion of its portfolio invested in taxable investments. 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 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 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 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
June 30, 2001 FINANCIAL HIGHLIGHTS
(Dollars in millions)
(Unaudited)
Three-month period ended
June 30,
--------
2001 2000 % Chg
----------- ----------- -----------
Summary Performance Data
(GAAP BASIS)
Gross premiums written $ 1,064.2 $ 914.0 16.4 %
Net premiums written 867.8 770.4 12.6
Pre-tax net
investment income 113.8 111.4 2.2
After-tax net
investment income 75.9 77.2 (1.7)
Income Statement Data
Operating income,
excluding
realized capital gains $ 4.7 $ 10.8
Net realized
capital gains,
net of taxes 3.4 11.4
----------- -----------
Net income to common
stockholder (1) $ 8.1 $ 22.2
=========== ===========
(1) Includes effect
of catastrophes $ 29.3 $ 3.1
=========== ===========
GAAP COMBINED RATIO
Loss ratio 78.0 % 78.9 %
Commission ratio 21.4 22.6
Other underwriting
expense ratio 8.6 8.0
----------- -----------
Combined ratio 108.0 % 109.5 %
=========== ===========
Six-month period ended
June 30,
--------
2001 2000 % Chg
------------ ----------- ---------
Summary Performance Data
(GAAP BASIS)
Gross premiums written $ 2,080.8 $ 1,725.3 20.6 %
Net premiums written 1,749.2 1,518.1 15.2
Pre-tax net
investment income 236.1 218.7 8.0
After-tax net
investment income 155.6 154.0 1.0
Income Statement Data
Operating income,
excluding
realized capital gains $ 9.3 $ (57.0)
Net realized
capital gains,
net of taxes 1.1 20.3
------------ -----------
Net income to common
stockholder (1) $ 10.4 $ (36.7)
============ ===========
(1) Includes effect
of catastrophes $ 44.9 $ 33.7
============ ===========
GAAP COMBINED RATIO
Loss ratio 77.9 % 85.1 %
Commission ratio 23.2 24.7
Other underwriting
expense ratio 8.0 7.8
------------ -----------
Combined ratio 109.1 % 117.6 %
============ ===========
June 30, December 31,
BALANCE SHEET DATA 2001 2000
------------------ -------------- --------------
Cash and
invested assets $ 8,132.3 $ 7,893.8
Total assets 15,437.8 14,942.8
Loss and loss adjustment
expense reserves 9,036.4 8,882.2
Loan from parent 72.2 80.1
Senior notes 498.5 498.5
Company-obligated
mandatorily redeemable
Preferred securities
of subsidiary trust 237.5 237.5
Common stockholder's equity 2,407.4 2,420.1
STATUTORY DATA
Statutory surplus $ 2,416.9 $ 2,177.1
Premiums/surplus ratio 1.41 to 1 1.46 to 1
Reserves/surplus ratio 2.33 to 1 2.59 to 1
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions)
(Unaudited)
GAAP Basis Three-month period ended
June 30,
--------
2001 2000
------------ ------------
Gross premiums written $ 1,064.2 $ 914.0
============ ============
Revenue:
Net premiums written $ 867.8 $ 770.4
Change in unearned premiums (20.2) (9.4)
------------ ------------
Premiums earned 847.6 761.0
Net investment income 113.8 111.4
Net realized capital gains 5.3 17.6
Other income 0.9 6.5
------------ ------------
Total revenue 967.6 896.5
------------ ------------
Losses and expenses:
Losses and loss
adjustment expense 661.3 600.6
Commission expense 181.3 172.5
Operating expense 72.9 60.3
Interest expense 10.4 10.7
Other expense 24.6 20.1
------------ ------------
Total losses and expenses 950.5 864.2
------------ ------------
Income before income
taxes, and distributions
on preferred securities
of subsidiary trust 17.1 32.3
Federal and
foreign income taxes 5.7 6.8
------------ ------------
Income before
distributions
on preferred
securities of
subsidiary trust 11.4 25.5
Distributions on preferred
securities of subsidiary
trust, net of applicable income taxes (3.3) (3.3)
------------ ------------
Net income to common stockholder $ 8.1 $ 22.2
============ ============
Six-month period ended
June 30,
--------
2001 2000
------------ ------------
Gross premiums written $ 2,080.8 $ 1,725.3
============ ============
Revenue:
Net premiums written $ 1,749.2 $ 1,518.1
Change in unearned premiums (43.7) (6.6)
------------ ------------
Premiums earned 1,705.5 1,511.5
Net investment income 236.1 218.7
Net realized capital gains 1.7 31.3
Other income 9.9 16.1
------------ ------------
Total revenue 1,953.2 1,777.6
------------ ------------
Losses and expenses:
Losses and loss
adjustment expense 1,328.4 1,286.9
Commission expense 395.3 373.8
Operating expense 137.2 116.9
Interest expense 21.0 21.3
Other expense 46.3 41.8
------------ ------------
Total losses and expenses 1,928.2 1,840.7
------------ ------------
Income before income
taxes, and distributions
on preferred securities
of subsidiary trust 25.0 (63.1)
Federal and
foreign income taxes 8.0 (33.0)
------------ ------------
Income before
distributions
on preferred
securities of
subsidiary trust 17.0 (30.1)
Distributions on preferred
securities of subsidiary
trust, net of applicable income taxes (6.6) (6.6)
------------ ------------
Net income to common stockholder $ 10.4 $ (36.7)
============ ============
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
GAAP Basis
(unaudited)
Assets June 30, December 31,
Investments 2001 2000
------------- -------------
Fixed Maturities
Bonds available for sale, at
fair value (amortized cost:
June 30, 2001 - $6,857.7,
December 31, 2000 -
$6,669.4) $ 6,908.5 $ 6,697.2
Preferred stock available for
sale, at fair value (amortized
cost: June 30, 2001 - $72.8,
December 31, 2000 - $72.3) 72.7 72.4
Equity securities available for
sale, at fair value (cost:
June 30, 2001 - $679.5,
December 31, 2000 - $578.3) 593.2 500.5
Other invested assets 10.2 16.4
Cash and cash equivalents 547.7 607.3
-------------- --------------
Total investments and cash 8,132.3 7,893.8
Accrued investment income 90.4 86.5
Premiums and other receivables 1,281.4 1,232.2
Deferred policy acquisition costs 314.9 323.8
Reinsurance recoverable on paid
and unpaid losses 3,320.6 3,198.0
Funds held by ceding companies 718.5 622.4
Prepaid reinsurance premiums 121.0 113.9
Deferred federal income taxes 385.0 384.2
Other assets 1,073.7 1,088.0
-------------- --------------
Total assets $ 15,437.8 $ 14,942.8
============== ==============
Liabilities
Loss and loss adjustment
expense reserves $ 9,036.4 $ 8,882.2
Unearned premium reserve 1,223.5 1,180.5
-------------- --------------
Total insurance reserves 10,259.9 10,062.7
Loss balances payable 495.8 414.8
Funds held under reinsurance
treaties 513.2 431.3
Loan from parent 72.2 80.1
Senior notes 498.5 498.5
Other liabilities 953.3 797.8
-------------- --------------
Total liabilities 12,792.9 12,285.2
-------------- --------------
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: June
30, 2001, and December 31, 2000
- 149.49712 shares --- ---
Additional paid-in capital 1,332.4 1,332.4
Retained earnings 1,242.6 1,232.2
Accumulated other comprehensive
income (167.6) (144.5)
-------------- --------------
Total stockholder's equity 2,407.4 2,420.1
-------------- --------------
Total liabilities, Company
-obligated mandatorily
redeemable preferred
securities of subsidiary
trust and stockholder's
equity $ 15,437.8 $ 14,942.8
============== ==============
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion