American Re Corporation Reports Third Quarter and Year-To-Date Results.Business & Insurance 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)--Nov. 10, 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 net income to its common stockholder of $14.0 million for the quarter ended September September: see month. 30, 2000, compared to net income of $4.4 million in the third quarter of 1999. The third quarter of 2000 includes $5.1 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 and $9.6 million of after-tax capital gains, compared to $56.2 million of catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses and $10.6 million of capital gains in the third quarter of 1999. The result for the third quarter of 2000 does not yet fully reflect the impact of pricing improvements the Company has been obtaining on renewal business (due to the usual lags in earning premiums written in recent periods) and does include adverse development on several contracts, primarily for recent accident years and in many cases reflecting actions of American Re clients to strengthen their own loss reserves for such periods. 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 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 increased 9.5% during the third quarter of 2000 to $988.0 million, compared to the $902.1 million written in the same period of 1999. This increase is primarily the result of increased writings in the Company's new healthcare and credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing units as well as increased traditional 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. business, offset in part by reduced finite finite - compact risk writings. Net premiums written during the quarter increased 7.7% over the comparable period of 1999. 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 109.1% for the third quarter of 2000, compared to 111.9% for the same period of 1999. The decreased combined ratio compared to 1999 reflects lower catastrophe losses, which added 1.0 points in the third quarter of 2000 compared to 10.9 points in the same period of 1999, offset in part by the Company's higher provisions for current accident year losses than in the comparable period of last year and by an increase in the commission ratio, which was lower in the comparable quarter of 1999 due to the impact of several retrospectively ret·ro·spec·tive adj. 1. Looking back on, contemplating, or directed to the past. 2. Looking or directed backward. 3. Applying to or influencing the past; retroactive. 4. rated contracts written in that period. The Company's net investment income was $117.7 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta for the third quarter of 2000, a 12.4% increase compared to $104.7 million for 1999. 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
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" 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. discipline, we are confident that American Re is in a strong position to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this improving market condition." 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 4.1% to $14.867 billion at September 30, 2000, compared to $14.279 billion at December December: see month. 31, 1999, 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. grew 2.5% to $2.551 billion over the same period. 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 nine-month period ended September 30, 2000, the Company reported a net loss to its common stockholder of $22.7 million, compared to net income of $107.1 million in the same period of 1999. The reduction in net income reflects the Company's higher provisions for losses from the current and recent accident years than in the comparable period of last year, and a reduction in after-tax capital gains from $48.4 million in 1999 to $29.9 million in 2000, offset in part by decreased catastrophe losses, which were $38.7 million after-tax in the first nine months of 2000 compared to $74.1 million in the same period of 1999. Gross premiums written by the Company's reinsurance and insurance subsidiaries during the first three quarters of 2000 were $2.713 billion, a 1.4% increase compared to the $2.675 billion written in 1999. This increase was primarily the result of increased healthcare, credit enhancement and traditional facultative business, offset in part by reduced finite risk writings. Net premiums written during the first nine months of 2000 increased 6.9% over the comparable period of 1999, due primarily to changes in the Company's retrocessional programs which resulted in increased retentions compared to the comparable period of 1999. The GAAP combined ratio of the Company's reinsurance and insurance subsidiaries was 114.7% for the first three quarters of 2000, compared to 108.3% for 1999. The increased combined ratio reflects the Company's higher provisions for losses from the current and recent accident years than in the comparable period of last year, offset in part by decreased catastrophe losses, which added 2.6 points in the first nine months of 2000 compared to 5.6 points added by catastrophe losses in the same period of 1999. The Company's net investment income was $336.4 million pre-tax for the first nine months of 2000, a 7.3% increase compared to $313.4 million for 1999. American Re, a member of the Munich Re 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 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
September 30, 2000 FINANCIAL HIGHLIGHTS
(Dollars in millions)
Three-month period ended Nine-month period ended
September 30, September 30,
------------- -------------
2000 1999 % Chg 2000 1999 % Chg
------ ------ ----- ---- ---- -------
Summary Performance
Data
---------------------
(GAAP BASIS)
Gross premiums
written $988.0 $902.1 9.5% $2,713.3 $2,674.9 1.4 %
Net premiums
written 815.7 757.7 7.7 2,333.8 2,182.4 6.9
Pre-tax net
investment
income 117.7 104.7 12.4 336.4 313.4 7.3
After-tax net
investment
income 78.0 76.5 2.0 232.0 230.8 0.5
Income Statement Data
---------------------
Operating income
(loss), excluding
realized capital
gains $ 4.4 $ (6.2) $ (52.6) $ 58.7
Net realized
capital gains,
net of taxes 9.6 10.6 29.9 48.4
----- ------- -------- -------
Net income (loss)
to common
stockholder (1) $14.0 $ 4.4 $ (22.7) $ 107.1
===== ======= ======== =======
(1) Includes effect
of catastrophes $ 5.1 $ 56.2 $ 38.7 $ 74.1
===== ======= ======== =======
GAAP COMBINED RATIO
Loss ratio 78.1 % 85.4 % 82.7 % 77.4 %
Commission ratio 23.1 17.5 24.2 21.3
Other underwriting
expense ratio 7.9 9.0 7.8 9.6
----- ------ ------ ------
Combined ratio 109.1 % 111.9 % 114.7 % 108.3 %
===== ====== ====== ======
September 30, December 31,
BALANCE SHEET DATA 2000 1999
------------------ ------------- ------------
Cash and invested assets $7,762.7 $7,439.9
$ $
Total assets 14,867.1 14,278.8
Loss and loss adjustment
expense reserves 8,598.3 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 2,551.5 2,489.0
STATUTORY DATA
--------------
Statutory surplus $2,038.7 $2,166.0
$ $
Premiums/surplus ratio 1.48 to 1 1.31 to 1
Reserves/surplus ratio 2.71 to 1 2.47 to 1
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions)
GAAP Basis Three-month period ended Nine-month period ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
-------- -------- -------- -------
Gross premiums
written $ 988.0 $ 902.1 $2,713.3 $2,674.9
======== ======== ======== ========
Revenue:
Net premiums
written $ 815.7 $ 757.7 $2,333.8 $2,182.4
Change in
unearned
premiums (14.4) 35.2 (21.0) (132.9)
-------- -------- -------- --------
Premiums earned 801.3 792.9 2,312.8 2,049.5
Net investment
income 117.7 104.7 336.4 313.4
Net realized
capital gains 14.7 16.3 46.0 74.5
Other income 6.8 2.9 22.9 19.7
-------- -------- -------- --------
Total revenue 940.5 916.8 2,718.1 2,457.1
-------- -------- -------- --------
Losses and expenses:
Losses and loss
adjustment
expense 626.4 677.3 1,913.3 1,585.3
Commission expense 184.9 138.3 558.7 437.5
Operating expense 63.1 71.5 180.0 196.4
Interest expense 10.6 10.8 31.9 31.3
Other expense 29.6 22.3 71.5 64.4
------- -------- -------- --------
Total losses
and expenses 914.6 920.2 2,755.4 2,314.9
------- -------- -------- --------
Income (loss)
before income
taxes, and
distributions
on preferred
securities of
subsidiary
trust 25.9 (3.4) (37.3) 142.2
Federal and foreign
income taxes 8.6 (11.1) (24.4) 25.3
------- -------- -------- --------
Income (loss)
before
distributions
on preferred
securities of
subsidiary
trust 17.3 7.7 (12.9) 116.9
Distributions on
preferred securities
of subsidiary trust,
net of applicable
income taxes (3.3) (3.3) (9.8) (9.8)
------- ------- -------- -------
Net income
(loss) to
common
stockholder $ 14.0 $ 4.4 $ (22.7) $ 107.1
======= ======= ======== =======
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
GAAP Basis
Assets September 30, December 31,
Investments 2000 1999
------------- ------------
Fixed Maturities
Bonds available for sale, at fair
value (amortized cost: September
30, 2000 - $6,659.4, December 31,
1999 - $6,511.6) $ 6,570.0 $ 6,315.2
Preferred stock available for sale,
at fair value (amortized cost:
September 30, 2000 - $87.7,
December 31, 1999 - $84.4) 86.7 84.6
Equity securities available for sale,
at fair value (cost: September 30,
2000 - $425.3, December 31, 1999 -
$367.1) 410.3 402.1
Other invested assets 13.5 40.5
Cash and cash equivalents 682.2 597.5
------- -------
Total investments and cash 7,762.7 7,439.9
Accrued investment income 89.3 83.5
Premiums due and other receivables 1,157.9 1,181.2
Deferred policy acquisition costs 330.8 324.5
Reinsurance recoverable on paid and
unpaid losses 3,184.9 3,034.9
Funds held by ceding companies 648.3 609.7
Prepaid reinsurance premiums 129.6 138.8
Deferred federal income taxes 400.7 376.0
Other assets 1,162.9 1,090.3
------- -------
Total assets $ 14,867.1 $ 14,278.8
========== ==========
Liabilities
Loss and loss adjustment expense
reserves $ 8,598.3 $ 8,369.0
Unearned premium reserve 1,243.1 1,223.4
------- -------
Total insurance reserves 9,841.4 9,592.4
Loss balances payable 356.7 421.3
Funds held under reinsurance treaties 467.5 322.6
Senior bank debt 75.0 75.0
Senior notes 498.5 498.5
Other liabilities 839.0 642.5
------- -------
Total liabilities 12,078.1 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: September 30, 2000, and
December 31, 1999 - 149.49712 shares --- ---
Additional paid-in capital 1,332.4 1,332.4
Retained earnings 1,273.9 1,296.6
Accumulated other comprehensive income (54.8) (140.0)
------- -------
Total stockholder's equity 2,551.5 2,489.0
------- -------
Total liabilities, Company-obligated
mandatorily redeemable
preferred securities of
subsidiary trust and
stockholder's equity $ 14,867.1 $ 14,278.8
========== ==========
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