American Re Reports Third Quarter Results.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. 14, 1997--For the three months ended September September: see month. 30, 1997, 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 $50.9 million, compared to $47.3 million for the same period of 1996. In early July July: see month. 1997, 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. American 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. Company ("MARC") was merged into American
Re-Insurance RE-INSURANCE, mar. contr. An insurance made by a former insurer, his executors, administrators, or assigns, to protect himself and his estate from a risk to which they were liable by the first insurance.2. It differs from a double insurance (q.v. Company ("American Re-Insurance"), the Company's principal operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , and Munich Re's U.S. Branch (the "U.S. Branch") was domesticated do·mes·ti·cate tr.v. do·mes·ti·cat·ed, do·mes·ti·cat·ing, do·mes·ti·cates 1. To cause to feel comfortable at home; make domestic. 2. To adopt or make fit for domestic use or life. 3. a. into American Re-Insurance. By reason of these transactions, the Company's 1997 third quarter and nine-month results include the results of such entities, effective December December: see month. 31, 1996. For comparative purposes, this press release also contains certain pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma amounts for 1996, combining the results of the Company, MARC, and the U.S. Branch as if the July transactions had occurred on January January: see month. 1, 1996. Pro forma net income for the third quarter of 1996 was $68.5 million. Excluding $17.7 million of net realized capital gains after tax, the Company's net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter was $33.2 million, compared to $46.7 million in the third quarter of 1996, when there were net realized capital gains of $0.6 million after tax. Net premiums written by the Company's subsidiaries during the third quarter of 1997 were $550.0 million, compared to $467.2 million in 1996. On a pro forma basis, net premiums written for the third quarter of 1996 were $660.0 million. The Company attributes the decrease in the third quarter of 1997 primarily to adverse market conditions, especially in the 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. market. The subsidiaries statutory combined ratio was 107.8% for the third quarter of 1997, compared to 94.2% for 1996, and 96.6% for 1996 on a pro forma basis. The Company attributes this increase in the combined ratio for 1997 to a combination of factors, including adverse market conditions, a change in the Company's mix of business to include a larger percentage of treaty business, which carries a higher loss ratio, and increased overhead costs overhead costs see fixed costs. , including costs associated with the Company's 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" technology and process engineering initiatives. Neither period included any material catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses. The combined statutory surplus of the Company's subsidiaries was $2.3 billion at September 30, 1997. The Company's net investment income was $107.6 million for the three-month period ended September 30, 1997, compared to $66.0 million in 1996 and $102.3 million for 1996 on a pro forma basis. At September 30, 1997, the Company's 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 $13.1 billion, and consolidated common stockholders equity totaled $2.5 billion. 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, 1997, American Re reported net income to common stockholders of $136.8 million, including net realized capital gains of $50.4 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. . The 1997 period included one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges of $80.1 million, after-tax, related to the July 1997 transactions and the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the value of data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a equipment. In the same period of 1996, American Re posted net income to common stockholders of $144.9 million, including net realized capital gains of $1.5 million after-tax. On a pro forma basis for the same period in 1996, net income was $237.6 million. Net premiums written by the Company's subsidiaries were $2,026.6 million for the nine month period ended September 30, 1997, versus $1,432.8 million for the same period in 1996 and $1,963.8 million for 1996 on a pro forma basis. The subsidiaries statutory combined ratio was 103.4% for the nine month period ended September 30, 1997, compared to 94.7% for the same period in 1996, and 97.1% for 1996 on a pro forma basis. Neither period included any material catastrophe losses. The Company's net investment income for the nine month period ended September 30, 1997 was $317.5 million, compared to $186.0 million for the same period last year and $292.0 million for 1996 on a pro forma basis. -0- 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 a direct writer of treaty and facultative reinsurance and provider of related services and is the second largest writer 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 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:
AMERICAN RE CORPORATION
September 30, 1997
FINANCIAL HIGHLIGHTS
(Dollars in millions)
Three-month
period ended
September 30,
1997 1996 %
Chg
SUMMARY PERFORMANCE DATA
(GAAP BASIS)
Gross premiums written % $ 725.9 $618.7 17.3
Net premiums written 550.0 467.2 17.7
Net investment income 107.6 66.0 63.0
-0-
Nine-month
period ended
September 30,
1997 1996 %
Chg
Gross premiums written % $2,411.4 $1.815.2 32.8
Net premiums written 2,026.6 1,432.8 41.4
Net investment income 317.5 186.0 70.7
-0-
INCOME STATEMENT DATA
Three-month Nine-month
period ended period ended
September 30, September 30,
1997 1996 1997 1996
Operating income,
excluding realized
capital gains $ 33.2 $46.7 $86.4 $143.4
Net realized capital
gains, net of taxes
net of taxes 17.7 0.6 50.4 1.5
Net income to common
stockholders $ 50.9 $47.3 $136.8 $144.9
-0-
CASH FLOW DATA
Cash provided by
operations $142.5 $41.1 $ 285.2 $221.9
-0-
Restated
September 30, December 31,
BALANCE SHEET DATA 1997 1996
Cash and invested assets $7,417.5 $ 7,007.3
Total assets 13,090.6 12,143.0
Loss and loss adjustment
expense reserves 7,476.3 7,192.2
Senior bank debt 75.0 75.0
Senior notes 498.4 498.4
Company-obligated mandatorily
redeemable
preferred securities
of subsidiary trust 237.5 237.5
Common stockholders' equity 2,482.5 1,792.5
-0-
AMERICAN RE CORPORATION
September 30, 1997 FINANCIAL HIGHLIGHTS
(Dollars in millions)
STATUTORY DATA
Three-month period Nine-month period
ended ended
September 30, September 30,
1997 1996 1997 1996
Combined Ratio
Loss ratio 70.5 % 60.7 % 69.6 % 64.4 %
Commission ratio 27.7 26.0 25.2 22.7
Other underwriting
expense ratio 9.6 7.5 8.6 7.6
Combined ratio 107.8 % 94.2 % 103.4 % 94.7 %
-0-
Restated
September 30, December 31,
1997 1996
Statutory surplus $ 2,293.3 $ 2,178.1
Premiums/surplus ratio 1.18 to 1 1.21 to 1
Reserves/surplus ratio 2.34 to 1 2.24 to 1
-0-
Actual to Pro Forma Comparison
Three-month period Nine-month period
ended ended
September 30, September 30,
1997 1996 % 1997 1996 %
Chg Chg
(GAAP Basis)
Gross premiums
written $725.9 $874.0 (16.9)% $2,411.4 $2,518.0 (4.3)%
Net premiums
written 550.0 660.0 (16.7) 2,026.6 1,963.8 3.2
Net investment
income 107.6 102.3 5.1 317.5 292.0 8.7
Net income 50.9 68.5 (25.6) 136.8 237.6 (42.4)
-0-
Statutory combined
ratio
Loss ratio 70.5 % 64.0 % 6.5 % 69.6 % 66.6 % 3.0 %
Underwriting
expense ratio 36.3 32.6 3.7 33.8 30.5 3.3
Combined ratio 107.8 % 96.6 % 10.2 % 103.4 % 97.1 % 6.6 %
-0-
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions)
GAAP Basis Three-month period Nine-month period
ended ended
September 30, September 30,
1997 1996 1997 1996
Gross premiums written $ 725.9 $ 618.7 $ 2,411.4 $ 1,815.2
Revenue:
Net premiums written $ 550.0 $ 467.2 $ 2,026.6 $ 1,432.8
Change in unearned
premiums 2.8 (44.8) (139.7) (150.5)
Premiums earned 552.8 422.4 1,886.9 1,282.3
Net investment income 107.6 66.0 317.5 186.0
Net realized capital
gains 26.3 1.0 70.1 2.2
Other income 11.5 12.0 34.8 35.1
Total revenue 698.2 501.4 2,309.3 1,505.6
Losses and expenses:
Losses and loss
adjustment expense 398.4 252.2 1,317.7 820.8
Commission expense 148.7 115.5 464.3 274.6
Operating expense 49.5 31.3 158.6 99.6
Interest expense 10.6 13.4 32.2 40.5
Other expense 20.3 18.5 187.4 55.1
Total losses and
expenses 627.5 430.9 2,160.2 1,290.6
Income before income taxes,
minority interest, and
distributions on preferred
securities of subsidiary
trust 70.7 70.5 149.1 215.0
Federal and foreign income
taxes 16.5 19.9 9.3 60.3
Income before minority
interest and
distributions on
preferred securities of
subsidiary 54.2 50.6 139.8 154.7
Minority interest --- --- 6.8 ---
Distributions on preferred
securities of subsidiary
trust, net of applicable
income taxes (3.3) (3.3) (9.8) (9.8)
Net income to common
stockholders $ 50.9 $ 47.3 $ 136.8 $ 144.9
-0-
AMERICAN RE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
GAAP Basis
Restated
Sept. 30, Dec. 31,
1997 1996
Assets
Investments
Fixed Maturities
Bonds available for sale, at fair value
(amortized cost: September 30, 1997 -
$6,466.1, December 31, 1996 - $6,090.0) 6,590.0 6,148.9
Preferred stock available for sale, at
fair value (amortized cost: September 30,
1997 - $69.6, December 31, 1996 - $69.6) 69.6 69.6
Equity securities available for sale, at
fair value (cost: September 30, 1997 -
$222.3, December 31, 1996 - $174.3) 236.8 211.5
Other invested assets 23.4 24.2
Cash and cash equivalents 497.7 553.1
Total investments and cash 7,417.5 7,007.3
Accrued investment income 96.9 105.2
Premiums due and other receivables 1,176.6 916.0
Deferred policy acquisition costs 380.7 336.9
Reinsurance recoverable on paid and unpaid
losses 2,564.5 2,469.0
Funds held by ceding companies 293.6 310.0
Prepaid reinsurance premiums 180.3 173.0
Deferred federal income taxes 169.1 155.0
Other assets 811.4 670.6
Total assets $ 13,090.6 $ 12,143.0
Liabilities
Loss and loss adjustment expense reserves $ 7,476.3 $ 7,192.3
Unearned premium reserve 1,452.8 1,335.3
Total insurance reserves 8,929.1 8,527.6
Loss balances payable 275.3 141.7
Funds held under reinsurance treaties 173.8 171.1
Senior bank debt 75.0 75.0
Senior notes 498.4 498.4
Other liabilities 419.0 451.3
Total liabilities 10,370.6 9,864.9
Minority interest --- 248.1
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust 237.5 237.5
Stockholders Equity
MARC common stock, par value $1,000 per
share --- 1.9
MARC preferred stock, par value $1,000
per share --- 19.5
ARC common stock, par value $.01 per
share; authorized: 1,000 shares;
issued and outstanding Sept. 30, 1997 -
149.49712 shares and
December 31, 1996 - 100 shares --- ---
Additional paid-in capital 1,332.4 801.0
Retained earnings 1,086.9 950.6
Net unrealized appreciation of
investments 90.0 55.2
Net unrealized loss on foreign exchange (26.8) (35.7)
Total stockholders' equity 2,482.5 1,792.5
Total liabilities, Company-obligated
mandatorily redeemable preferred
securities of subsidiary trust and
stockholders' equity $ 13,090.6 $ 12,143.0
CONTACT: Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs H. Walker, Jr., 609/243-4679 or Terese Rosenthal Rosenthal is a name of German origin, meaning rose valley, and may refer to:
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