Chartwell Re Corp. Reports Record Quarterly Operating Earnings.STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , Conn.--(BUSINESS WIRE)--Nov. 5, 1997--Chartwell Re Corporation ("Chartwell") (NYSE NYSE See: New York Stock Exchange : CWL CWL Catholic Women's League CWL Campus Wide Login CWL Center for Writing and Learning CWL Concealed Weapons License CWL Cardiff, Wales, United Kingdom - Cardiff-Wales (Airport Code) CWL Congestion Window Limit CWL Crying With Laughter ) reported record 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. 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. of $6,914,000 for the three months ended September September: see month. 30, 1997, excluding net realized capital gains on the sale of investments, compared with $5,958,000 for the same period last year. On a per share basis, after-tax operating income increased approximately 16% to $0.72 per share for the three months ended September 30, 1997 calculated on a 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 basis in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 128, "Earnings per Share," which will be effective commencing in the fourth quarter of 1997, compared to $0.62 per share for the same period in 1996. For the nine months ended September 30, 1997, after-tax operating income amounted to $20,138,000, a 26% increase over the $15,938,000 reported for the same period in 1996. On a per share basis, after-tax operating income increased 18% to $2.10 per share (pro forma, as noted above) for the first nine months of 1997 from $1.78 per share for the first nine months of 1996. Net income before extraordinary items increased almost 22% to $20,179,000 for the nine months ended September 30, 1997 compared to $16,589,000 for the comparable period in 1996 and, on a per share basis, increased 9% to $2.03 from $1.86 reported a year ago. Net income for the nine months ended September 30, 1996 included an extraordinary charge of $1,874,000, or $0.21 per share, attributable to the redemption of 35% of Chartwell Re Holdings Corporation's 10 1/4 % Senior Notes on April 8, 1996. Total revenues for the first nine months of 1997 increased approximately 31% to a record $251,878,000 from $192,625,000 reported last year. The 1997 financial data includes the results of Archer Group Holdings plc and its 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. , Archer Managing Agents Limited (collectively, "Archer"), which were acquired by the Company in November November: see month. 1996. Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a E. Cole, Chairman and Chief Executive Officer of Chartwell, said that "It is gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. to note that the implementation of Chartwell's diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. strategy has enabled the Company to report continued improvement in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the persistent soft insurance and 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. market. As an example, service revenue from Archer, consisting of fees, profit commissions and investment income, was approximately $20 million for the nine months ended September 30, 1997. In addition, Chartwell's participation in Archer's 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. operations contributed another $15 million to revenue year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . As another example, our Controlled Source Insurance client segment now accounts for 27% of Chartwell's 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. and, for the nine months ended September 30, 1997, gross premiums written for this segment rose 75% from 1996 levels." Underwriting Operations: Gross premiums written increased 52% to $298,040,000 for the nine months ended September 30, 1997 from $196,080,000 recorded for the same period in 1996. Net pg companies in the Specialty Accounts client segment, (ii) the addition of several new programs in the Controlled Source Insurance Accounts segment and (iii) gross premiums written through two dedicated corporate capital vehicles supporting Archer syndicates. The composite underwriting result (defined as earned premium Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. less losses and loss adjustment expenses and policy acquisition expenses) improved 91% to $9,718,000 for the first nine months of 1997 compared torformance that excludes investment income, improved to 101.9% for the third quarter of 1997 from 104.0% rea year ago. The composite ratio, which excludesurance programs as well as the benefits of new reinsurance programs and the enhancement of existing reinsurance programs purchased at attractive terms. In addition, the 1997 results were not materially affected by the run-off of reinsurance programs written by The Insurance Corporation of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of prior to December 1995, a factor which impacted the 1996 results. The overhead expense ratio for the three months ended September 30, 1997 was 7.7% compared to 7.8% for the same period in 1996. The overhead expense ratio for the nine months ended September 30, 1997 was 6.6% compared to 7.7% reported for the same period last year. Service Operations: Revenue from service operations increased 406% to $25,663,000 for the nine months ended September 30, 1997 compared to $5,073,000 for the comparable period in 1996, due principally to revenues from Archer. Income before taxes from service operations amounted to $10,432,000 for the nine months ended September 30, 1997, a 143% increase compared to $4,295,000 for the same period in 1996. Corporate: Interest and amortization expense increased to $9,217,000 for the nine months ended September 30, 1997 from $7,456,000 for 1996. The increase was due principally to interest on the debt related to the acquisition of Archer offset by a reduction in interest payable on Chartwell Re Holdings Corporation's 10 1/4 % Senior Notes due 2004 resulting from the April 1996 redemption of 35% of the then outstanding principal amount. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased by approximately 10% to $248,264,000 at September 30, 1997 from $225,990,000 at December 31, 1996. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). book value per share increased to $25.85 at September 30, 1997 from $23.58 at December 31, 1996. Chartwell's ratio of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. improved to 30.2% at September 30, 1997 from 32.2 % reported at December 31, 1996. The Company's Board of Directors declared a quarterly cash dividend of $0.04 per share, payable on December 3, 1997 to stockholders of record as of November 19, 1997. Statutory policyholders' surplus of Chartwell Reinsurance Company increased from $238,271,000 at December 31, 1996 to a record high of $251,279,000 at September 30, 1997. The principal reason for the increase was the strong earnings of Chartwell Reinsurance Company's wholly-owned subsidiary, INSCORP, which increased its statutory surplus by more than 11% to $110,013,000 at September 30, 1997 from $98,685,000 at December 31, 1996. For the nine months ended September 30, 1997, consolidated after-tax net investment income amounted to $23,031,000 compared to $22,383,000 for the same period in 1996. The average annual tax equivalent yield on invested assets increased to 6.54% for the first nine months of 1997 compared to 6.31% for the first nine months of 1996. Chartwell realized net capital gains of $63,000 for the nine months ended September 30, 1997 compared to net capital gains of $1,002,000 for the same period in 1996. The 1996 net capital gains were realized principally to reposition certain sectors of the investment portfolio and to modify the portfolio to improve credit quality without sacrificing yield. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the third quarter of 1997 was $4,760,000, bringing total operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the nine months ended September 30, 1997 to $9,236,000. Chartwell Re Corporation is an insurance holding company with global underwriting and service operations, conducting its business 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. and in the Lloyd's market through its four principal operating subsidiaries, Chartwell Reinsurance Company, The Insurance Corporation of New York, Archer Group Holdings plc and Chartwell Advisers Limited. Chartwell Reinsurance underwrites treaty reinsurance through reinsurance brokers for casualty and, to a lesser extent, property risks as well as for marine and aviation risks. INSCORP writes property and casualty insurance through specialty program administrators. Chartwell Reinsurance Company and INSCORP are rated A (Excellent) and A- (Excellent), respectively, by A.M. Best Company and are assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. an A- claims paying ability rating by Standard & Poor's. Archer Group Holdings plc is the parent company of Archer Managing Agents Limited, which manages 10 Lloyd's syndicates with a total underwriting capacity for 1997 of 380 million Pounds Sterling. All of Archer's syndicates enjoy the benefit of the newly issued ratings of Lloyds, which has been rated "A" (Excellent) by A.M. Best and has been assigned an A+ claims paying ability rating by S&P. Chartwell Advisers Limited provides advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to New London New London, city (1990 pop. 24,540), New London co., SE Conn., on the Thames River near its mouth on Long Island Sound; laid out 1646 by John Winthrop, inc. 1784. Capital plc, a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. which provides capital to select syndicates at Lloyd's. This press release, information on Chartwell's directors and senior officers and current business and financial data are available on Chartwell's website at www.chartwellre.com. -0-
Following is a comparative table for the third quarter
(dollars in thousands):
Three Month Periods Nine Month Periods
Ended Sept. 30, Ended Sept. 30,
1997 1996 1997 1996
-------- ------- -------- --------
Gross premiums written $104,425 $63,613 $298,040 $196,080
Ceded premiums written 29,927 18,376 77,280 55,120
-------- ------- -------- ---------
$74,498 $45,237 $220,760 $140,960
======== ======= ======== =========
Underwriting Operations:
Premiums earned $59,002 $47,982 $194,677 $153,186
Net losses incurred 36,454 34,579 128,299 110,593
Net acquisition expenses 19,088 11,566 56,660 37,511
-------- -------- -------- ---------
Composite underwriting result 3,460 1,837 9,718 5,082
Overhead expenses 4,525 3,753 12,752 11,757
-------- -------- -------- ---------
Total underwriting result (1,065) (1,916) 3,034) (6,675)
-------- ------- ------- ---------
Net investment income 10,665 11,570 31,289 32,591
Net realized capital gains 112 97 63 950
-------- ------- -------- ---------
Total investment income 10,777 11,667 31,352 33,541
-------- ------- -------- ---------
Income before taxes
- underwriting operations 9,712 9,751 28,318 26,866
-------- ------- -------- --------
Service Operations:
Service and other revenue 7,076 965 21,510 2,337
Equity in net earning
of investees 1,097 877 3,273 2,731
Net investment income 236 1 880 5
-------- ------- -------- --------
Total revenues 8,409 1,843 25,663 5,073
Overhead expenses 4,184 167 13,710 778
Amortization of goodwill 476 1,521
-------- ------- -------- --------
Income before taxes
- service operations 3,749 1,676 10,432 4,295
-------- ------- -------- --------
Corporate:
Net investment income 42 220 186 773
Net realized capital gains (16) 52
General and administrative
expenses 448 777 1,258 1,124
Interest and amortization 3,211 2,253 9,217 7,456
-------- -------- -------- --------
Loss before taxes - corporate (3,617) (2,826) (10,289) (7,755)
-------- -------- -------- --------
Consolidated income before taxes
and extraordinary item 9,844 8,601 28,461 23,406
Income tax expense 2,857 2,590 8,282 6,817
-------- ------- -------- --------
Net income before
extraordinary item 6,987 6,011 20,179 16,589
Extraordinary item, net of tax (1,874)
-------- ------- -------- --------
Net income $6,987 $6,011 $20,179 $14,715
======== ======= ======== ========
Per Share Data:
Operating income per
common share(1) $0.72 $0.62 $2.10 $1.78
======== ======= ======== ========
Primary earnings per share:
Net income before
extraordinary item $0.69 $0.63 $2.03 $1.86
Extraordinary item,
net of income tax 0.21
-------- ------- -------- --------
Net income $0.69 $0.63 $2.03 $1.65
======== ======= ======== ========
Weighted average shares
outstanding 10,064,542 9,583,811 9,930,711 8,914,552
========== ========= ========= =========
Cash flow from operations $4,760 ($198) $9,236 $7,240
========= ======== ======== ========
GAAP Combined Ratio:
Loss and loss adjustment
expenses 61.8% 72.1% 65.9% 72.2%
Policy acquisition costs 32.4% 24.1% 29.1% 24.5%
Other expenses 7.7% 7.8% 6.6% 7.7%
------- -------- -------- --------
GAAP Combined Ratio 101.9% 104.0% 101.6% 104.4%
======= ======== ======== ========
-0-
(1) Basic operating income per share is calculated on a pro forma
basis in accordance with SFAS No. 128, "Earnings per Share," which
will be effective in the fourth quarter of 1997. The quarter ended
September 30, 1997 is the first period in which the outstanding
options and warrants would have had a dilutive effect on the per
share calculations under APB No. 15.
-0-
Balance Sheet information
(dollars in thousands, except per share amounts):
September 30, December 31,
1997 1996
------------ -------------
Total investments and cash $744,466 $724,694
Total assets 1,346,990 1,257,864
Reserves for loss and
loss adjustment expenses 765,903 747,858
Long-term debt 107,525 107,297
Common stockholders' equity 248,264 225,990
Book value per common share $25.85 $23.58
Statutory policyholders' surplus:
Chartwell Reinsurance Company $251,279 $238,271
The Insurance Corporation of New York $110,013 $ 98,685
CONTACT: Chartwell Re Corporation, Stamford Steven J. Bensinger, 203/705-2520 or Nancy B. Saltzman, 203/705-2532 |
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