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ALLIED GROUP, INC. REPORTS RECORD NINE-MONTH EARNINGS

 DES MOINES, Iowa, Oct. 22 /PRNewswire/ -- ALLIED Group, Inc. (NASDAQ: ALGR) had record earnings for both the third quarter (ended Sept. 30) and the year to date. Before net realized gains, fully diluted earnings per share were $.56 for the third quarter and $1.89 for the nine months compared with $.44 and $1.35 for the same periods of 1992. Realized gains increased third-quarter earnings to $.58 and nine- month earnings to $1.95.
 "As was true at midyear, our results were again aided by three earlier transactions: a preferred stock exchange, appointment of an ALLIED Group, Inc. subsidiary as the property-casualty pool administrator, and an increase in our pool participation percentage," said Chairman John E. Evans. "Our core business, property-casualty insurance, did well in light of the volatile weather that has plagued the Midwest since spring."
 Net written premiums for the pool (including ALLIED Mutual Insurance Company) were up nearly 13 percent to $427.9 million through Sept. 30, 1993, from $379.8 million for the same period a year ago. The public company's portion of net earned premiums also grew, increasing to $254 million from $215.4 million.
 "Wind and hail losses were indeed costly," continued Evans. "The totals came to $.50 per share for the third quarter and $.85 for the year to date; in 1992, the comparable numbers were $.35 and $.68."
 Though property claims were up, private passenger auto experience improved sufficiently to reduce the property-casualty segment's nine- month 1993 statutory combined ratio (after policyholder dividends) to 99.8 from 102.7 for the same period a year ago. The underwriting loss (on a generally accepted accounting principles basis) was $1.3 million.
 "The bottom line," Evans said, "is how much profit the company made. The consolidated pre-tax profit for the first nine months of last year was $29.4 million; this year it was $40.9 million." Of that total, $29.3 million came from the property-casualty segment, a little over $4 million from excess and surplus lines, a little over $5 million from investment services, and approximately $2.8 million from data processing.
 "Property-casualty's contribution was up 58 percent, and the other three business segments were pretty much on target," Evans said. "ALLIED Group Mortgage, one of two companies making up the investment services segment, continued to have expenses associated with prepayments spurred by the refinancing environment. In line with our trend of focusing on our core business, we agreed to sell our other investment services company, Dougherty Dawkins, Inc., to its management for $13.9 million. I expect that sale to close on the 29th of this month."
 ALLIED Group, Inc., is a regional property-casualty insurer specializing in personal lines. The company uses independent agencies, exclusive agencies, and direct response marketing to offer products in central and western states.
 ALLIED GROUP, INC.
 SUMMARIZED CONSOLIDATED FINANCIAL HIGHLIGHTS
 Three Months Ended
 9/30/93 9/30/92
 Premiums earned $93,770,637 $82,634,052
 Investment income excluding
 realized gains 10,012,837 8,415,503
 Realized investment gains 332,497 170,195
 Investment services 11,895,112 10,216,004
 Other income 10,018,798 13,512,852
 Revenues 126,029,881 114,948,606
 Losses and expenses 113,714,042 105,439,285
 Income before income taxes 12,315,839 9,509,321
 Income taxes 3,179,424 2,621,351
 Net income $9,136,415 $6,887,970
 Fully diluted earnings per share
 Net operating income $.56 $.44
 Realized investment gains, after tax $.02 $.01
 Net income $.58 $.45
 Weighted average shares 13,880,773 14,739,926
 Wind and hail losses per share $.50 $.35
 Primary earnings per share $.80 $.60
 Dividends paid per common share $.13 $.11
 Nine Months Ended
 9/30/93 9/30/92
 Premiums earned $271,749,399 $236,667,648
 Investment income excluding
 realized gains 29,212,502 24,370,390
 Realized investment gains 1,320,713 1,841,480
 Investment services 33,966,667 25,750,335
 Other income 24,369,661 41,310,061
 Revenues 360,618,942 329,939,914
 Losses and expenses 319,696,956 300,531,398
 Income before income taxes 40,921,986 29,408,516
 Income taxes 11,318,163 8,133,734
 Net income $29,603,823 $21,274,782
 Fully diluted earnings per share
 Net operating income $1.89 $1.35
 Realized investment gains, after tax $.06 $.08
 Net income $1.95 $1.43
 Weighted average shares 13,540,291 14,172,893
 Wind and hail losses per share $.85 $.68
 Primary earnings per share $2.76 $1.98
 Dividends paid per common share $.38 $.32
 ALLIED GROUP, INC.
 SUMMARIZED CONSOLIDATED BALANCE SHEET
 9/30/93 12/31/92
 Assets
 Invested assets (market
 value of $596,138,044
 and $479,340,712) $563,488,330 $460,037,809
 Accounts receivable 63,311,222 54,017,464
 Securities held for sale 92,869,840 72,930,998
 Deferred policy acquisition
 costs 34,212,315 28,578,196
 Other assets 119,218,106 72,923,896
 Total assets $873,099,813 $688,488,363
 Liabilities
 Loss and loss settlement
 expenses $276,610,800 $227,971,575
 Unearned premiums 161,053,398 129,384,146
 Notes payable to nonaffiliates 110,776,558 58,155,394
 Notes payable to affiliates 4,599,043 8,387,221
 Guarantee of ESOP obligations 30,500,000 30,590,000
 Other liabilities 48,118,858 57,986,745
 Total liabilities $631,658,657 $512,475,081
 Stockholders' equity 241,441,156 176,013,282
 Total liabilities and
 stockholders' equity $873,099,813 $688,488,363
 Number of shares outstanding
 Nonconvertible preferred stock 1,827,222 1,827,222
 ESOP convertible preferred stock 3,235,860 3,314,038
 Common stock 8,791,000 4,469,342
 Total shares outstanding 13,854,082 9,610,602
 Book value per share $16.99 $14.34
 Investment yield 7.3 percent 7.6 percent
 ALLIED GROUP, INC.
 SEGMENT INFORMATION
 Three Months Ended
 9/30/93 9/30/92
 Revenues(a)
 Property-casualty $97,955,907 $84,711,607
 Excess & surplus lines 7,368,637 7,738,438
 Investment services 12,529,766 10,393,483
 Data processing 13,002,445 10,464,869
 Eliminations and other (4,826,874) 1,640,209
 Total $126,029,881 $114,948,606
 Income before income taxes(a)
 Property-casualty $6,754,651 $4,720,664
 Excess & surplus lines 2,513,784 1,994,447
 Investment services 1,784,062 2,245,330
 Data processing 1,686,674 708,402
 Eliminations and other(b) (423,332) (159,522)
 Total $12,315,839 $9,509,321
 Nine Months Ended
 9/30/93 9/30/92
 Revenues(a)
 Property-casualty $284,495,410 $241,147,363
 Excess & surplus lines 21,509,322 25,407,357
 Investment services 35,851,264 26,415,682
 Data processing 35,066,019 28,794,450
 Eliminations and other (16,303,073) 8,175,062
 Total $360,618,942 $329,939,914
 Income before income taxes(a)
 Property-casualty $29,270,871 $18,541,682
 Excess & surplus lines 4,185,618 4,435,399
 Investment services 5,219,777 5,037,328
 Data processing 2,803,604 2,176,926
 Eliminations and other(b) (557,884) (782,819)
 Total $40,921,986 $29,408,516
 9/30/93 12/31/92 9/30/92
 Assets
 Property-casualty $651,765,484 $520,683,163 $519,557,020
 Excess & surplus
 lines 90,646,234 78,100,417 76,232,017
 Investment
 services 155,091,965 114,863,466 129,845,863
 Data processing 16,032,547 13,905,685 12,969,466
 Eliminations and
 other (40,436,417) (39,064,368) (37,077,507)
 Total $873,099,813 $688,488,363 $701,526,859
 (a) Includes realized investment gains or losses.
 (b) Includes interest expense of $289,136 and $267,105 for the three months ended Sept. 30, 1993 and 1992, respectively. Interest expense for the nine months ended Sept. 30, 1993 and 1992 was $784,905 and $851,777, respectively.
 ALLIED GROUP, INC.
 SUPPLEMENTAL INSURANCE INFORMATION
 Three Months Ended
 9/30/93 9/30/92
 Property-casualty segment
 results:
 Net premiums written $94,705,881 $79,080,099
 Premiums earned 87,620,406 76,163,099
 Loss & loss adjustment expenses 65,983,606 57,065,434
 Underwriting expenses 26,132,476 23,654,575
 Statutory underwriting loss (4,495,676) (4,556,910)
 GAAP adjustments 914,825 729,066
 GAAP underwriting gain (loss) (3,580,851) (3,827,844)
 Investment income excluding
 realized gains 8,603,365 7,184,513
 Realized investment gains 327,132 147,440
 Other income 1,405,005 1,216,555
 Income before income taxes 6,754,651 4,720,664
 GAAP combined ratio 104.1 105.0
 Wind and hail losses 10,740,732 7,757,978
 Impact of wind and hail losses
 on combined ratio 12.3 10.2
 Excess & surplus lines segment results:
 Net premiums written 6,312,395 6,426,831
 Premiums earned 6,150,232 6,470,953
 Loss & loss adjustment expenses 3,263,860 3,825,162
 Underwriting expenses 1,631,540 1,810,363
 Statutory underwriting loss 1,254,832 835,428
 GAAP adjustments 40,547 (108,466)
 GAAP underwriting loss 1,295,379 726,962
 Investment income excluding realized
 gains 1,213,040 1,244,730
 Realized investment gains (losses) 5,365 22,755
 Income before income taxes 2,513,784 1,994,447
 GAAP combined ratio 78.9 88.8
 Nine Months Ended
 9/30/93 9/30/92
 Property-casualty segment
 results:
 Net premiums written $279,506,636 $239,603,618
 Premiums earned 253,956,442 215,380,254
 Loss & loss adjustment expenses 180,006,915 156,089,344
 Underwriting expenses 79,722,663 71,619,072
 Statutory underwriting loss (5,773,116) (12,328,162)
 GAAP adjustments 4,505,039 5,102,735
 GAAP underwriting gain (loss) (1,268,097) (7,225,427)
 Investment income excluding
 realized gains 25,225,668 20,827,859
 Realized investment gains 1,218,212 1,378,097
 Other income 4,095,088 3,561,153
 Income before income taxes $29,270,871 $18,541,682
 GAAP combined ratio 100.5 103.4
 Wind and hail losses 17,649,266 14,525,514
 Impact of wind and hail losses
 on combined ratio 6.9 6.7
 Excess & surplus lines segment results:
 Net premiums written 18,243,195 22,253,321
 Premiums earned 17,792,957 21,287,394
 Loss & loss adjustment expenses 12,085,789 14,580,740
 Underwriting expenses 5,119,090 6,639,022
 Statutory underwriting loss 588,078 67,632
 GAAP adjustments (118,825) 247,804
 GAAP underwriting loss 469,253 315,436
 Investment income excluding realized
 gains 3,613,864 3,656,580
 Realized investment gains (losses) 102,501 463,383
 Income before income taxes 4,185,618 4,435,399
 GAAP combined ratio 97.4 98.5
 ALLIED GROUP, INC.
 PROPERTY CASUALTY STATUTORY COMBINED RATIOS
 Nine Months Ended Sept. 30,
 1993 1992
 Premiums Combined Premiums Combined
 Earned Ratio Earned Ratio
 Statutory underwriting
 results by line:
 Personal automobile $128,781,858 96.3 $110,277,144 102.5
 Homeowners 37,577,458 117.9 30,937,592 111.6
 Personal lines 166,359,316 101.2 141,214,736 104.5
 Commercial automobile 15,124,794 92.3 13,297,405 88.6
 Workers' compensation 18,084,847 92.6 13,735,763 107.7
 Other property/liability 52,769,518 101.1 45,512,538 101.2
 Other lines 1,617,967 51.5 1,619,812 56.3
 Commercial lines 87,597,126 96.8 74,165,518 99.0
 Total $253,956,442 99.8 $215,380,254 102.7
 Loss ratio 59.6 60.1
 Loss adjustment expense ratio 11.3 12.4
 Underwriting expense ratio 28.5 29.9
 Dividend ratio 0.4 0.3
 Statutory combined ratio 99.8 102.7
 -0- 10/22/93
 /CONTACT: Jim Shaffer of ALLIED Group, 515-280-4326/
 (ALGR)


CO: ALLIED Group, Inc. ST: Iowa IN: INS SU: ERN

DS-CP -- MN002 -- 5527 10/22/93 06:02 EDT
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Date:Oct 22, 1993
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