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GEICO CORPORATION REPORTS 1991 THIRD QUARTER RESULTS

        GEICO CORPORATION REPORTS 1991 THIRD QUARTER RESULTS
    WASHINGTON, Nov. 4 /PRNewswire/ -- GEICO Corp. (NYSE: GEC) today


reported its results for the third quarter and nine months ended Sept. 30, 1991. The corporation's interim report to shareholders will be mailed on or about Nov. 12, 1991.
    Commenting on the corporation's results, chairman Bill Snyder said:  "Through the first nine months of 1991, I view overall financial results as mixed but generally satisfactory.  Net income was $147.4 million, down 4.0 percent from $153.6 million for the same period in 1990.  On a per share basis, net income increased modestly to $10.10 in 1991, up from $10.03 for 1990.  These per share results include realized investment gains after tax of $1.02 in 1991 and $1.33 for 1990.
    "Results from operations were also generally satisfactory, as is indicated by operating income data.  While not required for financial reporting purposes, we believe operating income is a more meaningful indication of our business performance.  For the first nine months of 1991, operating income was $132.5 million compared to $133.3 million in 1990.  On a per share basis, operating income was $9.08 in 1991 and $8.70 last year, a 4.4 percent increase.
    "Underwriting results were excellent.  The consolidated underwriting ratio year-to-date was 95.9 percent, compared to a ratio of 95.7 percent for the corresponding 1990 period.  This year's results included an accrual for a policyholder dividend and weather- related catastrophe losses only slightly higher than last year, despite Hurricane Bob losses during the quarter.  Auto claim frequency and the rate of increase in average severity for auto coverages continued to be either about the same or better than last year for all coverages.  The Oakland fire occurred in the fourth quarter but these losses were relatively modest.
    "Property and casualty earned premiums through nine months were up 10.4 percent over the same 1990 period, reflecting rate increases, policy growth and purchased subsidiaries in 1991.  Premium rate increases for GEICO's voluntary auto averaged 4.3 percent countrywide.  We are monitoring price levels quite closely.  Policy growth for all voluntary product lines combined at the end of September was 9.1 percent above the number in force 12 months earlier.  We are most pleased with this growth rate which exceeds our plan.  The policy growth excludes the policies belonging to Southern Heritage Insurance Company and Merastar Insurance Company, which were acquired during the second quarter of 1991.
    "In GEICO, our principal subsidiary, earned premiums were up 9.8 percent over the first nine months of 1990.  Voluntary auto and homeowners new policy sales for the period were substantially above 1990 sales.  GEICO's underwriting ratio was 95.4 percent after accruing for a dividend to policyholders compared to a ratio of 95.2 percent in 1990," Snyder said.
    A comparison of 1991 and 1990 third quarter and nine months results follows.
                          GEICO CORPORATION
                Third Quarter and Nine Months Results
         (In millions, except ratios and per share results)
                                Three Months Ended  Nine Months Ended
                                     Sept. 30,           Sept. 30,
                                 1991        1990    1991        1990
    Operating Results
     Premiums                   $487.4      $431.8  $1,388.3 $1,251.6
     Net investment income        47.6        43.4     141.3    126.9
     Realized gains on
      investments, pretax         14.2         3.7      22.5     30.7
     Other revenue                 8.5        10.7      29.0     33.2
      Total revenue             $557.7      $489.6  $1,581.1 $1,442.4
     Realized gains on
      investments, aftertax     $  9.4      $  2.4  $   14.9 $   20.3
     Net income                   55.7        59.0     147.4    153.6
     Fresh start tax benefit       0.5         0.9       2.0      3.1
     Net income per share         3.83        3.87     10.10    10.03
     Aftertax realized gains
      per share                   0.64        0.16      1.02     1.33
     Fresh start tax benefit
      per share                   0.03        0.06      0.13     0.20
     Dividends paid per common
      share                      $0.57       $0.50     $1.71    $1.50
     Weighted average shares
      assumed outstanding         14.5        15.2      14.6     15.3
    Property and Casualty
     Ratios (in percent)
     Loss ratio                   78.8        76.9      79.8     80.8
     Expense ratio                15.2        15.5      15.5     14.9
     Underwriting ratio           94.0        92.4      95.3     95.7
     Underwriting ratio after
      policyholder dividends      95.9        92.4      95.9     95.7
                                          Sept. 30,        Dec. 31,
                                            1991             1990
    Financial Condition
     Assets                               $4,045.5         $3,575.9
     Shareholders' equity                 $1,098.0         $  970.0
     Common shares outstanding                14.2             14.9
     Book value per share                 $  77.22         $  65.32
     Return on equity (three-year
      rolling)                           24.7 pct.        27.8 pct.
     Surplus for protection of
      policyholders                       $1,034.7         $  811.6
     Ratio of 12 months written
      premiums to surplus                    1.8:1            2.1:1
    -0-                       11/4/91
    /CONTACT:  Carroll R. Franklin, director, investor relations, GEICO, 301-986-2055/
     (GEC) CO:  GEICO Corporation ST:  District of Columbia IN:  INS SU:  ERN MH-TW -- DC017 -- 0767 11/04/91 13:20 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Nov 4, 1991
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