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HARLEYSVILLE GROUP'S THIRD QUARTER EARNINGS IMPACTED BY HURRICANE ANDREW

HARLEYSVILLE GROUP'S THIRD QUARTER EARNINGS IMPACTED BY HURRICANE ANDREW
 HARLEYSVILLE, Pa., Oct. 21 /PRNewswire/ -- Harleysville Group Inc. (NASDAQ: HGIC), a regional insurance holding company, today reported third quarter results.
 Reflecting primarily the impact of Hurricane Andrew on Harleysville's business in south Florida, operating earnings in the third quarter of 1992 declined 29 percent to $0.35 per share, compared with $0.49 per share in the third quarter of 1991. For the first nine months of 1992, operating earnings declined 3 percent to $1.45 per share, compared with $1.49 per share in 1991.
 After reinsurance, pooling and taxes, Harleysville Group's charge to third quarter earnings due to Hurricane Andrew was $3.0 million, or $0.24 per share. That compares with a charge of $0.14 per share during the third quarter of 1991 to account for Hurricane Bob. Results were also adversely impacted in the third quarter of 1992 by other weather- related losses of approximately $0.05 per share.
 Net income per share decreased 22 percent to $0.40 in the third quarter, compared with $0.51 in the third quarter of 1991. For the first nine months of 1992, net income per share was up 23 percent to $1.86, compared with $1.51 in 1991. Net income includes $0.05 per share of after-tax realized capital gains in the latest quarter and $0.41 in the first nine months of 1992, compared with $0.02 per share for both the third quarter and first nine months of 1991. The realized capital gains in 1992 primarily reflect the sale of high coupon Government National Mortgage Association (GNMA) pass-through securities.
 Third quarter investment income was up 3 percent to $14.5 million, from $14.1 million in the same period of 1991. For the nine months, investment income rose 3 percent to $43.3 million in 1992 from $41.8 million in 1991. At the same time, after-tax investment income increased 4 percent in the third quarter of 1992 to $10.9 million, compared with $10.5 million in 1991. For the first nine months, after- tax investment income was up 5 percent to $32.4 million in 1992, compared with $30.9 million in 1991. The greater increase in after-tax investment income is due to a higher level of tax-exempt investments.
 "The increase in our investment income comes in a very difficult environment for the property and casualty insurance industry," commented Bradford W. Mitchell, chairman of the board, president and chief executive officer of Harleysville Group. "With lower interest rates and deteriorating underwriting results, analysts generally forecast declines in investment income for the insurance industry in 1992."
 Earned premiums declined 1 percent to $90.1 million in the third quarter, compared with $91.0 million during the corresponding period in 1991. For the first nine months, earned premiums decreased 2 percent to $267.9 million in 1992 from $272.2 million in 1991. The declines in earned premiums continue to reflect the ongoing removal of Pennsylvania and New Jersey personal auto insurance business from the intercompany pooling arrangement.
 Total revenues of $105.9 million for the third quarter were virtually unchanged from last year's third quarter. For the corresponding nine-month periods, total revenues were up 2 percent to $320.2 million in 1992 from $315.2 million in 1991.
 Stockholders' equity rose 14 percent to $234.4 million ($18.47 per share) at Sept. 30, 1992, up from $204.9 million ($16.56 per share) at Sept. 30, 1991. The trailing 12-month return on average stockholders' equity at Sept. 30, 1992, was 11.3 percent based on operating earnings only.
 Harleysville Group's statutory combined ratio was 110.3 percent (105.2 percent excluding Hurricane Andrew) in the third quarter, compared with 106.3 percent (103.4 percent excluding Hurricane Bob) in 1991. For the first nine months, the combined ratio was 107.6 percent (105.9 percent excluding Andrew), compared with 106.3 percent (105.3 excluding Bob) in 1991.
 Harleysville Group Inc. is a regional holding company for six property and casualty insurers whose marketing territory encompasses the entire East Coast. The companies include: Atlantic Insurance Company of Savannah, Connecticut Union Insurance Company, Harleysville Insurance Company of New Jersey, Huron Insurance Company, New York Casualty Insurance Company and Worcester Insurance Company. Harleysville Group also manages the operations of Berkshire Mutual Insurance Group, the financial results of which are not consolidated into Harleysville Group. Harleysville Group's property/casualty subsidiaries are rated A+ (Superior) by the A.M. Best Company.
 HARLEYSVILLE GROUP INC. AND SUBSIDIARIES
 (Unaudited; in thousands except per-share data)
 Periods ended Quarter Nine months
 Sept. 30 1992 1991 1992 1991
 Operating results:
 Premiums earned $90,115 $91,010 $267,864 $272,214
 Investment income,
 net of investment
 expenses 14,506 14,120 43,272 41,812
 Net income 5,063 6,295 23,385 18,380
 Per common share:
 Net income $.40 $.51 $1.86 $1.51
 Cash dividends .14 .12 .38 .33
 Financial condition at Sept. 30, 1992 Dec. 31, 1991
 Assets $896,359 $846,970
 Stockholders' equity 234,421 211,275
 Per common share $18.47 $16.98
 Consolidated Statements of Income
 (Unaudited; in thousands, except per-share data)
 Periods ended Quarter Nine months
 Sept. 30 1992 1991 1992 1991
 Revenues:
 Premiums earned $90,115 $91,010 $267,864 $272,214
 Investment income,
 net of investment
 expenses 14,506 14,120 43,272 41,812
 Realized investment gains 1,009 462 7,799 385
 Other income 256 299 1,268 823
 Total revenues 105,886 105,891 320,203 315,234
 Losses and expenses:
 Losses and loss settlement
 expenses 68,219 65,060 195,358 195,977
 Amortization of deferred
 policy acquisition
 costs 24,150 24,354 71,680 72,790
 Other underwriting
 expenses 7,305 7,773 21,390 21,220
 Interest expense 308 434 984 987
 Other expenses 379 542 1,563 1,753
 Total expenses 100,361 98,163 290,975 292,727
 Income before income
 taxes 5,525 7,728 29,228 22,507
 Income taxes 462 1,433 5,843 4,127
 Net income 5,063 6,295 23,385 18,380
 Weighted average number of
 shares outstanding 12,623,683 12,287,127 12,552,658 12,175,316
 Earnings per common
 share $.40 $.51 $1.86 $1.51
 Cash dividends per common
 share .14 .12 .38 .33
 Supplementary Financial Analysts' Data
 (Unaudited; in thousands, except per-share data)
 Periods ended Quarter Nine months
 Sept. 30 1992 1991 1992 1991
 Pre-tax investment
 income $14,506 $14,120 $43,272 $41,812
 Related federal
 income taxes 3,586 3,633 10,826 10,903
 After-tax investment
 income 10,920 10,487 32,446 30,909
 Net premiums written(A) 94,568 96,906 276,867 300,011
 Fresh start benefit
 per share $.01 $.01 $.02 $.02
 Earnings per common share:
 Operating income .35 .49 1.45 1.49
 Net income .40 .51 1.86 1.51
 (A) The net premiums written for the nine months ended Sept. 30, 1991, includes $19,565,799 from the Jan. 1, 1991, pooling change.
 /delval/
 -0- 10/21/92
 /CONTACT: Frederick W. Baker, 215-256-5287, or Randy Buckwalter, 215-256-5288 (both media); or (investors) Mark R. Cummins, 215-256-5025, Bruce J. Magee, 215-256-5011, or Robert Simpson Jr., 215-256-5392, all of Harleysville Group/
 (HGIC) CO: Harleysville Group Inc. ST: Pennsylvania IN: INS SU: ERN


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Date:Oct 21, 1992
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