ITT HARTFORD'S NET INCOME UP FOR THIRD QUARTER, FIRST NINE MONTHS
HARTFORD, Conn., Nov. 7, /PRNewswire/ -- ITT Hartford Insurance Group announced today that net income for the third quarter ended Sept. 30, 1991, was $107 million, up 23 percent from the same period a year ago.
Net income for the first nine months of this year was $338 million, up 51 percent from the first nine months of 1990.
The gains were largely due to continued improvement in net investment income, including realized capital gains, said Donald R. Frahm, chairman and chief executive officer of ITT Hartford.
North American life and health operations also registered profitable growth, reflecting new business gained as a result of ITT Hartford's reputation for financial stability, said Frahm.
Net income from international operations, however, declined due to losses in the United Kingdom, which are at an all-time high for the industry. The effects of an ongoing recession in England and continuing intense price competition have led to significant underwriting losses in most product lines.
"While the personal and commercial lines property-casualty markets in both the United States and Europe remained intensely competitive, we minimized the impact on our bottom line by continuing to emphasize cost-containment, disciplined pricing and prudent underwriting," said Frahm.
"In addition, the company's investment operations continued to contribute significantly to our earnings, and all segments of our life and health operations posted strong gains," he said.
Written premiums from ITT Hartford's worldwide insurance operations for the third quarter totaled $1.9 billion, up 2 percent from the 1990 third quarter, due to growth in North American life and health operations. Written premiums for the first nine months totaled $5.6 billion, up 1 percent from the same period in 1990.
Net investment income (after-tax) for worldwide property-casualty operations in the third quarter was $176 million, up 9 percent from the year-earlier period. For the first nine months, net investment income (after-tax) for worldwide property-casualty operations was $535 million, up 8 percent from the same period in 1990.
ITT Hartford's combined ratio for worldwide property-casualty operations -- which is claims and other expenses as a percentage of property-casualty premiums -- deteriorated to 110.2 percent in the third quarter, from 106.8 percent in the same period the year before. The nine-month combined ratio was 108.9 percent, compared with 107.9 percent in 1990.
ITT Hartford's total assets were nearly $36 billion at the end of the third quarter. North American Property-Casualty Operations
"Competition in all segments of the commercial lines marketplace continues to be intense, with a large number of insurers competing for new business," said Frahm. "Personal lines competition also remains aggressive in most states.
"Our reputation for financial integrity, however, has had a positive impact on our new commercial business flow, and we're beginning to see an increase in new personal lines business in more of our target markets," he said.
Net income rose 56 percent to $84 million in the third quarter, largely due to an increase in net investment income, including realized capital gains. Net income increased 86 percent to $246 million in the first nine months.
As a result of continued aggressive price competition, written premiums remained flat in both the third-quarter and nine-month periods. Written premiums were $1.4 billion in the third quarter and $3.9 billion in the first nine months. North American Life and Health Operations
Highly profitable growth continues in ITT Hartford's North American life and health operations, with earnings improvement across all segments.
The Asset Management Services division reached $9 billion in assets under management in the third quarter, while the Individual Life and Annuities division sold its 100,000th annuity and achieved $1 billion in new individual annuity deposits. The Employee Benefits division's continued emphasis on cost control, through managed health-care initiatives, helped the division maintain its profitability.
In addition, three independent rating organizations -- A.M Best, Standard & Poor's and Duff & Phelps -- reaffirmed their highest ratings for the Hartford Life Insurance Co. Standard & Poor's and Duff & Phelps extended those ratings to Hartford Life and Accident Co.
Net income from North American life and health operations was $21 million in the third quarter, up 24 percent from the year-earlier period. Nine-month net income was $60 million, up 36 percent.
Deposits and premiums were $1.6 billion in the third quarter, up 59 percent from the same period in 1990. For the first nine months, deposits and premiums were $4.2 billion, up 5 percent.
Deposits consist mainly of funds entrusted to the company by individuals and groups as part of their retirement programs. International Operations
Operating results for ITT Hartford's international operations deteriorated due to negative impacts from a recession and continued difficult conditions in the personal and commercial lines markets in the United Kingdom.
The negative impacts were compounded by adverse marine and reinsurance experience at the company's London & Edinburgh subsidiary in the United Kingdom.
Net income was $2 million in the third quarter, down 87 percent from the same period in 1990. Nine-month net income was $32 million, down 33 percent.
Written premiums also declined in the third quarter to $243 million, down 2 percent from the 1990 quarter. Nine-month written premiums increased to $839 million, up 5 percent.
The above results are for all insurance operations owned or managed by ITT Hartford.
ITT Hartford, a subsidiary of ITT Corp. (NYSE: ITT), is one of the nation's oldest and largest international insurance and financial services operations. Member companies offer commercial property and casualty insurance, automobile and homeowners coverages, and a variety of life insurance, employee benefit and asset management plans.
/CONTACT: Rich Bulat, 203-547-5815 (office) or 203-482-5907 (home), or Joyce Willis, 203-547-4951 (office) or 203-286-0202 (home), of ITT Hartford/
(ITT) CO: ITT Hartford Insurance Group; ITT Corp. ST: Connecticut IN: INS SU: ERN SH -- NE008 -- 2132 11/07/91 10:34 EST