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RECORD CATASTROPHE LOSSES AND CHANGES IN ACCOUNTING FOR RETIREE HEALTH CARE REDUCE ITT HARTFORD'S SECOND-QUARTER AND FIRST-HALF NET INCOME

RECORD CATASTROPHE LOSSES AND CHANGES IN ACCOUNTING FOR RETIREE HEALTH

CARE REDUCE ITT HARTFORD'S SECOND-QUARTER AND FIRST-HALF NET INCOME
 NEW YORK, July 30 /PRNewswire/ -- ITT Corporation (NYSE: ITT) announced today that its ITT Hartford Insurance Group had net income for the second quarter ended June 30 of $32 million, compared with a restated $90 million in the comparable 1991 quarter.
 The decline was due to a decrease in net income reported by the company's worldwide property-casualty operations, partially offset by higher net income from North American life operations.
 "In line with the industry, ITT Hartford experienced record losses in the second quarter from a series of catastrophes, including severe wind and hail storms in several parts of the country, the Los Angeles riots and Chicago water damage," said Donald R. Frahm, ITT Hartford's chairman and chief executive officer.
 "Additionally, increases in workers' compensation claim costs and continued soft market conditions adversely affected our results," said Frahm.
 "However, our investment operations continued to report improvements, and North American life operations continued to take leadership positions in many markets."
 The 1992 second quarter and six months included after tax portfolio gains of $18 million and $95 million respectively, compared with $30 million in the 1991 six months. There were virtually no portfolio gains in the 1991 second quarter.
 Net written premiums from ITT Hartford's worldwide insurance operations in the second quarter were $1.8 billion, up slightly from last year's second quarter. Net written premiums in the first half were $3.8 billion, compared with $3.7 billion in the first half last year.
 Deposits, which consist mainly of funds entrusted to ITT Hartford's life operations by individuals and groups as part of their retirement programs, were $986 million in the second quarter, compared with $1.1 billion in last year's second quarter. Deposits were $2.5 billion in the first half of 1992, compared with $2 billion last year.
 ITT Hartford adopted two new accounting standards in the second quarter: Financial Accounting Standards Board (FASB) Statement No. 106, "Accounting for Postretirement Benefits Other Than Pensions"; and FASB Statement No. 109, "Accounting for Income Taxes."
 In connection with the adoption of FASB 106, a cumulative one-time charge of $358 million was recorded as of Jan. 1, 1992. As a result of the one-time charge, ITT Hartford recorded a first-half net loss of $212 million, compared with a restated net income of $221 million in the first half of 1991. Excluding the one-time charge, net income in the first half would have been $146 million.
 FASB 109 was adopted by restating the reported financial results of prior periods and, accordingly, Dec. 31, 1991 retained earnings was increased by $114 million. Net income in the second-quarter and first-half was reduced by $5 million and $10 million, respectively. FASB 109 had a similar impact on the 1991 second quarter and first-half.
 North American property-casualty operations posted a net loss of $1 million in the second quarter, compared with a restated net income of $59 million last year, as a result of record catastrophe losses, an increase in workers' compensation claim costs and continued soft market conditions. For the first half, net income excluding the cumulative one-time charge was $67 million, compared with a restated $152 million last year.
 Net income from North American life and health operations was $24 million in the second quarter, compared with $17 million last year, due to improved results in most market segments and higher realized capital gains. For the first half, net income excluding the cumulative one-time charge was $62 million, compared with $39 million last year.
 Net income from international operations was $9 million in the second quarter, compared with a restated $14 million last year, due to greater underwriting losses in Europe caused by the lingering effects of a soft market. For the first half, net income was $17 million, compared with a restated $30 million last year.
 ITT Hartford's total assets were $39.9 billion at the end of the second quarter, compared with a restated $38.5 billion at the end of the first quarter.
 ITT Hartford, a subsidiary of ITT Corporation, 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. The above results are for all insurance operations owned or managed by ITT Hartford.
 -0- 7/30/92
 /CONTACT: Rich Bulat of ITT, 203-547-5815/
 (ITT) CO: ITT Corporation; ITT Hartford Insurance Group ST: New York, Connecticut IN: INS SU: ERN


TS -- NY066 -- 5110 07/30/92 12:51 EDT
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Publication:PR Newswire
Date:Jul 30, 1992
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