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THE HANOVER INSURANCE COMPANY REPORTS 1991 FOURTH QUARTER EARNINGS

 THE HANOVER INSURANCE COMPANY REPORTS 1991 FOURTH QUARTER EARNINGS
 WORCESTER, Mass., Feb. 27 /PRNewswire/ -- The Hanover Insurance Company (NASDAQ: HINS) today reported annual net income of $48.7 million, or $2.36 per share for 1991 compared to net income of $53.2 million, or $2.58 per share for 1990. Net income for the fourth quarter was $15.7 million, or 76 cents per share compared to net income of $16.1 million or 78 cents per share for the fourth quarter of 1990. Year-to-date Results
 In 1991, income from operations, excluding net realized capital gains and the "fresh start" benefit was $43.9 million, or $2.13 per share. In 1990, income from operations, excluding net realized capital losses and the "fresh start" benefit was $41.7 million, or $2.02 per share.
 Earnings in 1991 include unusual involuntary charges of $21 million before tax. This includes a $9 million assessment from the National Workers' Compensation Reinsurance Pool reported in first quarter earnings and a $12 million charge for the Maine Workers' Compensation Residual Market Pool (MWCRMP) reported in fourth quarter earnings. These charges represent approximately 67 cents per share after taxes. Included in the 1990 "fresh start" benefit was a one-time benefit of $10.5 million for salvage and subrogation.
 The company's combined ratio, including policyholders' dividends, was 109.5 percent in 1991 compared to 107.6 percent in 1990. Net weather-related catastrophes in 1991 were $32.4 million adding 2.0 points to the combined ratio, compared to $18.4 million in 1990, which added 1.2 points to the combined ratio.
 Net investment income before taxes was $200.9 million in 1991, an increase of 14.4 percent over net investment income of $175.6 million in 1990. The strong growth in investment income is a result of our significant increase in 1990 premiums and our continued movement away from non-taxable to taxable securities.
 For 1991, net premiums written decreased 1.0 percent from $1,622.7 million in 1990 to $1,605.8 million in 1991 while net premiums earned increased 1.5 percent in the same period.
 For 1991, the investment portfolio showed a net capital gain before taxes of $38.2 million consisting of realized capital gains of $4.4 million and unrealized capital gains of $33.8 million. In 1990, the investment portfolio showed a net capital loss before taxes of $22.5 million consisting of realized capital losses of $3.1 million and unrealized capital losses of $19.4 million. Fourth Quarter Results
 For the fourth quarter of 1991, net income from operations, excluding net realized capital gains and the "fresh start" benefit was $14.7 million, or 71 cents per share. Earnings include a $12 million charge for the MWCRMP. This charge represents approximately 38 cents per share after tax. In the fourth quarter of 1990 income from operations, also excluding net realized capital losses and the "fresh start" benefit was $12.1 million, or 59 cents per share.
 The company's combined ratio, including policyholders' dividends, was 110.1 percent in the fourth quarter of 1991 compared to 111.1 percent in 1990. Net weather-related catastrophes impacted the fourth quarter by approximately $2.2 million in 1991, adding 0.6 points to the combined ratio, compared to $5.2 million in 1990 which added 1.2 points to the combined ratio.
 Net investment income before taxes was $53.2 million in the fourth quarter, an increase of 13.3 percent over net investment income of $47.0 million in 1990.


In the fourth quarter, net premiums written decreased 6.8 percent from $397.1 million in 1990 to $370.2 million in 1991 while net premiums earned decreased 5.1 percent in the same period.
 In the fourth quarter of 1991, the investment portfolio showed a net capital gain before taxes of $7.3 million consisting of realized capital gains of $.8 million and unrealized capital gains of $6.5 million. In the same period of 1990, the investment portfolio showed a net capital gain before taxes of $4.2 million consisting of realized capital losses of $11.1 million and unrealized capital gains of $15.3 million.
 Bond holdings represented 93 percent of total invested asets of $2.6 billion. On Dec. 31, 1991, the carrying value of bonds whose credit rating had fallen below investment grade was $37.9 million, or 1.4 percent of invested assets. This has not changed significantly from year end 1990. The estimated market value of these bonds was $35.3 million. There are no investments in real estate or mortgages secured by real estate.
 Shareholders' equity increased $17.8 million in the fourth quarter of 1991 from $816.5 million ($39.58 per share) at Sept. 30, 1991 to $834.3 million ($40.44 per share) at Dec. 31, 1991.
 All quarterly figures are unaudited and reported in accordance with generally accepted accounting principles (GAAP) with the exception of the combined ratio and underwriting exhibits which are on a statutory basis following industry practice.
 Realized and unrealized capital gains, fresh start and net investment income reported net of tax for 1991 and 1990 are calculated at the statutory federal income tax rate of 34 percent without regard to alternative minimum tax (AMT).
 The Hanover Insurance Company is a property and liability insurance and financial services organization. The company's common stock is traded "over the counter" under the symbol HINS.
 HANOVER INSURANCE COMPANY
 Quarter ended 12/31/91 12/31/90
 Net income $15,762,000 $16,121,000
 Earnings per share (1) 76 cents 78 cents
 Average number of shares 20,632,000 20,632,000
 12 months ended 12/31/91 12/31/90
 Net income $48,748,000 $53,208,000
 Earnings per share (1) $2.36 $2.58
 Average number of shares 20,632,000 20,632,000
 All figures are reported in accordance with generally accepted accounting principles (GAAP).
 (1) Includes net realized gain on investments, net of federal income taxes at the statutory rate of 34 percent, without regard for alternative minimum tax (AMT) in 1991 and 1990, as follows:
 Y-T-D Fourth quarter
 1991 1990 1991 1990
 Net realized gain
 (loss) on investments,
 net of applicable
 federal income taxes 14 cents (10 cents) 3 cents (36 cents)
 -0- 2/27/92
 /CONTACT: Joseph C. Henry, vice president and treasurer, or Pamela C. Domin, of The Hanover Insurance Company, 508-855-7200/
 (HINS) CO: The Hanover Insurance Company ST: Massachusetts IN: INS SU: ERN


EG-PB -- NE005 -- 3244 02/27/92 11:52 EST
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Date:Feb 27, 1992
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