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USF&G CORPORATION REPORTS FIRST QUARTER PROFIT; PROPERTY/CASUALTY OPERATIONS DRIVE RESULTS

 USF&G CORPORATION REPORTS FIRST QUARTER PROFIT;
 PROPERTY/CASUALTY OPERATIONS DRIVE RESULTS
 BALTIMORE, April 29 /PRNewswire/ -- USF&G Corporation (NYSE: FG) today reported consolidated net income of $4 million, compared with a consolidated net loss of $55 million for the same period in 1991. After accounting for preferred stock dividends, these results equate to a 1992 first quarter net loss of 9 cents per common share, compared with a net loss of 9 cents per common share for the same period last year.
 Consolidated operating income, which excludes realized gains and losses, for the first quarter was $5 million, compared with a consolidated operating loss of $30 million for the 1991 first quarter. On a per common share basis, the operating loss was 9 cents per common share for the first quarter of 1992, compared with an operating loss of 41 cents per common share for the same period in 1991.
 Norman P. Blake Jr., chairman, president, and chief executive officer, said today: "A measurable positive trend is emerging, as evidenced by consolidated net income for the first quarter of $4 million. These results also include some strengthening of both core insurance loss reserves and reserves on the company's real estate portfolio.
 "The key driver of this operating earnings improvement is the performance of property/casualty (P/C) operation. The primary impetus for improving the P/C operating income is lower loss experience resulting from restructuring initiatives and Best Practices programs commenced in 1991. This improvement is being realized concurrently with the planned decline in revenue (written premiums) as the company continues to prune its book of business to eliminate unprofitable business. It is important to note that the earnings drag associated with non-insurance operations has been significantly reduced.
 "We are, of course, encouraged by the measurable progress in terms of earnings, but are equally encouraged by the growth in the underlying strength of USF&G and the loyalty of our agency partners. The P/C company has the strongest position in terms of operating leverage, and gross surplus that it has had in recent years. Our attention to fundamental financial integrity is evident."
 Additional Consolidated Data
 Net realized losses on investments for the 1992 first quarter totaled $.3 million, compared with net realized gains of $.4 million for the same period of 1991.
 Consolidated revenues for the three months of 1992 totaled $941 million, compared with $1.1 billion for the same period of 1991. This decline is in line with the planned declines in P/C premiums. Assets were $14.0 billion as of March 31, 1992, and stockholders' equity totaled $1.3 billion, or $9.61 per common share.
 Property/Casualty Insurance
 Property/casualty net income totaled $40 million for the first quarter of 1992, compared with a net loss of $15 million in the first quarter of 1991. Operating income totaled $21 million for the first quarter of 1992, compared with an operating loss of $16 million for the same period of 1991.
 First quarter earnings reflect the favorable impact of eliminating unprofitable product lines in selected states, reducing expenses, and improving the core capabilities in the insurance operations. The improvement is occurring concurrently with the planned premium declines associated with the company's actions to eliminate unprofitable business.
 Life Insurance
 Life insurance net income for the first quarter 1992 totaled $4 million, compared with break even in the same 1991 period. Operating income was $2 million in the first quarter of 1992, compared with operating income of $8 million in the same period of 1991.
 Life company performance in the first quarter of 1992 continued to be affected by lower sales and policy surrender activity, both of which were prompted by negative public perceptions of the life insurance industry during the middle of 1991. Surrender activity has been, however, significantly contained from the unusually high levels experienced in 1991. Efforts to regain sales momentum are focused in the areas of rebuilding confidence in the broker/dealer community and introducing new products for the life company's other distribution channels, independent agents and financial institutions.
 Parent and Non-Insurance Operations
 Parent and non-insurance operations had a net loss of $40 million for the first quarter of 1992 and 1991. These losses primarily relate to corporate interest expense, non-insurance operations, and certain real estate and related expenses.
 Baltimore-based USF&G Corporation, with assets of $14.0 billion, is composed of subsidiaries engaged in the writing of property/casualty and life insurance. The corporation's principal subsidiary is United States Fidelity and Guaranty Company, founded in 1896.
 USF&G CORPORATION
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
 (Unaudited -- dollars in millions except per share data)
 Three Months Ended
 March 31,
 1992 1991
 REVENUES:
 Premiums earned $ 709 $ 848
 Net investment income 214 217
 Other 18 19
 Total revenues 941 1,084
 EXPENSES:
 Losses, loss expenses
 and policy benefits 651 787
 Underwriting, acquisition
 and operating expenses 274 312
 Interest expense 11 15
 Total expenses 936 1,114
 Revenue less expenses 5 (30)
 Realized gains (losses) on
 investments -- --
 Restructuring charges -- (21)
 Pretax loss from continuing
 operations 5 (51)
 Provision for income taxes 1 --
 Income (loss) from continuing
 operations 4 (51)
 Loss from discontinued
 operations -- (4)
 Net income (loss) $ 4 $ (55)
 EARNINGS PER COMMON SHARE(A)
 Loss from continuing
 operations $ (.09) $ (.65)
 Loss from discontinued
 operation -- (.05)
 Net loss $ (.09) $ (.70)
 Weighted average common
 shares outstanding (000s) 84,273 84,050
 (A) Earnings per common share amounts are based on income (loss) after deduction of preferred stock dividends.
 -0- 4/29/92 R
 /CONTACT: Kerrie Burch-DeLuca of USF&G, 410-547-3573/
 (FG) CO: USF&G Corporation ST: Maryland IN: INS SU: ERN


MH-TW -- DC011 -- 4311 04/29/92 11:17 EDT
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Publication:PR Newswire
Date:Apr 29, 1992
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