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

 BALTIMORE, April 28 /PRNewswire/ -- USF&G Corporation (NYSE: FG) today reported consolidated net income for the 1993 first quarter of $61 million, compared with consolidated net income of $4 million for the same period in 1992. After accounting for preferred stock dividends, these results equate to a first quarter net income of 58 cents per common share, compared with a net loss of 9 cents per common share for the same period last year. On a fully diluted basis, which assumes the conversion of certain preferred stock to common stock, net income was 51 cents per share for the first quarter of 1993. Consolidated first quarter net income, prior to realized gains and losses and the net impact of adopting three new Financial Accounting Standards Board (FASB) standards, was $22 million or $.12 per share, compared with net income before realized gains and losses of $5 million or a loss of 9 cents per share for the 1992 first quarter.
 USF&G Chairman, President, and Chief Executive Officer Norman P. Blake Jr. described the results: "Our 1993 first quarter is, by far, the most promising performance since we began our restructuring in late 1990. Our underlying book of business continues to improve due to our repositioning programs and the related reduction in loss experience is driving our increasing profitability.
 "The quarter also included the adoption of three new Financial Accounting Standards Board (FASB) standards. To be specific, we adopted FASB 106 relating to accounting for post-retirement employment benefits, FASB 109 relating to accounting for income taxes, and FASB 113 relating to accounting for reinsurance contracts. The net effect of adopting these three standards is a benefit of $38 million.
 "Our strong operating performance was even more impressive considering it included catastrophe losses of $30 million that were primarily due to the March blizzard that affected 24 states. That level is $22 million higher than our five-year average first quarter catastrophe losses.
 "We are experiencing some growth in targeted areas and expect this to improve as we develop and introduce new products for specific markets in 1993 and 1994. In summary, we are beginning to realize some positive results from our strategies to rebuild USF&G."
 ADDITIONAL CONSOLIDATED DATA
 Net realized gains on investments for the 1993 first quarter totaled $.8 million, compared with net realized losses of $.3 million for the same period of 1992.
 Consolidated revenues for the three months of 1993 totaled $875 million, compared with $941 million for the same period of 1992. This decline is in line with the company's ongoing strategies to reduce exposures in unprofitable lines of business in specific states. Assets were $14.8 billion as of March 31, 1993, and stockholders' equity totaled $1.3 billion, or $9.51 per common share.
 PROPERTY/CASUALTY INSURANCE
 Property/casualty net income totaled $80 million for the first quarter of 1993, compared with net income of $40 million in the first


quarter of 1992. Net income before realized gains and losses and the effects of FASB 106, 109, and 113, totaled $40 million for the first quarter of 1993, compared with $21 million for the same period of 1992.
 First quarter earnings reflect the positive impact of improving loss ratios due to strategic initiatives taken to improve profitability by reducing or eliminating unprofitable business, improved productivity and growth in targeted lines of insurance. The results also include the aforementioned large catastrophe losses of $30 million, approximately $23 million of which was related to the 24-state March blizzard.
 LIFE INSURANCE
 Life insurance net income for the first quarter 1993 was break-even, compared with net income of $4 million in the same 1992 period. Results before realized gains and the impact of FASB 106, 109, and 113 were also break-even in the first quarter of 1993, compared with income before realized gains and losses of $2 million in the same period of 1992.
 Life company performance in the first quarter of 1993 continues to reflect the strategic repositioning of late 1992 that increases both distribution and product opportunities.
 NON-INSURANCE OPERATIONS, INTEREST AND UNALLOCATED EXPENSES
 Non-insurance operations, interest, and unallocated expenses produced a net loss of $19 million for the first quarter of 1993, compared with a net loss of $40 million for the same 1992 period. Interest expense totaled $10 million for the quarter, unallocated expenses totaled $8 million, and non-insurance operations had a loss of $1 million.
 USF&G Corporation, with assets of $14.8 billion, is one of the nation's largest insurers. The corporation's principal subsidiary is United States Fidelity and Guaranty Company, its property/casualty insurance 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,
 1993 1992
 REVENUES:
 Premiums earned $ 674 $ 709
 Net investment income 192 214
 Other 8 18
 Revenues before realized gains 874 941
 Realized gains on investments 1 --
 Total revenues 875 941
 EXPENSES:
 Losses, loss expenses and policy benefits 590 651
 Underwriting, acquisition
 and operating expenses 252 274
 Interest expense 10 11
 Total expenses 852 936
 Income before income taxes 23 5
 Provision for income taxes -- 1
 Income before cumulative effect of
 accounting changes 23 4
 Income (loss) from cumulative effect of
 accounting changes:
 Income taxes 90 --
 Postretirement benefits (52) --
 Net income $ 61 $ 4
 PRIMARY EARNINGS PER COMMON SHARE(A)
 Income (loss) before cumulative effect of
 accounting changes $ .13 $ (.09)
 Income (loss) from cumulative effect of
 accounting changes:
 Income taxes 1.06 --
 Postretirement benefits (.61) --
 Net income (loss) $ .58 $ (.09)
 FULLY DILUTED EARNINGS PER COMMON SHARE(B)
 Income (loss) before cumulative effect of
 accounting changes $ .17 $ (.09)
 Income (loss) from cumulative effect of
 accounting changes:
 Income taxes .80 --
 Postretirement benefits (.46) --
 Net income (loss) $ .51 $ (.09)
 Weighted average common shares
 outstanding (000s):
 Primary 84,541 84,273
 Fully diluted 112,736 84,273
 (A) Primary earnings per common share amounts are based on income after deduction of preferred stock dividends of $12 million in 1993 and 1992.
 (B) Fully diluted earnings per common share amounts are calculated assuming the conversion of all securities whose contingent issuance would have a dilutive effect on earnings.
 -0- 4/28/93
 /CONTACT: Kerrie Burch-DeLuca of USF&G, 410-547-3573/
 (FG)


CO: USF&G Corporation ST: Maryland IN: INS SU: ERN

MH -- DC011 -- 1832 04/28/93 09:22 EDT
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Date:Apr 28, 1993
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