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USF&G CORPORATION REPORTS SECOND QUARTER PROFIT; IMPROVEMENT IN PROPERTY/CASUALTY OPERATIONS CONTINUES

 USF&G CORPORATION REPORTS SECOND QUARTER PROFIT;
 IMPROVEMENT IN PROPERTY/CASUALTY OPERATIONS CONTINUES
 BALTIMORE, July 29 /PRNewswire/ -- USF&G Corporation (NYSE: FG) today reported consolidated net income of $6 million for the second quarter of 1992, compared with a consolidated net loss of $56 million for the same period in 1991. For the first six months of 1992, consolidated net income totaled $10 million, compared with a net loss of $111 million for the same period in 1991. After accounting for preferred stock dividends, these results equate to a 1992 second quarter and first half net loss of $.07 and $.17 per common share, respectively compared with a net loss of $.77 and $1.47 per common share for the same periods last year.
 Property/casualty earnings before realized gains on investments ("operating income") improved for the fourth consecutive quarter, but were offset by noninsurance operating losses resulting in a break- even quarterly consolidated (corporate) result. This compares with a consolidated operating loss of $55 million for the 1991 second quarter. On a per common share basis, the operating loss was $.14 per common share for the second quarter of 1992, compared with an operating loss of $.76 per common share for the same period in 1991. Operating income for the first six months of 1992 was $5 million, or a loss of $.23 per share, compared with an operating loss of $85 million or $1.16 per share for the same period in 1991.
 Norman P. Blake, Jr., Chairman, President, and Chief Executive Officer, said today: "USF&G's second quarter performance represents the expected continuation of positive earnings improvement. We are particularly encouraged by the performance of our core property/casualty (P/C) business as it drives the earnings recovery and continues to implement strategies to be an increasingly more market-focused, customer-driven insurance organization. Having strengthened our financial foundation in 1991, we now have the strongest statutory surplus position in many years and stand ready to capitalize on future profitable growth opportunities.
 "The quarter's results continue the positive earnings trend begun in the latter half of 1991 and include larger than expected catastrophe losses in the second quarter as 1992 is emerging as the third costliest to the industry in terms of insured property loss. Although overall premium levels have declined as a result of planned management actions to focus on profitable business, growth in the more desirable segments of business has improved as have renewal/retention rates. These latter developments are reflective of the continued loyalty and confidence of our agency partnership."
 ADDITIONAL CONSOLIDATED DATA
 Net realized gains on investments for the 1992 first half totaled $6 million, compared with net realized gains of $8 million for the same period in 1991.
 Consolidated revenues for the first half of 1992 totaled $1.8 billion, compared with $2.1 billion for the same period in 1991. Assets were $13.9 billion as of June 30, 1992, and stockholders' equity totaled $1.3 billion, or $9.36 per common share.
 PROPERTY/CASUALTY INSURANCE
 Property/casualty net income totaled $52 million for the second quarter of 1992, compared with a net loss of $44 million for the second quarter in 1991. Net income for the first six months of 1992 totaled $92 million, compared with a net loss of $59 million for the same period in 1991. Operating income totaled $26 million for the second quarter of 1992, compared with an operating loss of $36 million for the same period in 1991. Operating income for the first six months of 1992 totaled $47 million, compared with an operating loss of $52 million for the same period in 1991.
 Second quarter earnings reflect improved loss experience resulting from Best Practices programs in claims, underwriting, and loss control as well as the improvement in product/market mix resulting from state and market withdrawals. This positive shift in the quality of the book of business continues to be accompanied by planned premium declines as the company eliminates unprofitable business. The results were adversely impacted by larger than expected catastrophe losses, primarily hailstorms and tornadoes in late June in Kansas and Oklahoma. The entire insurance industry was affected by extraordinary catastrophe losses in the second quarter.
 LIFE INSURANCE
 Life insurance net loss for the second quarter of 1992 totaled $1 million, compared with net income of $11 million for the same 1991 period. Net income for the first six months of 1992 totaled $3 million, compared with $11 million for the same period in 1991. Operating income was $1 million in the second quarter of 1992, compared with operating income of $3 million for the same period in 1991. Operating income for the first six months of 1992 totaled $3 million, compared with $11 million for the same period in 1991.
 Life company performance in the second quarter of 1992 continued to be affected by lower sales related to the depressed nature of the single premium deferred annuity market.
 PARENT AND NONINSURANCE OPERATIONS
 Parent and noninsurance operations had a net loss of $45 million for the second quarter of 1992, compared with a net loss of $23 million for the same 1991 quarter. Net loss for the first six months of 1992 totaled $85 million compared, with $63 million for the same period in 1991. These losses include corporate interest expense and noninsurance operations, as well as $18 million in the second quarter and six months of 1992 for nonroutine provisions for impaired investments, and $4 million and $18 million for additions to real estate reserves in the same 1992 periods, respectively.
 Baltimore-based USF&G Corporation, with assets of $13.9 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 Six Months Ended
 June 30, June 30,
 1992 1991 1992 1991
 REVENUES:
 Premiums earned $ 669 $ 815 $ 1,378 $ 1,663
 Net investment income 216 220 430 437
 Other 15 18 33 37
 Total revenues 900 1,053 1,841 2,137
 EXPENSES:
 Losses, loss expenses 611 781 1,262 1,568
 and policy benefits
 Underwriting, acquisition 278 315 552 627
 and operating expenses
 Interest expense 10 10 21 25
 Restructuring charges -- 9 -- 30
 Total expenses 899 1,115 1,835 2,250
 Realized gains on
 investments 6 8 6 8
 Pretax income (loss) from
 continuing operations 7 (54) 12 (105)
 Provision for income taxes -- 2 1 2
 Income (loss) from
 continuing operations 7 (56) 11 (107)
 Loss from discontinued
 operations (1) -- (1) (4)
 Net income (loss) $ 6 $ (56) $ 10 $ (111)
 EARNINGS PER COMMON SHARE(A)
 Loss from continuing
 operations $ (.06) $ (.77) $ (.16) $ (1.43)
 Loss from discontinued
 operations (.01) -- (.01) (.04)
 Net loss $ (.07) $ (.77) $ (.17) $ (1.47)
 Weighted average common
 shares outstanding (000s) 84,280 84,140 84,277 84,095
 (A) Earnings per common share amounts are based on income after deduction of preferred stock dividends.
 -0- 7/29/92
 /CONTACT: Kerrie Burch-DeLuca of USF&G, 410-547-3573/
 (FG) CO: USF&G Corporation ST: Maryland IN: INS SU: ERN


TW -- DC006 -- 4487 07/29/92 10:12 EDT
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Date:Jul 29, 1992
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