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USF&G CORPORATION REPORTS THIRD QUARTER RESULTS; CORE PROPERTY/CASUALTY OPERATIONS CONTINUE TO IMPROVE

 USF&G CORPORATION REPORTS THIRD QUARTER RESULTS;
 CORE PROPERTY/CASUALTY OPERATIONS CONTINUE TO IMPROVE
 BALTIMORE, Oct. 28 /PRNewswire/ -- USF&G Corporation (NYSE: FG) today reported consolidated net income of $5 million for the third quarter of 1992, compared with a consolidated net loss of $25 million for the same period in 1991.
 These results include the previously announced $80 million net impact of Hurricane Andrew. In addition, the company initiated the implementation of a regionalization strategy to enhance its field marketing and underwriting operations and to improve its operating efficiencies in both the small and middle market segments. These actions and others implemented during the quarter are expected to result in annualized expense reductions of approximately $55 million by 1994. As a result, a one-time restructuring charge of $51 million was included in the third quarter results. Investment gains, which more than offset the impact of both Hurricane Andrew and the restructuring charge, were realized during the third quarter, sustaining the company's strong statutory surplus level.
 For the first nine months of 1992, consolidated net income totaled $15 million, compared with a net loss of $136 million for the same period in 1991. After accounting for preferred stock dividends, these results equate to 1992 third quarter and nine month net losses of $.09 and $.25 per common share, respectively, compared with net losses of $.44 and $1.91 per common share, respectively, for the same periods last year.
 Norman P. Blake Jr., chairman, president, and chief executive officer, described the results as follows. "While we continue to experience improvement in our core property/casualty business, third quarter operating performance was masked by the impact of Hurricane Andrew, an event that has significantly affected the entire insurance industry. We are intently focused on responding to the needs of our insured during this time of tragedy and my recent review of our catastrophe team operations in South Florida reaffirms my confidence and pride in our company. Our strategy to lessen exposure to such catastrophes through our 1991 state exits of Louisiana and Texas proved to be beneficial as our loss from Hurricane Andrew in Louisiana was minimal.
 "Looking forward, we have recently initiated the implementation of a major regionalization strategy in our field organization. We are opening six new regional offices by year end, and will expand into our first new full-service branch office in many years. This redesign of our marketing, underwriting, and service capabilities, to be completed in 1993, will significantly improve our efficiency, product production, and delivery process and will position us for profitable growth in the future."
 ADDITIONAL CONSOLIDATED DATA
 Consolidated results from continuing operations before realized gains and restructuring charges, but including losses from Hurricane Andrew, were a loss of $80 million, or $1.09 per share, for the third quarter of 1992. This compares with losses of $30 million, or $.49 per share, for the same 1991 period. Similar results for the first nine months of 1992 were a loss of $75 million, or $1.32 per share, compared with losses of $115 million, or $1.66 per share, for the same period in 1991.
 Net realized gains on investments for the first nine months of 1992 totaled $148 million, compared with net realized gains of $22 million for the same period in 1991.
 Consolidated revenues, which include realized gains, for the first nine months of 1992 totaled $2.9 billion, compared with $3.1 billion for the same period in 1991 and are in line with expectations as the company continues to focus on profitable lines of business in specific states and eliminates unprofitable business.
 Assets were $14.7 billion as of Sept. 30, 1992, and stockholders' equity totaled $1.3 billion, or $8.90 per common share.
 PROPERTY/CASUALTY INSURANCE
 Property/casualty net income totaled $43 million for the third quarter of 1992, compared with net income of $10 million for the third quarter in 1991. Net income for the first nine months of 1992 totaled $135 million, compared with a net loss of $49 million for the same period in 1991. Results before realized gains and restructuring charges were a loss of $43 million for the third quarter of 1992, but included the $80 million net losses from Hurricane Andrew. This compares with similar income of $3 million for the same period in 1991. Income before realized gains and restructuring charges for the first nine months of 1992 totaled $4 million, compared with losses of $49 million for the same period in 1991.
 The property/casualty operations continue to be the earnings driver for USF&G. Aside from history-making catastrophe losses in the entire industry as well as USF&G this quarter, and a field reorganization that necessitated restructuring charges, these operations continue their positive trend and benefit from strong agency retention, an improved market mix, and a more profitable core book of business.
 LIFE INSURANCE
 Life insurance net loss for the third quarter of 1992 totaled $4 million, compared with net income of $3 million for the same 1991 period. Net loss for the first nine months of 1992 totaled $1 million, compared with net income of $14 million for the same period in 1991. Results before realized gains and restructuring charges were a loss of $6 million in the third quarter of 1992, compared with a loss of $4 million for the same period in 1991. Similar results for the first nine months of 1992 were a loss of $3 million, compared with income of $7 million for the first nine months of 1991.
 The implementation of a repositioning strategy for the life company was completed in the third quarter, resulting in a more balanced insurance operation in terms of product and distribution channel. Traditional life insurance products are being marketed on a wholesale basis through independent agents, centralized customer and agent service centers have been established in Baltimore, and new tax-sheltered annuity products are being sold through a national broker to the education marketplace. This redirection will increase opportunities for profitable growth in this segment.
 PARENT AND NON-INSURANCE OPERATIONS
 Parent and non-insurance operations had a net loss of $34 million for the third quarter of 1992, compared with a net loss of $38 million for the same 1991 quarter. Net loss for the first nine months of 1992 totaled $119 million compared with a net loss of $101 million for the same period in 1991. These results include corporate interest expense and losses from non-insurance operations.
 Baltimore-based USF&G Corporation, with assets of $14.7 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 Nine Months Ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 REVENUES:
 Premiums earned $ 657 $ 743 $ 2,035 $ 2,406
 Net investment income 197 218 627 655
 Other 15 16 48 53
 Revenues before
 realized gains 869 977 2,710 3,114
 Realized gains on
 investments 142 14 148 22
 Total revenues 1,011 991 2,858 3,136
 EXPENSES:
 Losses, loss expenses
 and policy benefits 679 709 1,941 2,277
 Underwriting, acquisition
 and operating expenses 260 287 812 914
 Interest expense 10 11 31 36
 Restructuring charges 51 4 51 34
 Total expenses 1,000 1,011 2,835 3,261
 Pretax income (loss) from
 continuing operations 11 (20) 23 (125)
 Provision for income taxes -- 1 1 3
 Income (loss) from
 continuing operations 11 (21) 22 (128)
 Loss from discontinued
 operations (6) (4) (7) (8)
 Net income (loss) $ 5 $ (25) $ 15 $ (136)
 EARNINGS PER COMMON SHARE(A)
 Loss from continuing
 operations $ (.02) $ (.38) $ (.17) $ (1.81)
 Loss from discontinued
 operations (.07) (.06) (.08) (.10)
 Net loss $ (.09) $ (.44) $ (.25) $ (1.91)
 Weighted average common
 shares outstanding (000s) 84,377 84,211 84,310 84,134
 (A) Earnings per common share amounts are based on income after deduction of preferred stock dividends.
 -0- 10/28/92
 /CONTACT: Kerrie Burch-DeLuca of USF&G, 410-547-3573/
 (FG) CO: USF&G Corporation ST: Maryland IN: INS SU: ERN


IH-TW -- DC006 -- 5909 10/28/92 10:52 EST
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Date:Oct 28, 1992
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