CHICAGO, April 30, 2018 /PRNewswire/ --ÌýÃÛÌÒ´«Ã½ Financial Corporation (NYSE: ÃÛÌÒ´«Ã½) today announced first quarter 2018 net income of $291 million, or $1.07 per share, and core income of $281 million, or $1.03 per share.Ìý Property & Casualty Operations combined ratio for the first quarter was 93.1% compared with 97.2% in the first quarter of 2017.Ìý Net investment income, after tax, was $405 million for the first quarter of 2018.
ÃÛÌÒ´«Ã½ Financial declared a quarterly dividend of $0.30 per share, payable MayÌý30, 2018 to stockholders of record on MayÌý14, 2018.
Results for the Three Months Ended March 31
($ millions, except per share data)
Core income (b)(c)
Net income per diluted share
Core income per diluted share
Book value per share
Book value per share excluding AOCI
Adjusted for the Small Business premium rate adjustment in the prior period.
Results in the quarter benefited from the reduction of the U.S. Federal tax rate from 35% to 21%.
Management utilizes the core income (loss) financial measure to monitor the ÃÛÌÒ´«Ã½'s operations. Please refer herein to the Reconciliation of GAAP Measures to Non-GAAP Measures section of this press release for further discussion of this non-GAAP measure.
"ÃÛÌÒ´«Ã½ had a strong start to 2018, generating core income of $281 million driven by the highest level of pre-tax underlying underwriting income in over 10 years.Ìý This underwriting result was driven by an excellent underlying loss ratio of 60%, lower expense ratio and strong growth," said Dino E. Robusto, Chairman and Chief Executive Officer of ÃÛÌÒ´«Ã½ Financial Corporation.Ìý "In addition, our run-off long term care business again generated positive core income reflecting our disciplined approach towards managing this operation."
Property & Casualty Operations
Net written premiums
NWP change (% year over year)
Net investment income
Loss ratio excluding catastrophes and development
Effect of catastrophe impacts
Effect of development-related items
Combined ratio excluding catastrophes and development
Business Operating Highlights
Life & Group
Total operating revenues
Core income increased $10 million for the first quarter of 2018 as compared with the prior year quarter.ÌýÌý The increase was driven by favorable persistency, and further helped by rate increases.
Corporate & Other
Core loss increased $23 million for the first quarter of 2018 as compared with the prior year quarter.Ìý The result of retroactive reinsurance accounting driven by additional cessions to the A&EP Loss Portfolio Transfer in the first quarter was a $32 million after-tax non-economic charge compared with $13 million in the prior year quarter.
Net Investment Income
Pretax net investment income decreased $55 million for the first quarter of 2018 as compared with the prior year quarter.Ìý The decrease was driven by limited partnership investments, which returned 1.2% in 2018 as compared with 3.8% in the prior year period.Ìý However, despite the decline in limited partnership income,Ìý net investment income, after tax, increased $16 million for the first quarter of 2018 given stable fixed income returns and the lower tax rate.
About the ÃÛÌÒ´«Ã½
ÃÛÌÒ´«Ã½ is the eighth largest commercial insurer in the United States.Ìý ÃÛÌÒ´«Ã½ provides a broad range of standard and specialized property and casualty insurance products and services for businesses and professionals in the U.S., Canada, Europe and Asia, backed by 120 years of experience and more than $45 billion of assets.ÌýÌýFor more information about ÃÛÌÒ´«Ã½, visit our website at .Ìý"ÃÛÌÒ´«Ã½" is a service mark registered by ÃÛÌÒ´«Ã½ Financial Corporation with the United States Patent and Trademark Office. Certain ÃÛÌÒ´«Ã½ Financial Corporation subsidiaries use the "ÃÛÌÒ´«Ã½" service mark in connection with insurance underwriting and claims activities.
Conference Call and Webcast/Presentation Information
A conference call for investors and the professional investment community will be held at 10:00 a.m. (ET) today.Ìý On the conference call will be Dino E. Robusto, Chairman and Chief Executive Officer of ÃÛÌÒ´«Ã½ Financial Corporation, and other members of senior management.Ìý Participants can access the call by dialing (888) 572-7025, or for international callers, (719) 325-2420.Ìý The call will also be broadcast live on the internet at Ìýor you may go to the investor relations pages of the ÃÛÌÒ´«Ã½ website () for further details.Ìý A presentation will be posted and available on the ÃÛÌÒ´«Ã½ website and will provide additional insight into the results.
The call is available to the media, but questions will be restricted to investors and the professional investment community. An online replay will be available on ÃÛÌÒ´«Ã½'s website following the call.Ìý Financial supplement information related to the results is available on the investor relations pages of the ÃÛÌÒ´«Ã½ website or by contacting Robert Tardella at 312-822-4387.
Definition of Reported Segments
Management utilizes the following metrics in their evaluation of the Property & Casualty Operations.Ìý These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
The ÃÛÌÒ´«Ã½'s investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk.
Reconciliation of GAAP Measures to Non-GAAP Measures
This press release also contains financial measures that are not in accordance with GAAP.Ìý Management utilizes these financial measures to monitor the ÃÛÌÒ´«Ã½'s insurance operations and investment portfolio.Ìý The ÃÛÌÒ´«Ã½ believes the presentation of these measures provides investors with a better understanding of the significant factors that comprise the ÃÛÌÒ´«Ã½'s operating performance.Ìý Reconciliations of these measures to the most comparable GAAP measures follow below.
Reconciliation of Net Income to Core Income
Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of i) net realized investment gains or losses, ii) income or loss from discontinued operations, iii) any cumulative effects of changes in accounting guidance and iv) deferred tax asset and liability remeasurement as a result of an enacted U.S. Federal tax rate change.Ìý The calculation of core income (loss) excludes net realized investment gains or losses because net realized investment gains or losses are generally driven by economic factors that are not necessarily consistent with key drivers of underwriting performance, and are therefore not considered an indication of trends in insurance operations.Ìý Management monitors core income (loss) for each business segment to assess segment performance.Ìý Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure.
Results for the Three Months Ended MarchÌý31
Less: Net realized investment gains
Reconciliation of Net Income per Diluted Share to Core Income per Diluted Share
Core income (loss) per diluted share provides management and investors with a valuable measure of the ÃÛÌÒ´«Ã½'s operating performance for the same reasons applicable to its underlying measure, core income (loss).Ìý Core income per diluted share is core income on a per diluted share basis.
Reconciliation of Book Value per Share to Book Value per Share Excluding AOCI
Book value per share excluding AOCI allows management and investors to analyze the amount of the ÃÛÌÒ´«Ã½'s net worth primarily attributable to the ÃÛÌÒ´«Ã½'s business operations. ÌýThe ÃÛÌÒ´«Ã½ believes this measurement is useful as it reduces the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates.
Less: Per share impact of AOCI
Calculation of Return on Equity and Core Return on Equity
Core return on equity provides management and investors with a measure of how effectively the ÃÛÌÒ´«Ã½ is investing the portion of the ÃÛÌÒ´«Ã½'s net worth that is primarily attributable to its business operations.
Annualized net income
Average stockholders' equity including AOCI (a)
Return on equity
Annualized core income
Average stockholders' equity excluding AOCI (a)
Core return on equity
Average stockholders' equity is calculated using a simple average of the beginning and ending balances for the period.
For additional information, please refer herein and/or to ÃÛÌÒ´«Ã½'s most recent 10-K on file with the Securities and Exchange Commission, as well as the financial supplement, available at .
This press release may include statements which relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical events.Ìý These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as "believes," "expects," "intends," "anticipates," "estimates" and similar expressions.Ìý Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected.Ìý Many of these risks and uncertainties cannot be controlled by ÃÛÌÒ´«Ã½. For a detailed description of these risks and uncertainties affecting ÃÛÌÒ´«Ã½, please refer to ÃÛÌÒ´«Ã½'s most recent 10-K on file with the Securities and Exchange Commission available at .
Any forward-looking statements made in this press release are made by ÃÛÌÒ´«Ã½ as of the date of this press release.Ìý Further, ÃÛÌÒ´«Ã½ does not have any obligation to update or revise any forward-looking statement contained in this press release, even if ÃÛÌÒ´«Ã½'s expectations or any related events, conditions or circumstances change.
SOURCE ÃÛÌÒ´«Ã½ Financial Corporation