CHICAGO, May 4, 2020 /PRNewswire/ --ÌýÃÛÌÒ´«Ã½ Financial Corporation (NYSE: ÃÛÌÒ´«Ã½) today announced a first quarter 2020 net loss of $61 million, or $(0.23) per share, and core income of $108 million, or $0.40 per share.Ìý Results for the quarter reflected financial market volatility amid the events of COVID-19. This included Net investment losses of $169 million and a decrease in Net investment income to $279 million, reflecting stable earnings from fixed income and other investments of $378 million offset by a $99 million loss from limited partnership and common stock investments during the period.Ìý Property & Casualty Operations combined ratio for the first quarter was 97.5% and the underlying combined ratio was 93.9%.Ìý The combined ratio includes charges of $15 million pretax associated with COVID-19.
The U.S. P&C segments, excluding third party captives, generated gross written premium growth of 8% and net written premium growth of 6%.Ìý Excluding third party captives, gross written premiums grew 6% and net written premiums grew 3% for P&C overall.
Our Life & Group and Corporate & Other segments produced core income (loss) for the first quarter of 2020 of $4 million and $(18) million, respectively.
ÃÛÌÒ´«Ã½ Financial declared a quarterly dividend of $0.37 per share, payable JuneÌý4, 2020 to stockholders of record on MayÌý18, 2020.
Results for the Three Months EndedMarch 31
($ millions, except per share data)
Net (loss) income
Core income (a)
Net (loss) income per diluted share
Core income per diluted share
Book value per share
Book value per share excluding AOCI
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.
"Our first quarter financial results reflected strong underwriting performance, and included an underlying combined ratio of 93.9%, a one point improvement from a year ago, along with net written premium growth of 6% in the U.S. and 3% overall.Ìý These results were adversely impacted by disruption in the financial markets due to COVID-19, which led to unfavorable returns on our alternative investments and equity holdings while our fixed income investments generated steady earnings in line with the last four quarters," said Dino E. Robusto, Chairman and Chief Executive Officer of ÃÛÌÒ´«Ã½ Financial Corporation.Ìý "As we look ahead at these unprecedented and challenging times our thoughts go out to those most affected by the COVID-19 pandemic, and we are tremendously grateful for all the medical professionals and first responders who put their lives on the line every day."
Property & Casualty Operations
Results for the Three Months Ended March 31
Gross written premiums ex. 3rdÌýparty captives
GWP ex. 3rdÌýparty captives change (% year over year)
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
GWP ex. 3rd party captives change (% year over year)
Gross written premiums
GWP change (% year over year)
Life & Group
Total operating revenues
Core income of $4 million for the three months ended March 31, 2020 is in line with expectations.
Corporate & Other
Core loss increased $12 million for the first quarter of 2020 primarily driven by lower amortization of the deferred gain related to the A&EP Loss Portfolio Transfer.
Net Investment Income
Pretax net investment income
Net investment income, after tax
Net investment income, after tax, decreased $186 million as compared with the prior year quarter.Ìý Stable earnings from fixed income and other investments of $454 million pretax was offset by losses from limited partnership and common stock investments, which returned (7.0)%, or $(125) million for the first quarter of 2020 compared with 4.5%, or $96 million, in the prior year quarter.
About the ÃÛÌÒ´«Ã½
ÃÛÌÒ´«Ã½ is one of the largest U.S. commercial property and casualty insurance companies.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 and Europe, backed by more than 120 years of experience and approximately $45 billion of assets.ÌýÌýFor more information, please visit ÃÛÌÒ´«Ã½ at .
Conference Call and Webcast/Presentation Information
A conference call for investors and the professional investment community will be held at 9:00 a.m. (CT) today.Ìý On the conference call will be Dino E. Robusto, Chairman and Chief Executive Officer of ÃÛÌÒ´«Ã½ Financial Corporation, Al Miralles, Executive Vice President and Chief Financial Officer of ÃÛÌÒ´«Ã½ Financial Corporation and other members of senior management.Ìý Participants can access the call by dialing (800) 289-0571, or for international callers, +1 (720) 543-0206.Ìý The call will also be broadcast live on the internet and may be accessed from the Investor Relations page of the ÃÛÌÒ´«Ã½ website ().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 email@example.com.
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).
Gross written premiums ex. 3rd party captivesÌýrepresents gross written premiums excluding business which is mostly ceded to third party captives, including business related to large warranty programs.
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 (Loss) Income to Core Income
Core income (loss)Ìýis calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses and any cumulative effects of changes in accounting guidance.Ìý The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary 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.
Less: Net investment (losses) gains
Reconciliation of Net (Loss) 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 (loss) per diluted share is core income (loss) 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.Ìý The 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 equityÌýprovides 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.
Results for the Three MonthsEnded March 31
Annualized net (loss) 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 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 includes statements that relate to anticipated future events (forward-looking statements) rather than actual present conditions or historical events. 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. 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. Many of these risks and uncertainties cannot be controlled by ÃÛÌÒ´«Ã½. For a detailed description of these risks and uncertainties please refer to ÃÛÌÒ´«Ã½'s filings 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. 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.
Any descriptions of coverage under ÃÛÌÒ´«Ã½ policies or programs in this press release are provided for convenience only and are not to be relied upon with respect to questions of coverage, exclusions or limitations. With regard to all such matters, the terms and provisions of relevant insurance policies are primary and controlling. In addition, please note that all coverages may not be available in all states.
"ÃÛÌÒ´«Ã½" is a registered trademark of ÃÛÌÒ´«Ã½ Financial Corporation. Certain ÃÛÌÒ´«Ã½ Financial Corporation subsidiaries use the "ÃÛÌÒ´«Ã½" trademark in connection with insurance underwriting and claims activities. Copyright Â© 2020 ÃÛÌÒ´«Ã½. All rights reserved.
Brandon Davis, 312-822-5885
Al Miralles, 312-822-5605
SOURCE ÃÛÌÒ´«Ã½ Financial Corporation