CHICAGO, Feb. 11, 2019 /PRNewswire/ --ÌýÃÛÌÒ´«Ã½ Financial Corporation (NYSE: ÃÛÌÒ´«Ã½) today announced a fourth quarter 2018 net loss of $84 million, or $(0.31) per share, and a core loss of $23 million, or $(0.08) per share, with catastrophe losses and investment returns from limited partnership and common equities accounting for $(0.82) per diluted share.Ìý Property & Casualty Operations combined ratio for the fourth quarter was 105.4% and the underlying combined ratio was 98.0%. Property & Casualty Operations net written premium increased 4% compared with the prior year quarter.
Fourth quarter 2018 core results decreased $309 million from the prior year period.Ìý Contributing to this variance was lower investment returns on our limited partnership and common equity portfolios of $143 million, higher net catastrophe losses of $91 million and higher non-catastrophe current accident year losses driven by increased property losses as well as increased professional liability losses in our London operation.
Core income (loss) for our Life & Group and Corporate & Other segments was $7 million and $(46) million, respectively.
ÃÛÌÒ´«Ã½ Financial declared a quarterly dividend of $0.35 per share and a special dividend of $2.00 per share, payable MarchÌý14, 2019 to stockholders of record on FebruaryÌý25, 2019.
Results for the Three Months Ended December 31
Results for the Year Ended December 31
($ millions, except per share data)
Net (loss) income(a)
Core (loss) income(a)(b)
Net (loss) income per diluted share
Core (loss) income per diluted share
Book value per share
Book value per share excluding AOCI
Results in 2018 were impacted by 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.
"While the combination of limited partnership investment returns and catastrophe losses drove a loss in the fourth quarter, we made significant progress in 2018," said Dino E. Robusto, Chairman & Chief Executive Officer of ÃÛÌÒ´«Ã½ Financial Corporation.Ìý "Both our all-in combined ratio and underlying combined ratio improved for the year, we achieved meaningful premium growth, and we are continuing to get needed rate increases."
Property & Casualty Operations
Results for the Three Months Ended DecemberÌý31
Results for the Year Ended DecemberÌý31
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
Core (loss) income
Life & Group
Total operating revenues
Core income decreased $24 millionÌýfor the fourth quarter of 2018 compared with the prior year quarter.Ìý The prior period included a $27 million after-tax reduction of long term care claim reserves resulting from the annual claims experience study.Ìý For 2018, the claims experience study was completed in the third quarter.Ìý Persistency continues to benefit from a high proportion of policyholders choosing to reduce benefits in lieu of premium rate increases.Ìý Morbidity continues to trend in line with expectations.Ìý For the full year, Life & Group core income was $43 million.
Corporate & Other
Core loss increased $38 million for the fourth quarter of 2018 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 fourth quarter of 2018 resulted in a $28 million after-tax non-economic charge.
Net Investment Income
Pretax net investment income
Net investment income, after tax
Pretax net investment income decreased $171 million for the fourth quarter of 2018 compared with the prior year quarter.Ìý The decrease was driven by limited partnership and common stock investments, which returned (5.7)%, or a loss of $138 million for the fourth quarter of 2018 compared with 2.1%, or $50 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 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, and other members of senior management.Ìý Participants can access the call by dialing (800) 289-0571, or for international callers, (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).
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 (Loss) to Core Income (Loss)
Core income (loss)Ìýis 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.
Net (loss) income
Less: Net realized investment (losses) gains
Less: Net deferred tax asset remeasurement
Reconciliation of Net Income (Loss) per Diluted Share to Core Income (Loss) 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.
Annualized net (loss) income
Average stockholders' equity including AOCI (a)
Return on equity
Annualized core (loss) 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 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© 2019 ÃÛÌÒ´«Ã½. All rights reserved.
Brandon Davis, 312-822-5885
James Anderson, 312-822-7757
SOURCE ÃÛÌÒ´«Ã½ Financial Corporation