CHICAGO, July 30, 2018 /PRNewswire/ --ÌýÃÛÌÒ´«Ã½ Financial Corporation (NYSE: ÃÛÌÒ´«Ã½) today announced second quarter 2018 net income and core income of $270 million, or $0.99 per share.Ìý Property & Casualty Operations combined ratio for the second quarter was 93.8% compared with 93.5% in the second quarter of 2017.Ìý Property & Casualty Operations net written premiums grew 4% compared to the prior year quarter.Ìý Net investment income, after tax, was $416 million for the second quarter of 2018.
Net income for the six months ended June 30, 2018 was $561 million, or $2.06 per share, and core income was $551 million, or $2.02 per share, both improved from the prior year period.Ìý Property & Casualty Operations combined ratio for the six months ended June 30, 2018 was 93.5% compared with 95.3% in the prior year period.Ìý Property & Casualty Operations underlying combined ratio for the six months ended June 30, 2018 was 94.3% compared with 95.9% in the prior year period.Ìý Property & Casualty Operations net written premiums grew 7% for the six months ended June 30, 2018 compared to the prior year period.Ìý Net investment income, after tax, was $821 million for the six months ended June 30, 2018.
ÃÛÌÒ´«Ã½ Financial declared a quarterly dividend of $0.35 per share, payable AugustÌý29, 2018 to stockholders of record on AugustÌý13, 2018.
Results for the Three Months Ended June 30
Results for the Six Months Ended June 30
($ millions, except per share data)
Core income (a)(b)
Net income per diluted share
Core income per diluted share
Book value per share
Book value per share excluding AOCI
Results in 2018 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.
"I am pleased with the second quarter's strong core income of $0.99 per share, and combined with our first quarter performance generated a first half core income of $2.02 per share, which is the highest first-half result for ÃÛÌÒ´«Ã½ in over 10 years.Ìý Our first half underlying combined ratio of 94.3% improved 1.6 points compared with the first half of 2017.Ìý These results give me confidence in the ongoing progress ÃÛÌÒ´«Ã½ is making in our journey of generating sustained top quartile underwriting performance," said Dino E. Robusto, Chairman and Chief Executive Officer of ÃÛÌÒ´«Ã½ Financial Corporation.
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
Core (loss) income
Life & Group
Total operating revenues
Core results decreased $15 million for the second quarter of 2018 as compared with the prior year quarter.Ìý Excluding the unfavorable effect of the Federal corporate income tax rate change which reduced the income tax benefit, core income was consistent with the prior year period.Ìý Morbidity continues to trend in line with expectations.Ìý Persistency was slightly unfavorable in the quarter.Ìý Excluding the unfavorable effect of the Federal corporate income tax rate change, core income for the year-to-date period increased approximately $23 million.
Corporate & Other
Core loss increased $12 million for the second quarter of 2018 as compared with the prior year quarter.Ìý Excluding the unfavorable effect of the Federal corporate income tax rate change, core loss increased approximately $5 million driven by non-recurring costs of $23 million associated with the transition to a new IT infrastructure service provider.Ìý This was partially offset by a higher recognition of retroactive reinsurance deferred gain on the LPT due to higher net A&EP claim payments, as compared to the prior year period.Ìý Excluding the unfavorable effect of the Federal corporate income tax rate change, core loss for the year-to-date period increased approximately $17 million.
Net Investment Income
Pretax net investment income increased $31 million for the second quarter of 2018 as compared with the prior year quarter.Ìý The increase was driven by limited partnership and common stock investments, which returned 1.8% in 2018 as compared with 0.7% in the prior year quarter.Ìý Net investment income, after tax, increased $72 million for the three months ended June 30, 2018 as compared with the same period in 2017 driven by the lower tax rate and higher limited partnership returns.Ìý For the year-to-date period, pretax net investment income decreased $24 million and net investment income, after tax, increased $88 million.
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.Ìý 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.Ìý 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 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.
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.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 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.
Brandon Davis, 312-822-5885
James Anderson, 312-822-7757
SOURCE ÃÛÌÒ´«Ã½ Financial Corporation