CHICAGO, July 31, 2023 /PRNewswire/ -- ├█╠Ď┤ź├Ż Financial Corporation (NYSE: ├█╠Ď┤ź├Ż) today announced second quarter 2023 net income of $283 million, or $1.04 per share, versus $190 million, or $0.69 per share, in the prior year quarter. Net investment losses for the quarter were $25 million compared to $40 million in the prior year quarter. Core income for the quarter was up 34% to $308 million, or $1.13 per share, versus $230 million, or $0.84 per share, in the prior year quarter.
Our Property & Casualty segments produced core income of $374 million for the second quarter of 2023, an increase of $57 million compared to the prior year quarter driven by higher investment income and record high pretax underlying underwriting income, partially offset by higher catastrophe losses and lower favorable net prior year development. P&C segments, excluding third party captives, generated gross written premium growth of 12% and net written premium growth of 9% for the second quarter of 2023 driven by renewal premium change of +7%, including rate of +5%, exposure change of +2% and new business growth of 11%. Excluding currency fluctuations, gross written premiums grew 12% and net written premiums grew 10%.
Our Life & Group segment produced a core loss of $20 million for the second quarter of 2023 versus $9 million in the prior year quarter primarily due to long term care policy buyouts.
Our Corporate & Other segment produced a core loss of $46 million for the second quarter of 2023 versus $78 million in the prior year quarter driven by lower net prior year loss reserve development and higher net investment income.
├█╠Ď┤ź├Ż Financial declared a quarterly dividend of $0.42 per share, payable August 31, 2023 to stockholders of record on August 14, 2023.
Results for the Three Months Ended June 30
Results for the Six Months Ended June 30
($ millions, except per share data)
Core income (b)
Net income per diluted share
Core income per diluted share
╠řJune 30, 2023
December 31, 2022 (a)
Book value per share
Book value per share excluding AOCI
As╠řof╠řJanuary╠ř1,╠ř2023,╠řthe ├█╠Ď┤ź├Ż╠řadopted╠řLDTI╠řusing the modified╠řretrospective method╠řapplied as╠řof the transition╠řdate of January╠ř1,╠ř2021.╠řPrior╠řperiod amounts╠řhave╠řbeen adjusted╠řto reflect application of╠řthe╠řnew guidance.
Management╠řutilizes the╠řcore╠řincome (loss)╠řfinancial╠řmeasure to╠řmonitor the╠ř├█╠Ď┤ź├Ż's╠řoperations.╠řPlease╠řrefer╠řherein to the Reconciliation of╠řGAAP╠řMeasures to Non-GAAP╠řMeasures╠řsection of╠řthis╠řpress╠řrelease╠řfor╠řfurther╠řdiscussion╠řof╠řthis╠řnon-GAAP measure.
"We produced strong results in the quarter with double-digit top-line growth and continued excellent profitability. Core income increased by 34% in the quarter and net investment income was up 33% with significant increases in LPs, common stock, and the fixed income portfolio.
The all-in combined ratio was very strong at 93.8%, with pretax catastrophe losses of $68 million, or 3.1 points of the combined ratio, and 0.4 points of favorable prior period development. The P&C underlying combined ratio of 91.1%╠řgenerated a╠řrecord $200╠řmillion╠řof pretax P&C underlying╠řunderwriting gain.
In the quarter, we achieved very strong production performance with 12% growth in gross written premium ex captives and 9% growth in net written premium. Renewal premium change was 7% for P&C overall and 11% in Commercial, which was up 2 points from the first quarter. Retention remained consistently high at 86% and new business was up 11%, similar to the first quarter.
With the strong top-line and bottom-line results in the first half of the year and improved investment returns, we are╠řoptimistic about our opportunities through the remainder of 2023," said Dino E. Robusto, Chairman & Chief Executive╠řOfficer╠řof╠ř├█╠Ď┤ź├Ż╠řFinancial╠řCorporation.
Results for the Three Months╠řEnded╠řJune╠ř30
Results for the Six╠řMonths Ended╠řJune╠ř30
GWP╠řex. 3rd╠řparty╠řcaptives change╠ř(%╠řyear╠řover year)
NWP╠řchange (% year╠řover╠řyear)
NEP╠řchange (%╠řyear╠řover year)
Business Operating Highlights Specialty
Results for the Three╠řMonths Ended╠řJune╠ř30
Results for the Six Months╠řEnded╠řJune 30
$╠ř ╠ř ╠ř ╠ř ╠ř961
$╠ř ╠ř ╠ř ╠ř ╠ř825
NWP╠řchange (%╠řyear╠řover year)
$╠ř ╠ř ╠ř ╠ř ╠ř812
$╠ř ╠ř ╠ř 1,604
$╠ř ╠ř ╠ř 1,321
$╠ř ╠ř ╠ř 1,329
$╠ř ╠ř ╠ř 1,134
$╠ř ╠ř ╠ř 1,120
$╠ř ╠ř ╠ř ╠ř ╠ř974
$╠ř ╠ř ╠ř ╠ř ╠ř 83
GWP╠řchange (%╠řyear╠řover year)
Loss╠řratio excluding╠řcatastrophes╠řand development
Life & Group
(a) As of January 1, 2023, the ├█╠Ď┤ź├Ż adopted╠řLDTI╠řusing╠řthe╠řmodified╠řretrospective╠řmethod╠řapplied╠řas╠řof╠řthe╠řtransition╠řdate╠řof╠řJanuary 1,╠ř2021.╠řPrior period amounts╠řhave╠řbeen╠řadjusted╠řto reflect application of╠řthe╠řnew╠řguidance.
Excluding the impacts of long term care policy buyouts,╠řyear╠řto╠řdate╠ř2023╠řunderwriting╠řresults are╠řgenerally╠řin╠řline with expectations.
Core loss decreased $32 million for the second quarter of 2023 as compared with the prior year quarter╠řdriven by lower net prior year loss reserve development and higher net investment income.╠řThe current╠řquarter includes a $28 million after-tax charge related to unfavorable prior year development largely╠řassociated╠řwith╠řlegacy╠řmass╠řtort╠řclaims compared╠řwith╠řa╠ř$51╠řmillion after-tax╠řcharge╠řin╠řthe╠řsecond╠řquarter╠řof╠ř2022.
Results for the Three╠řMonths╠řEnded╠řJune 30
Results for the Six Months╠řEnded June 30
Net investment income increased $143 million for the second quarter of 2023 as compared with the prior year quarter. The increase was driven by an $83 million increase in income from limited partnership and common stock investments and a $60 million increase in income from fixed income securities and other investments.
Stockholders' equity of $8.7 billion improved 2% from year-end 2022 primarily due to net income partially offset by dividends paid to stockholders.
Book╠řvalue╠řper╠řshare╠řex╠řAOCI of $44.86 increased 5% from year-end 2022 adjusting for $2.04 of dividends per share.
As of June 30, 2023, statutory capital and surplus for the Combined Continental Casualty Companies was $10.5 billion.
In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted╠řImprovements to the Accounting for Long-Duration Contracts (LDTI). The updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts. For the ├█╠Ď┤ź├Ż, this includes the run-off long term care business in the Life & Group segment. The ├█╠Ď┤ź├Ż adopted the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. All prior period amounts have been adjusted to reflect application of the new guidance. While the requirements of the new guidance represent a material change from legacy accounting, the new guidance does not impact capital and surplus under statutory accounting practices, cash flows or the underlying economics of the business. Additional information regarding the ├█╠Ď┤ź├Ż's adoption of╠řASU 2018-12 and the impact to historical financial results is contained in the ├█╠Ď┤ź├Ż's Q1╠ř2023 Financial Supplement, furnished on Form 8-K, on May 1, 2023 with the Securities and Exchange╠řCommission.
├█╠Ď┤ź├Ż is one of the largest U.S. commercial property and casualty insurance companies.╠řBacked by more than 125 years of╠řexperience, ├█╠Ď┤ź├Ż provides a broad range of standard and specialized insurance products and services for businesses and╠řprofessionals╠řin╠řthe U.S.,╠řCanada╠řand Europe.╠řFor╠řmore╠řinformation,╠řplease visit╠ř├█╠Ď┤ź├Ż╠řat
Conference Call and Webcast/Presentation Information
A╠řconference╠řcall╠řfor╠řinvestors╠řand╠řthe╠řprofessional╠řinvestment╠řcommunity╠řwill╠řbe╠řheld╠řat╠ř8:00╠řa.m.╠ř(CT)╠řtoday.╠řOn╠řthe╠řconference╠řcall will be Dino E. Robusto, Chairman and Chief Executive Officer of ├█╠Ď┤ź├Ż Financial Corporation, Scott R. Lindquist, Executive╠řVice President and Chief Financial Officer of ├█╠Ď┤ź├Ż Financial Corporation and other members of senior management. Participants╠řcan access the call by dialing (844) 481-2830 (USA Toll Free) or +1 (412) 317-1850 (International). The call will also be broadcast╠řlive on the internet and may be accessed from the Investor Relations page of the ├█╠Ď┤ź├Ż website ().╠řA presentation╠řwill╠řbe╠řposted and╠řavailable╠řon╠řthe╠ř├█╠Ď┤ź├Ż╠řwebsite that╠řwill╠řprovide additional╠řinsight╠řinto the results.
The call is available to the media, but questions will be restricted to investors and the professional investment community.╠řAn╠řonline replay will be available on ├█╠Ď┤ź├Ż's website following the call. Financial supplement information related to the results is available on the investor relations pages of the ├█╠Ď┤ź├Ż╠řwebsite or╠řby╠řcontacting╠řinvestor.email@example.com.
Management utilizes the following metrics in their evaluation of the Property & Casualty Operations.
These ratios are calculated using financial results prepared in accordance with accounting principles generally accepted in the╠řUnited States╠řof╠řAmerica (GAAP).
Renewal premium change represents the estimated change in average premium on policies that renew, including rate and╠řexposure╠řchanges.
Rate╠řrepresents the average change in price on policies that renew excluding exposure change. For certain products within Small Business, where quantifiable, rate includes the influence of new business as well.
Exposure represents the measure of risk used in the pricing of the insurance product.╠řThe change in exposure represents the╠řchange in╠řpremium╠řdollars on╠řpolicies that renew╠řas╠řa╠řresult of the╠řchange╠řin╠řrisk╠řof╠řthe╠řpolicy.
Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the╠řexpiring╠řpremium dollars from╠řpolicies╠řavailable to renew.
New business represents premiums from policies written with new customers and additional policies written with existing╠řcustomers.
Gross written premiums ex. 3rd party captives represents gross written premiums excluding business which is ceded to third╠řparty╠řcaptives,╠řincluding business╠řrelated to╠řlarge warranty╠řprograms.
Development-related╠řitems represents╠řnet╠řprior╠řyear╠řloss╠řreserve╠řand╠řpremium╠řdevelopment,╠řand╠řincludes╠řthe╠řeffects╠řof╠řinterest╠řaccretion╠řand change╠řin allowance╠řfor╠řuncollectible╠řreinsurance╠řand╠řdeductible╠řamounts.
Underwriting gain (loss) represents net earned premiums less total insurance expenses, which includes insurance claims and╠řpolicyholders'╠řbenefits, amortization╠řof deferred╠řacquisition╠řcosts╠řand╠řother╠řinsurance╠řrelated expenses, pre-tax.
Underlying underwriting gain (loss) represents underwriting results excluding catastrophe losses and development-related╠řitems.
Statutory╠řcapital╠řand╠řsurplus╠řrepresents╠řthe╠řexcess╠řof╠řan╠řinsurance╠řcompany's╠řadmitted╠řassets over╠řits╠řliabilities,╠řincluding╠řloss╠řreserves, as determined in accordance with statutory accounting practices.╠řStatutory capital and surplus as of the current period is preliminary.
The ├█╠Ď┤ź├Ż's investment portfolio is monitored by management through analysis of various factors including unrealized gains╠řand╠řlosses╠řon╠řsecurities, portfolio╠řduration╠řand╠řexposure to╠řmarket╠řand credit risk.
Reconciliation of╠řGAAP╠řMeasures to╠řNon-GAAP╠řMeasures
This press release also contains financial measures that are not in accordance with GAAP.╠řManagement utilizes these financial╠řmeasures to monitor the ├█╠Ď┤ź├Ż's insurance operations and investment portfolio.╠řThe ├█╠Ď┤ź├Ż believes the presentation of╠řthese measures provides investors with a better understanding of the significant factors that comprise the ├█╠Ď┤ź├Ż's operating╠řperformance.╠řReconciliations╠řof╠řthese╠řmeasures to╠řthe╠řmost╠řcomparable╠řGAAP╠řmeasures╠řfollow below.
Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses. 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. Management monitors core income (loss) for each business segment to assess segment performance. Presentation of consolidated core income (loss) is deemed to be a non-GAAP financial measure.
Results╠řfor the╠řThree╠řMonths Ended╠řJune 30
Results╠řfor╠řthe╠řSix Months Ended╠řJune 30╠ř
(a)╠řAs╠řof╠řJanuary╠ř1,╠ř2023,╠řthe╠ř├█╠Ď┤ź├Ż adopted╠řLDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.
Core income (loss) per diluted share╠řprovides╠řmanagement╠řand╠řinvestors╠řwith╠řa╠řvaluable measure╠řof╠řthe╠ř├█╠Ď┤ź├Ż's╠řoperating performance for the same reasons applicable to its underlying measure, core income (loss). Core income (loss) per diluted share╠řis core╠řincome╠ř(loss)╠řon a╠řper╠řdiluted╠řshare basis.
Results╠řfor╠řthe╠řSix Months Ended╠řJune 30
Book value per share excluding AOCI allows management and investors to analyze the amount of the ├█╠Ď┤ź├Ż's net worth primarily attributable to the ├█╠Ď┤ź├Ż's business operations. The ├█╠Ď┤ź├Ż 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.
(a)╠řAs╠řof╠řJanuary╠ř1,╠ř2023,╠řthe╠ř├█╠Ď┤ź├Ż adopted╠řLDTI╠řusing╠řthe╠řmodified retrospective╠řmethod╠řapplied as╠řof╠řthe╠řtransition╠řdate╠řof╠řJanuary╠ř1,╠ř2021.╠řPrior╠řperiod amounts╠řhave╠řbeen╠řadjusted╠řto╠řreflect╠řapplication╠řof╠řthe new╠řguidance.
Core╠řreturn╠řon╠řequity provides management and investors with a measure of how effectively the ├█╠Ď┤ź├Ż is investing the portion of the ├█╠Ď┤ź├Ż's net worth that is primarily attributable to its business operations.
Results for the Three MonthsEnded June 30
Results for the Six MonthsEnded June 30
Annualized net income
Average stockholders' equity including AOCI (b)
Return on equity
Annualized core income
$╠ř ╠ř ╠ř ╠ř ╠ř ╠ř 1,233
$╠ř ╠ř ╠ř ╠ř ╠ř ╠ř ╠ř ╠ř924
$╠ř ╠ř ╠ř ╠ř ╠ř ╠ř 1,266
$╠ř ╠ř ╠ř ╠ř ╠ř ╠ř 1,058
Average stockholders' equity excluding AOCI (b)
Core return on equity
As of January 1, 2023, the ├█╠Ď┤ź├Ż adopted╠řLDTI using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance.
Average stockholders' equity is calculated using a simple average of the beginning and ending balances for the period.
For╠řadditional information, please╠řrefer to╠ř├█╠Ď┤ź├Ż's╠řmost╠řrecent╠ř10-K╠řon╠řfile╠řwith╠řthe╠řSecurities and╠řExchange╠řCommission,╠řas╠řwell╠řas the financial supplement,╠řavailable at╠ř
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 ├█╠Ď┤ź├Ż. For a detailed description of these risks and uncertainties, please refer to ├█╠Ď┤ź├Ż's╠řfilings╠řwith╠řthe╠řSecurities╠řand╠řExchange╠řCommission,╠řavailable at
Any forward-looking statements made in this press release are made by ├█╠Ď┤ź├Ż as of the date of this press release.╠řFurther, ├█╠Ď┤ź├Ż╠řdoes not have any obligation to update or revise any forward-looking statement contained in this press release, even if ├█╠Ď┤ź├Ż's╠řexpectations or╠řany╠řrelated╠řevents, conditions or╠řcircumstances╠řchange.
Any╠řdescriptions╠řof╠řcoverage╠řunder ├█╠Ď┤ź├Ż╠řpolicies╠řor╠řprograms╠řin╠řthis╠řpress release╠řare╠řprovided for╠řconvenience╠řonly╠řand╠řare╠řnot╠řto be relied upon with respect to questions of coverage, exclusions or limitations.╠řWith regard to all such matters, the terms and╠řprovisions of relevant insurance policies are primary and controlling.╠řIn addition, please note that all coverages may not be╠řavailable╠řin all states.
"├█╠Ď┤ź├Ż" is a registered trademark of ├█╠Ď┤ź├Ż Financial Corporation. Certain ├█╠Ď┤ź├Ż Financial Corporation subsidiaries use the "├█╠Ď┤ź├Ż" trademark in connection with insurance underwriting and claims activities. Copyright ┬ę 2023 ├█╠Ď┤ź├Ż. All rights reserved.