CHICAGO, Oct. 30, 2023 /PRNewswire/ -- ├█╠Ď┤ź├Ż Financial Corporation (NYSE: ├█╠Ď┤ź├Ż) today announced third quarter 2023 net income of $258 million, or $0.95 per share, versus net loss of $42 million, or $(0.15) per share, in the prior year quarter. Net investment losses for the quarter were $31 million compared to $85 million in the prior year quarter. Core income for the quarter was $289 million, or $1.06 per share, versus $43 million, or $0.16╠řper╠řshare,╠řin╠řthe╠řprior year╠řquarter.
Our Property & Casualty segments produced core income of $351 million for the third quarter of 2023, an increase of $91╠řmillion compared to the prior year quarter driven by higher net investment income, record high pretax underlying underwriting income and lower catastrophe losses.╠řP&C segments, excluding third party captives, generated gross written premium growth of 7% and net written premium growth of 6% for the third╠řquarter of 2023╠řdriven by╠řrenewal╠řpremium╠řchange of +6%, including rate of +5%╠řand exposure change of +1%.
Our Life & Group segment produced a core loss of $29 million for the third quarter of 2023 versus $192 million in the prior year quarter, which reflects an unfavorable after-tax impact of $2 million in 2023 and $143╠řmillion in╠ř2022╠řas╠řa╠řresult╠řof╠řthe╠řannual╠řreserve reviews.
Our Corporate & Other segment produced a core loss of $33 million for the third quarter of 2023 versus $25╠řmillion in╠řthe╠řprior╠řyear╠řquarter.
├█╠Ď┤ź├Ż Financial declared a quarterly dividend of $0.42 per share, payable November 30, 2023 to stockholders of record on November 13, 2023.╠ř
Results╠řfor╠řthe╠řThree MonthsEnded September 30
ŞÚ▒▓§│▄▒˘│┘▓§╠ř┤┌┤ă░¨╠ř│┘│ˇ▒╠ř▒Ěż▒▓ď▒╠ř▓Đ┤ă▓ď│┘│ˇ▓§ Ended September 30
Net income (loss) per diluted share
$╠ř ╠ř ╠ř ╠ř ╠ř ╠ř ╠ř31.61
$╠ř ╠ř ╠ř ╠ř ╠ř ╠ř ╠ř 31.55
As of January 1, 2023, the ├█╠Ď┤ź├Ż adopted LDTI 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.
Management utilizes the╠řcore income (loss) financial measure to monitor the ├█╠Ď┤ź├Ż's operations.╠řPlease 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.
"We continued to produce very strong results with a significant increase in core income driven by a 31% increase in net investment income, record levels of P&C underlying underwriting gain, lower levels of catastrophe loss, and improved results in Life & Group.╠řOur annual Life and Group reserve assumption review resulted in a neutral change this year compared to a $143 million after-tax loss last year.╠řExcluding the impacts of the Life & Group reserve review, our core income was still up by 56% this quarter.
P&C core income was up 35% in the quarter driven by higher investment income, and $220 million of underlying underwriting income.╠řThe all-in combined ratio was 94.3% with pretax catastrophe losses of $94 million or 4.1 points, and 0.2 points of favorable prior period development.╠řThe P&C underlying combined ratio was 90.4%.
We recorded 7% growth in gross written premium ex captives and 6% growth in net written premium. Our overall rate change remained stable at 5%, and importantly, rates improved in our casualty lines most impacted by social inflation, and rate turned positive in Specialty as decreases in management liability pricing moderated in the quarter. We are encouraged by these trends as we continue to cover our long run loss cost trends from written rate increases together with the exposure increases that act like rate, and we are confident in our ability to continue to leverage the favorable market conditions," said╠řDino E. Robusto, Chairman & Chief Executive Officer of ├█╠Ď┤ź├Ż Financial Corporation.
Property & Casualty Operations
Results for the Three Months╠řEnded╠řSeptember╠ř30
NWP╠řchange (% year╠řover╠řyear)
NEP╠řchange (%╠řyear╠řover year)
Loss ratio excluding catastrophes and development
Business╠řOperating Highlights Specialty
Underwriting gain (loss)
GWP╠řchange (%╠řyear╠řover year)
Results╠řfor the╠řNine╠řMonths Ended September 30
As of January 1, 2023, the ├█╠Ď┤ź├Ż adopted LDTI using the modified retrospective method applied as of the transition date of╠řJanuary 1, 2021.╠řPrior period amounts have been adjusted to reflect application of the new guidance.
Core loss improved $163 million for the third quarter of 2023 as compared with the prior year quarter. Both periods are inclusive of assumption updates as a result of the annual reserve reviews.╠řResults for the prior year quarter have been adjusted to reflect the application of the LDTI accounting standard and include an unfavorable impact from reserve assumption updates in 2022.
The assumption updates in the third quarter of 2023 unfavorably impacted core loss by $2 million after- tax, which╠řis╠řcomprised of an╠ř$8╠řmillion increase╠řin╠řlong╠řterm╠řcare╠řreserves, partially╠řoffset╠řby╠řa╠ř$6╠řmillion reduction in structured settlement reserves.
Adjusted to reflect the application of the LDTI accounting standard, assumption updates in the third quarter of 2022 unfavorably impacted core loss by $143 million after-tax.╠řThe 2022 assumption updates included an $186╠řmillion increase in long term care reserves, primarily driven by the unfavorable impact╠řof increased cost of care inflation offset by favorable premium rate action assumptions. In addition, favorable assumption updates resulted in a $5 million reduction in structured settlement reserves.
Results for the Three Months╠řEnded September╠ř30
Results╠řfor╠řthe╠řNine Months Ended September 30
Core loss╠řincreased $8╠řmillion for the third╠řquarter of 2023 as╠řcompared╠řwith the prior year quarter driven by unfavorable net prior year loss reserve development partially offset by higher net investment income. The current quarter includes a $16 million after-tax charge related to unfavorable prior year development largely associated with legacy mass tort claims compared with no charge in the third quarter of 2022.
$ ╠ř╠ř╠ř╠ř╠ř╠ř╠ř╠ř 422
$ ╠ř╠ř╠ř╠ř 1,302
Net investment income increased $131╠řmillion for the third quarter of 2023 as compared with the prior year quarter.╠řThe increase was driven by a $72 million increase in income from limited partnership and common stock investments and a $59╠řmillion increase in income from fixed income securities and other investments.
Stockholders' equity of $8.6 billion was consistent with year-end 2022. Book value per share ex AOCI of $45.43╠řincreased 7%╠řfrom╠řyear-end╠ř2022╠řadjusting for╠ř$2.46╠řof╠řdividends╠řper╠řshare.╠řAs╠řof September 30, 2023, statutory capital and surplus for the Combined Continental Casualty Companies was $10.6 billion.
In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI).╠řThe updated accounting guidance requires changes to the measurement and disclosure of long-duration contracts.╠řFor the ├█╠Ď┤ź├Ż, this includes the run-off long term care business in the Life & Group segment.╠řThe ├█╠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.╠řAll prior period amounts have been adjusted to reflect application of the new guidance.╠řWhile the requirements of the new╠řguidance represent a material change╠řfrom legacy accounting, the new guidance does not impact capital and surplus under statutory accounting practices, cash flows or the underlying economics of the business.╠řAdditional information regarding the ├█╠Ď┤ź├Ż's adoption of ASU 2018-12 and the impact to historical financial results is contained in the ├█╠Ď┤ź├Ż's Q1 2023 Financial Supplement, furnished on Form 8-K, on May 1, 2023 with the Securities and Exchange Commission.
├█╠Ď┤ź├Ż is one of the largest U.S. commercial property and casualty insurance companies.╠řBacked by more than 125 years of experience, ├█╠Ď┤ź├Ż provides a broad range of standard and specialized insurance products and services for businesses and professionals in the U.S., Canada and Europe.╠řFor more information, please visit ├█╠Ď┤ź├Ż╠řat
Heather Giordano, 312-822-4319
Ralitza Todorova, 312-822-3834
A conference call for investors and the professional investment community will be held at 8:00 a.m. (CT) today.╠řOn the conference call will be Dino E. Robusto, Chairman and Chief Executive Officer of ├█╠Ď┤ź├Ż╠řFinancial Corporation, Scott R. Lindquist, Executive Vice President and Chief Financial Officer of ├█╠Ď┤ź├Ż Financial Corporation and other members of senior management. Participants╠řcan╠řaccess╠řthe╠řcall╠řby╠řdialing (844)╠ř481-2830╠ř(USA╠řToll Free) or╠ř+1╠ř(412)╠ř317-1850╠ř(International).╠řThe╠řcall╠řwill also be broadcast live on the internet and may be accessed from the Investor Relations page of the ├█╠Ď┤ź├Ż╠řwebsite ().╠řA presentation will be posted and available on the ├█╠Ď┤ź├Ż╠řwebsite that 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.╠řAn online replay will be available on ├█╠Ď┤ź├Ż's website following the call.╠řFinancial supplement information related to the results is available on the investor relations pages of the ├█╠Ď┤ź├Ż╠řwebsite or by contacting firstname.lastname@example.org.
Management╠řutilizes the╠řfollowing╠řmetrics in╠řtheir╠řevaluation╠řof╠řthe╠řProperty &╠řCasualty╠řOperations.
These╠řratios are calculated using financial results prepared in accordance with accounting principles generally accepted in t╠řhe United States of America (GAAP).
Renewal╠řpremium╠řchange╠řrepresents╠řthe╠řestimated╠řchange╠řin╠řaverage premium╠řon╠řpolicies that╠řrenew,╠řincluding rate╠řand exposure changes.
Rate represents╠řthe╠řaverage╠řchange╠řin╠řprice╠řon╠řpolicies that╠řrenew╠řexcluding exposure╠řchange.╠řFor╠řcertain╠řproducts 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 change in premium dollars on policies that renew as a result of the change in risk of the policy.
Retention represents the percentage of premium dollars renewed, excluding rate and exposure changes, in comparison to the expiring premium dollars from policies available to renew.
New business represents premiums from policies written with new customers and additional policies written with existing customers.
Gross written premiums ex. 3rd╠řparty captives represents gross written premiums excluding business which is ceded to third party captives, including business related to large warranty programs.
Development-related items represents net prior year loss reserve and premium development, and includes the effects of interest accretion and change in allowance for uncollectible reinsurance and deductible amounts.
Underwriting gain (loss) represents net earned premiums less total insurance expenses, which includes insurance claims and policyholders' benefits, amortization of deferred acquisition costs and other insurance related expenses, pre-tax.
Underlying underwriting gain (loss) represents underwriting results excluding catastrophe losses and development-related items.
Statutory capital and surplus represents the excess of an insurance company's admitted assets over its liabilities, including loss reserves, 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 and losses on securities, portfolio duration and exposure to market and credit risk.
This press release also contains financial measures that are not in accordance with GAAP.╠řManagement utilizes these financial measures to monitor the ├█╠Ď┤ź├Ż's insurance operations and investment portfolio.╠řThe ├█╠Ď┤ź├Ż believes the presentation of these measures provides investors with a better understanding of the significant factors that comprise the ├█╠Ď┤ź├Ż's operating performance.╠řReconciliations of these measures to the most comparable GAAP measures follow below.
Reconciliation╠řof╠řNet╠řIncome╠ř(Loss) to╠řCore╠řIncome (Loss)
░ń┤ă░¨▒╠řż▒▓ď│Ž┤ă│ż▒╠ř(loss)╠řis╠řcalculated╠řby╠řexcluding╠řfrom╠řnet╠řincome╠ř(loss)╠řthe╠řafter-tax╠řeffects of╠řnet╠řinvestment╠řgains╠řor╠řlosses.╠řThe calculation╠řof core income (loss) excludes net investment gains or losses because net investment gains or losses are generall╠řy 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╠řthe╠řThree Months Ended September 30
Reconciliation╠řof╠řNet╠řIncome╠ř(Loss)╠řper╠řDiluted Share╠řto╠řCore╠řIncome╠ř(Loss) per╠řDiluted╠řShare
Core income (loss) per diluted share provides management and investors with a valuable measure of the ├█╠Ď┤ź├Ż's operating performance for the same reasons applicable to its underlying measure, core income (loss). Core income (loss) per diluted share is core income (loss) on a per diluted share basis.
As of January 1, 2023, the ├█╠Ď┤ź├Ż adopted LDTI using the modified retrospective method applied as╠řof the transition date of January 1, 2021.╠řPrior period amounts have been adjusted to reflect application of the new guidance.
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.
September 30, 2023
Core return on equity 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.
Annualized core income
Average╠řstockholders'╠řequity is╠řcalculated╠řusing a╠řsimple╠řaverage of╠řthe╠řbeginning╠řand╠řending balances╠řfor╠řthe╠řperiod.
For additional information, please refer to ├█╠Ď┤ź├Ż's most recent 10-K╠řon file with the Securities and Exchange Commission,╠řas 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.╠řThese 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.╠řForward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that╠řcould cause actual results to differ materially from the results projected.╠řMany of these risks and uncertainti╠řes cannot be controlled by ├█╠Ď┤ź├Ż.╠řFor a detailed description of these risks and uncertainties, please refer to ├█╠Ď┤ź├Ż's filings with the Securities and Exchange Commission, available at
Any forward-looking statements made in this press release are made by ├█╠Ď┤ź├Ż╠řas of the date of this press release.╠řFurther, ├█╠Ď┤ź├Ż does not have any obligation to update or revise any forward-looking statement contained in this press release, even if ├█╠Ď┤ź├Ż's expectations or any related events, conditions or circumstances change.
Any descriptions of coverage under ├█╠Ď┤ź├Ż policies or programs in this press release are provided for convenience only and are╠řnot to be relied upon with respect to questions of coverage, exclusions or limitations.╠řWith regard to all such matters, the╠řterms and provisions of relevant insurance policies are primary and controlling.╠řIn addition, please note that all coverages may not be available in all states.
"├█╠Ď┤ź├Ż" is a registered trademark of ├█╠Ď┤ź├Ż Financial Corporation.╠řCertain ├█╠Ď┤ź├Ż Financial Corporation subsidiaries use the "├█╠Ď┤ź├Ż" trademark in connection with insurance underwriting and claims activities.╠řCopyright ┬ę 2023 ├█╠Ď┤ź├Ż.╠řAll rights reserved.