6 Insurers Report 2012 and Q4 Earnings

See which insurers Superstorm Sandy hit the hardest, as Allstate, Prudential and four others release fourth-quarter and year-end results.

Insurance Networking News, February 8, 2013

Chris McMahon

A number of insurers, including Allstate, Aspen, Hanover, Kemper, Lincoln and Prudential, have begun to release their financial results for year-end 2012. The following is a compilation of their announcements.

Allstate Corp.

For Q4 2014, Allstate reported net income of $394 million, or $0.81 per diluted share, compared with $712 million, or $1.40 per diluted share, for the same quarter last year, a decline of 44.7 percent. For the year ended Dec. 31, 2012, net income increased 193 percent to $2.306 billion, or $4.68 per diluted share, compared with $787 million, or $1.50 per diluted share, for 2011. Catastrophe losses for 2012 were $2.345 billion compared with $3.815 billion for 2011. The property-liability combined ratio was 95.5 percent for 2012, compared with 103.4 percent for 2011.

The Q4 2012 property-liability underlying combined ratio was 86.7, vs. 90.7 in Q4 2011, driven by improvements in auto and homeowners. The Q4 2012 recorded combined ratio was 101.7 and included 10 catastrophe events costing $1.16 billion, offset by favorable reserve reestimates of prior catastrophe losses worth $103 million, $80 million of which were for pre-2012 catastrophe events.

The loss estimate for Superstorm Sandy was updated to $1.117 billion from $1.075 billion; $22 million of the increase is due to losses not covered by reinsurance programs, and the balance resulting from claim expenses not recoverable under the National Flood Insurance Program.

Property-liability premiums written for the quarter were $6.637 billion, compared to $6.426 billion for the same quarter last year. For the year, property-liability premiums written were $27.027 billion compared with $25.98 billion.

"Allstate had a good finish to a strong year despite the costs incurred in the fourth quarter related to Superstorm Sandy," said Thomas J. Wilson, chairman, president and CEO.

 

Aspen Insurance Holdings Limited

Aspen reported net income after tax of $280.4 million for 2012, and $2.0 million for Q4 2012, equivalent to $3.38 net income per share diluted for the year and a $0.09 diluted net loss per share for Q4 2012.

Net catastrophe losses were $170 million, after tax and net of reinsurance and reinstatements, including $175 million from Superstorm Sandy and favorable development on the 2012 U.S. storms.

“In 2012, despite the impact of Superstorm Sandy, we made strong progress against our strategic objectives and generated an operating return on equity of 8.5 percent,” said Chris O’Kane, CEO. “In 2013, we will be intensely focused on further improving return on equity, against a backdrop of modestly improving insurance pricing, lackluster global economies, and a continued low interest rate environment. We will allocate capital efficiently to profitable underwriting opportunities, scale back in certain lines whose performance has not been consistent with our targeted risk profile, and return excess capital to shareholders through our expanded share repurchase authorization. We will also strive to generate increased returns from our investment portfolio while ensuring that our investments remain within our risk tolerance.”

Highlights from 2012

• Net return on average equity of 8.5 percent and operating return on average equity of 8.5 percent for 2012, compared with (4.8) percent and (3.4) percent, respectively last year

• GWP of $2,583.3 million, up 17.0 percent from 2011, due to growth in the insurance segment

• Combined ratio of 94.3 percent, including $205.0 million or 10.8 percentage points of pre-tax catastrophe losses, net of reinsurance and reinstatements compared with 115.9 percent for 2011, which included 31.5 percentage points of net losses from catastrophes

• Net favorable development on prior year loss reserves of $137.4 million, or 6.6 combined ratio points, for the year compared with $92.3 million, or 4.9 combined ratio points, for 2011

Highlights from Q4 2012

• Diluted net loss per share of $0.09 compared with $0.09 in Q4 2011

• Diluted operating loss per share of $0.15 compared with $0.01 in Q4 2011

• Diluted book value per share of $40.65, up 6.4 percent from the year ended 2011

• Annualized net return on average equity of (0.8) percent and annualized operating return on average equity of (1.6) percent, compared with 0.8 percent and 0 percent in Q4 2011

• GWP of $576.2 million, increased 25.6 percent from Q4 2011 with growth resulting from a 40.2 percent increase in the insurance segment

• Combined ratio of 108.0 percent, or 72.0 percent excluding catastrophes, pre-tax and net of reinsurance and reinstatements, compared with 114.3 percent, or 85.9 percent excluding catastrophes for Q4 2011

• Net favorable development on prior year loss reserves of $42.0 million, or 7.5 combined ratio points, compared with $22.0 million, or 4.5 combined ratio points, for Q4 2011.

 

The Hanover Insurance Group Inc.

Hanover Insurance reported a net loss of $55.0 million, or $1.24 per diluted share, for Q4 2012, compared to net income of $49.6 million, or $1.09 per diluted share, for the same quarter last year. Results include catastrophe losses of $132.1 million after-tax ($203.3 million pre-tax), with $128.8 million after-tax ($198.1 million pre-tax) attributable to Superstorm Sandy. Catastrophe losses for Q4 2011 were $36.1 million after-tax ($55.6 million pre-tax).

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