Ct Healthmarket via BizWire
08-07-2003, 09:41 AM
DES MOINES, Iowa--(BUSINESS WIRE)--Aug. 7, 2003--EMC Insurance
Group Inc. (Nasdaq:EMCI) today reported operating income of $0.09 per
share for the second quarter ended June 30, 2003 compared to operating
income of $0.45 per share for the second quarter of 2002.(1) Operating
income for the six months ended June 30, 2003 was $0.76 per share,
which equaled the operating income of $0.76 per share reported for the
first six months of 2002.
Net income, including realized investment gains/losses, was
$1,430,000 ($0.12 per share) for the second quarter of 2003 compared
to net income of $2,945,000 ($0.26 per share) for the second quarter
of 2002. Net income for the six-month period ended June 30, 2003
totaled $7,876,000 ($0.69 per share) compared to net income of
$6,635,000 ($0.58 per share) for the same period in 2002.
Results for the second quarter of 2003 were negatively impacted by
a large amount of storm losses and adverse development on prior years'
reserves. Storm losses for the first six months of 2003 are comparable
in amount to those experienced during the storm-plagued first six
months of 2001; however, the impact of these losses was not as severe
because premium rates are much more adequate now than they were in
2001. The adverse development on prior years' reserves is primarily
related to a strengthening of loss reserves in the workers'
compensation line of business and a general strengthening of
settlement expense reserves. These reserve increases were implemented
in response to recently completed actuarial projections.
Premiums earned increased 11.8 percent to $81,978,000 for the
three months ended June 30, 2003 from $73,349,000 for the same period
in 2002. For the six-month period ended June 30, 2003, premiums earned
increased 14.5 percent to $162,360,000 from $141,858,000 for the same
period in 2002. These increases are primarily attributed to rate
increases implemented during the last two years in the property and
casualty insurance business and growth and improved pricing in the
assumed reinsurance business. The Company continued to implement rate
increases in the property and casualty insurance business during the
first six months of 2003 and additional rate increases are anticipated
for the remainder of 2003. These rate increases will be targeted to
specific territories and lines of business and generally will be
smaller than the rate increases implemented during the past several
months.
"Continued positive investing and operating results brought our
book value to a record level," said President and CEO Bruce G. Kelley.
"We are generally pleased with our performance for the first half of
the year, even though results for the second quarter are down from
last year. The Company monitors claims activity and performs actuarial
analyses and projections of loss and settlement expense reserves on a
regular basis. As necessary, reserves are strengthened in accordance
with established practices that attempt to maintain consistently
adequate levels of reserves."
Catastrophe and storm losses amounted to $10,342,000 ($0.59 per
share after tax) in the second quarter of 2003 compared to $3,937,000
($0.22 per share after tax) in the second quarter of 2002. For the
first six months of 2003, catastrophe and storm losses totaled
$11,428,000 ($0.65 per share after tax) compared to $4,819,000 ($0.28
per share after tax) for the same period in 2002.
The Company's GAAP combined ratio was 107.3 percent in the second
quarter of 2003 compared to 101.5 percent in the second quarter of
2002. For the first six months of 2003, the GAAP combined ratio was
101.1 percent compared to 102.6 percent for the first six months of
2002.
Net book value of the Company's stock as of June 30, 2003 was
$14.93 per share, an increase of 7.9 percent from $13.84 per share at
December 31, 2002.
Employers Mutual Casualty Company has advised the Company that it
intends to reinvest 25 percent of its dividends in additional shares
of common stock through the Company's dividend reinvestment plan
beginning in the third quarter of 2003. Employers Mutual reinvested 75
percent of its dividends in the second quarter of 2003 and 50 percent
of its dividends in the first quarter of 2003.
EMC Insurance Group Inc., the publicly-held insurance holding
company of EMC Insurance Companies, owns subsidiaries with operations
in property and casualty insurance and reinsurance. EMC Insurance
Companies is one of the largest property and casualty entities in Iowa
and among the top 60 insurance entities nationwide. For more
information, visit our website www.emcinsurance.com.
The Private Securities Litigation Reform Act of 1995 provides
issuers the opportunity to make cautionary statements regarding
forward-looking statements. Accordingly, any forward-looking statement
contained in this report is based on management's current expectations
and actual results of the Company may differ materially from such
expectations. The risks and uncertainties that may affect the actual
results of the Company include but are not limited to the following:
catastrophic events and the occurrence of significant severe weather
conditions; state and federal legislation and regulations; rate
competition; changes in interest rates and the performance of
financial markets; the adequacy of loss and settlement expense
reserves, including asbestos and environmental claims; rate agency
actions and other risks and uncertainties inherent to the Company's
business.
(1) The Company uses a non-GAAP financial measure called
"operating income" that management believes is useful to investors
because it illustrates the performance of our normal, ongoing
operations, which is important in understanding and evaluating our
financial condition and results of operations. While this measure is
consistent with measures utilized by investors to evaluate
performance, it is not a substitute for the U.S. GAAP financial
measure of net income. Therefore, we have provided a reconciliation of
this non-GAAP financial measure to the U.S. GAAP financial measure of
net income in the Summary of Consolidated Financial Data schedule
contained in this release. Management also uses non-GAAP financial
measures for goal setting, determining employee and senior management
awards and compensation, and evaluating performance.
Summary of Consolidated Financial Data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------ ------------- -------------
Premiums earned. $81,977,768 $73,348,688 $162,359,666 $141,858,080
Net investment
income......... 7,387,056 8,346,315 15,233,980 16,605,026
Other income.... 264,328 260,163 432,158 377,275
------------ ------------ ------------- -------------
Total revenues.. 89,629,152 81,955,166 178,025,804 158,840,381
Losses and
expenses....... 88,796,144 75,064,484 165,899,535 146,751,295
------------ ------------ ------------- -------------
Operating
income before
income tax
(benefit)
expense...... 833,008 6,890,682 12,126,269 12,089,086
Income tax
(benefit)
expense........ (215,904) 1,753,950 3,494,318 3,439,224
------------ ------------ ------------- -------------
Operating income
after income
tax (benefit)
expense........ 1,048,912 5,136,732 8,631,951 8,649,862
------------ ------------ ------------- -------------
Realized
investment
gains (losses). 586,584 (3,372,379) (1,163,201) (3,100,460)
Income tax
expense
(benefit)...... 205,304 (1,180,333) (407,120) (1,085,161)
------------ ------------ ------------- -------------
Net realized
investment
gains
(losses).... 381,280 (2,192,046) (756,081) (2,015,299)
------------ ------------ ------------- -------------
Net income. $1,430,192 $2,944,686 $7,875,870 $6,634,563
============ ============ ============= =============
Operating income
per share
- basic and
diluted....... $0.09 $0.45 $0.76 $0.76
============ ============ ============= =============
Net income per
share
- basic and
diluted....... $0.12 $0.26 $0.69 $0.58
============ ============ ============= =============
Dividend per
share.......... $0.15 $0.15 $0.30 $0.30
============ ============ ============= =============
Average number
of shares
outstanding -
basic and
diluted...... 11,442,717 11,374,729 11,423,035 11,357,957
============ ============ ============= =============
Property & casualty
insurance Reinsurance
Written premiums 2003 2002 2003 2002
----------------------------------------------------------------------
Three months ended:
March 31,..... $60,022,622 $54,843,250 $23,301,452 $17,296,985
June 30,...... 65,126,418 62,295,162 22,160,253 17,683,733
-----------------------------------------------------
Year to date:... $125,149,040 $117,138,412 $45,461,705 $34,980,718
================================================== ===
Total
Written premiums 2003 2002
----------------------------------------------------------------------
Three months ended:
March 31,............................... $83,324,074 $72,140,235
June 30,................................ 87,286,671 79,978,895
---------------------------
Year to date:............................. $170,610,745 $152,119,130
===========================
Consolidated Balance Sheets
June 30, December 31,
2003 2002
------------- -------------
ASSETS (UNAUDITED)
------
Investments:
Fixed maturities:
Securities held-to-maturity, at
amortized cost(fair value $23,270,855
and $61,639,037)....................... $20,745,186 $55,033,675
Securities available-for-sale, at fair
value(amortized cost $387,788,519 and
$459,844,928).......................... 417,953,300 485,855,966
Fixed maturity securities on loan:
Securities held-to-maturity, at
amortized cost(fair value $33,428,582
and $0)................................ 30,144,246 -
Securities available-for-sale, at fair
value(amortized cost $70,505,300 and
$0).................................... 70,955,510 -
Equity securities available-for-sale, at
fair value(cost $34,630,883 and
$38,444,030)............................ 38,711,870 34,596,985
Other long-term investments, at cost..... 3,475,473 3,057,000
Short-term investments, at cost.......... 54,461,720 29,650,230
------------- -------------
Total investments............. 636,447,305 608,193,856
Balances resulting from related party
transactions with
Employers Mutual:
Reinsurance receivables................. 12,137,066 11,582,136
Prepaid reinsurance premiums............ 4,642,206 2,442,899
Intangible asset, defined benefit
retirement plan........................ 1,411,716 1,411,716
Other assets............................ 3,042,753 1,331,816
Indebtedness of related party........... 15,351,230 -
Cash...................................... (4,280,288) (119,097)
Accrued investment income................. 8,051,825 9,179,555
Accounts receivable (net of allowance for
uncollectible accounts of $7,297 and
$7,297).................................. 1,044,702 772,944
Income taxes recoverable.................. 2,715,969 213,504
Deferred policy acquisition costs......... 26,690,369 24,926,861
Deferred income taxes..................... 9,410,324 13,986,172
Goodwill, at cost less accumulated
amortization of $2,616,234 and $2,616,234 941,586 941,586
Securities lending collateral............. 107,255,529 -
------------- -------------
Total assets................... $824,862,292 $674,863,948
============= =============
LIABILITIES
-----------
Balances resulting from related party
transactions with
Employers Mutual:
Losses and settlement expenses........ $350,985,734 $331,226,753
Unearned premiums..................... 125,962,065 115,746,814
Other policyholders' funds............ 1,353,740 1,035,622
Surplus notes payable................. 36,000,000 36,000,000
Indebtedness to related party......... - 3,304,539
Employee retirement plans............. 10,970,232 10,014,349
Other liabilities..................... 21,241,604 19,767,507
Securities lending obligation............. 107,255,529 -
------------- -------------
Total liabilities............. 653,768,904 517,095,584
------------- -------------
STOCKHOLDERS' EQUITY
--------------------
Common stock, $1 par value, authorized
20,000,000 shares; issued and
outstanding, 11,459,977 shares in 2003
and 11,399,050 shares in 2002............ 11,459,977 11,399,050
Additional paid-in capital................ 68,360,742 67,270,591
Accumulated other comprehensive income.... 22,364,118 14,218,330
Retained earnings......................... 68,908,551 64,880,393
------------- -------------
Total stockholders' equity.... 171,093,388 157,768,364
------------- -------------
Total liabilities and stockholders' equity $824,862,292 $674,863,948
============= =============
Segment Information
(Unaudited)
Six Months Ended Property and
---------------- Casualty Parent
June 30, 2003 Insurance Reinsurance Company Consolidated
------------- ---------------------------------------------------
Premiums earned... $119,547,945 $42,811,721 - $162,359,666
Losses and
expenses......... 120,762,273 43,415,990 - 164,178,263
---------------------------------------------------
Underwriting
loss........... (1,214,328) (604,269) - (1,818,597)
Net investment
income........... 10,738,318 4,439,732 $55,930 15,233,980
Other income...... 432,158 - - 432,158
Interest expense.. 533,112 230,954 - 764,066
Other expenses.... 610,422 - 346,784 957,206
---------------------------------------------------
Operating income
(loss) before
income tax
expense
(benefit)...... 8,812,614 3,604,509 (290,854) 12,126,269
Realized
investment losses (943,531) (219,670) - (1,163,201)
---------------------------------------------------
Income (loss)
before income
tax expense
(benefit)...... $7,869,083 $3,384,839 $(290,854) $10,963,068
================================================== =
Six Months Ended Property and
---------------- Casualty Parent
June 30, 2002 Insurance Reinsurance Company Consolidated
------------- ---------------------------------------------------
Premiums earned... $107,811,323 $34,046,757 - $141,858,080
Losses and
expenses......... 109,608,704 35,907,384 - 145,516,088
---------------------------------------------------
Underwriting
loss........... (1,797,381) (1,860,627) - (3,658,008)
Net investment
income........... 12,035,034 4,498,920 $71,072 16,605,026
Other income...... 377,275 - - 377,275
Interest expense.. 666,972 4,747 - 671,719
Other expenses.... 330,657 - 232,831 563,488
---------------------------------------------------
Operating income
(loss) before
income tax
expense
(benefit)...... 9,617,299 2,633,546 (161,759) 12,089,086
Realized
investment
(losses) gains... (2,056,396) (1,049,377) 5,313 (3,100,460)
---------------------------------------------------
Income (loss)
before income
tax expense
(benefit)...... $7,560,903 $1,584,169 $(156,446) $8,988,626
================================================== =
June 30,
(UNAUDITED)
Other data: 2003 2002
----------------------------------------------------------------------
Book Value Per Share.............................. $14.93 $12.74
Price to Book Value............................... 1.24x 1.18x
Common stock price:
High........................................... $20.85 $23.50
Low............................................ $18.00 $15.00
Close.......................................... $18.53 $15.05
Effective tax rate................................ 28.2% 26.2%
Statutory surplus as regards
policyholders-insurance subsidiaries
(in thousands)................................... $153,626 $139,929
Annualized Data
--------------------------------------------------
Net income (loss) as a percent of beginning
stockholders' equity............................. 10.0% 9.5%
Average ROE....................................... 9.6% 9.3%
P/E Multiple (price/last 4 qtrs).................. 12.2x 32.0x
Group Inc. (Nasdaq:EMCI) today reported operating income of $0.09 per
share for the second quarter ended June 30, 2003 compared to operating
income of $0.45 per share for the second quarter of 2002.(1) Operating
income for the six months ended June 30, 2003 was $0.76 per share,
which equaled the operating income of $0.76 per share reported for the
first six months of 2002.
Net income, including realized investment gains/losses, was
$1,430,000 ($0.12 per share) for the second quarter of 2003 compared
to net income of $2,945,000 ($0.26 per share) for the second quarter
of 2002. Net income for the six-month period ended June 30, 2003
totaled $7,876,000 ($0.69 per share) compared to net income of
$6,635,000 ($0.58 per share) for the same period in 2002.
Results for the second quarter of 2003 were negatively impacted by
a large amount of storm losses and adverse development on prior years'
reserves. Storm losses for the first six months of 2003 are comparable
in amount to those experienced during the storm-plagued first six
months of 2001; however, the impact of these losses was not as severe
because premium rates are much more adequate now than they were in
2001. The adverse development on prior years' reserves is primarily
related to a strengthening of loss reserves in the workers'
compensation line of business and a general strengthening of
settlement expense reserves. These reserve increases were implemented
in response to recently completed actuarial projections.
Premiums earned increased 11.8 percent to $81,978,000 for the
three months ended June 30, 2003 from $73,349,000 for the same period
in 2002. For the six-month period ended June 30, 2003, premiums earned
increased 14.5 percent to $162,360,000 from $141,858,000 for the same
period in 2002. These increases are primarily attributed to rate
increases implemented during the last two years in the property and
casualty insurance business and growth and improved pricing in the
assumed reinsurance business. The Company continued to implement rate
increases in the property and casualty insurance business during the
first six months of 2003 and additional rate increases are anticipated
for the remainder of 2003. These rate increases will be targeted to
specific territories and lines of business and generally will be
smaller than the rate increases implemented during the past several
months.
"Continued positive investing and operating results brought our
book value to a record level," said President and CEO Bruce G. Kelley.
"We are generally pleased with our performance for the first half of
the year, even though results for the second quarter are down from
last year. The Company monitors claims activity and performs actuarial
analyses and projections of loss and settlement expense reserves on a
regular basis. As necessary, reserves are strengthened in accordance
with established practices that attempt to maintain consistently
adequate levels of reserves."
Catastrophe and storm losses amounted to $10,342,000 ($0.59 per
share after tax) in the second quarter of 2003 compared to $3,937,000
($0.22 per share after tax) in the second quarter of 2002. For the
first six months of 2003, catastrophe and storm losses totaled
$11,428,000 ($0.65 per share after tax) compared to $4,819,000 ($0.28
per share after tax) for the same period in 2002.
The Company's GAAP combined ratio was 107.3 percent in the second
quarter of 2003 compared to 101.5 percent in the second quarter of
2002. For the first six months of 2003, the GAAP combined ratio was
101.1 percent compared to 102.6 percent for the first six months of
2002.
Net book value of the Company's stock as of June 30, 2003 was
$14.93 per share, an increase of 7.9 percent from $13.84 per share at
December 31, 2002.
Employers Mutual Casualty Company has advised the Company that it
intends to reinvest 25 percent of its dividends in additional shares
of common stock through the Company's dividend reinvestment plan
beginning in the third quarter of 2003. Employers Mutual reinvested 75
percent of its dividends in the second quarter of 2003 and 50 percent
of its dividends in the first quarter of 2003.
EMC Insurance Group Inc., the publicly-held insurance holding
company of EMC Insurance Companies, owns subsidiaries with operations
in property and casualty insurance and reinsurance. EMC Insurance
Companies is one of the largest property and casualty entities in Iowa
and among the top 60 insurance entities nationwide. For more
information, visit our website www.emcinsurance.com.
The Private Securities Litigation Reform Act of 1995 provides
issuers the opportunity to make cautionary statements regarding
forward-looking statements. Accordingly, any forward-looking statement
contained in this report is based on management's current expectations
and actual results of the Company may differ materially from such
expectations. The risks and uncertainties that may affect the actual
results of the Company include but are not limited to the following:
catastrophic events and the occurrence of significant severe weather
conditions; state and federal legislation and regulations; rate
competition; changes in interest rates and the performance of
financial markets; the adequacy of loss and settlement expense
reserves, including asbestos and environmental claims; rate agency
actions and other risks and uncertainties inherent to the Company's
business.
(1) The Company uses a non-GAAP financial measure called
"operating income" that management believes is useful to investors
because it illustrates the performance of our normal, ongoing
operations, which is important in understanding and evaluating our
financial condition and results of operations. While this measure is
consistent with measures utilized by investors to evaluate
performance, it is not a substitute for the U.S. GAAP financial
measure of net income. Therefore, we have provided a reconciliation of
this non-GAAP financial measure to the U.S. GAAP financial measure of
net income in the Summary of Consolidated Financial Data schedule
contained in this release. Management also uses non-GAAP financial
measures for goal setting, determining employee and senior management
awards and compensation, and evaluating performance.
Summary of Consolidated Financial Data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------ ------------- -------------
Premiums earned. $81,977,768 $73,348,688 $162,359,666 $141,858,080
Net investment
income......... 7,387,056 8,346,315 15,233,980 16,605,026
Other income.... 264,328 260,163 432,158 377,275
------------ ------------ ------------- -------------
Total revenues.. 89,629,152 81,955,166 178,025,804 158,840,381
Losses and
expenses....... 88,796,144 75,064,484 165,899,535 146,751,295
------------ ------------ ------------- -------------
Operating
income before
income tax
(benefit)
expense...... 833,008 6,890,682 12,126,269 12,089,086
Income tax
(benefit)
expense........ (215,904) 1,753,950 3,494,318 3,439,224
------------ ------------ ------------- -------------
Operating income
after income
tax (benefit)
expense........ 1,048,912 5,136,732 8,631,951 8,649,862
------------ ------------ ------------- -------------
Realized
investment
gains (losses). 586,584 (3,372,379) (1,163,201) (3,100,460)
Income tax
expense
(benefit)...... 205,304 (1,180,333) (407,120) (1,085,161)
------------ ------------ ------------- -------------
Net realized
investment
gains
(losses).... 381,280 (2,192,046) (756,081) (2,015,299)
------------ ------------ ------------- -------------
Net income. $1,430,192 $2,944,686 $7,875,870 $6,634,563
============ ============ ============= =============
Operating income
per share
- basic and
diluted....... $0.09 $0.45 $0.76 $0.76
============ ============ ============= =============
Net income per
share
- basic and
diluted....... $0.12 $0.26 $0.69 $0.58
============ ============ ============= =============
Dividend per
share.......... $0.15 $0.15 $0.30 $0.30
============ ============ ============= =============
Average number
of shares
outstanding -
basic and
diluted...... 11,442,717 11,374,729 11,423,035 11,357,957
============ ============ ============= =============
Property & casualty
insurance Reinsurance
Written premiums 2003 2002 2003 2002
----------------------------------------------------------------------
Three months ended:
March 31,..... $60,022,622 $54,843,250 $23,301,452 $17,296,985
June 30,...... 65,126,418 62,295,162 22,160,253 17,683,733
-----------------------------------------------------
Year to date:... $125,149,040 $117,138,412 $45,461,705 $34,980,718
================================================== ===
Total
Written premiums 2003 2002
----------------------------------------------------------------------
Three months ended:
March 31,............................... $83,324,074 $72,140,235
June 30,................................ 87,286,671 79,978,895
---------------------------
Year to date:............................. $170,610,745 $152,119,130
===========================
Consolidated Balance Sheets
June 30, December 31,
2003 2002
------------- -------------
ASSETS (UNAUDITED)
------
Investments:
Fixed maturities:
Securities held-to-maturity, at
amortized cost(fair value $23,270,855
and $61,639,037)....................... $20,745,186 $55,033,675
Securities available-for-sale, at fair
value(amortized cost $387,788,519 and
$459,844,928).......................... 417,953,300 485,855,966
Fixed maturity securities on loan:
Securities held-to-maturity, at
amortized cost(fair value $33,428,582
and $0)................................ 30,144,246 -
Securities available-for-sale, at fair
value(amortized cost $70,505,300 and
$0).................................... 70,955,510 -
Equity securities available-for-sale, at
fair value(cost $34,630,883 and
$38,444,030)............................ 38,711,870 34,596,985
Other long-term investments, at cost..... 3,475,473 3,057,000
Short-term investments, at cost.......... 54,461,720 29,650,230
------------- -------------
Total investments............. 636,447,305 608,193,856
Balances resulting from related party
transactions with
Employers Mutual:
Reinsurance receivables................. 12,137,066 11,582,136
Prepaid reinsurance premiums............ 4,642,206 2,442,899
Intangible asset, defined benefit
retirement plan........................ 1,411,716 1,411,716
Other assets............................ 3,042,753 1,331,816
Indebtedness of related party........... 15,351,230 -
Cash...................................... (4,280,288) (119,097)
Accrued investment income................. 8,051,825 9,179,555
Accounts receivable (net of allowance for
uncollectible accounts of $7,297 and
$7,297).................................. 1,044,702 772,944
Income taxes recoverable.................. 2,715,969 213,504
Deferred policy acquisition costs......... 26,690,369 24,926,861
Deferred income taxes..................... 9,410,324 13,986,172
Goodwill, at cost less accumulated
amortization of $2,616,234 and $2,616,234 941,586 941,586
Securities lending collateral............. 107,255,529 -
------------- -------------
Total assets................... $824,862,292 $674,863,948
============= =============
LIABILITIES
-----------
Balances resulting from related party
transactions with
Employers Mutual:
Losses and settlement expenses........ $350,985,734 $331,226,753
Unearned premiums..................... 125,962,065 115,746,814
Other policyholders' funds............ 1,353,740 1,035,622
Surplus notes payable................. 36,000,000 36,000,000
Indebtedness to related party......... - 3,304,539
Employee retirement plans............. 10,970,232 10,014,349
Other liabilities..................... 21,241,604 19,767,507
Securities lending obligation............. 107,255,529 -
------------- -------------
Total liabilities............. 653,768,904 517,095,584
------------- -------------
STOCKHOLDERS' EQUITY
--------------------
Common stock, $1 par value, authorized
20,000,000 shares; issued and
outstanding, 11,459,977 shares in 2003
and 11,399,050 shares in 2002............ 11,459,977 11,399,050
Additional paid-in capital................ 68,360,742 67,270,591
Accumulated other comprehensive income.... 22,364,118 14,218,330
Retained earnings......................... 68,908,551 64,880,393
------------- -------------
Total stockholders' equity.... 171,093,388 157,768,364
------------- -------------
Total liabilities and stockholders' equity $824,862,292 $674,863,948
============= =============
Segment Information
(Unaudited)
Six Months Ended Property and
---------------- Casualty Parent
June 30, 2003 Insurance Reinsurance Company Consolidated
------------- ---------------------------------------------------
Premiums earned... $119,547,945 $42,811,721 - $162,359,666
Losses and
expenses......... 120,762,273 43,415,990 - 164,178,263
---------------------------------------------------
Underwriting
loss........... (1,214,328) (604,269) - (1,818,597)
Net investment
income........... 10,738,318 4,439,732 $55,930 15,233,980
Other income...... 432,158 - - 432,158
Interest expense.. 533,112 230,954 - 764,066
Other expenses.... 610,422 - 346,784 957,206
---------------------------------------------------
Operating income
(loss) before
income tax
expense
(benefit)...... 8,812,614 3,604,509 (290,854) 12,126,269
Realized
investment losses (943,531) (219,670) - (1,163,201)
---------------------------------------------------
Income (loss)
before income
tax expense
(benefit)...... $7,869,083 $3,384,839 $(290,854) $10,963,068
================================================== =
Six Months Ended Property and
---------------- Casualty Parent
June 30, 2002 Insurance Reinsurance Company Consolidated
------------- ---------------------------------------------------
Premiums earned... $107,811,323 $34,046,757 - $141,858,080
Losses and
expenses......... 109,608,704 35,907,384 - 145,516,088
---------------------------------------------------
Underwriting
loss........... (1,797,381) (1,860,627) - (3,658,008)
Net investment
income........... 12,035,034 4,498,920 $71,072 16,605,026
Other income...... 377,275 - - 377,275
Interest expense.. 666,972 4,747 - 671,719
Other expenses.... 330,657 - 232,831 563,488
---------------------------------------------------
Operating income
(loss) before
income tax
expense
(benefit)...... 9,617,299 2,633,546 (161,759) 12,089,086
Realized
investment
(losses) gains... (2,056,396) (1,049,377) 5,313 (3,100,460)
---------------------------------------------------
Income (loss)
before income
tax expense
(benefit)...... $7,560,903 $1,584,169 $(156,446) $8,988,626
================================================== =
June 30,
(UNAUDITED)
Other data: 2003 2002
----------------------------------------------------------------------
Book Value Per Share.............................. $14.93 $12.74
Price to Book Value............................... 1.24x 1.18x
Common stock price:
High........................................... $20.85 $23.50
Low............................................ $18.00 $15.00
Close.......................................... $18.53 $15.05
Effective tax rate................................ 28.2% 26.2%
Statutory surplus as regards
policyholders-insurance subsidiaries
(in thousands)................................... $153,626 $139,929
Annualized Data
--------------------------------------------------
Net income (loss) as a percent of beginning
stockholders' equity............................. 10.0% 9.5%
Average ROE....................................... 9.6% 9.3%
P/E Multiple (price/last 4 qtrs).................. 12.2x 32.0x
