ProAssurance Reports Results for Third Quarter 2017
Consolidated Income Statement Highlights ($ in thousands, except per share data) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
2017 |
2016 |
% Change |
2017 |
2016 |
% Change |
|||||||||||
Revenues |
||||||||||||||||
Gross premiums written* |
$ |
245,547 |
$ |
232,016 |
5.8% |
$ |
683,132 |
$ |
647,564 |
5.5% |
||||||
Net premiums written |
$ |
216,706 |
$ |
205,775 |
5.3% |
$ |
596,584 |
$ |
573,071 |
4.1% |
||||||
Net premiums earned |
$ |
192,303 |
$ |
185,275 |
3.8% |
$ |
555,559 |
$ |
539,587 |
3.0 % |
||||||
Net investment income |
$ |
23,729 |
$ |
25,261 |
(6.1%) |
$ |
69,592 |
$ |
75,284 |
(7.6%) |
||||||
Equity in earnings (loss) of unconsolidated |
$ |
4,164 |
$ |
(3,349) |
224.3% |
$ |
8,489 |
$ |
(6,607) |
228.5% |
||||||
Net realized investment gains (losses) |
$ |
7,749 |
$ |
15,737 |
(50.8%) |
$ |
18,810 |
$ |
18,314 |
2.7% |
||||||
Other income* |
$ |
510 |
$ |
1,428 |
(64.3%) |
$ |
4,581 |
$ |
5,963 |
(23.2%) |
||||||
Total revenues* |
$ |
228,455 |
$ |
224,352 |
1.8% |
$ |
657,031 |
$ |
632,541 |
3.9% |
||||||
Expenses |
||||||||||||||||
Net losses and loss adjustment expenses* |
$ |
129,356 |
$ |
118,082 |
9.5% |
$ |
364,058 |
$ |
335,936 |
8.4% |
||||||
Underwriting, policy acquisition and operating |
$ |
57,111 |
$ |
55,812 |
2.3% |
$ |
172,106 |
$ |
166,735 |
3.2% |
||||||
Total expenses* |
$ |
193,482 |
$ |
180,838 |
7.0% |
$ |
562,642 |
$ |
519,851 |
8.2% |
||||||
Income tax expense (benefit) |
$ |
6,024 |
$ |
9,680 |
(37.8%) |
$ |
4,467 |
$ |
16,457 |
(72.9%) |
||||||
Net income |
$ |
28,949 |
$ |
33,834 |
(14.4%) |
$ |
89,922 |
$ |
96,233 |
(6.6%) |
||||||
Operating income |
$ |
24,263 |
$ |
24,437 |
(0.7%) |
$ |
79,020 |
$ |
85,398 |
(7.5%) |
||||||
Weighted average number of common shares |
||||||||||||||||
Diluted |
53,614 |
53,456 |
0.3% |
53,586 |
53,419 |
0.3% |
||||||||||
Earnings per share |
||||||||||||||||
Net income per diluted share |
$ |
0.54 |
$ |
0.63 |
(14.3%) |
$ |
1.68 |
$ |
1.80 |
(6.7%) |
||||||
Operating income per diluted share |
$ |
0.45 |
$ |
0.46 |
(2.2%) |
$ |
1.47 |
$ |
1.60 |
(8.1%) |
||||||
*Consolidated totals include inter-segment eliminations. The eliminations affect individual line items only and have no effect on net income. See Note 11 of the Notes to Condensed Consolidated Financial Statements in the |
Consolidated Key Ratios |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2017 |
2016 |
2017 |
2016 |
||||
Current accident year loss ratio |
84.1% |
79.4% |
81.7% |
79.8% |
|||
Effect of prior accident years' reserve development |
(16.8%) |
(15.7%) |
(16.2%) |
(17.5%) |
|||
Net loss ratio |
67.3% |
63.7% |
65.5% |
62.3% |
|||
Expense ratio |
29.7% |
30.1% |
31.0% |
30.9% |
|||
Combined ratio |
97.0% |
93.8% |
96.5% |
93.2% |
|||
Operating ratio |
84.7% |
80.2% |
84.0% |
79.2% |
|||
Return on equity * |
6.3% |
6.6% |
6.6% |
6.4% |
|||
* Annualized |
Management Commentary
"
Third Quarter 2017 Highlights
- Gross premiums written increased 5.8% quarter-over-quarter, driven primarily by the timing of certain policy renewals in our Specialty P&C segment and by overall premium gains in our Lloyd's Syndicate segment. Gross premiums written in our Workers' Compensation segment were essentially level, reflecting the intense competition in that line of business.
- Net premiums earned grew in all three operating segments, quarter-over-quarter, and were up 3.8% overall.
- Our coordinated sales & marketing programs continued to drive additional business opportunities and resulted in
$2.9 million of direct premiums written in the quarter.
- Net favorable development was
$32.3 million in the quarter, as compared to$29.0 million in the year-ago period. Net favorable development in our Specialty P&C segment was$30.1 million , and our Workers' Compensation segment experienced net favorable development of$2.3 million .
- The consolidated current accident year net loss ratio was 4.7 points higher quarter-over-quarter, due to losses, somewhat offset by reinstatement premiums, related to Hurricanes Harvey, Irma and Maria in our Lloyd's Syndicate segment. The consolidated underwriting expense ratio decreased 0.4 points over the third quarter of 2016.
- The results of our income from equity investments in unconsolidated subsidiaries were
$4.2 million , an increase of$7.5 million from a$3.3 million loss in the third quarter of 2016. However, net investment income declined$1.5 million quarter-over-quarter primarily due to lower earnings in our fixed income portfolio.
- Net realized investment gains were
$7.7 million in the third quarter of 2017. This is an$8.0 million decrease from the prior-year quarter because of a reduction in the amount of unrealized gains in our securities trading portfolio.
- Taxes decreased
$3.7 million , quarter-over-quarter, primarily due to lower net realized investment gains, and as in prior quarters this year, the effect of our investment in various tax credits and tax exempt income.
Non-GAAP Financial Measures
Operating income is a non-GAAP financial measure that is widely used to evaluate performance within the insurance sector. In calculating operating income, we have excluded the after-tax effects of the items listed in the following table that do not reflect normal operating results. We believe operating income presents a useful view of the performance of our insurance operations, but should be considered in conjunction with net income computed in accordance with GAAP. The following table reconciles net income to operating income:
Reconciliation of Net Income to Operating Income (In thousands, except per share data) |
|||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||
Net income |
$ |
28,949 |
$ |
33,834 |
$ |
89,922 |
$ |
96,233 |
|||
Items excluded in the calculation of operating income: |
|||||||||||
Net realized investment (gains) losses |
(7,749) |
(15,737) |
(18,810) |
(18,314) |
|||||||
Net realized gains (losses) attributable to SPCs which no |
764 |
1,189 |
2,191 |
1,502 |
|||||||
Guaranty fund assessments (recoupments) |
(225) |
91 |
(154) |
143 |
|||||||
Pre-tax effect of exclusions |
(7,210) |
(14,457) |
(16,773) |
(16,669) |
|||||||
Tax effect at 35% |
2,524 |
5,060 |
5,871 |
5,834 |
|||||||
Operating income |
$ |
24,263 |
$ |
24,437 |
$ |
79,020 |
$ |
85,398 |
|||
Per diluted common share |
|||||||||||
Net income |
$ |
0.54 |
$ |
0.63 |
$ |
1.68 |
$ |
1.80 |
|||
Effect of exclusions |
(0.09) |
(0.17) |
(0.21) |
(0.20) |
|||||||
Operating income per diluted common share |
$ |
0.45 |
$ |
0.46 |
$ |
1.47 |
$ |
1.60 |
|||
* Net realized investment gains (losses) on investments related to our SPCs are recognized in the earnings of our Corporate segment and the portion of earnings related to the gain or loss, net of our participation, is distributed back to the cells through our SPC dividend expense (income). To be consistent with our exclusion of Net realized investment gains (losses) recognized in earnings, we are excluding the portion of Net realized investment gains (losses) that is included in SPC dividend expense (income) during all periods presented. |
Capital Management
To date we have not repurchased any shares of our stock this year. As of
Balance Sheet Highlights (in thousands, except per share data) |
|||||
|
|
||||
Total investments |
$ |
3,671,838 |
$ |
3,925,696 |
|
Total assets |
$ |
4,925,154 |
$ |
5,065,181 |
|
Total liabilities |
$ |
3,074,264 |
$ |
3,266,479 |
|
Common shares (par value |
$ |
628 |
$ |
627 |
|
Retained earnings |
$ |
1,864,136 |
$ |
1,824,088 |
|
|
$ |
(419,928) |
$ |
(419,930) |
|
Shareholders' equity |
$ |
1,850,890 |
$ |
1,798,702 |
|
Book value per share |
$ |
34.65 |
$ |
33.78 |
Conference Call Information
About
SEGMENT RESULTS
Specialty P&C Insurance Segment ($ in thousands) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2017 |
2016 |
% Change |
2017 |
2016 |
% Change |
||||||||||
Gross premiums written |
$ |
166,284 |
$ |
155,838 |
6.7% |
$ |
428,032 |
$ |
410,201 |
4.3% |
|||||
Net premiums written |
$ |
143,286 |
$ |
134,989 |
6.1% |
$ |
367,112 |
$ |
354,510 |
3.6% |
|||||
Net premiums earned |
$ |
118,331 |
$ |
116,199 |
1.8% |
$ |
340,394 |
$ |
335,080 |
1.6% |
|||||
Total revenues |
$ |
119,607 |
$ |
117,211 |
2.0% |
$ |
344,337 |
$ |
339,101 |
1.5% |
|||||
Net losses and loss adjustment expenses |
$ |
73,831 |
$ |
72,311 |
2.1% |
$ |
220,123 |
$ |
205,787 |
7.0% |
|||||
Underwriting, policy acquisition and operating |
$ |
27,037 |
$ |
26,563 |
1.8% |
$ |
79,252 |
$ |
77,519 |
2.2% |
|||||
Segregated portfolio cell dividend expense |
$ |
(65) |
$ |
94 |
(169.1%) |
$ |
5,026 |
$ |
94 |
5,246.8% |
|||||
Total expenses |
$ |
100,803 |
$ |
98,968 |
1.9% |
$ |
304,401 |
$ |
283,400 |
7.4% |
|||||
Segment operating results |
$ |
18,804 |
$ |
18,243 |
3.1% |
$ |
39,936 |
$ |
55,701 |
(28.3%) |
Specialty P&C Insurance Segment Key Ratios |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2017 |
2016 |
2017 |
2016 |
||||
Current accident year loss ratio |
87.8% |
88.1% |
88.7% |
88.3% |
|||
Effect of prior accident years' reserve development |
(25.4%) |
(25.9%) |
(24.0%) |
(26.9%) |
|||
Net loss ratio |
62.4% |
62.2% |
64.7% |
61.4% |
|||
Underwriting expense ratio |
22.8% |
22.9% |
23.3% |
23.1% |
|||
Combined ratio |
85.2% |
85.1% |
88.0% |
84.5% |
Gross premiums written in our Specialty P&C segment increased
New business totaled
Premium retention in physician professional liability, the largest line in this segment, was 90% in the quarter, one point higher than in the third quarter of 2016. Renewal pricing on physician business, the largest source of revenue in this segment, increased two points quarter-over-quarter.
The current accident year net loss ratio and underwriting expense ratios were essentially level with 2016's third quarter, as was the segment's combined ratio, which was 85.2%.
Net favorable loss development in the third quarter of 2017 was
Workers' Compensation Segment ($ in thousands) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2017 |
2016 |
% Change |
2017 |
2016 |
% Change |
||||||||||
Gross premiums written |
$ |
59,683 |
$ |
59,910 |
(0.4%) |
$ |
203,237 |
$ |
194,420 |
4.5% |
|||||
Net premiums written |
$ |
54,647 |
$ |
54,444 |
0.4% |
$ |
184,917 |
$ |
175,986 |
5.1% |
|||||
Net premiums earned |
$ |
57,654 |
$ |
54,498 |
5.8% |
$ |
169,791 |
$ |
163,974 |
3.5% |
|||||
Total revenues |
$ |
57,818 |
$ |
54,584 |
5.9% |
$ |
170,310 |
$ |
164,670 |
3.4% |
|||||
Net losses and loss adjustment expenses |
$ |
35,081 |
$ |
34,472 |
1.8% |
$ |
103,217 |
$ |
104,160 |
(0.9%) |
|||||
Underwriting, policy acquisition and operating |
$ |
18,434 |
$ |
18,331 |
0.6% |
$ |
52,220 |
$ |
52,494 |
(0.5%) |
|||||
Segregated portfolio cell dividend expense |
$ |
1,722 |
$ |
1,449 |
18.8% |
$ |
5,593 |
$ |
3,440 |
62.6% |
|||||
Total expenses |
$ |
55,237 |
$ |
54,252 |
1.8% |
$ |
161,030 |
$ |
160,094 |
0.6% |
|||||
Segment operating results |
$ |
2,581 |
$ |
332 |
677.4% |
$ |
9,280 |
$ |
4,576 |
102.8% |
|||||
* Represents the underwriting profit (loss) attributable to the alternative market business ceded to the SPCs at Eastern Re, net of our participation. |
Workers' Compensation Segment Key Ratios |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2017 |
2016 |
2017 |
2016 |
||||
Current accident year loss ratio |
64.8% |
66.6% |
65.3% |
65.9% |
|||
Effect of prior accident years' reserve development |
(4.0%) |
(3.3%) |
(4.5%) |
(2.4%) |
|||
Net loss ratio |
60.8% |
63.3% |
60.8% |
63.5% |
|||
Underwriting expense ratio |
32.0% |
33.6% |
30.8% |
32.0% |
|||
Combined ratio |
92.8% |
96.9% |
91.6% |
95.5% |
The increase in the Workers' Compensation segment operating results for the third quarter of 2017 was driven by an increase in net premiums earned and a decrease in the net loss ratio and underwriting expense ratio.
Gross premiums written decreased 0.4% as compared to the third quarter of 2016, driven by a decrease in renewal pricing and audit premium, as well as changes in estimated premiums under retrospectively rated policies, partially offset by an increase in new business writings and solid premium retention. We retained the single alternative market program that was available for renewal in the quarter.
New business in the third quarter of 2017 totaled
Premium retention was 87% for the third quarter of 2017 as compared to 83% for the same period in 2016. Renewal pricing declined 5% quarter-over-quarter, driven by continued competitive pressure across all operating territories.
The decrease in the third quarter of 2017 accident year net loss ratio reflects more favorable trends in claim closing patterns in both of our traditional and alternative lines.
We recognized
The decrease in the 2017 expense ratio primarily reflected the increase in net premiums earned, a 1.1 point reduction in intangible asset amortization and continued effective management of operating expenses, all of which were partially offset by an increase in underwriting acquisition expenses.
Lloyd's Syndicate Segment ($ in thousands) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2017 |
2016 |
% Change |
2017 |
2016 |
% Change |
||||||||||
Gross premiums written |
$ |
20,972 |
$ |
18,956 |
10.6% |
$ |
56,995 |
$ |
50,870 |
12.0% |
|||||
Net premiums written |
$ |
18,773 |
$ |
16,342 |
14.9% |
$ |
44,555 |
$ |
42,575 |
4.7% |
|||||
Net premiums earned |
$ |
16,318 |
$ |
14,578 |
11.9% |
$ |
45,374 |
$ |
40,533 |
11.9% |
|||||
Net investment income |
$ |
412 |
$ |
351 |
17.4% |
$ |
1,194 |
$ |
1,004 |
18.9% |
|||||
Other gains (losses) |
$ |
(1,850) |
$ |
784 |
(336.0%) |
$ |
(1,536) |
$ |
1,233 |
(224.6%) |
|||||
Total revenues |
$ |
14,880 |
$ |
15,713 |
(5.3%) |
$ |
45,032 |
$ |
42,770 |
5.3% |
|||||
Net losses and loss adjustment |
$ |
20,444 |
$ |
11,299 |
80.9% |
$ |
40,718 |
$ |
25,989 |
56.7% |
|||||
Underwriting, policy acquisition and |
$ |
6,723 |
$ |
6,251 |
7.6% |
$ |
19,786 |
$ |
16,660 |
18.8% |
|||||
Total expenses |
$ |
27,167 |
$ |
17,550 |
54.8% |
$ |
60,504 |
$ |
42,649 |
41.9% |
|||||
Total income tax expense (benefit) |
$ |
61 |
$ |
1,352 |
(95.5%) |
$ |
(495) |
$ |
2,248 |
(122.0%) |
|||||
Segment operating results |
$ |
(12,348) |
$ |
(3,189) |
(287.2%) |
$ |
(14,977) |
$ |
(2,127) |
(604.1%) |
Lloyd's Syndicate Segment Key Ratios |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2017 |
2016 |
2017 |
2016 |
||||
Current accident year loss ratio |
124.6% |
58.1% |
91.0% |
65.0% |
|||
Effect of prior accident years' reserve development |
0.7% |
19.4% |
(1.3%) |
(0.9%) |
|||
Net loss ratio |
125.3% |
77.5% |
89.7% |
64.1% |
|||
Underwriting expense ratio |
41.2% |
42.9% |
43.6% |
41.1% |
Results of our Lloyd's Syndicate segment, which represents our 58% participation in the results of Lloyd's Syndicate 1729, are generally reported on a one-quarter lag, except in quarters such as this one, where we believe investors will benefit from knowing of material event occurring the quarter. Additionally, results associated with investment assets solely allocated to Syndicate operations and certain
During the third quarter of 2017, Syndicate 1729 reported preliminary loss estimates in connection with Hurricanes Harvey, Irma and Maria, which affected
Primarily as a result of these storm-related losses, the current accident year loss ratio increased by 66.5 points as compared to the third quarter of 2016. The net loss ratio increased 47.8 points as compared to the year-ago quarter primarily due the aforementioned storm losses. Excluding the storm-related effect on the segment, we expect current loss trends to continue as the Syndicate writes new business and the existing book matures, which will continue to result in quarter-to-quarter fluctuations in the Syndicate's loss ratios.
Gross premiums written were
These same factors also were the primary reason for the
Underwriting and operating expenses increased by approximately
The maximum underwriting capacity of Syndicate 1729 is now approximately
Corporate Segment ($ in thousands) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2017 |
2016 |
% Change |
2017 |
2016 |
% Change |
||||||||||
Net investment income |
$ |
23,317 |
$ |
24,910 |
(6.4%) |
$ |
68,398 |
$ |
74,280 |
(7.9%) |
|||||
Equity in earnings (loss) of |
$ |
4,164 |
$ |
(3,349) |
224.3% |
$ |
8,489 |
$ |
(6,607) |
228.5% |
|||||
Net realized investment gains (losses) |
$ |
7,718 |
$ |
15,687 |
(50.8%) |
$ |
18,705 |
$ |
18,255 |
2.5% |
|||||
Total revenues |
$ |
36,222 |
$ |
37,263 |
(2.8%) |
$ |
97,566 |
$ |
86,686 |
12.6% |
|||||
Operating expenses |
$ |
4,989 |
$ |
5,086 |
(1.9%) |
$ |
21,062 |
$ |
20,748 |
1.5% |
|||||
Segregated portfolio cell dividend |
$ |
1,234 |
$ |
1,653 |
(25.3%) |
$ |
3,457 |
$ |
2,361 |
46.4% |
|||||
Interest expense |
$ |
4,124 |
$ |
3,748 |
10.0% |
$ |
12,402 |
$ |
11,285 |
9.9% |
|||||
Income tax expense (benefit) |
$ |
5,963 |
$ |
8,328 |
(28.4%) |
$ |
4,962 |
$ |
14,209 |
(65.1%) |
|||||
Segment operating results |
$ |
19,912 |
$ |
18,448 |
7.9% |
$ |
55,683 |
$ |
38,083 |
46.2% |
|||||
* Represents the investment results attributable to the SPCs at Eastern Re, net of our participation. |
The quarter-over-quarter increase in operating results in our Corporate segment were primarily driven by a
Net investment income was lower, quarter-over-quarter, reflecting lower earnings from our fixed income portfolio, which has declined in recent years, primarily due to capital management activity since 2007. Returns from our fixed-income investments also have been affected by the prolonged low-interest rate environment.
Caution Regarding Forward-Looking Statements
Statements in this news release that are not historical fact or that convey our view of future business, events or trends are specifically identified as forward-looking statements. Forward-looking statements are based upon our estimates and anticipation of future events and highlight significant risks, assumptions and uncertainties that could cause actual results to vary materially from our expected results. We expressly claim the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, for any forward-looking statements in this news release. Forward-looking statements represent our outlook only as of the date of this news release. Except as required by law or regulation, we do not undertake and specifically decline any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Forward-looking statements are generally identified by words such as, but not limited to, "anticipate," "believe," "estimate," "expect," "hope," "hopeful," "intend," "likely," "may," "optimistic," "possible," "potential," "preliminary," "project," "should," "will," and other analogous expressions. When we address topics such as liquidity and capital requirements, the value of our investments, return on equity, financial ratios, net income, premiums, losses and loss reserves, premium rates and retention of current business, competition and market conditions, the expansion of product lines, the development or acquisition of business in new geographical areas, the availability of acceptable reinsurance, actions by regulators and rating agencies, court actions, legislative actions, payment or performance of obligations under indebtedness, payment of dividends, and other similar matters, we are making forward-looking statements.
These forward-looking statements are subject to significant risks, assumptions, and uncertainties, including, among other things, the following factors that could affect the actual outcome of future events:
- changes in general economic conditions, including the impact of inflation or deflation and unemployment;
- our ability to maintain our dividend payments;
- regulatory, legislative and judicial actions or decisions that could affect our business plans or operations;
- the enactment or repeal of tort reforms;
- formation or dissolution of state-sponsored insurance entities providing coverages now offered by
ProAssurance which could remove or add sizable numbers of insureds from or to the private insurance market; - changes in the interest and tax rate environment;
- resolution of uncertain tax matters and changes in tax laws;
- changes in
U.S. laws or government regulations regarding financial markets or market activity that may affect theU.S. economy and our business; - changes in the ability of the
U.S. government to meet its obligations that may affect theU.S. economy and our business; - performance of financial markets affecting the fair value of our investments or making it difficult to determine the value of our investments;
- changes in requirements or accounting policies and practices that may be adopted by our regulatory agencies, the FASB, the
SEC , the PCAOB or theNYSE that may affect our business; - changes in laws or government regulations affecting the financial services industry, the property and casualty insurance industry or particular insurance lines underwritten by our subsidiaries;
- the effect on our insureds, particularly the insurance needs of our insureds, and our loss costs, of changes in the healthcare delivery system and/or changes in the
U.S. political climate that may affect healthcare policy or our business; - consolidation of our insureds into or under larger entities which may be insured by competitors, or may not have a risk profile that meets our underwriting criteria or which may not use external providers for insuring or otherwise managing substantial portions of their liability risk;
- uncertainties inherent in the estimate of our loss and loss adjustment expense reserve and reinsurance recoverable;
- changes in the availability, cost, quality or collectability of insurance/reinsurance;
- the results of litigation, including pre- or post-trial motions, trials and/or appeals we undertake; effects on our claims costs from mass tort litigation that are different from that anticipated by us;
- allegations of bad faith which may arise from our handling of any particular claim, including failure to settle;
- loss or consolidation of independent agents, agencies, brokers or brokerage firms;
- changes in our organization, compensation and benefit plans;
- changes in the business or competitive environment may limit the effectiveness of our business strategy and impact our revenues;
- our ability to retain and recruit senior management;
- the availability, integrity and security of our technology infrastructure or that of our third-party providers of technology infrastructure, including any susceptibility to cyber-attacks which might result in a loss of information or operating capability;
- the impact of a catastrophic event, as it relates to both our operations and our insured risks; the impact of acts of terrorism and acts of war;
- the effects of terrorism-related insurance legislation and laws;
- guaranty funds and other state assessments;
- our ability to achieve continued growth through expansion into new markets or through acquisitions or business combinations;
- changes to the ratings assigned by rating agencies to our insurance subsidiaries, individually or as a group;
- provisions in our charter documents,
Delaware law and state insurance laws may impede attempts to replace or remove management or may impede a takeover; - state insurance restrictions may prohibit assets held by our insurance subsidiaries, including cash and investment securities, from being used for general corporate purposes;
- taxing authorities can take exception to our tax positions and cause us to incur significant amounts of legal and accounting costs and, if our defense is not successful, additional tax costs, including interest and penalties; and
- expected benefits from completed and proposed acquisitions may not be achieved or may be delayed longer than expected due to business disruption; loss of customers, employees or key agents; increased operating costs or inability to achieve cost savings; and assumption of greater than expected liabilities, among other reasons.
Additional risks, assumptions and uncertainties that could arise from our membership in the
- members of Lloyd's are subject to levies by the
Council of Lloyd's based on a percentage of the member's underwriting capacity, currently a maximum of 3%, but can be increased by Lloyd's; - Syndicate operating results can be affected by decisions made by the
Council of Lloyd's which the management of Syndicate 1729 has little ability to control, such as a decision to not approve the business plan of Syndicate 1729, or a decision to increase the capital required to continue operations, and by our obligation to pay levies to Lloyd's; - Lloyd's insurance and reinsurance relationships and distribution channels could be disrupted or Lloyd's trading licenses could be revoked making it more difficult for Syndicate 1729 to distribute and market its products;
- rating agencies could downgrade their ratings of Lloyd's as a whole; and
- Syndicate 1729 operations are dependent on a small, specialized management team and the loss of their services could adversely affect the Syndicate's business. The inability to identify, hire and retain other highly qualified personnel in the future, could adversely affect the quality and profitability of Syndicate 1729's business.
Our results may differ materially from those we expect and discuss in any forward-looking statements. The principal risk factors that may cause these differences are described in "Item 1A, Risk Factors" in our Form 10-K and other documents we file with the
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SOURCE
American Equity Reports Third Quarter 2017 Results
Brookdale Announces Third Quarter 2017 Results
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