The Hanover Reports Second Quarter Net Income and Operating Income (1) of $1.83 and $1.69 per Diluted Share, Respectively; Combined Ratio of 95.6%, including Catastrophe Impact of 4.8 points; Operating Return on Equity (2) of 10.6%
Second Quarter Highlights
- Combined ratio, excluding catastrophes (3), of 90.8%, an improvement of 2.0 points over the prior-year quarter
- Catastrophe losses of
$57.1 million before taxes, or 4.8% of earned premiums, primarily in Commercial Lines - Net premiums written of
$1.3 billion ; up 4.4%, driven primarily by growth in Personal Lines - Continued price increases in Commercial and Personal Lines
- Net investment income of
$72.3 million , up 4.6% compared to the prior-year quarter - Book value per share of
$70.18 , up 2.5% from the first quarter of 2017; book value per share, excluding net unrealized gains on investments (4), of$64.87 , up 2.0% - Repurchased approximately 275,000 shares of common stock for
$23.4 million - Initiated expense actions to generate annualized pre-tax savings of approximately
$50 million to accelerate strategic expense leverage initiative and to reinvest in the business
Three months ended |
Six months ended |
|||||||
|
|
|||||||
($ in millions, except per share data) |
2017 |
2016 |
2017 |
2016 |
||||
Net premiums written |
|
|
|
|
||||
Operating income |
72.3 |
54.0 |
113.1 |
125.5 |
||||
per diluted share |
1.69 |
1.24 |
2.64 |
2.89 |
||||
Net income |
78.4 |
2.0 |
123.6 |
80.2 |
||||
per diluted share |
1.83 |
0.05 |
2.88 |
1.84 |
||||
Net investment income |
72.3 |
69.1 |
143.4 |
137.4 |
||||
Book value per share |
|
|
|
|
||||
Ending shares outstanding |
42.4 |
42.7 |
42.4 |
42.7 |
||||
Combined ratio |
95.6 % |
97.3 % |
97.5 % |
96.2 % |
||||
Prior year development ratio |
(1.3)% |
1.3 % |
(0.7)% |
0.2 % |
||||
Catastrophe ratio |
4.8 % |
4.5 % |
6.0 % |
3.6 % |
||||
Combined ratio, excluding catastrophes(3) |
90.8 % |
92.8 % |
91.5 % |
92.6 % |
||||
Current accident year combined ratio, |
92.1 % |
91.5 % |
92.2 % |
92.4 % |
(1) See information about this and other footnotes throughout this press release on the final page of this document.
"We are very pleased with our performance in the quarter," said
"We also advanced our Hanover 2021 strategy in the quarter," Zubretsky said, "We realigned our leadership team, expanded
"Our combined ratio of 95.6% in the quarter was a notable improvement over the prior-year quarter, on comparable catastrophe losses," said
Second Quarter Operating Highlights
Commercial Lines
Commercial Lines operating income before taxes was
Commercial Lines current accident year combined ratio, excluding catastrophe losses(5), increased by 1.6 points to 92.2%, compared to 90.6% in the prior-year quarter. The increase was primarily due to large loss activity and related ratio impact of reinstatement premiums, in particular due to one large fire loss in the inland marine line within Other Commercial. The expense ratio improved by 0.7 points in the second quarter of 2017. This improvement was driven by growth leverage and operating efficiencies.
Net premiums written were
The following table summarizes premiums and the components of the combined ratio for Commercial Lines:
Three months ended |
Six months ended |
|||||||
|
|
|||||||
($ in millions) |
2017 |
2016 |
2017 |
2016 |
||||
Net premiums written |
|
|
|
|
||||
Net premiums earned |
591.2 |
574.7 |
1,179.5 |
1,146.1 |
||||
Operating income before taxes |
43.2 |
44.0 |
80.6 |
86.7 |
||||
Loss and LAE ratio |
64.0% |
62.8% |
63.9% |
62.8% |
||||
Expense ratio(7) |
35.4% |
36.1% |
35.9% |
36.2% |
||||
Combined ratio |
99.4% |
98.9% |
99.8% |
99.0% |
||||
Prior year development ratio |
- |
3.8 % |
- |
3.7 % |
||||
Catastrophe ratio |
7.2 % |
4.5 % |
6.7 % |
3.9 % |
||||
Combined ratio, excluding catastrophes(3) |
92.2 % |
94.4 % |
93.1 % |
95.1 % |
||||
Current accident year combined ratio, |
92.2 % |
90.6 % |
93.1 % |
91.4 % |
Personal Lines
Personal Lines operating income before taxes was
Personal Lines current accident year combined ratio, excluding catastrophe losses(5), was 88.4%, compared to 88.0% in the prior-year quarter, driven by a higher expense ratio. This was due to a one-time premium tax benefit in the second quarter of 2016.
Net premiums written were
The following table summarizes premiums and the components of the combined ratio in Personal Lines:
Three months ended |
Six months ended |
|||||||
|
|
|||||||
($ in millions) |
2017 |
2016 |
2017 |
2016 |
||||
Net premiums written |
|
|
|
|
||||
Net premiums earned |
391.3 |
364.7 |
773.1 |
723.3 |
||||
Operating income before taxes |
47.9 |
47.4 |
57.8 |
94.5 |
||||
Loss and LAE ratio |
63.6% |
64.0% |
68.2% |
63.6% |
||||
Expense ratio(7) |
28.2% |
27.3% |
28.5% |
27.7% |
||||
Combined ratio |
91.8% |
91.3% |
96.7% |
91.3% |
||||
Prior year development ratio |
- |
0.2 % |
- |
- |
||||
Catastrophe ratio |
3.4 % |
3.1 % |
6.9 % |
3.2 % |
||||
Combined ratio, excluding catastrophes(3) |
88.4 % |
88.2 % |
89.8 % |
88.1 % |
||||
Current accident year combined ratio, |
88.4 % |
88.0 % |
89.8 % |
88.1 % |
Net premiums written were
The following table summarizes premiums and the components of the combined ratio in the
Three months ended |
Six months ended |
|||||||
|
|
|||||||
($ in millions) |
2017 |
2016 |
2017 |
2016 |
||||
Net premiums written |
|
|
|
|
||||
Net premiums earned |
198.7 |
206.1 |
409.9 |
427.4 |
||||
Operating income before taxes |
29.7 |
5.5 |
54.6 |
39.2 |
||||
Loss and LAE ratio |
49.0% |
65.6% |
51.2% |
58.0% |
||||
Expense ratio(7) |
42.0% |
37.6% |
41.0% |
38.3% |
||||
Combined ratio |
91.0% |
103.2% |
92.2% |
96.3% |
||||
Prior year development ratio |
(7.9)% |
(4.0)% |
(4.4)% |
(8.9)% |
||||
Catastrophe ratio |
0.6 % |
6.7 % |
2.1 % |
3.4 % |
||||
Combined ratio, excluding catastrophes(3) |
90.4 % |
96.5 % |
90.1 % |
92.9 % |
||||
Current accident year combined ratio, |
98.3 % |
100.5 % |
94.5 % |
101.8 % |
Expense Management
The company initiated expense actions to eliminate approximately 160 positions, which is expected to contribute to annualized pre-tax expense savings of approximately
Investments
Net investment income was
Net realized investment gains were
The company held
Capitalization, Shareholders' Equity and Other Items
Book value per share of
During the quarter, the company repurchased approximately 275,000 shares of common stock for
Earnings Conference Call
The Hanover will host a conference call to discuss its second quarter results on
Financial Supplement
The Hanover's second quarter earnings news release and financial supplement are available in the "Investors" section of the company's website at www.hanover.com.
|
|||||
Condensed Consolidated Balance Sheet |
|||||
|
|
||||
($ in millions) |
2017 |
2016 |
|||
Assets |
|||||
Total investments |
|
|
|||
Cash and cash equivalents |
317.8 |
282.6 |
|||
Premiums and accounts receivable, net |
1,599.4 |
1,438.1 |
|||
Reinsurance recoverable on paid and unpaid losses and unearned premiums |
2,701.1 |
2,611.8 |
|||
Other assets |
1,454.9 |
1,438.4 |
|||
Total assets |
|
|
|||
Liabilities |
|||||
Loss and loss adjustment expense reserves |
|
|
|||
Unearned premiums |
2,776.0 |
2,561.0 |
|||
Debt |
786.7 |
786.4 |
|||
Other liabilities |
1,095.1 |
1,066.1 |
|||
Total liabilities |
11,820.2 |
11,362.9 |
|||
Total shareholders' equity |
2,972.5 |
2,857.5 |
|||
Total liabilities and shareholders' equity |
|
|
|||
|
|||||||||
Condensed Consolidated Income Statement |
Three months ended |
Six months ended |
|||||||
|
|
||||||||
($ in millions) |
2017 |
2016 |
2017 |
2016 |
|||||
Revenues |
|||||||||
Premiums earned |
|
|
|
|
|||||
Net investment income |
72.3 |
69.1 |
143.4 |
137.4 |
|||||
Total net realized investment gains (losses) |
5.9 |
(0.7) |
7.8 |
0.8 |
|||||
Fees and other income |
6.7 |
8.1 |
13.3 |
14.6 |
|||||
Total revenues |
1,266.1 |
1,222.0 |
2,527.0 |
2,449.6 |
|||||
Losses and expenses |
|||||||||
Losses and loss adjustment expenses |
725.0 |
729.7 |
1,491.5 |
1,429.3 |
|||||
Amortization of deferred acquisition costs |
264.6 |
254.4 |
531.0 |
513.5 |
|||||
Interest expense |
12.2 |
15.6 |
24.2 |
30.3 |
|||||
Gain on disposal of |
- |
(0.4) |
- |
(1.2) |
|||||
Net loss from repayment of debt |
- |
86.1 |
- |
86.1 |
|||||
Other operating expenses |
153.3 |
143.7 |
310.3 |
290.6 |
|||||
Total losses and expenses |
1,155.1 |
1,229.1 |
2,357.0 |
2,348.6 |
|||||
Income (loss) from continuing operations before income taxes |
111.0 |
(7.1) |
170.0 |
101.0 |
|||||
Income tax expense (benefit) |
32.6 |
(9.0) |
46.4 |
21.0 |
|||||
Income from continuing operations |
78.4 |
1.9 |
123.6 |
80.0 |
|||||
Discontinued operations |
- |
0.1 |
- |
0.2 |
|||||
Net income |
|
|
|
|
|||||
The following is a reconciliation from operating income to net income(8):
|
|||||||||||||||||||||||||||||||||
Three Months ended |
Six Months ended |
||||||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||||||||||||||||
($ In millions, except per share data) |
$ Amount |
Per Share |
$ Amount |
Per Share |
$ Amount |
Per Share |
$ Amount |
Per Share |
|||||||||||||||||||||||||
Operating income (loss) |
|||||||||||||||||||||||||||||||||
Commercial Lines |
$ |
43.2 |
$ |
44.0 |
$ |
80.6 |
$ |
86.7 |
|||||||||||||||||||||||||
Personal Lines |
47.9 |
47.4 |
57.8 |
94.5 |
|||||||||||||||||||||||||||||
|
29.7 |
5.5 |
54.6 |
39.2 |
|||||||||||||||||||||||||||||
Other |
(1.9) |
(2.2) |
(5.0) |
(5.3) |
|||||||||||||||||||||||||||||
Total |
118.9 |
94.7 |
188.0 |
215.1 |
|||||||||||||||||||||||||||||
Interest expense |
(12.2) |
(15.6) |
(24.2) |
(30.3) |
|||||||||||||||||||||||||||||
Operating income before income taxes |
106.7 |
$ |
2.49 |
79.1 |
$ |
1.82 |
163.8 |
$ |
3.82 |
184.8 |
$ |
4.25 |
|||||||||||||||||||||
Income tax expense on operating income |
(34.4) |
(0.80) |
(25.1) |
(0.58) |
(50.7) |
(1.18) |
(59.3) |
(1.36) |
|||||||||||||||||||||||||
Operating income after income taxes |
72.3 |
1.69 |
54.0 |
1.24 |
113.1 |
2.64 |
125.5 |
2.89 |
|||||||||||||||||||||||||
Other non-operating items: |
|||||||||||||||||||||||||||||||||
Net realized investment gains (losses) |
5.9 |
0.14 |
(0.7) |
(0.02) |
7.8 |
0.18 |
0.8 |
0.02 |
|||||||||||||||||||||||||
Loss from repurchase of debt |
- |
- |
(86.1) |
(1.98) |
- |
- |
(86.1) |
(1.98) |
|||||||||||||||||||||||||
Other |
(1.6) |
(0.04) |
0.6 |
0.01 |
(1.6) |
(0.04) |
1.5 |
0.02 |
|||||||||||||||||||||||||
Income tax benefit on non-operating items |
1.8 |
0.04 |
34.1 |
0.79 |
4.3 |
0.10 |
38.3 |
0.89 |
|||||||||||||||||||||||||
Income from continuing operations, net of taxes |
78.4 |
1.83 |
1.9 |
0.04 |
123.6 |
2.88 |
80.0 |
1.84 |
|||||||||||||||||||||||||
Discontinued operations, net of taxes |
- |
- |
0.1 |
0.01 |
- |
- |
0.2 |
- |
|||||||||||||||||||||||||
Net income |
$ |
78.4 |
$ |
1.83 |
$ |
2.0 |
$ |
0.05 |
$ |
123.6 |
$ |
2.88 |
$ |
80.2 |
$ |
1.84 |
|||||||||||||||||
Weighted average shares outstanding |
42.8 |
43.4 |
42.9 |
43.5 |
Forward-Looking Statements and Non-GAAP Financial Measures
Forward-looking statements
Certain statements in this release or in the above-referenced conference call may be forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Use of the words "believes," "anticipates," "expects," "projections," "forecast", "outlook," "should," "could," "confident," "plan," "guidance," "on track to" and similar expressions is intended to identify forward-looking statements. The company cautions investors that any such forward-looking statements are estimates or projections that involve significant judgment and that neither historical results and trends nor forward-looking statements are guarantees or necessarily indicative of future performance. Actual results could differ materially.
In particular, "forward-looking statements" include statements in this press release or in such conference call regarding our ability to deliver on "Hanover 2021" goals and objectives, including maintaining margins, while growing premiums and producing double-digit return on equity; ability to grow profitably within our existing distribution plant; confidence in the ability to drive rate and an improved business mix in commercial auto; ability to deliver solid results; the level of conservatism and strength of reserves and the balance sheet, and the adequacy of current and prior-year reserve actions; the relative likelihood of favorable or unfavorable reserve development in domestic lines and expectations for
Investors should consider the risks and uncertainties in the company's business that may affect such estimates and future performance, including (i) the inherent difficulties in arriving at such estimates, particularly with respect to current and prior accident year results and loss reserve development or with respect to lines of business which are more volatile, or with respect to which historical losses are less predictive of future losses, or "longer tail" products such as commercial liability, or, with respect to
Non-GAAP financial measures
As discussed on page 43 of the Company's Annual Report for the year ended
Net realized investment gains and losses are excluded for purposes of presenting operating income since they are largely determined by interest rates, financial markets and the timing of sales. Operating income also excludes net gains and losses on disposals of businesses, discontinued operations, restructuring costs, the cumulative effect of accounting changes and certain other items such as employee termination costs incurred in connection with the company's expense initiative, as referenced in this press release. Operating income is the sum of the segment income from: Commercial Lines, Personal Lines,
The Hanover also provides measures of operating income and loss and combined ratios that exclude the effects of catastrophe losses (catastrophe losses as discussed here and in all other measures include catastrophe loss development). A catastrophe is a severe loss, resulting from natural and manmade events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, severe winter weather, fire, explosions, and terrorism. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or loss amount in advance. The Hanover believes that a discussion of the effect of catastrophes is meaningful for investors to understand the variability of periodic earnings and loss and combined ratios.
Reserve development, which can be favorable or unfavorable, represents changes in the company's estimate of the costs to resolve claims from prior years. The company believes that a discussion of loss and combined ratios excluding reserve development is helpful to investors since it provides insight into both its estimate of current accident year results and the accuracy of prior-year estimates. Calendar year loss ratios determined in accordance with GAAP, excluding reserve development, are sometimes referred to as "accident-year loss ratios".
Income from continuing operations is the most directly comparable GAAP measure for operating income (and operating income before taxes) and measures of operating income that exclude the effects of catastrophe losses or reserve development. Operating income and measures of operating income that exclude the effects of catastrophe losses or reserve development should not be construed as substitutes for income from continuing operations or net income determined in accordance with GAAP. A reconciliation of operating income to income from continuing operations and net income for the three and six months ended
Loss and combined ratios calculated in accordance with GAAP are the most directly comparable GAAP measures for loss and combined ratios calculated excluding the effects of catastrophe losses or reserve development. The presentation of loss and combined ratios calculated excluding the effects of catastrophe losses or reserve development should not be construed as a substitute for loss or combined ratios determined in accordance with GAAP.
Book value per share, excluding net unrealized gains and losses, is also a non-GAAP measure. It is calculated as total shareholders' equity excluding the after-tax effect of unrealized investment gains and losses, divided by the number of common shares outstanding.
Loss and combined ratios calculated in accordance with GAAP are the most directly comparable GAAP measures for loss and combined ratios calculated excluding the effects of catastrophe losses or reserve development. The presentation of loss and combined ratios calculated excluding the effects of catastrophe losses or reserve development should not be construed as a substitute for loss or combined ratios determined in accordance with GAAP.
Book value per share, excluding net unrealized gains and losses, is also a non-GAAP measure. It is calculated as total shareholders' equity excluding the after-tax effect of unrealized investment gains and losses, divided by the number of common shares outstanding.
ABOUT THE HANOVER
Contact Information |
||||
Investors: |
Media: |
|||
|
|
|||
E-mail: [email protected] |
E-mail: [email protected] |
|||
1-508-855-2063 |
1-508-855-3099 |
Definition of Reported Segments
Continuing operations include four operating segments: Commercial Lines, Personal Lines,
Endnotes
(1) Operating income (loss) and operating income (loss) per diluted share are non-GAAP measures. Operating income before taxes, as referenced in the results of the three business segments, is defined as, with respect to such segment, operating income before taxes and interest expense. These measures are used throughout this document. The reconciliation of operating income and operating income per diluted share to the closest GAAP measures, income from continuing operations and income from continuing operations per diluted share, respectively, is provided on page 8 of this press release. See the disclosure on the use of this and all other non-GAAP measures under the heading "Forward-Looking Statements and Non-GAAP Financial Measures."
(2) Operating Return on Average Equity ("Operating ROE") is a non-GAAP financial measure. Operating ROE is calculated by dividing operating income after-tax annualized, as defined on end note (1), by average shareholders' equity, excluding unrealized appreciation (depreciation) on investments, net of tax, for the stated period, as shown below:
Period Ended |
||||||||||
($ In millions) |
|
|
||||||||
2017 |
2017 |
|||||||||
Total shareholders' equity |
|
|
||||||||
Less: net unrealized appreciation (depreciation) on investments, net of tax |
205.0 |
224.8 |
||||||||
Total shareholders' equity, excluding net unrealized appreciation (depreciation) on investments, net of tax |
|
|
||||||||
Average shareholders' equity |
|
|||||||||
Average shareholders' equity, excluding net unrealized appreciation (depreciation) on investments, net of tax |
|
Period Ended |
|||||
|
|||||
($ In millions, except percentages) |
2017 |
||||
Annualized net income ( |
$ |
313.6 |
|||
Average shareholders' equity |
$ |
2,943.0 |
|||
Return on equity (GAAP) |
10.7% |
||||
Period Ended |
|||||
|
|||||
($ In millions, except percentages) |
2017 |
||||
Annualized operating income(1) ( |
$ |
289.2 |
|||
Average shareholders' equity, excluding net unrealized appreciation (depreciation) on investments, net of tax |
$ |
2,728.1 |
|||
Operating return on equity (non-GAAP) |
10.6% |
(3) Combined ratio, excluding catastrophes, is a non-GAAP measure, which is equal to the combined ratio, excluding catastrophe losses. This measure and measures excluding prior-year reserve development ("current accident-year" ratios) are used throughout this document. The combined ratio (which includes catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. The following is a reconciliation of combined ratio, excluding catastrophes:
Three months ended |
||||||||||||
|
||||||||||||
Commercial |
Personal |
Total |
|
Total |
||||||||
Total combined ratio |
99.4% |
91.8% |
96.5% |
91.0% |
95.6% |
|||||||
Less: catastrophe ratio |
7.2% |
3.4% |
5.7% |
0.6% |
4.8% |
|||||||
Combined ratio, excluding catastrophe losses |
92.2% |
88.4% |
90.8% |
90.4% |
90.8% |
|||||||
Three months ended |
||||||||||||
|
||||||||||||
Commercial |
Personal |
Total |
|
Total |
||||||||
Total combined ratio |
98.9% |
91.3% |
96.0% |
103.2% |
97.3% |
|||||||
Less: catastrophe ratio |
4.5% |
3.1% |
3.9% |
6.7% |
4.5% |
|||||||
Combined ratio, excluding catastrophe losses |
94.4% |
88.2% |
92.1% |
96.5% |
92.8% |
|||||||
Six months ended |
||||||||||||
|
||||||||||||
Commercial |
Personal |
Total |
|
Total |
||||||||
Total combined ratio |
99.8% |
96.7% |
98.6% |
92.2% |
97.5% |
|||||||
Less: catastrophe ratio |
6.7% |
6.9% |
6.8% |
2.1% |
6.0% |
|||||||
Combined ratio, excluding catastrophe losses |
93.1% |
89.8% |
91.8% |
90.1% |
91.5% |
|||||||
Six months ended |
||||||||||||
|
||||||||||||
Commercial |
Personal |
Total |
|
Total |
||||||||
Total combined ratio |
99.0% |
91.3% |
96.1% |
96.3% |
96.2% |
|||||||
Less: catastrophe ratio |
3.9% |
3.2% |
3.6% |
3.4% |
3.6% |
|||||||
Combined ratio, excluding catastrophe losses |
95.1% |
88.1% |
92.5% |
92.9% |
92.6% |
|||||||
(4) The following is a reconciliation of book value per share, excluding net unrealized gains on investments:
Period Ended |
||||||
|
|
|||||
2017 |
2017 |
|||||
Book value per share |
|
|
||||
Less: net unrealized gains on investments |
4.82 |
5.31 |
||||
Book value per share, excluding net unrealized gains on investments |
|
|
||||
(5) Current accident year combined ratio, excluding catastrophe losses, is a non-GAAP measure, which is equal to the combined ratio, excluding prior-year reserve development and catastrophe losses. The combined ratio (which includes catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. The following is a reconciliation of current accident year combined ratio:
Three months ended |
||||||||||
|
||||||||||
Commercial |
Personal |
|
Total |
|||||||
Total combined ratio |
99.4 % |
91.8 % |
91.0 % |
95.6 % |
||||||
Less: |
||||||||||
Prior-year reserve development ratio |
- |
- |
(7.9)% |
(1.3)% |
||||||
Catastrophe ratio |
7.2 % |
3.4 % |
0.6 % |
4.8 % |
||||||
Current accident year combined ratio, excluding catastrophe losses |
92.2 % |
88.4 % |
98.3 % |
92.1 % |
||||||
|
||||||||||
Total combined ratio |
98.9 % |
91.3 % |
103.2 % |
97.3 % |
||||||
Less: |
||||||||||
Prior-year reserve development ratio |
3.8 % |
0.2 % |
(4.0)% |
1.3 % |
||||||
Catastrophe ratio |
4.5 % |
3.1 % |
6.7 % |
4.5 % |
||||||
Current accident year combined ratio, excluding catastrophe losses |
90.6 % |
88.0 % |
100.5 % |
91.5 % |
||||||
Six Months Ended |
||||||||||
|
||||||||||
Total combined ratio |
99.8 % |
96.7 % |
92.2 % |
97.5 % |
||||||
Less: |
||||||||||
Prior-year reserve development ratio |
- |
- |
(4.4)% |
(0.7)% |
||||||
Catastrophe ratio |
6.7 % |
6.9 % |
2.1 % |
6.0 % |
||||||
Current accident year combined ratio, excluding catastrophe losses |
93.1 % |
89.8 % |
94.5 % |
92.2 % |
||||||
|
||||||||||
Total combined ratio |
99.0 % |
91.3 % |
96.3 % |
96.2 % |
||||||
Less: |
||||||||||
Prior-year reserve development ratio |
3.7 % |
- |
(8.9)% |
0.2 % |
||||||
Catastrophe ratio |
3.9 % |
3.2 % |
3.4 % |
3.6 % |
||||||
Current accident year combined ratio, excluding catastrophe losses |
91.4 % |
88.1 % |
101.8 % |
92.4 % |
||||||
(6) Core Commercial business provides commercial property and casualty coverages to small and mid-sized businesses in the
Three months ended |
Three months ended |
|||||||||||||
|
|
|||||||||||||
($ in millions) |
Core Commercial |
Other |
Total |
Core |
Other |
Total |
||||||||
Net premiums written |
|
|
|
|
|
|
||||||||
Net premiums earned |
|
|
|
|
|
|
||||||||
Six months ended |
Six months ended |
|||||||||||||
|
|
|||||||||||||
($ in millions) |
Core Commercial |
Other |
Total |
Core |
Other |
Total |
||||||||
Net premiums written |
|
|
|
|
|
|
||||||||
Net premiums earned |
|
|
|
|
|
|
||||||||
(7) Here, and later in this document, the expense ratio is reduced by installment fee revenues for purposes of the ratio calculation.
(8) The separate financial information of each operating segment is presented consistent with the way results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Management evaluates the results of the aforementioned operating segments without consideration of interest expense on debt and on a pre-tax basis. Operating income (loss) is determined by adjusting net income for net realized investment gains and losses. These gains and losses are excluded because they are determined by interest rates, financial markets and the timing of sales. Also, operating income excludes net gains and losses on disposals of businesses, discontinued operations, gains and losses from the repayment of debt, restructuring costs, the cumulative effect of accounting changes and certain other items such as employee termination costs incurred in connection with the company's expense initiative, as referenced in this press release.
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SOURCE
American Equity Reports Second Quarter 2017 Results
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