|
05.11.2009 11:00:00
|
Tower Group, Inc. Reports Strong Third Quarter 2009 Operating Results
Tower Group, Inc. (NASDAQ: TWGP) today reported net income of $30 million and diluted earnings per share of $0.74 for the third quarter 2009. Operating income(1) and operating earnings per share(1) were $30.2 million and $0.74, respectively, for the third quarter of 2009.
Key Highlights (all percentage increases compare the third quarter 2009 results to the results for the same period in 2008 except as noted otherwise):
- Gross premiums written and produced(2) increased by 39.4% to $283 million.
- Net investment income increased by 165.9% to $21.7 million.
-
Brokerage Insurance (formerly Tower managed business):
- Gross premiums written and produced increased by 25.8% to $205.6 million.
- Net combined ratio was 87.6% versus 80.5% in the prior year third quarter.
-
Specialty Business (formerly CastlePoint managed business):
- Gross premiums written increased by 95.4% to $77.3 million.
- Net combined ratio was 83.6% versus 87.4% in the prior year third quarter.
- Book value per share increased 8.6% during the quarter to $22.72 at September 30, 2009 versus $20.93 at June 30, 2009. Year to date, book value per share increased by 58.2% from $14.36 at December 31, 2008.
- During the quarter, the investment portfolio had net unrealized gains of $67.1 million before taxes.
Michael H. Lee, President and Chief Executive Officer of Tower Group, Inc., stated, "We are pleased to report another strong quarter of record premium volume, operating income and book value. Primarily due to the CastlePoint and Hermitage acquisitions completed this year, we were able to significantly increase our premium volume over the same period last year while maintaining our underwriting profitability. We were also able to achieve meaningful organic growth through continued expansion of our specialty business and brokerage business outside the Northeast. We were also pleased with the growth in our book value as a result of the significant recovery in our investment portfolio that resulted in pre-tax net unrealized gains of $67 million during the quarter. Finally, we announced a renewal rights transaction involving small workers compensation business in Florida shortly after the quarter, which we believe will allow us to continue to profitably expand our business in the Southeast region.”
| Financial Summary ($ in thousands, except per share data): | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
| Gross premiums written | $ | 282,800 | $ | 157,207 | $ | 743,485 | $ | 458,282 | |||||||||
| Premiums produced by managing general agency | 318 | 46,616 | 11,526 | 106,006 | |||||||||||||
| Net premiums written | 258,648 | 114,615 | 680,730 | 265,595 | |||||||||||||
| Total commission and fee income | 8,074 | 37,008 | 34,118 | 104,189 | |||||||||||||
| Net investment income | 21,733 | 8,174 | 53,683 | 26,335 | |||||||||||||
| Net realized gains (losses) on investments | 2,555 | (2,684 | ) | 2,325 | (9,280 | ) | |||||||||||
| Total revenues | 256,340 | 130,747 | 711,645 | 348,037 | |||||||||||||
| Gain on CastlePoint shares | - | - | 7,388 | - | |||||||||||||
| Net income | 29,978 | 16,716 | 78,582 | 41,739 | |||||||||||||
| Earnings per share—Basic |
$ |
0.74 | $ | 0.72 | $ | 2.05 | $ | 1.79 | |||||||||
| Earnings per share—Diluted | $ | 0.74 | $ | 0.71 | $ | 2.04 | $ | 1.78 | |||||||||
| Return on average equity | 13.6 | % | 20.9 | % | 16.3 | % | 17.7 | % | |||||||||
| Combined Brokerage and Specialty Segments | |||||||||||||||||
| Net premiums earned | 223,978 | 88,250 | 621,519 | 226,793 | |||||||||||||
| Net loss ratio | 54.0 | % | 49.8 | % | 53.2 | % | 52.1 | % | |||||||||
| Net expense ratio | 32.7 | % | 31.2 | % | 32.7 | % | 30.3 | % | |||||||||
| Brokerage Insurance Segment | |||||||||||||||||
| Net premiums earned | 173,852 | 82,596 | 474,715 | 215,598 | |||||||||||||
| Net loss ratio | 54.0 | % | 49.3 | % | 52.6 | % | 51.8 | % | |||||||||
| Net expense ratio | 33.6 | % | 31.3 | % | 33.5 | % | 30.3 | % | |||||||||
| Specialty Business Segment | |||||||||||||||||
| Net premiums earned | 50,127 | 5,653 | 146,804 | 11,195 | |||||||||||||
| Net loss ratio | 53.8 | % | 56.8 | % | 55.5 | % | 57.5 | % | |||||||||
| Net expense ratio | 29.7 | % | 30.6 | % | 30.0 | % | 30.4 | % | |||||||||
| Reconciliation of non-GAAP financial measures: | |||||||||||||||||
| Net income | 29,978 | 16,716 | 78,582 | 41,739 | |||||||||||||
| Net realized gains (losses) on investments, net of tax | 1,661 | (1,745 | ) | 1,511 | (6,032 | ) | |||||||||||
|
Acquisition-related transaction costs, net of tax (3) |
(1,853 | ) | - | (10,909 | ) | - | |||||||||||
| Operating income | 30,170 | 18,461 | 87,980 | 47,771 | |||||||||||||
| Operating EPS and ROE: | |||||||||||||||||
| Earnings per share—Basic | $ | 0.75 | $ | 0.79 | $ | 2.30 | $ | 2.05 | |||||||||
| Earnings per share—Diluted | $ | 0.74 | $ | 0.79 | $ | 2.29 | $ | 2.03 | |||||||||
| Return on average equity | 13.7 | % | 23.1 | % | 18.3 | % | 20.3 | % | |||||||||
Gross premiums written increased to $282.8 million in the third quarter of 2009, a 79.9% increase compared to the third quarter of 2008.
Total revenues increased 96.1% to $256.3 million in the third quarter of 2009 compared to $130.7 million in the prior year's third quarter. Net premiums earned represented 87.3% of total revenues for the three months ended September 30, 2009 compared to 67.5% for the same period in 2008.
Total commission and fee income decreased 78.2% to $8.1 million in the third quarter of 2009 compared to $37 million in the third quarter of 2008. Commission and fee income decreased primarily due to our decision to not cede quota share brokerage premiums in 2009. Ceding commission revenue in 2009 represents commissions on ceded premiums earned from quota share reinsurance contracts written in 2008 and continuing to earn in 2009. Insurance services revenue decreased in the quarter because Tower ceased to produce business on behalf of CastlePoint Insurance Company subsequent to the acquisition of CastlePoint.
Net investment income increased by 165.9% to $21.7 million for the three months ended September 30, 2009 compared to $8.2 million for the same period in 2008. On a tax equivalent basis, the investment yield including cash was 5.6% as of September 30, 2009 compared to 5.5% as of September 30, 2008. New cash invested over the last six months has experienced lower yields as a result of tightening spreads combined with a low interest rate environment.
Net realized investment gains were $2.6 million for the three month period ending September 30, 2009 compared to losses of $2.7 million for the same period last year. Realized capital gains in 2009 were primarily from opportunistic sales of commercial mortgage-backed securities (CMBS) and corporate bonds, which were positively affected by spread tightening. Included in the 2009 net realized investment gains are approximately $11.7 million of credit related other-than-temporary impairments (OTTI) losses for the three months ended September 30, 2009. These OTTI losses related principally to CMBS and non agency residential mortgage-backed securities as a result of declining estimates for cash flows for specific investments.
Operating expenses were $81.9 million for the three months ended September 30, 2009 compared to $58.5 million for the same period in 2008.
For the Brokerage Insurance Segment, premiums on renewal business increased 3.2% in personal lines and decreased 0.6% in commercial lines, resulting in an overall increase of 0.8% during the third quarter of 2009. The retention rate on brokerage business was 91% for personal lines and 80% for commercial lines, resulting in a retention rate of 87% for all lines during the third quarter of 2009. Brokerage insurance premiums earned continued to increase, primarily due to the acquisitions of CastlePoint and Hermitage, which together added $53.2 million and $15.5 million in net premiums earned, respectively, for the three months ended September 30, 2009.
The Specialty Business Segment consists of program business written in Tower insurance subsidiaries and reinsurance business written in CastlePoint Re. The increase in specialty business premiums earned resulted primarily from the acquisition of CastlePoint, which added $32.3 million of net premiums earned for the three months ended September 30, 2009.
Additional Highlights and Disclosures:
2009 and 2010 Guidance
Tower expects fourth quarter 2009 operating earnings per share to be in a range of $0.86 to $0.96 per diluted share. For the full year 2009, Tower projects operating earnings per share to be in a range between $3.15 and $3.25 per diluted share. For 2010, Tower projects its operating earnings per share to be in a range between $3.50 and $3.70 per diluted share. Both 2009 and 2010 ranges include the effects of the pending SUA transaction.
Notes on Non-GAAP Financial Measures
(1) Operating income is a common performance measurement for insurance companies and excludes realized investment gains or losses and expenses related to the adoption of new accounting guidance related to business combinations. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. The Federal statutory tax rate of 35% was used to calculate the tax applicable to net realized gains or losses on investments and tax deductible acquisition-related transaction costs. Operating earnings per share is operating income divided by diluted weighted average shares outstanding. Operating return on equity is annualized operating income divided by average common stockholders’ equity.
(2) Gross premiums written through our insurance subsidiaries and produced as managing general agent on behalf of other insurance companies.
(3) For the three and nine month periods ending September 30, 2009, $1.6 million and $6.4 million, respectively, of acquisition-related transaction costs were not deemed deductible for tax purposes. The tax rate used to calculate the acquisition related transaction costs that were tax deductible was 35%.
Conference Call
Tower will host a conference call and webcast to discuss these results today at 10:00 a.m. ET. This conference call will be broadcast live over the Internet. To access a listen-only webcast over the Internet, please visit the Investor Information section of Tower Group, Inc.’s website, www.twrgrp.com, or use this link: http://investor.twrgrp.com/events.cfm
Please access the website at least 15 minutes prior to the call to register and to download any necessary audio software. If you are unable to participate during the live conference call, a webcast will be archived in the Investor Information section of Tower Group, Inc.'s website at www.twrgrp.com.
About Tower Group, Inc.
Tower Group, Inc. offers diversified property and casualty insurance products and services through its operating subsidiaries. Its insurance company subsidiaries offer insurance products to individuals and small to medium-sized businesses through its network of retail and wholesale agents and specialty business through program underwriting agents. Tower's insurance services subsidiaries provide underwriting, claims and reinsurance brokerage services to other insurance companies.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This press release and any other written or oral statements made by or on behalf of Tower may include forward-looking statements that reflect Tower's current views with respect to future events and financial performance. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may," "will," "plan," "expect," "project," "intend," "estimate," "anticipate," "believe" and "continue" or their negative or variations or similar terminology. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the actual results of Tower to differ materially from those indicated in these statements. Please refer to Tower’s filings with the SEC, including among others Tower’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent filings on Form 10-Q, for a description of the important factors that could cause the actual results of Tower to differ materially from those indicated in these statements. Forward-looking statements speak only as of the date on which they are made, and Tower undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
For more information visit Tower's website at http://www.twrgrp.com/
Tower has changed the presentation of its business results, beginning January 1, 2009, by allocating its previously reported insurance segment into brokerage insurance and specialty business, based on the way management organizes the segments for making operating decisions and assessing profitability. This will result in the reporting of three operating segments. The prior period segment disclosures have been restated to conform to the current presentation.
The Brokerage Insurance Segment offers a broad range of commercial lines and personal lines property and casualty insurance products to small to mid-sized businesses and individuals distributed through a network of retail and wholesale agents on both an admitted and non-admitted basis;
The Specialty Business Segment provides specialty classes of business through program underwriting agents. This segment also includes reinsurance solutions provided primarily to small insurance companies; and
The Insurance Services Segment provides underwriting, claims and reinsurance brokerage services to insurance companies.
| Brokerage Insurance & Specialty Business Combined | |||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2009 | 2008 | Change(%) | 2009 | 2008 | Change(%) | ||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Premiums earned | |||||||||||||||||||||||
| Gross premiums earned | $ | 263,742 | $ | 150,510 | 75.2 | % | $ | 747,440 | $ | 424,280 | 76.2 | % | |||||||||||
| Less: ceded premiums earned | (39,764 | ) | (62,260 | ) | -36.1 | % | (125,921 | ) | (197,487 | ) | -36.2 | % | |||||||||||
| Net premiums earned | 223,978 | 88,250 | 153.8 | % | 621,519 | 226,793 | 174.0 | % | |||||||||||||||
| Ceding commission revenue | 6,932 | 18,432 | -62.4 | % | 27,674 | 60,577 | -54.3 | % | |||||||||||||||
| Policy billing fees | 930 | 485 | 91.8 | % | 2,171 | 1,446 | 50.1 | % | |||||||||||||||
| Total | 231,840 | 107,167 | 116.3 | % | 651,364 | 288,816 | 125.5 | % | |||||||||||||||
| Expenses | |||||||||||||||||||||||
| Loss and loss adjustment expenses | |||||||||||||||||||||||
| Gross loss and loss adjustment expenses | 126,470 | 70,120 | 80.4 | % | 390,950 | 207,201 | 88.7 | % | |||||||||||||||
|
Less: ceded loss and loss adjustment expenses |
(5,632 | ) | (26,213 | ) | -78.5 | % | (60,029 | ) | (89,074 | ) | -32.6 | % | |||||||||||
| Net loss and loss adjustment expenses | 120,838 | 43,907 | 175.2 | % | 330,921 | 118,127 | 180.1 | % | |||||||||||||||
| Underwriting expenses | |||||||||||||||||||||||
| Direct commission expense | 50,241 | 28,556 | 75.9 | % | 148,575 | 76,658 | 93.8 | % | |||||||||||||||
| Other underwriting expenses | 30,956 | 17,920 | 72.7 | % | 84,562 | 54,060 | 56.4 | % | |||||||||||||||
| Total underwriting expenses | 81,197 | 46,476 | 74.7 | % | 233,138 | 130,718 | 78.4 | % | |||||||||||||||
| Underwriting profit | $ | 29,806 | $ | 16,784 | 77.6 | % | $ | 87,305 | $ | 39,971 | 118.4 | % | |||||||||||
| Key Measures | |||||||||||||||||||||||
| Premiums written | |||||||||||||||||||||||
| Gross premiums written | $ | 282,800 | $ | 157,207 | 79.9 | % | $ | 743,485 | $ | 458,282 | 62.2 | % | |||||||||||
| Less: ceded premiums written | (24,151 | ) | (42,592 | ) | -43.3 | % | (62,754 | ) | (192,687 | ) | -67.4 | % | |||||||||||
| Net premiums written | $ | 258,648 | $ | 114,615 | 125.7 | % | $ | 680,730 | $ | 265,595 | 156.3 | % | |||||||||||
| Loss Ratios | |||||||||||||||||||||||
| Gross | 48.0 | % | 46.6 | % | 52.3 | % | 48.8 | % | |||||||||||||||
| Net | 54.0 | % | 49.8 | % | 53.2 | % | 52.1 | % | |||||||||||||||
| Accident Year Loss Ratios | |||||||||||||||||||||||
| Gross | 54.1 | % | 52.4 | % | 54.3 | % | 51.6 | % | |||||||||||||||
| Net | 54.1 | % | 53.3 | % | 54.3 | % | 54.1 | % | |||||||||||||||
| Underwriting Expense Ratios | |||||||||||||||||||||||
| Gross | 30.4 | % | 30.6 | % | 30.9 | % | 30.5 | % | |||||||||||||||
| Net | 32.7 | % | 31.2 | % | 32.7 | % | 30.3 | % | |||||||||||||||
| Combined Ratios | |||||||||||||||||||||||
| Gross | 78.4 | % | 77.1 | % | 83.2 | % | 79.3 | % | |||||||||||||||
| Net | 86.7 | % | 81.0 | % | 86.0 | % | 82.4 | % | |||||||||||||||
| Brokerage Insurance Segment Information | |||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2009 | 2008 | Change(%) | 2009 | 2008 | Change(%) | ||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Premiums earned | |||||||||||||||||||||||
| Gross premiums earned | $ | 205,094 | $ | 124,191 | 65.1 | % | $ | 569,200 | $ | 375,124 | 51.7 | % | |||||||||||
| Less: ceded premiums earned | (31,242 | ) | (41,595 | ) | -24.9 | % | (94,485 | ) | (159,526 | ) | -40.8 | % | |||||||||||
| Net premiums earned | 173,852 | 82,596 | 110.5 | % | 474,715 | 215,598 | 120.2 | % | |||||||||||||||
| Ceding commission revenue | 3,908 | 11,259 | -65.3 | % | 20,461 | 48,150 | -57.5 | % | |||||||||||||||
| Policy billing fees | 930 | 485 | 91.8 | % | 2,171 | 1,446 | 50.1 | % | |||||||||||||||
| Total | 178,690 | 94,340 | 89.4 | % | 497,346 | 265,194 | 87.5 | % | |||||||||||||||
| Expenses | |||||||||||||||||||||||
| Loss and loss adjustment expenses | |||||||||||||||||||||||
| Gross loss and loss adjustment expenses | 95,221 | 54,962 | 73.2 | % | 290,410 | 178,768 | 62.5 | % | |||||||||||||||
|
Less: ceded loss and loss adjustment expenses |
(1,369 | ) | (14,268 | ) | -90.4 | % | (40,900 | ) | (67,073 | ) | -39.0 | % | |||||||||||
| Net loss and loss adjustment expenses | 93,852 | 40,694 | 130.6 | % | 249,510 | 111,695 | 123.4 | % | |||||||||||||||
| Underwriting expenses | |||||||||||||||||||||||
| Direct commission expenses | 35,767 | 20,860 | 71.5 | % | 108,236 | 62,857 | 72.2 | % | |||||||||||||||
| Other underwriting expenses | 27,504 | 16,713 | 64.6 | % | 73,603 | 52,033 | 41.5 | % | |||||||||||||||
| Total underwriting expenses | 63,271 | 37,573 | 68.4 | % | 181,840 | 114,890 | 58.3 | % | |||||||||||||||
| Underwriting profit | $ | 21,567 | $ | 16,073 | 34.2 | % | $ | 65,997 | $ | 38,609 | 70.9 | % | |||||||||||
| Key Measures | |||||||||||||||||||||||
| Premiums written | |||||||||||||||||||||||
| Gross premiums written | $ | 205,451 | $ | 117,625 | 74.7 | % | $ | 571,111 | $ | 370,876 | 54.0 | % | |||||||||||
| Less: ceded premiums written | (13,418 | ) | (11,872 | ) | 13.0 | % | (37,654 | ) | (125,600 | ) | -70.0 | % | |||||||||||
| Net premiums written | $ | 192,033 | $ | 105,753 | 81.6 | % | $ | 533,457 | $ | 245,276 | 117.5 | % | |||||||||||
| Loss Ratios | |||||||||||||||||||||||
| Gross | 46.4 | % | 44.3 | % | 51.0 | % | 47.7 | % | |||||||||||||||
| Net | 54.0 | % | 49.3 | % | 52.6 | % | 51.8 | % | |||||||||||||||
| Accident Year Loss Ratios | |||||||||||||||||||||||
| Gross | 54.6 | % | 51.3 | % | 53.5 | % | 50.7 | % | |||||||||||||||
| Net | 54.0 | % | 53.1 | % | 53.7 | % | 53.9 | % | |||||||||||||||
| Underwriting Expense Ratios | |||||||||||||||||||||||
| Gross | 30.4 | % | 29.9 | % | 31.6 | % | 30.2 | % | |||||||||||||||
| Net | 33.6 | % | 31.3 | % | 33.5 | % | 30.3 | % | |||||||||||||||
| Combined Ratios | |||||||||||||||||||||||
| Gross | 76.8 | % | 74.1 | % | 82.6 | % | 77.9 | % | |||||||||||||||
| Net | 87.6 | % | 80.5 | % | 86.1 | % | 82.1 | % | |||||||||||||||
| Specialty Business Segment Information | |||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2009 | 2008 | Change(%) | 2009 | 2008 | Change(%) | ||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Premiums earned | |||||||||||||||||||||||
| Gross premiums earned | $ | 58,648 | $ | 26,319 | 122.8 | % | $ | 178,241 | $ | 49,156 | 262.6 | % | |||||||||||
| Less: ceded premiums earned | (8,521 | ) | (20,665 | ) | -58.8 | % | (31,437 | ) | (37,961 | ) | -17.2 | % | |||||||||||
| Net premiums earned | 50,127 | 5,654 | 786.6 | % | 146,804 | 11,195 | 1211.3 | % | |||||||||||||||
| Ceding commission revenue | 3,024 | 7,173 | -57.8 | % | 7,213 | 12,427 | -42.0 | % | |||||||||||||||
| Total | 53,150 | 12,827 | 314.4 | % | 154,018 | 23,622 | 552.0 | % | |||||||||||||||
| Expenses | |||||||||||||||||||||||
| Loss and loss adjustment expenses | |||||||||||||||||||||||
| Gross loss and loss adjustment expenses | 31,248 | 15,158 | 106.1 | % | 100,541 | 28,433 | 253.6 | % | |||||||||||||||
| Less: ceded loss and loss adjustment expenses | (4,263 | ) | (11,945 | ) | -64.3 | % | (19,129 | ) | (22,001 | ) | -13.1 | % | |||||||||||
| Net loss and loss adjustment expenses | 26,985 | 3,213 | 739.9 | % | 81,411 | 6,432 | 1165.7 | % | |||||||||||||||
| Underwriting expenses | |||||||||||||||||||||||
| Direct commission expense | 14,474 | 7,696 | 88.1 | % | 40,339 | 13,801 | 192.3 | % | |||||||||||||||
| Other underwriting expenses | 3,452 | 1,207 | 186.0 | % | 10,959 | 2,027 | 440.6 | % | |||||||||||||||
| Total underwriting expenses | 17,926 | 8,903 | 101.3 | % | 51,298 | 15,828 | 224.1 | % | |||||||||||||||
| Underwriting profit | $ | 8,239 | $ | 711 | 1058.8 | % | $ | 21,309 | $ | 1,362 | 1464.5 | % | |||||||||||
| Key Measures | |||||||||||||||||||||||
| Premiums written | |||||||||||||||||||||||
| Gross premiums written | $ | 77,349 | $ | 39,582 | 95.4 | % | $ | 172,373 | $ | 87,406 | 97.2 | % | |||||||||||
| Less: ceded premiums written | (10,733 | ) | (30,720 | ) | -65.1 | % | (25,100 | ) | (67,087 | ) | -62.6 | % | |||||||||||
| Net premiums written | $ | 66,616 | $ | 8,862 | 651.7 | % | $ | 147,274 | $ | 20,319 | 624.8 | % | |||||||||||
| Loss Ratios | |||||||||||||||||||||||
| Gross | 53.3 | % | 57.6 | % | 56.4 | % | 57.8 | % | |||||||||||||||
| Net | 53.8 | % | 56.8 | % | 55.5 | % | 57.5 | % | |||||||||||||||
| Accident Year Loss Ratios | |||||||||||||||||||||||
| Gross | 52.5 | % | 57.6 | % | 56.7 | % | 57.8 | % | |||||||||||||||
| Net | 54.3 | % | 56.8 | % | 56.4 | % | 57.5 | % | |||||||||||||||
| Underwriting Expense Ratios | |||||||||||||||||||||||
| Gross | 30.6 | % | 33.8 | % | 28.8 | % | 32.2 | % | |||||||||||||||
| Net | 29.7 | % | 30.6 | % | 30.0 | % | 30.4 | % | |||||||||||||||
| Combined Ratios | |||||||||||||||||||||||
| Gross | 83.8 | % | 91.4 | % | 85.2 | % | 90.0 | % | |||||||||||||||
| Net | 83.6 | % | 87.4 | % | 85.5 | % | 87.8 | % | |||||||||||||||
| Insurance Services Segment Results of Operations | |||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2009 | 2008 | Change(%) | 2009 | 2008 | Change(%) | ||||||||||||||
| Revenue | |||||||||||||||||||
|
Direct commission revenue from managing general |
$ | (270 | ) | $ | 15,286 | -101.8 | % | $ | 2,013 | $ | 35,353 | -94.3 | % | ||||||
| Claims administration revenue | 71 | 1,606 | -95.6 | % | 1,053 | 3,576 | -70.6 | % | |||||||||||
| Other administration revenue | 53 | 846 | -93.7 | % | 469 | 2,426 | -80.7 | % | |||||||||||
| Reinsurance intermediary fees | 417 | 255 | 63.5 | % | 718 | 540 | 33.0 | % | |||||||||||
| Policy billing fees | (59 | ) | 99 | -160.0 | % | 20 | 271 | -92.6 | % | ||||||||||
| Total revenue | 212 | 18,092 | -98.8 | % | 4,273 | 42,166 | -89.9 | % | |||||||||||
| Expenses | |||||||||||||||||||
|
Direct commission expenses paid to producers |
56 | 6,857 | -99.2 | % | 1,672 | 15,382 | -89.1 | % | |||||||||||
| Other insurance services expenses | (14 | ) | 3,225 | -100.4 | % | 1,025 | 7,970 | -87.1 | % | ||||||||||
| Claims expense reimbursement to TICNY | 71 | 1,606 | -95.6 | % | 1,053 | 3,576 | -70.6 | % | |||||||||||
| Total | 113 | 11,688 | -99.0 | % | 3,750 | 26,928 | -86.1 | % | |||||||||||
| Insurance services pre-tax income | $ | 99 | $ | 6,404 | -98.4 | % | $ | 523 | $ | 15,238 | -96.6 | % | |||||||
|
Premiums produced by TRM on behalf of issuing companies |
$ | 318 | $ | 46,616 | -99.3 | % | $ | 11,526 | $ | 106,006 | -89.1 | % | |||||||
| Tower Group, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| September 30, | December 31, | |||||||
| ($ in thousands, except par value and share amounts) | 2009 | 2008 | ||||||
| Assets | ||||||||
|
Fixed-maturity securities, available-for-sale, at fair value (amortized cost of $1,324,067 and $581,470) |
$ | 1,387,011 | $ | 530,159 | ||||
| Equity securities, available-for-sale, at fair value (cost of $79,089 and $12,726) | 76,097 | 10,814 | ||||||
| Short-term investments, available-for-sale, at fair value (cost of $17,188) | 17,188 | - | ||||||
| Total investments | 1,480,296 | 540,973 | ||||||
| Cash and cash equivalents | 150,625 | 136,253 | ||||||
| Receivable for securities | 67,778 | 3,542 | ||||||
| Investment income receivable | 17,283 | 6,972 | ||||||
| Premiums receivable | 229,086 | 188,643 | ||||||
| Reinsurance recoverable on unpaid losses | 105,053 | 222,229 | ||||||
| Reinsurance recoverable on paid losses | 18,833 | 50,377 | ||||||
| Prepaid reinsurance premiums | 38,731 | 153,650 | ||||||
| Deferred acquisition costs, net of deferred ceding commission revenue | 151,696 | 53,080 | ||||||
| Deferred income taxes | 30,943 | 36,207 | ||||||
| Intangible assets | 38,028 | 20,464 | ||||||
| Goodwill | 236,407 | 18,962 | ||||||
| Fixed assets, net of accumulated depreciation | 49,994 | 39,038 | ||||||
| Investment in unconsolidated affiliate | - | 29,293 | ||||||
| Other assets | 26,678 | 38,698 | ||||||
| Total assets | $ | 2,641,431 | $ | 1,538,381 | ||||
| Liabilities | ||||||||
| Loss and loss adjustment expenses | $ | 827,946 | $ | 534,991 | ||||
| Unearned premium | 532,076 | $ | 328,847 | |||||
| Reinsurance balances payable | 34,232 | 134,598 | ||||||
| Payable to issuing carriers | 66 | 47,301 | ||||||
| Funds held under reinsurance agreements | 14,865 | 20,474 | ||||||
| Accounts payable, accrued liabilities and other liabilities | 77,513 | 35,930 | ||||||
| Subordinated debentures | 235,058 | 101,036 | ||||||
| Total liabilities | 1,721,756 | 1,203,177 | ||||||
| Stockholders' equity | ||||||||
|
Common stock ($0.01 par value; 100,000,000 shares authorized, 40,560,948 and 23,408,145 shares issued, and 40,479,611 and 23,339,470 shares outstanding) |
405 | 234 | ||||||
| Treasury stock (81,337 and 68,675 shares) | (1,365 | ) | (1,026 | ) | ||||
| Paid-in-capital | 643,652 | 208,094 | ||||||
| Accumulated other comprehensive income (loss) | 38,969 | (37,498 | ) | |||||
| Retained earnings | 238,014 | 165,400 | ||||||
| Total stockholders' equity | 919,675 | 335,204 | ||||||
| Total liabilities and stockholders' equity | $ | 2,641,431 | $ | 1,538,381 | ||||
| Tower Group, Inc. | ||||||||||||||||
| Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| ($ in thousands, except | September 30, | September 30, | ||||||||||||||
| per share and share amounts) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Revenues | ||||||||||||||||
| Net premiums earned | $ | 223,978 | $ | 88,249 | $ | 621,519 | $ | 226,793 | ||||||||
| Ceding commission revenue | 6,933 | 18,432 | 27,674 | 60,577 | ||||||||||||
| Insurance services revenue | 270 | 17,993 | 4,253 | 41,896 | ||||||||||||
| Policy billing fees | 871 | 583 | 2,191 | 1,716 | ||||||||||||
| Net investment income | 21,733 | 8,174 | 53,683 | 26,335 | ||||||||||||
| Net realized (losses) gains | ||||||||||||||||
| Other-than-temporary impairments | (19,451 | ) | (5,606 | ) | (34,322 | ) | (16,335 | ) | ||||||||
|
Portion of loss recognized in accumulated other comprehensive income (loss) |
7,761 | - | 15,278 | - | ||||||||||||
| Other net realized investment gains | 14,245 | 2,922 | 21,369 | 7,055 | ||||||||||||
| Total net realized investment (losses) gains | 2,555 | (2,684 | ) | 2,325 | (9,280 | ) | ||||||||||
| Total revenues | 256,340 | 130,747 | 711,645 | 348,037 | ||||||||||||
| Expenses | ||||||||||||||||
| Loss and loss adjustment expenses | 120,839 | 43,907 | 330,922 | 118,127 | ||||||||||||
| Direct and ceding commission expense | 50,289 | 35,406 | 150,238 | 92,040 | ||||||||||||
| Other operating expenses | 31,631 | 23,060 | 89,794 | 66,917 | ||||||||||||
| Acquisition-related transaction costs | 1,987 | - | 13,335 | - | ||||||||||||
| Interest expense | 5,055 | 2,110 | 13,497 | 6,593 | ||||||||||||
| Total expenses | 209,801 | 104,483 | 597,786 | 283,677 | ||||||||||||
| Other Income (expense) | ||||||||||||||||
| Equity income (loss) in unconsolidated affiliate | - | (820 | ) | (777 | ) | 700 | ||||||||||
| Gain on investment in acquired unconsolidated affiliate | - | - | 7,388 | - | ||||||||||||
| Income before income taxes | 46,539 | 25,444 | 120,470 | 65,060 | ||||||||||||
| Income tax expense | 16,561 | 8,728 | 41,888 | 23,321 | ||||||||||||
| Net income | $ | 29,978 | $ | 16,716 | $ | 78,582 | $ | 41,739 | ||||||||
|
Gross unrealized investment holding gains/ (losses) arising during periods |
$ | 67,113 | $ | (31,732 | ) | $ | 115,672 | $ | (54,201 | ) | ||||||
|
Cumulative effect of adjustment resulting from adoption of new accounting guidance |
- | - | (2,497 | ) | - | |||||||||||
|
Equity in net unrealized gains (losses) on investment in unconsolidated affiliate's investment portfolio |
- | (1,615 | ) | 3,124 | (2,722 | ) | ||||||||||
|
Less: reclassification adjustment for (gains) losses included in net income |
(2,555 | ) | 2,684 | (2,325 | ) | 9,280 | ||||||||||
|
Income tax benefit (expense) related to items of other comprehensive income |
(20,934 | ) | 10,732 | (37,507 | ) | 16,675 | ||||||||||
| Comprehensive net income | $ | 73,602 | $ | (3,215 | ) | $ | 155,049 | $ | 10,771 | |||||||
| Basic and diluted earnings per share | ||||||||||||||||
| Basic—Common stock: | ||||||||||||||||
| Distributed | $ | 0.07 | $ | 0.05 | $ | 0.19 | $ | 0.15 | ||||||||
| Undistributed | 0.67 | 0.67 | 1.86 | 1.64 | ||||||||||||
| Total | $ | 0.74 | $ | 0.72 | $ | 2.05 | $ | 1.79 | ||||||||
| Diluted | $ | 0.74 | $ | 0.71 | $ | 2.04 | $ | 1.78 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 40,481,517 | 23,293,783 | 38,247,867 | 23,281,200 | ||||||||||||
| Diluted | 40,701,217 | 23,490,053 | 38,462,320 | 23,475,645 | ||||||||||||
| Dividends declared and paid per common share | $ | 0.07 | $ | 0.05 | $ | 0.19 | $ | 0.15 | ||||||||
Der finanzen.at Ratgeber für Aktien!
Wenn Sie mehr über das Thema Aktien erfahren wollen, finden Sie in unserem Ratgeber viele interessante Artikel dazu!
Jetzt informieren!
Nachrichten zu Tower Group International Ltdmehr Nachrichten
| Keine Nachrichten verfügbar. |
Analysen zu Tower Group International Ltdmehr Analysen
ETF-Sparplan
Oskar ist der einfache und intelligente ETF-Sparplan. Er übernimmt die ETF-Auswahl, ist steuersmart, transparent und kostengünstig.