Ohio Casualty Reports Drop in Net Income for 2ndQ

Ohio Casualty Corporation, based in Fairfield, Ohio, announced net income of $13.1 million, or $0.21 per share, for the second quarter ended June 30. In the same quarter of 2001, the Corporation reported net income of $16.7 million, or $0.28 per share.

After-tax operating income, which differs from net income by the exclusion of realized investment gains (losses), for the second quarter of 2002 was $6.9 million, or $0.11 per share, compared with an operating loss of $10.9 million, or $0.18 per share for the second quarter of 2001. Underwriting actions and improved pricing led to overall improved loss results and operating income.

Excluding the impact of the New Jersey private passenger auto business, which began to be non- renewed in March 2002, after-tax operating income was approximately $10 million, or $0.16 per share.

“The New Jersey private passenger auto impact validates our decision to exit the market,” president and CEO Dan Carmichael said. “The overall results for the quarter are consistent with the operating income targeted results for full year 2002. Better than usual second quarter catastrophe losses offset the poor New Jersey private passenger auto results.”

On June 30 statutory surplus was $763.2 million.

Net income year to date at June 30 totaled $39.9 million, or $0.65 per share, compared with net income of $12.6 million, or $0.21 per share, for the same period of 2001. Year-to-date operating income was $18.9 million, or $0.31 per share, compared with an operating loss of $23.2 million, or $.39 per share, in the same period of 2001. After-tax realized capital gains for the first six months of 2002 were $21.0 million, or $0.34 per share, compared with capital gains of $35.8 million, or $.60 per share, in the same period of 2001. Before-tax net investment income was $101.6 million for the six months ending June 30, 2002, compared with $103.4 million in 2001.

Statutory net premiums written in the second quarter 2002 included: $206.2 million in commercial lines, up from $185.7 million the previous year; $45.3 million in specialty lines, up from $36.9 million in 2001; and $123.7 in personal lines, down from $166.7 for last year.

Statutory net premiums written year to date at June 30, 2002 were: $399.1 million for commercial lines compared with $364.1 million for the previous year; $84.8 million in specialty lines versus $67.0 million for 2001; and $266.3 million for personal lines down from the 2001 figure of 329.6 million.

Personal Lines 2002 net premiums written declined as expected, driven by management decisions to cancel unprofitable agents and withdraw from New Jersey private passenger auto and other selected markets. These actions caused a $42.6 million decrease in Personal Lines net premiums written in the second quarter of 2002. The group’s exit from the New Jersey private passenger auto market, which began in March 2002, made up $30.3 million of the decrease.

Renewal price increases had a positive impact on net premiums written. The second quarter 2002 average renewal price increase of 14.5 percent, including exposure changes, for the commercial lines direct premiums written increased from the 13.9 percent average renewal price increase in the same period of 2001. The first quarter 2002 average renewal price increase for commercial lines was 14.9 percent. For commercial umbrella business in the specialty lines business unit, average renewal price increases were 37.7 percent for the second quarter of 2002, compared with 21.1 percent for the same quarter in 2001. First quarter 2002 average renewal price increases for commercial umbrella business were 38.4 percent.

Catastrophe losses in the second quarter of 2002 were $10.3 million, a decrease of $8.6 million from the same period of 2001. Catastrophe losses added 2.8 points to the statutory combined ratio in the second quarter of 2002. In the second quarter of 2001, catastrophes added 5.0 points to the combined ratio.

Topics Auto Profit Loss Ohio New Jersey Casualty