21st Century Insurance Group Reports 2002 First Quarter Results
WOODLAND HILLS, Calif.--April 24, 2002--21st Century Insurance Group today reported net income for the quarter ended March 31, 2002, of $8.3 million, or $0.10 diluted earnings per share, compared to net income of $4.9 million, or $0.06 diluted earnings per share, for the quarter ended March 31, 2001.In the first quarter of 2002, the Company executed various transactions to exit from its homeowner line resulting in a one time after-tax charge of $3.7 million, and incurred legal defense costs in connection with California Senate Bill 1899 ("SB 1899"), resulting in an after-tax charge of $0.9 million.
Operating income (i.e., net income before realized investment gains or losses and excluding results of the homeowner and earthquake lines of business, which are in runoff) for the three months ended March 31, 2002, was $11.8 million, or $0.14 diluted earnings per share. This compares to 2001 first quarter operating income of $7.9 million, or $0.09 diluted earnings per share.
Direct premiums written for the personal auto lines were $230.4 million and $228.5 million for the quarters ended March 31, 2002 and 2001, respectively. The combined ratio for personal auto lines for the first quarter 2002 improved to 98.6 compared to 101.8 for the same period 2001.
"We have received approval for a 5.7% rate increase for our California auto business that will take effect on May 6th. This will enable us to continue the steady improvement in our personal auto combined ratio in the face of rising loss costs," said Bruce Marlow, 21st Century's president and chief executive officer.
"We have consistently been ahead of the market taking needed rate changes. While this makes growth more difficult over the short term, longer term we are in a much better position. During the first quarter, we acquired more new customers in our California personal auto program than in any quarter in the Company's history. As consumers react to the rate increases being taken throughout the industry, we, as a low cost producer, expect to increasingly benefit.
"We are also pleased that the Internet has become an integrated part of our business," said Marlow. "Half of our quotes are delivered through our i21.com website and more than 10% of our new customers complete the buying process entirely online. In addition, customers use our full service web site to review and make changes to their policy, add or delete drivers, report claims and pay their premiums electronically using their checking account information."
About 21st Century
Founded in 1958, 21st Century Insurance Group is a pioneer in the direct-to-consumer marketing of personal automobile insurance serving customers in California, Arizona, Nevada, Oregon and Washington. The Company provides full service 24 hours a day, 365 days a year at 1-800-211-SAVE and its website, www.i21.com. 21st Century is rated A+ (Superior) by A.M. Best and A+ by Standard & Poor's.
21st Century Insurance Group is traded on the New York Stock Exchange under the trading symbol TW and is headquartered at 21st Century Plaza, 6301 Owensmouth Avenue, Woodland Hills, CA 91367.
Cautionary Statement:
Statements contained herein and within other publicly available documents may include, and the Company's officers and representatives may from time to time make, statements which may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts but instead represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. These statements may address, among other things, the Company's strategy for growth, underwriting results, product development, regulatory approvals, market position, financial results and reserves. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Important factors that could cause the Company's actual results to differ, possibly materially, from those in the specific forward-looking statements include the effects of competition and competitors' pricing actions; unanticipated adverse underwriting and claims experience, including revived claims under SB 1899; systems and customer service problems, including potential negative effects of power shortages in California; adverse developments in financial markets or interest rates; and unanticipated results of legislative, regulatory or legal actions, including the inability to obtain approval for rate increases and product changes. The Company is not under any obligation to (and expressly disclaims any such obligations to) update or alter any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. Additional financial information is available at the Company's website at www.i21.com (which shall not be deemed to be incorporated in or a part of this release) or by request to the Investor Relations Department.
Exhibit A
21st Century Insurance Group and Subsidiaries
Condensed Financial Data -- Personal Auto
(amounts in thousands, except share data)
First Quarter Ended March 31,
2002 2001
Personal Auto Lines
Gross premiums written $ 230,419 $ 228,513
Net premiums written $ 220,699 $ 214,423
Net premiums earned $ 215,111 $ 207,890
Loss and loss adjustment
expenses incurred 181,777 183,438
Underwriting expenses incurred 30,368 28,275
Underwriting profit (loss) 2,966 (3,823)
Net investment income 11,265 11,726
Federal income tax (expense)
benefit (2,409) 36
Operating income $ 11,822 $ 7,939
Operating income per common
share (1) $ 0.14 $ 0.09
Loss and loss adjustment expense
ratio 84.5 88.2
Underwriting expense ratio 14.1 13.6
GAAP combined ratio 98.6 101.8
(1) Basic and diluted amounts per common share are the same for all
periods shown.
Exhibit B
21st Century Insurance Group and Subsidiaries
Condensed Financial Data -- All Lines
(amounts and units in thousands, except share data)
First Quarter Ended March 31,
2002 2001
Total All Lines
Gross premiums written $ 233,015 $ 236,913
Net premiums written $ 209,108 $ 222,203
Net premiums earned $ 215,111 $ 214,611
Loss and loss adjustment
expenses incurred 188,635 194,636
Underwriting expenses incurred 30,459 29,614
Underwriting loss (3,983) (9,639)
Net investment income 11,265 11,726
Realized gains 1,663 1,116
Federal income tax (expense)
benefit (622) 1,719
Net income $ 8,323 $ 4,922
Net income per common share (1) $ 0.10 $ 0.06
Loss and loss adjustment
expense ratio 87.7 90.7
Underwriting expense ratio 14.2 13.8
GAAP combined ratio 101.9 104.5
March 31, December 31,
Balance Sheet Data 2002 2001
Invested assets $ 883,712 $ 884,633
Total assets $ 1,361,887 $ 1,352,016
Stockholders' equity $ 656,840 $ 659,306
Number of common shares
outstanding 85,368,891 85,361,848
Book value per share $ 7.69 $ 7.72
Additional Information
Statutory surplus $ 374,855 $ 393,119
Net premiums written to
statutory surplus ratio 2.3 2.2
Cash and investments at
holding company $ 30,230 $ 52,847
Auto units in force 1,096 1,075
Homeowner units in force
(in runoff) 58 74
California auto renewal ratio 93% 93%
After-tax yield on investments 4.4% 4.5%
(1) Basic and diluted amounts per common share are the same for all
periods shown.