21st Century Insurance Group Reports 2000 First Quarter Results
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WOODLAND HILLS, Calif.--(BUSINESS WIRE)--April 27, 2000--21st Century Insurance Group (NYSE:TW - news) today reported net income of $3.7 million, or $0.04 diluted earnings per share, on revenues of $209.6 million for the first quarter of 2000. This compares to 1999 first quarter net income of $28.9 million, or $0.33 diluted earnings per share, on revenues of $219.5 million.
21st Century's performance was impacted by adverse weather conditions in California during the quarter, following near drought conditions in the fourth quarter of 1999. First quarter financial results also reflect the full impact on premium revenue of the company's 6.8 percent rate decrease implemented in February 1999 as well as less favorable loss trends affecting automobile personal lines.
``We expect 2000 to continue to be intensely competitive throughout the personal lines sector at the same time loss costs are turning up. Our first quarter results clearly demonstrate the challenges we face in the upcoming year,'' said Bruce W. Marlow, 21st Century president and chief executive officer. ``Bodily injury claims cost is no longer dropping and will likely rise after several years of dramatic decreases. Property damage claim costs continue to increase and can no longer be offset by reduced bodily injury costs. There is no question we are back to a more traditional loss cost pattern, especially in California. Combined with a hyper-competitive industry and reduced premiums, this makes comparisons to last year difficult across the board.
``While we are not insulated from current industry-wide pressures, we are well positioned to gain market efficiencies in the long term. We are confident that our low overhead structure and solid pricing, investment and profitability strategies prepare the company for significant growth in the coming years, as pricing integrity returns to the market.''
Voluntary vehicles insured in California grew 8,542 during the quarter and new business quotations issued were a healthy 88,382. Customer policy renewals continued at an excellent 97 percent rate. 21st Century also insured more than 26,900 vehicles in Nevada, Oregon and Washington at the end of the quarter, an increase of over 25,000 since the first quarter of 1999. 21st Century Insurance Company of Arizona performed well, with a 29.8 percent increase in vehicles insured over the same period a year ago. Homes insured in California numbered 61,249.
During the quarter, 21st Century initiated a new corporate Internet address, www.my21st.com, signifying the company's strategic emphasis on web-based business, as an increasingly important channel for future growth and profitability.
``Electronic commerce will be the hub of the new global economy. Building an innovative and distinctive Internet brand further extends our traditional customer-direct value,'' Marlow commented. ``Technology will enable more rapid product and service delivery and low-cost customer acquisition in the next few years. We will develop and deploy new technologies and direct distribution channels, as well as pursue strategic alliances, to extend our sales and service reach.''
During the quarter, the company strengthened its organizational structure with the addition of product manager functions to focus on key strategic business opportunities. These individuals will have complete responsibility for growth, profit and service of major business lines, drawing on the operational resources of all support areas.
The company also announced a review of marketing and product performance in all states. The review includes advertising content, demographic study and branding.
According to Marlow, ``When we expanded into states outside of California, we had expectations regarding the nature of the business received and the cost of acquisition. Now that these operations are up and running, we're taking a look at our books of business to determine if it's the mix we want, if our early strategies work in these varied environments and if our marketing is as effective as we know it can be. After this analysis, which will last through the second quarter, we will re-launch our marketing programs using the experience we have gained in our review.''
Financial Notes
Other financial information for the 2000 first quarter includes:Voluntary vehicles insured grew 5.6 percent from the same
period a year ago. The total number of vehicles insured at
March 31, 2000 was 1,201,605. In addition, 21st Century
Insurance Company of Arizona insured 22,155 vehicles at the
end of the quarter.The total number of non-auto units insured was 75,295 at the
end of 2000 first quarter.Net premiums earned for the first quarter increased to $200.3
compared to $194.3 million for the first quarter of 1999.Net investment income was $13.1 million for the first quarter
of 2000 compared to $17.9 million for the first quarter of
1999. Invested assets were $961.2 million at March 31, 2000,
and the annualized average yield for the quarter was 5.1
percent pre-tax and 4.6 percent after-tax. Total assets were
$1.4 billion. At the end of the first quarter, the investment
portfolio at fair value comprised 91.7 percent tax-exempt
fixed income securities compared to 35.9 percent a year ago.Realized after-tax investment losses for the first quarter
were $2.4 million compared to realized after-tax investment
gains of $4.7 million for the same quarter a year ago.Stockholders' equity on a GAAP basis, excluding unrealized
gains and losses, at the end of the 2000 first quarter was
$737.4 million, compared to $761.4 million at December 31,
1999. Combined statutory surplus was $572.6 million compared
to $581.4 million at the end of 1999.Book value per share was $8.32 at March 31, 2000, compared to
$8.90 at March 31, 1999.The combined ratio on a GAAP basis for the first quarter was
103.8. For the automobile lines, the combined ratio was 104.5
for the quarter.
21st Century Insurance Group (NYSE:TW - news) is the ninth largest personal auto insurance stock company in the United States. Founded in 1958, the Company was a pioneer of the direct-to-consumer marketing of personal automobile and home insurance. 21st Century markets personal automobile insurance in Arizona, California, Nevada, Oregon and Washington. The Company also offers home insurance in California. 21st Century Insurance group is traded on the New York Stock Exchange under the trading symbol TW. The company is headquartered at 21st Century Plaza, 6301 Owensmouth Avenue, Woodland Hills, CA 91367, 818/704-3595. 21st Century's address on the Internet is my21st.com
Statements contained in this press release which are not historical facts may be considered forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 relating to, among other things, the Company's future performance and operations, management's future plans and goals, and business environment changes. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected. Such risks and uncertainties could include, but are not limited to, the effects of competition, claims experience, service issues, financial or investment considerations and unanticipated results of regulatory or legal actions. For additional information, refer to the Company's public filings including the most recently filed Form 10-K and Form 10-Q. |
