Menu
iPMI Magazine Is Proudly Sponsored By:
For a healthier journey.

iPMI Magazine Has Moved

iPMI Magazine successfully rebranded to iPMI Global in 2023 and has moved to a new home on the internet. To visit the brand new international private medical insurance business intelligence platform, please go to www.ipmiglobal.com

QIC Group Posts Net Profit Of $130 Million For The First 9 Months Of 2018

Qatar Insurance Group, the leading insurer in Qatar and the Middle East North African (MENA) region reports a net profit of USD 130 million for the first nine months of 2018.

The MENA markets continued to produce stable premiums with underwriting profitability, weathering geopolitical headwinds in the region. Consistent with previous quarters, QIC Group’s international operations further expanded in select low volatility classes whilst shedding underpriced (severity) business. Compared with the first nine months of 2017, the Group’s gross written premiums expanded by 6% to USD 2.6 billion. QIC Group reported a combined ratio of 102% for the first nine months of 2018 which included natural and man-made catastrophe losses incurred in Q3 as well as reserve additions related to some older contracts in discontinued segments of business reported in the first quarter. Excluding any prior-year reserve developments as well as natural and man-made catastrophe losses, the underlying combined ratio came in at 99.2%.

Commenting on the financial performance for the first nine months of 2018, Mr. Khalifa Abdulla Turki Al Subaey, Group President & CEO of QIC Group stated, “The third quarter of 2018 saw a string of major catastrophes losses, especially in the US and Japan. Still, rate increases remain elusive as the growth of alternative capital with lower return hurdles places secular and not just cyclical pressure on (re)insurance margins in the low frequency high severity space. Against this backdrop, we continue rebuilding our book of business towards low volatility characteristics, focusing on clients who pursue an innovative and analytical approach to product development and underwriting.”

 

He further continued, “This transformation process unfolds as we have to deal with challenges beyond our control such as the geopolitical situation in the Middle East and the vagaries of global re/insurance loss and pricing cycles. Therefore, QIC Group is redoubling its efforts to excel in an area which counts among our historical strengths: Cost-efficiency. In that respect, we consider ourselves a forerunner among our global peers some of which have recently embarked on major restructuring plans.”

Financial performance In the first nine months of 2018 QIC Group recorded growth in gross written premiums (GWP) of 6% to USD 2.6 billion, compared to the same period of the previous year.

The Group’s international carriers namely Qatar Re, Antares and QIC Europe Limited (QEL) posted a GWP growth of 11%. QIC Group ’s domestic and MENA operations growth remained stable, while the Company’s Life and Medical insurance subsidiary, QLM, headquartered in Doha, and OQIC, the Group’s listed subsidiary in Oman, continued to expand. Further impetus for growth arose from the ongoing digitalization of the Group’s MENA retail pillar. QIC Group’s international subsidiaries in Bermuda, the UK and Malta accounted for approximately 76% of the Group’s total GWP.

The Group’s net underwriting result increased to USD 104 million, compared with a negative USD 28 million for the same period last year, the third quarter of which saw the devastating series of hurricanes Harvey, Irma and Maria. QIC Group diligently applies its strengthening reserving governance and philosophy, resulting in a more cautious view of ultimate loss projections and a slower release of prioryear IBNR reserves. QIC Group is constantly expanding its low severity high frequency business which now constitutes a significant portion of the total portfolio.

QIC Group reported a combined ratio of 102% for the first nine months of 2018. The current year’s combined ratio reflects Qatar Re’s and Antares’ share in hurricane Florence and typhoon Jebi in September (with industry-wide insured losses expected to exceed USD 10 billion). In addition, Antares was impacted by a major marine loss in Germany (Lürssen shipyard). Excluding any prior-year reserve developments as well as natural and man-made catastrophe losses, the nine months 2018 combined ratio was 99.2%.

Investment income came in at USD 169 million in the first nine months of 2018, compared with USD 219 million in the same period of the previous year. The 23% y-o-y decline is mainly attributed to certain one-off investment gains booked in H1 2017. Further reclassification of certain types of investment securities following the adoption of IFRS 9 from 1 January 2018 resulted in increased mark-to-market losses in the first nine months of 2018. QIC Group’s current investment return amounted to an annualized 4.7%, compared with 6.5% for the same period of 2017. The Group’s investment performance remains unrivalled by any of its peers.

Overall, the Group’s net profit for the first nine months of 2018 stood at USD 130 million, an increase of 54% compared with the USD 85 million recorded in the same period last year.

Operational efficiency

During the reporting period, QIC Group further improved its already exceptional operational efficiency. In the first nine months of 2018 the administrative expense ratio for its core operations came in at 6.5%, further down from 6.6% in the same period of the previous year. The Group continues to reap the benefits from its ongoing endeavor towards process efficiencies and automation. Further cost-efficiency gains are expected from the envisaged integration of back office operations across QIC Group’s international entities.

Regulatory update

In July, QIC Group consummated the acquisition of the Markerstudy Group Insurance companies (announced in January) through its subsidiary Qatar Re. This transaction is a milestone in the Group’s shift towards low volatility business.

 

For more news about Qatar Insurance Company on iPMI magazine please click here

About Qatar Insurance Company

Qatar Insurance Company (QIC) is a publicly listed composite insurer with a consistent performance history of over 54 years and a global underwriting footprint. Founded in 1964, QIC was the first domestic insurance company in the State of Qatar. Today, QIC is the market leader in Qatar and a dominant insurer in the GCC and MENA regions. QIC is one of the highest rated insurers in the Gulf region with a rating of A/Stable from Standard & Poor’s and A (Excellent) from A.M. Best. In terms of premium income, profitability and market capitalization, QIC is also the largest insurance company in the MENA region. It is listed on the Qatar Exchange and has a market capitalization in excess of USD 3 billion.

For further information on QIC, please visit: www.qatarinsurance.com

 

Read more...

Aetna Reports 2nd Quarter 2017 Results

Aetna has announced second-quarter 2017 net income(1) of $1.2 billion, or $3.60 per share. Adjusted earnings(2) for second-quarter 2017 were $1.1 billion, or $3.42 per share. Aetna's strong second-quarter performance resulted in net income of $822 million and adjusted earnings of $2.1 billion for the six months ended June 30, 2017.

“Our strong second quarter results speak to our continued focus on disciplined pricing and execution of our targeted growth strategy,” said Mark T. Bertolini, Aetna chairman and CEO. “Based on our continued outperformance, we are once again increasing our full-year 2017 earnings projections.”

“Our core businesses continued to outperform during the second quarter, carrying forward positive momentum from the start of the year,” said Shawn M. Guertin, Aetna executive vice president and CFO. “Additional 2017 earnings power allows us to improve our full-year outlook while also accelerating our timeline for targeted investments in growth initiatives.”

Aetna presents both GAAP and non-GAAP financial measures in this press release to provide investors with additional information. Refer to footnotes (1) through (6) for definitions of non-GAAP financial measures and pages 9 through 11 for reconciliations of the most directly comparable GAAP financial measures to non-GAAP financial measures.

Total Company Results

  • Net income(1) was $1.2 billion for second-quarter 2017 compared with $791 million for second-quarter 2016. The significant increase in net income during second-quarter 2017 was primarily due to the increase in adjusted earnings described below and lower transaction and integration-related costs in 2017 compared to 2016.
  • Adjusted earnings(2) were $1.1 billion for second-quarter 2017 compared with $783 million for second-quarter 2016. The substantial increase in adjusted earnings during second-quarter 2017 was primarily due to continued strong performance in Aetna's Health Care segment. The increase also reflects a larger decrease in Aetna's estimate of risk adjustment payables for the prior year for its individual and small group ACA compliant products in the second quarter of 2017 compared to the second quarter of 2016.
  • Total revenue and adjusted revenue(3) were both $15.5 billion for the second-quarter 2017 and were $16.0 billion and $15.9 billion, respectively, for second-quarter 2016. The decrease in total revenue and adjusted revenue during second-quarter 2017 was primarily due to lower premiums in Aetna's Health Care segment, including lower membership in Aetna's ACA compliant individual and small group products, and the temporary suspension of the health insurer fee ("HIF") in 2017.
  • Total company expense ratio was 16.4 percent and 17.5 percent for the second quarters of 2017 and 2016, respectively. The adjusted expense ratio(5) was 16.5 percent and 17.1 percent for the second quarters of 2017 and 2016, respectively. The improvement in both ratios during 2017 was primarily due to the temporary suspension of the HIF in 2017 and the execution of Aetna's expense management initiatives, partially offset by targeted investment spending on Aetna's growth initiatives. The total company expense ratio also improved due to lower transaction and integration-related costs in second-quarter 2017 compared to 2016.
  • After-tax net income margin was 7.7 percent and 5.0 percent for second quarters of 2017 and 2016, respectively. The adjusted pre-tax margin(6) was 11.7 percent and 8.9 percent for the second quarters of 2017 and 2016, respectively. The improvement in both second-quarter 2017 ratios was primarily due to continued strong performance in Aetna's Health Care segment. The improvement in the adjusted pre-tax margin was partially offset by the negative impact of the temporary suspension of the HIF in 2017.
  • Total debt to consolidated capitalization ratio(7) was 37.3 percent at June 30, 2017 compared with 53.6 percent at December 31, 2016. The total debt to consolidated capitalization ratio at June 30, 2017 reflects the repayment of approximately $11.6 billion aggregate principal amount of Aetna's senior notes during 2017.
  • Effective tax rate was 35.0 percent for second-quarter 2017 compared with 41.4 percent for second-quarter 2016. The decrease in Aetna's effective tax rate for second-quarter 2017 was primarily due to the temporary suspension of the non-deductible HIF in 2017.

Health Care Segment Results

Health Care, which provides a full range of insured and self-insured medical, pharmacy, dental and behavioral health products and services, reported:

  • Income before income taxes(1) of $1.7 billion for second-quarter 2017 compared with $1.3 billion for second-quarter 2016. Pre-tax adjusted earnings(2) were $1.8 billion for the second-quarter 2017 compared with $1.3 billion for second-quarter 2016. The increase in both income before income taxes and pre-tax adjusted earnings was primarily due to continued strong performance across Aetna's core Health Care businesses. The increase also reflects Aetna's updated estimate of risk adjustment payables for the prior year for individual and small group ACA compliant products described above.
  • Total revenue and adjusted revenue(3) were both $14.8 billion for second-quarter 2017 and both $15.2 billion for second-quarter 2016. The decrease in total revenue and adjusted revenue was primarily due to lower membership in Aetna's ACA compliant individual and small group products and the temporary suspension of the HIF in 2017, partially offset by higher premium yields in Aetna's Commercial and Government businesses and membership growth in Aetna's Medicare products.
  • Medical membership at June 30, 2017 decreased by 358 thousand compared with March 31, 2017. The decrease primarily reflects declines in Aetna's Medicaid products primarily due to the exit of the Missouri Medicaid program during second-quarter 2017 and declines in Aetna's Commercial Insured products primarily due to lower membership in Aetna's ACA compliant individual and small group products. The decrease was partially offset by increases in Aetna's Commercial ASC and Medicare Insured products.
  • Medical benefit ratios ("MBRs") for the three and six months ended June 30, 2017 and 2016 were as follows:
      Three Months Ended June 30,     Six Months Ended June 30,
      2017     2016     Change     2017     2016     Change
Commercial     78.6 %     83.4 %     (4.8 ) pts.     79.0 %     80.6 %     (1.6 ) pts.
Government     81.3 %     81.4 %     (0.1 ) pts.     83.3 %     82.4 %     0.9   pts.
Total Health Care     80.0 %     82.4 %     (2.4 ) pts.     81.3 %     81.5 %     (0.2 ) pts.
                                                     

 

 

 

 

 

 

  • Aetna's second-quarter 2017 Commercial MBR decreased compared with second-quarter 2016 primarily due to improved performance across Aetna's core Commercial business. The decrease also reflects Aetna's updated estimate of risk adjustment payables for the prior year for individual and small group ACA compliant products described above. The decrease was partially offset by the unfavorable impact of the temporary suspension of the HIF in 2017.
  • Aetna's second-quarter 2017 Government MBR remained relatively flat compared with second-quarter 2016 primarily due to improved performance in Aetna's Government business, largely offset by the unfavorable impact of the temporary suspension of the HIF in 2017.
  • In second-quarter 2017, Aetna experienced favorable development of prior-period health care cost estimates in its Medicare, Commercial and Medicaid products, primarily attributable to first-quarter 2017 performance.
  • Prior year's health care costs payable estimates developed favorably by $750 million and $709 million during the first six months of 2017 and 2016, respectively. This development is reported on a basis consistent with the prior years' development reported in the health care costs payable table in Aetna's annual audited financial statements, and does not directly correspond to an increase in 2017 operating results.
  • Days claims payable(7) was 54 days at June 30, 2017, a sequential increase of one day compared to March 31, 2017 and a decrease of two days compared with June 30, 2016. The year over year decrease was driven by a number of factors, including the operational maturation of new Medicaid contracts, decreased claims processing times and changes in business mix, primarily related to the decline in Aetna's individual Commercial product membership.

Group Insurance Segment Results

Group Insurance, which includes group life, disability and long-term care products, reported:

  • Income before income taxes(1) of $57 million for second-quarter 2017 compared with $74 million for second-quarter 2016. Pre-tax adjusted earnings(2) were $42 million for second-quarter 2017 compared with $57 million for second-quarter 2016. Income before income taxes and pre-tax adjusted earnings decreased primarily due to lower underwriting margins in Aetna's life products.
  • Total revenue of $642 million and $647 million for the second quarters of 2017 and 2016, respectively. Adjusted revenue(3) was $627 million and $630 million for the second quarters of 2017 and 2016, respectively.

Large Case Pensions Segment Results

Large Case Pensions, which manages a variety of discontinued and other retirement and savings products, primarily for qualified pension plans, reported:

  • Income before income taxes(1) of $115 million for second-quarter 2017 compared with $135 million for second-quarter 2016. The decrease in income before income taxes was primarily due to a larger reduction of Aetna's reserve for anticipated future losses on discontinued products in 2016 compared to 2017.
  • Pre-tax adjusted earnings(2) were $3 million for both the second quarters of 2017 and 2016.
  • Total revenue of $81 million for second-quarter 2017 compared with $82 million for second-quarter 2016. Adjusted revenue(3) was $78 million for both the second quarters of 2017 and 2016.

Aetna's conference call to discuss second-quarter 2017 results will begin at 8:30 a.m. ET today. The public may access the conference call through a live audio webcast available on Aetna's Investor Information website at www.aetna.com/investor. Financial, statistical and other information, including GAAP reconciliations, related to the conference call also will be available on Aetna's Investor Information website.

The conference call also can be accessed by dialing 1-877-709-8150, or +1-201-689-8354 for international callers. The company suggests participants dial in approximately 10 minutes before the call. No access code is required. Individuals who dial in will be asked to identify themselves and their affiliations.

A replay of the call may be accessed through Aetna's Investor Information website at www.aetna.com/investor or by dialing 1-877-660-6853, or +1-201-612-7415 for international callers. The replay conference ID is 13665591. Telephone replays will be available until 11 p.m. ET on August 17, 2017.

(1) Net income refers to net income attributable to Aetna reported in Aetna's Consolidated Statements of Income in accordance with U.S. generally accepted accounting principles ("GAAP"). Income before income taxes refers to income before income taxes attributable to Aetna in accordance with GAAP. Unless otherwise indicated, all references in this press release to net income, net income per share and income before income taxes exclude amounts attributable to non-controlling interests.

(2) Non-GAAP financial measures such as adjusted earnings, adjusted earnings per share, pre-tax adjusted earnings, adjusted operating expenses, adjusted revenue, adjusted expense ratio and adjusted pre-tax margin exclude from the relevant GAAP metrics, as applicable:

  • Amortization of other acquired intangible assets;
  • Net realized capital gains or losses; and
  • Other items, if any, that neither relate to the ordinary course of Aetna's business nor reflect Aetna's underlying business performance.

Although the excluded items may recur, management believes the non-GAAP financial measures Aetna discloses, including those described above, provide a more useful comparison of Aetna's underlying business performance from period to period. Prior to March 31, 2017, operating earnings was the measure reported to the chief executive officer for purposes of assessing financial performance and making operating decisions, such as the allocation of resources among Aetna's business segments. Effective March 31, 2017, the chief executive officer assesses consolidated Aetna results based on adjusted earnings and assesses business segment results based on pre-tax adjusted earnings because income taxes are recorded in Aetna's Corporate Financing segment and are not allocated to Aetna's business segments. Also effective March 31, 2017, transaction and integration-related costs were reclassified to Aetna's Corporate Financing segment because they do not reflect Aetna's underlying business performance. The prior periods have been restated to reflect this presentation. Non-GAAP financial measures Aetna discloses, including those described above, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.

For the periods covered in this press release, the following items are excluded from the non-GAAP financial measures described above, as applicable, because Aetna believes they neither relate to the ordinary course of Aetna's business nor reflect Aetna's underlying business performance:

  • During the six months ended June 30, 2017, Aetna incurred losses on the early extinguishment of long-term debt due to (a) the mandatory redemption of $10.2 billion aggregate principal amount of certain of its senior notes issued in June 2016 (collectively, the "SMR Notes") following the termination of the definitive agreement (the "Humana Merger Agreement") to acquire Humana Inc. ("Humana") and (b) the early redemption of $750 million aggregate principal amount of its outstanding senior notes due 2020.
  • During the six months ended June 30, 2017, Aetna recorded an expense for estimated future guaranty fund assessments related to Penn Treaty Network America Insurance Company and one of its subsidiaries (collectively, "Penn Treaty"), which was placed in rehabilitation in 2009 and placed in liquidation in March 2017. This expense does not directly relate to the underwriting or servicing of products for customers and is not directly related to the core performance of Aetna's business operations.
  • Aetna recorded transaction and integration-related costs during the three and six months ended June 30, 2017 and 2016 primarily related to its proposed acquisition of Humana (the "Humana Transaction"). The negative transaction costs for the three months ended June 30, 2017 reflect the release of previously accrued expenses upon reconciliation to the final actual expenses incurred related to the Humana Transaction. Transaction costs include costs associated with the termination of the Humana Merger Agreement, the termination of Aetna's agreement to sell certain assets to Molina Healthcare, Inc. and advisory, legal and other professional fees which are reflected in Aetna's GAAP Consolidated Statements of Income in general and administrative expenses. Transaction costs also include the negative cost of carry associated with the debt financing that Aetna obtained in June 2016 for the Humana Transaction. Prior to the mandatory redemption of the SMR Notes, the negative cost of carry associated with these senior notes was excluded from adjusted earnings and pre-tax adjusted earnings. The negative cost of carry associated with the $2.8 billion aggregate principal amount of Aetna's senior notes issued in June 2016 that are not subject to mandatory redemption (the "Other 2016 Senior Notes") was excluded from adjusted earnings and pre-tax adjusted earnings through the date of the termination of the Humana Merger Agreement. The components of the negative cost of carry are reflected in Aetna's GAAP Consolidated Statements of Income in interest expense and net investment income. Subsequent to the termination of the Humana Merger Agreement, the interest expense and net investment income associated with the Other 2016 Senior Notes were no longer excluded from adjusted earnings and pre-tax adjusted earnings.
  • In 1993, Aetna discontinued the sale of fully guaranteed large case pensions products and established a reserve for anticipated future losses on these products, which Aetna reviews quarterly. During both the three months ended June 30, 2017 and 2016, Aetna reduced the reserve for anticipated future losses on discontinued products. Aetna believes excluding any changes in the reserve for anticipated future losses on discontinued products from adjusted earnings provides more useful information as to Aetna's continuing products and is consistent with the treatment of the operating results of these discontinued products, which are credited or charged to the reserve and do not affect Aetna's operating results.
  • Other acquired intangible assets relate to Aetna's acquisition activities and are amortized over their useful lives. However, this amortization does not directly relate to the underwriting or servicing of products for customers and is not directly related to the core performance of Aetna's business operations.
  • Net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of liabilities. However, these transactions do not directly relate to the underwriting or servicing of products for customers and are not directly related to the core performance of Aetna's business operations.
  • The corresponding tax benefit or expense related to the items excluded from adjusted earnings discussed above. The tax benefit or expense was calculated utilizing the appropriate tax rate for each individual item excluded from adjusted earnings.

For a reconciliation of financial measures calculated under GAAP to these items, refer to the tables on pages 9 through 11 of this press release.

(3) Adjusted revenue excludes net realized capital gains and losses and interest income on the proceeds of Aetna's senior notes issued in June 2016 as noted in (2) above. Refer to the tables on pages 9 through 11 of this press release for a reconciliation of total revenue calculated under GAAP to adjusted revenue.

(4) Projected full-year 2017 net income per share and adjusted earnings per share reflect a range of 334 million to 335 million weighted average diluted shares. Projected full-year 2017 adjusted earnings per share exclude from projected full-year 2017 net income per share the loss on early extinguishment of long-term debt, the projected Penn Treaty-related guaranty fund assessments, projected transaction and integration-related costs (including termination costs) primarily related to the Humana Transaction, the reduction of the reserve for anticipated future losses on discontinued products, estimated amortization of other acquired intangible assets, net realized capital gains and losses, other items, if any, that neither relate to the ordinary course of Aetna's business nor reflect Aetna's underlying business performance and the corresponding income tax benefit or expense related to the items excluded from net income per share discussed above. Amortization of other acquired intangible assets relates to Aetna's acquisition activities. The table below reconciles projected 2017 net income per share to projected 2017 adjusted earnings per share:

Reconciliation of Projected 2017 Net Income Per Share to Projected 2017 Adjusted Earnings Per Share
Projected net income per share (GAAP measure)     $5.46 to $5.56  
Loss on early extinguishment of long-term debt     .74  
Penn Treaty-related guaranty fund assessments     .69  
Transaction and integration-related costs (including termination costs)     3.59  
Reduction of reserve for anticipated future losses on discontinued products     (.33 )
Amortization of other acquired intangible assets     .70  
Net realized capital losses     .92  
Income tax benefit     (2.32 )
Projected adjusted earnings per share     $9.45 to $9.55  
         

Aetna will experience net realized capital gains or net realized capital losses during the remainder of 2017, however Aetna cannot project the amount of such future gains or losses. Therefore, Aetna has assumed no net realized capital gains or losses after June 30, 2017 for purposes of projecting net income and net income per share. Aetna's annual net realized capital gains or losses ranged from a net realized capital loss of $65 million to a net realized capital gain of $86 million during calendar years 2014 through 2016.

(5) The adjusted expense ratio excludes net realized capital gains and losses and other items, if any, that are excluded from adjusted revenue or adjusted operating expenses, as noted in (2) above. For a reconciliation of the comparable GAAP measure to this metric for the periods covered by this press release, refer to page 11 of this press release.

(6) In order to provide useful information regarding Aetna's profitability on a basis comparable to others in the industry, without regard to financing decisions, income taxes or amortization of other acquired intangible assets (each of which may vary for reasons not directly related to the performance of the underlying business), Aetna's adjusted pre-tax margin is based on adjusted earnings excluding interest expense and income taxes. Management also uses adjusted pre-tax margin to assess Aetna's performance, including performance versus competitors.

(7) Days claims payable is calculated by dividing the health care costs payable at each quarter end by the average health care costs per day in each respective quarter. The total debt to consolidated capitalization ratio is calculated by dividing total long-term debt and short-term debt ("Total Debt") by the sum of Total Debt and total Aetna shareholders' equity.

(8) Aetna's Corporate Financing segment is not a business segment. It is added to Aetna's business segments to reconcile segment reporting to Aetna's consolidated results. The Corporate Financing segment includes interest expense on Aetna's outstanding debt and the financing components of Aetna's pension and other postretirement employee benefit plan expenses (benefits), and, effective March 31, 2017, all transaction and integration-related costs and income taxes. The prior periods have been restated to reflect this presentation. As described in (2) above, the adjusted earnings of the Corporate Financing segment exclude other items, if any, that neither relate to the ordinary course of Aetna's business nor reflect Aetna's underlying business performance.

(9) Interest expense included in the reconciliation to adjusted earnings before income taxes, excluding interest expense and the reconciliation to adjusted earnings excluding interest expense, net of tax for the six months ended June 30, 2017 and the three and six months ended June 30, 2016 excludes costs associated with the term loan credit agreement executed in connection with the Humana Transaction and the negative cost of carry on transaction-related debt incurred in connection with the Humana Transaction. Interest expense for the three and six months ended June 30, 2016 excludes costs associated with bridge credit agreement executed in connection with the Humana Transaction. These costs are included within transaction and integration-related costs. Refer to (2) above for further discussion.

Read more...

AXIS Capital Reports 2nd Quarter 2017 Results

AXIS Capital Holdings Limited has reported net income available to common shareholders for the second quarter of 2017 of $85 million, or $1.01 per diluted common share, compared to $119 million, or $1.29 per diluted common share, for the second quarter of 2016. Net income available to common shareholders for the six months ended June 30, 2017 was $90 million, or $1.05 per diluted common share, compared with $158 million, or $1.69 per diluted common share, for the corresponding period in 2016.

Non-GAAP operating income for the second quarter of 2017 was $110 million, or $1.31 per diluted common share, compared to $47 million, or $0.51 per diluted common share, for the second quarter of 2016. For the six months ended June 30, 2017, AXIS Capital reported non-GAAP operating income of $161 million, or $1.89 per diluted common share, compared with non-GAAP operating income of $149 million, or $1.59 per diluted common share for the first six months of 2016.

Commenting on the second quarter 2017 financial results, Albert Benchimol, President and CEO of AXIS Capital, said, "This quarter we continued to take tangible actions and make strong progress in advancing our strategy to build long-term profitable growth for AXIS. We are reporting operating ROE of 8.6% and growth in book value per share, adjusted for dividends, of 3% for the second quarter. Our underwriting results absorbed the impact of a higher frequency of Property losses and the continuing effect of the Ogden rate change, which reflects the benefits associated with our portfolio construction activities."

"We continue to enhance the AXIS franchise, dedicating more resources to data and analytics, recruiting top talent, and expanding our activities with strategic capital partners to do more for our clients and brokers and earn attractive fee income, and furthering our strategy of growing scale and relevance in attractive markets."

"In addition to organic growth in targeted lines of business during the quarter, we closed on the acquisition of Aviabel, a European specialty aviation (re)insurer and, earlier this month, we announced our offer to acquire Novae Group plc, a diversified specialty (re)insurer operating through Lloyd’s of London. Our proposed acquisition of Novae would accelerate strategic initiatives and strengthen our positioning in the important London market for international specialty risks."

Second Quarter Highlights2

  • Gross premiums written increased by $42 million or 3% (4% on a constant currency basis3) to $1.4 billion, with an increase of $30 million, or 6% in our reinsurance segment and an increase of $12 million, or 2% (3% on a constant currency basis3) in our insurance segment;
  • Net premiums written decreased 5% (4% on a constant currency basis3) to $956 million;
  • Net premiums earned increased by 4% (5% on a constant currency basis3) to $981 million;
  • Combined ratio of 97.6%, compared to 102.2%;
  • Current year accident loss ratio of 68.9%, compared to 75%;
  • Pre-tax catastrophe and weather-related net losses, net of reinstatement premiums, of $50 million, or 5.1 points, compared to $109 million, or 11.7 points;
  • Favorable prior year net reserve development of $71 million (benefiting the combined ratio by 7.2 points), compared to $78 million (benefiting the combined ratio by 8.2 points);
  • Net investment income increased to $106 million, compared to $92 million;
  • Pre-tax total return on cash and investmentsof 1.2%, including foreign exchange movements, or 1%, excluding foreign exchange movements. The comparable prior period pre-tax total return was 1.2% including (or 1.4% excluding) foreign exchange movements;
  • Fee income from strategic capital partners5 of $12 million ($5 million included in other insurance related income and $7 million included as a benefit to general and administrative expenses), compared to $1 million;
  • Bargain purchase gain of $15 million associated with the acquisition of Aviabel. This gain is excluded from non-GAAP operating income;
  • Net income available to common shareholders of $85 million and an annualized return on average common equity of 6.7%, compared to $119 million and 9%, respectively;
  • Non-GAAP operating income of $110 million, representing an annualized non-GAAP operating return on average common equity of 8.6%, compared to $47 million and 3.6%;
  • Net cash flows from operations of $185 million, compared to $77 million;
  • Diluted book value per common share of $60.45, an increase of 3% compared to the prior quarter, and a 5% increase over the last 12 months;
  • Dividends declared of $0.38 per common share, with the total common dividends declared of $1.49 per share over the past twelve months;
  • Adjusted for dividends, diluted book value per common share increased by $1.94, or 3%, per common share for the quarter and $4.32, or 7%, per common share over the past twelve months; and
  • Total common shares repurchased during the quarter were 2 million for $131 million. Following the offer to acquire Novae Group plc ("Novae") on July 5th, 2017, the Company has suspended its open market share repurchase program. The offer is subject to regulatory approval and other customary closing conditions and is expected to close in the fourth quarter of this year.
 

All comparisons are with the same period of the prior year, unless otherwise stated.

Amounts presented on a constant currency basis are “non-GAAP financial measures” as defined in Regulation G. The constant currency basis is calculated by applying the average foreign exchange rate from the current year to prior year amounts.

4 Pre-tax total return on cash and investments includes net investment income (loss), net realized investment gains (losses), interest in income (loss) of equity method investments and the change in unrealized gains (losses) generated by our average cash and investment balances. Total cash and invested assets represents the total cash, available for sale investments, mortgage loans, other investments, equity method investments, short-term investments, accrued interest receivable and net receivable (payable) for investments sold (purchased).
5 Fee income from strategic capital partners represents services fees and reimbursement of expenses earned by the AXIS Reinsurance segment from its strategic capital partners.
 

Segment Highlights

Insurance Segment

Our insurance segment reported gross premiums written of $796 million in the second quarter of 2017, an increase of $12 million, or 2% (3% on a constant currency basis), compared to gross premiums written of $784 million in the second quarter of 2016. The increase in gross premiums written was attributable to our liability lines driven by new business, and our aviation lines associated with our recent acquisition of Aviabel. These increases were partially offset by a decrease in premiums written in our property lines due to the impact of our exit from some retail insurance operations in the U.S. last year, and a decrease in our marine lines largely due to timing differences.

For the six months ended June 30, 2017, gross premiums written were $1.5 billion, an increase of $53 million, or 4%, compared to the same period in 2016. The increase in gross premiums written was attributable to our accident and health lines and our liability lines primarily driven by new business. These increases were partially offset by a decrease in premiums written in our marine lines largely due to timing differences, and a decrease in our property lines due to the impact of our exit from some retail insurance operations in the U.S. last year.

Net premiums written were comparable (2% increase on a constant currency basis) and increased by 3% (4% on a constant currency basis) in the three and six months ended June 30, 2017, respectively, compared to the same periods in 2016 reflecting the increase in gross premiums written, and a decrease in premiums ceded in our professional lines attributable to the impact of our exit from retail insurance operations in Australia, partially offset by an increase in premiums ceded in our liability and marine lines.

Net premiums earned increased by 12% (14% on a constant currency basis) and 8% (10% on a constant currency basis) in the three and six months ended June 30, 2017, respectively, compared to the same periods in 2016. The increases were largely due to strong premiums growth in our accident and health lines as well as our property lines in recent periods, together with a decrease in ceded premiums earned in our property lines.

Our insurance segment reported an underwriting loss of $0.5 million for the current quarter, compared to an underwriting loss of $11 million in the second quarter of 2016. The current quarter’s underwriting results reflected a combined ratio of 100.2%, compared to 102.5% in the same period in 2016. This included a decrease in the current accident year loss ratio to 69.9% this quarter from 74.3% in the second quarter of 2016. During the second quarter of 2017, we incurred pre-tax catastrophe and weather-related losses of $41 million, or 8.4 points, primarily attributable to U.S. weather-related events, compared to $49 million, or 11.1 points, of catastrophe and weather-related losses reported during the same period in 2016. After adjusting for catastrophe and weather-related losses, the segment's current accident year loss ratio in the second quarter decreased by 1.7 points, compared to the same period in 2016, primarily due to a decrease in mid-size loss experience in our marine lines and changes in business mix, partially offset by an increase in attritional loss experience in our property lines, and the ongoing adverse impact of rate and trend.

Net favorable prior year loss reserve development was $20 million, or 3.9 points, this quarter compared to $20 million, or 4.6 points, in the second quarter of 2016.

The segment's acquisition cost ratio increased in the quarter to 16.5% from 14.1%, primarily related to changes in business mix in our accident and health lines.

The segment's general and administrative expense ratio decreased in the quarter to 17.7% from 18.7%, driven by an increase in net premiums earned.

For the six months ended June 30, 2017, our insurance segment reported underwriting income of $12 million, compared to $6 million for the same period in 2016. The increase in underwriting income was principally associated with a decrease in the current accident year loss ratio excluding catastrophe and weather-related losses and an increase in net favorable prior year reserve development.

Reinsurance Segment

Our reinsurance segment reported gross premiums written of $566 million in the second quarter of 2017, an increase of $30 million, or 6%, compared to gross premiums written of $536 million in the second quarter of 2016. The increase in gross premiums written was primarily driven by our motor, catastrophe and property lines, partially offset by a decrease in our agriculture lines. The increase in our motor lines was largely due to timing differences and favorable premium adjustments. The increase in our catastrophe and property lines was primarily driven by new business spread across several cedants. Favorable treaty restructuring and increased line sizes on a number of treaties also contributed to the increase in our property lines. The decrease in our agriculture lines was due to the non-renewal of a significant treaty.

For the six months ended June 30, 2017, gross premiums written were $1.8 billion, a decrease of $58 million, or 3% (1% on a constant currency basis), compared to the same period in 2016. The decrease in gross premiums written was primarily driven by a lower level of premiums written on a multi-year basis, notably in our credit and surety lines and our liability lines. These decreases were partially offset by an increase in our agriculture, catastrophe, and property lines. The increase in agriculture is due to increased participation on a renewing treaty, which more than offset the cancellation of a large treaty. The increase in our catastrophe and property lines was driven by new business spread across several cedants.

Net premiums written decreased by 11% (10% on a constant currency basis) in the second quarter of 2017 compared to the same period in 2016, reflecting an increase in premiums ceded to our strategic capital partners, partially offset by the increase in gross premiums written in the quarter. The increase in premiums ceded was attributable to our agriculture lines, together with the impact of the retrocessional cover entered into with Harrington Re Ltd., which increased premiums ceded in our professional and liability lines.

On a year-to-date basis, net premiums written decreased by 15% (13% on a constant currency basis) compared to 2016, reflecting the impact of the retrocessional cover entered into with Harrington Re Ltd., as well as an increase in premiums ceded in our catastrophe, credit and surety lines, and our agriculture lines, together with a decrease in gross premiums written.

Net premiums earned decreased by 4% (2% on a constant currency basis) and were comparable (4% increase on a constant currency basis) in the three and six months ended June 30, 2017, respectively, compared to the same periods in 2016. The decrease in net premiums earned was driven by an increase in ceded premiums earned in our catastrophe and agriculture lines, together with the impact of the retrocession to Harrington Re Ltd., which increased ceded premiums earned in our professional lines, as well as a decrease in gross premiums earned in our professional lines. These decreases were partially offset by strong premium growth in our motor and catastrophe lines. On a year-to-date basis, net premiums earned were also impacted by strong premium growth in our agriculture lines.

Our reinsurance segment reported underwriting income of $57 million for the current quarter, compared to $21 million in the second quarter of 2016. The current quarter’s underwriting results reflected a combined ratio of 88.6%, compared to 95.7% in the same period in 2016. This included a decrease in the current accident year loss ratio to 67.9% this quarter from 75.6% in the second quarter of 2016. During the second quarter of 2017, we incurred pre-tax catastrophe and weather-related losses of $9 million, or 1.8 points, primarily attributable to U.S. weather-related events, compared to $61 million, or 12.2 points, of catastrophe and weather-related losses reported during the same period in 2016. After adjusting for the catastrophe and weather-related losses, the segment's current accident year loss ratio in the second quarter increased by 2.7 points, compared to the same period in 2016, primarily due to a large risk loss in our property lines, the impact of the Ogden rate change on our motor lines, and the ongoing adverse impact of rate and trend.

Net favorable prior year reserve development was $51 million, or 10.6 points, this quarter compared to $58 million, or 11.4 points, in the second quarter of 2016.

The segment's acquisition cost ratio was comparable to the same period in 2016 attributable to the impact of retrocessional contracts, largely offset by changes in the business mix.

The segment's general and administrative expenses in the second quarter of 2017 were comparable to the same period in 2016 reflecting the benefits from strategic capital partner arrangements.

For the six months ended June 30, 2017, our reinsurance segment reported underwriting income of $61 million compared to $103 million for the same period of 2016, principally associated with lower net favorable prior year reserve development relating to the Ogden rate change recognized in the first quarter.

Investments

Net investment income of $106 million for the quarter represents a $14 million increase from the second quarter of 2016, and a $7 million increase from the first quarter of 2017, primarily due to changes in the fair value of our alternative investments ("other investments"). These investments generated a gain of $24 million in the current quarter, compared to a gain of $14 million in the second quarter of 2016, and a gain of $19 million in the first quarter of 2017.

Net realized investment losses for the quarter were $4 million, compared to net realized investment gains of $21 million in the second quarter of 2016, and net realized investment losses of $25 million in the first quarter of 2017.

Capitalization / Shareholders’ Equity

Our total capital6 at June 30, 2017 was $6.9 billion, including $1 billion of senior notes and $0.8 billion of preferred equity, compared to $7.3 billion at December 31, 2016. The decrease in total capital is attributable to the redemption of the remaining $351 million of 6.875% Series C preferred shares, as well as the repurchase of $282 million of our common shares during the first six months of 2017. These decreases were partially offset by net income generated in the period as well as an increase in unrealized investment gains reported in other comprehensive income, following an increase in the market value of our fixed income and equity investment portfolios in the six months ended June 30, 2017.

At July 26, 2017, the Company had $739 million of remaining authorization under our Board-authorized share repurchase program for common share repurchases through December 31, 2017. Following the offer to acquire Novae on July 5th, 2017, the Company has suspended its open market share repurchase program. The offer is subject to regulatory approval and other customary closing conditions and is expected to close in the fourth quarter of this year.

Diluted book value per common share, calculated on a treasury stock basis, increased by $1.56 in the current quarter and by $2.83 over the past twelve months, to $60.45. The increase in the quarter was primarily driven by net income generated as well as an increase in unrealized investment gains reported in other comprehensive income, while the increase over the past twelve months was driven by net income generated during the period, partially offset by common share dividend declared and unrealized investment losses.

During the second quarter of 2017, the Company declared common dividends of $0.38 per share, with total common dividends declared of $1.49 per share over the past twelve months. Adjusted for dividends declared, the diluted book value per common share increased by $1.94, or 3%, for the quarter and $4.32, or 7%, over the past twelve months.

 
6 Total capital represents the sum of total shareholders' equity and our senior notes.
 

Conference Call

We will host a conference call on Thursday, July 27, 2017, at 9:00 AM (Eastern) to discuss the second quarter financial results and related matters. The teleconference can be accessed by dialing (888) 317-6003 (U.S. callers) or (412) 317-6061 (international callers) approximately ten minutes in advance of the call and entering the passcode 9599509. A live, listen-only webcast of the call will also be available via the Investor Information section of the Company’s website at www.axiscapital.com. A replay of the teleconference will be available for two weeks by dialing (877) 344-7529 (U.S. callers) or (412) 317-0088 (international callers) and entering the passcode 10109593. The webcast will be archived in the Investor Information section of the Company’s website.

In addition, a financial supplement relating to our financial results for the quarter ended June 30, 2017 is available in the Investor Information section of our website.

AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholders’ equity at June 30, 2017 of $5.9 billion and locations in Bermuda, the United States, Europe, Singapore, Middle East, Canada and Latin America. Its operating subsidiaries have been assigned a rating of “A+” (“Strong”) by Standard & Poor’s and “A+” (“Superior”) by A.M. Best. For more information about AXIS Capital, visit our website at www.axiscapital.com.

Read more...

Charles Taylor Announces Annual Results For 2016

Charles Taylor has announced its annual results for 2016.

David Marock, Group Chief Executive Office, Charles Taylor plc said: “Charles Taylor performed solidly overall in 2016, building on the strong growth achieved in 2015. Revenue grew significantly, while adjusted profit before tax and earnings have increased; we also made good progress on delivering our strategic growth strategy. We are reinvesting in the business to drive that growth, both organically and by undertaking strategic acquisitions, entering into joint ventures and making business investments. This will enable us to achieve scale economies, to diversify the business, and to deliver sustainable year-on-year growth, with reliable income streams. Our strategic investments are intended to create opportunities to drive future growth in the medium to longer term.”

The Group performed solidly overall in 2016, building on the strong growth achieved in 2015.  Revenue grew significantly, while adjusted profit before tax and earnings have increased; we also made good progress on delivering our strategic growth strategy.  We are reinvesting in the business to drive that growth, both organically and by undertaking strategic acquisitions, entering into joint ventures and making business investments.  This will enable us to achieve scale economies, to diversify the business, and to deliver sustainable year-on-year growth in earnings, with reliable income streams.  Our strategic investments are intended to create opportunities to drive future earnings growth in the medium to longer term.

Revenue increased by 18.1% to £169.3m and adjusted profit before tax increased by 4.0% to £14.8m.

The full results announcement is available here.

Read more...

ADNIC Reports AED205 Million Net Profit

Abu Dhabi National Insurance Company (ADNIC), one of the leading regional multi-line insurance providers for corporates and individuals, has announced its preliminary financial results for full-year 2016. The Company reported a net profit of AED 205 million for this year, a significant turnaround back into strong profit.

Commenting on the strong results, Shaikh Mohamed Bin Saif Al-Nahyan, Chairman of ADNIC, said: “The Board of Directors is pleased to note that ADNIC hassustained its profitability throughout 2016 with continued strong underwriting and net profit growth for the last quarter of this year. The realignment of ADNIC’s operational strategy has delivered positive results and has enabled the Company to report a strong financial performance.”

Key Financial Highlights

Gross Premium Written

For the year 2016, ADNIC’s Gross Premium Written was AED 2.38 billion compared to AED 2.29 billion last year.

Premium Retention

The overall premium retention ratio for the company reached 44% for the year 2016 compared to 48% for 2015. 

Net Underwriting Result

For the year 2016, ADNIC reported a Net Underwriting profit of AED 342.6 million, against a Net Underwriting Loss of AED 228.9 million for 2015. 

Net Investment Income

ADNIC’s Net Investment and Other Income was AED 102.4 million for 2016 compared to AED 102.0 million for 2015.

General and Administrative Expense

General and Administrative Expenses was AED 239.9 million for 2016 compared to AED 207.6 million for 2015. 

Net Result

The company has reported a net profit of AED 205.0 million for 2016, compared to a net loss of AED 334.5 million for 2015. 

Cash Balances

ADNIC’s cash balances increased by 54.4% to AED 1.030 billion as on December 31st 2016, compared to AED 667 million last year.

Total Investments

Total company investments including cash in time deposits, bank accounts and investment properties increased by 14.6% to AED 3.14 billion as on December 31st 2016, compared to AED 2.74 billion as on December 31st 2015.

Total Assets

The total assets of the company increased by 15.8% to AED 6.49 billion as on December 31st 2016, compared to AED 5.60 billion as at December 31st 2015.

Shareholders’ Equity

The Shareholders’ Equity position increased by 42.2% to AED 1.7655 billion as on 31st December 2016, compared to AED 1.2412 billion as on 31st December 2015. The issuance of Mandatory Convertible Bonds (MCB) as well as the net profit contributed to the growth in the shareholders’ equity.

Ahmad Idris, CEO of ADNIC said: “I am pleased to report that ADNIC has achieved strong results in 2016. The implementation of prudent underwriting strategy has resulted in premium growth for the year and also has strengthened ADNIC’s long term financial and operational performance. The management team is thankful to our customers, business partners and shareholders, who have supported the continuous development of ADNIC”

 

Read more...

Cigna Reports Third Quarter 2016 Results Led By Strong Commercial Health Care Performance

Cigna Corporation (NYSE: CI) has reported third quarter 2016 results with solid revenue and earnings, led by strong performance in Commercial health care.

Total revenues in the quarter were $9.9 billion, an increase of 5% over third quarter 2015, driven by continued growth in Cigna's targeted customer segments.

For the third quarter of 2016, shareholders’ net income was $456 million, or $1.76 per share, compared with $547 million, or $2.10 per share, for the third quarter of 2015. Third quarter 2016 shareholders’ net income included special item1 charges of $71 million after-tax, or $0.28 per share, for transaction costs related to Cigna’s proposed combination with Anthem and a litigation matter, while third quarter 2015 shareholders’ net income included $29 million after-tax, or $0.11 per share, of transaction costs related to Cigna’s proposed combination with Anthem.

Cigna's adjusted income from operations for the third quarter of 2016 was $503 million, or $1.94 per share, compared with $593 million, or $2.28 per share, for the third quarter of 2015.

“Cigna’s third quarter financial results are driven by our focus on affordable solutions and quality health outcomes for our customers and clients,” said David M. Cordani, President and Chief Executive Officer. “As we look to 2017, our commitment to delivering sustained value through innovative programs provides us with attractive growth opportunities in each of our businesses.”

 

Read more...

Aon Reports Third Quarter 2015 Results

Aon plc (NYSE: AON) reported results for the three months ended September 30, 2015.

Net income attributable to Aon shareholders was $295 million, or $1.04 per share, compared to $309 million, or $1.04 per share, for the prior year quarter.  Net income per share attributable to Aon shareholders, adjusted for certain items, decreased 4% to $1.24, compared to $1.29 in the prior year quarter, including a $0.09 per share unfavorable impact on adjusted net income from continuing operations if the Company were to translate prior year quarter results at current quarter foreign exchange rates ("foreign currency translation").  The prior year quarter included a $25 million pre-tax, or $0.07 per share after tax, gain related to the sale of a business.  Certain items that impacted third quarter results and comparisons with the prior year quarter are detailed in the "Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings per Share" on page 12 of this press release. 

"In our seasonally weakest quarter, our results reflect organic revenue growth and operating margin expansion across both segments, effective capital management and significant free cash flow generation, despite the impact of unfavorable foreign currency translation and macroeconomic challenges," said Greg Case, president and chief executive officer.  "Driven by our industry-leading portfolio and investments across data and analytics, we expect a strong fourth quarter and finish to the year across each of our key metrics, further positioning the firm for free cash flow generation and shareholder value creation."

THIRD QUARTER FINANCIAL SUMMARY

Total revenue decreased 5% to $2.7 billion compared to the prior year quarter driven primarily by a 7% unfavorable impact from foreign currency translation, partially offset by 2% organic revenue growth.

Total operating expenses for the third quarter decreased 5% to $2.3 billion compared to the prior year quarter due primarily to a $162 million favorable impact from foreign currency translation and a $12 million decrease in intangible asset amortization, partially offset by an increase in expense to support 2% organic revenue growth.

Depreciation expense decreased 8%, or $5 million, to $56 million compared to the prior year period.

Intangible asset amortization expense decreased 13%, or $12 million, to $78 million compared to the prior year quarter, consisting of a $10 million decrease in HR Solutions and a $2 million decrease in Risk Solutions.

Foreign currency exchange rates in the third quarter had a $0.09 per share, or $30 million pretax, unfavorable impact (-$25 million in Risk Solutions and -$5 million in HR Solutions) on adjusted net income from continuing operations, if the Company were to translate prior year quarter results at current quarter foreign exchange rates.

Effective tax rate used in the U.S. GAAP financial statements in the third quarter was 14.0%, compared to the prior year quarter of 19.1%.  After adjusting to exclude the applicable tax impact associated with expenses for legacy litigation incurred in the second quarter, the adjusted effective tax rate for the third quarter of 2015 declined to 16.0% compared to 19.1% in the prior year quarter, due primarily to certain favorable discrete items. 

Average diluted shares outstanding decreased to 283.8 million in the third quarter compared to 296.1 million in the prior year quarter.  The Company repurchased 6.3 million Class A Ordinary Shares for approximately $600 million in the third quarter.  As ofSeptember 30, 2015, the Company had $4.5 billion of remaining authorization under its share repurchase program.

Cash flow from operations for the first nine months of 2015 increased 22%, or $192 million, to $1.1 billion driven by working capital improvements and a decline in cash paid for pension contributions, taxes, and restructuring.

Free cash flow, defined as cash flow from operations less capital expenditures, for the first nine months of 2015 increased 21%, or $146 million, to $850 million driven by an increase in cash flow from operations, partially offset by a $46 million increase in capital expenditures primarily due to real estate related projects.  

THIRD QUARTER SEGMENT REVIEW

Certain noteworthy items impacted operating income and operating margins in the third quarters of 2015 and 2014.  The third quarter segment reviews provided below include supplemental information related to organic revenue, adjusted operating income and operating margin.

Risk Solutions total revenue decreased 8% to $1.7 billion compared to the prior year quarter due to an 8% unfavorable impact from foreign currency translation and a 1% decrease in commissions and fees related to acquisitions, net of divestitures, partially offset by 1% organic growth in commissions and fees.

Retail organic revenue increased 2% reflecting revenue growth in both the Americas and International businesses.  Americas organic revenue increased 4% driven by growth across all region and product lines, including strong new business generation in US Retail andCanada and effective management of the renewal book portfolio in Latin America.  International organic revenue increased 1% driven by growth in New Zealand and across Asia. 

Reinsurance organic revenue decreased 4% compared to the prior year quarter due primarily to an unfavorable market impact globally, a modest decline in facultative placements, and unfavorable timing, partially offset by record new business growth in treaty placements.

   

Three Months Ended

   

(millions)

 

Sep 30,
 2015

 

Sep 30,
 2014

 

%

 Change

Revenue

 

$

1,689

 

$

1,836

 

(8)%

Expenses

           

Compensation and benefits

 

979

 

1,055

 

(7)

Other general expenses

 

386

 

438

 

(12)

Total operating expenses

 

1,365

 

1,493

 

(9)

Operating income

 

$

324

 

$

343

 

(6)%

Operating margin

 

19.2%

 

18.7%

   

Operating income - adjusted

 

$

351

 

$

372

 

(6)%

Operating margin - adjusted

 

20.8%

 

20.3%

   

Compensation and benefits for the third quarter decreased 7%, or $76 million, compared to the prior year quarter due primarily to an $84 million favorable impact from foreign currency translation and a $9 million decrease in expenses related to acquisitions, net of divestitures, partially offset by an increase in expense to support 1% organic growth.

Other general expenses for the third quarter decreased 12%, or $52 million, compared to the prior year quarter due primarily to a $46 million favorable impact from foreign currency translation.

Third quarter operating income decreased 6% to $324 million compared to the prior year quarter. 

Read more...
Subscribe to this RSS feed