- Net earnings of $105.9 million, or $1.05 per diluted share
- GAAP combined ratio of 83.8%
- Net written premium increased 4% to $579.2 million
- Annualized return on equity of 11.9%
- Annualized operating return on equity(a) of 11.4%
HOUSTON, April 30, 2013 (GLOBE NEWSWIRE) -- HCC Insurance Holdings, Inc. (NYSE:HCC) today released results for its first quarter ended March 31, 2013.
Net earnings were $105.9 million, or $1.05 per diluted share, for the first quarter of 2013, compared to $82.6 million, or $0.79 per diluted share, for the first quarter of 2012.
The Company's combined ratio was 83.8% for the first quarter of 2013, compared to 85.5% for the first quarter of 2012. HCC's paid loss ratio was 53.4% for the first quarter of 2013, compared to 63.0% for the same quarter of 2012. The 2012 paid loss ratio included 5.1 percentage points related to a commutation in Exited Lines. HCC had no loss development in either the first quarter of 2013 or 2012. The 2013 results included accident year pretax net catastrophe losses of $5.2 million, which reduced net earnings by $0.03 per share. The 2012 results included accident year pretax net catastrophe losses of $7.6 million, which reduced net earnings by $0.05 per share.
"Building on momentum from our record performance for full-year 2012, HCC began 2013 with its best-ever first quarter earnings. We produced a combined ratio of 83.8% and an operating return on equity well in excess of our stated goal. We believe HCC will continue to benefit from price improvements currently being experienced throughout many of our businesses," HCC Chief Executive Officer Christopher J.B. Williams said.
Book value per share increased 1.7% and 10.7% for the first quarter of 2013 and the last twelve months, respectively, to $35.68 at March 31, 2013. The Company purchased 0.7 million shares of its common stock during the first quarter of 2013 for $28.8 million at an average cost of $39.18 per share.
Gross written premium increased 5% to $720.2 million for the first quarter of 2013, compared to $682.7 million for the same quarter of 2012. Net written premium increased 4% to $579.2 million for the first quarter of 2013, versus $558.4 million for the same quarter of 2012. Net earned premium increased 3% to $561.2 million for the first quarter of 2013, compared to $547.1 million for the same quarter of 2012.
Investment income was $55.8 million for the first quarter of 2013, compared to $57.0 million for the same quarter of 2012. As of March 31, 2013, HCC's fixed maturity securities portfolio had an average rating of AA, with a duration of 4.9 years and an average long-term tax equivalent yield of 4.6%.
HCC generated operating cash flow of $69.2 million in the first quarter of 2013, compared to $125.2 million in the same quarter of 2012. Operating cash flow is cash flow from operating activities excluding surety collateral outflows of $67.1 million and $22.7 million in the first quarter of 2013 and 2012, respectively, as well as a payment of $27.5 million in 2012 to commute a large contract in Exited Lines. The Company's liquidity position remains strong with $343.1 million of cash and short-term investments and $270.6 million of available capacity under its $600.0 million revolving loan facility at March 31, 2013.
As of March 31, 2013, total assets were $10.2 billion, shareholders' equity was $3.6 billion and the Company's debt to total capital ratio was 14.7%.
For further information about HCC's 2013 first quarter results, see the supplemental financial schedules that are accessible on HCC's website at http://www.hcc.com, as well as directly in the Investor Relations section of HCC's website at http://ir.hcc.com.
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HCC will hold an open conference call beginning at 8:00 a.m. Central Daylight Time on Wednesday, May 1. To participate, the number for domestic calls is (800) 374-0290 and the number for international calls is (706) 634-0161. There will also be a live webcast available on a listen-only basis that can be accessed through the HCC website at http://www.hcc.com. The webcast replay will be archived in the Investor Relations section of the HCC website through Friday, August 2, 2013.
Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. is a leading specialty insurer with offices in the United States, the United Kingdom, Spain and Ireland. HCC's major domestic and international insurance companies have financial strength ratings of "AA (Very Strong)" from Standard & Poor's Corporation, "A+ (Superior)" from A.M. Best Company, Inc., "AA (Very Strong)" from Fitch Ratings, and "A1 (Good Security)" from Moody's Investors Service, Inc.
For more information about HCC, please visit http://www.hcc.com.
a) Non-GAAP Financial Measure
Annualized operating return on equity is a non-GAAP financial measure under Regulation G and is calculated as net earnings excluding after-tax net realized investment gain/loss, other-than-temporary impairment credit losses, and foreign currency benefit/expense (collectively, operating earnings) divided by average shareholders' equity excluding accumulated other comprehensive income. To annualize a quarterly rate, the result is multiplied by four. See the supplemental financial schedules for a reconciliation of this non-GAAP financial measure to corresponding GAAP amounts. Management believes annualized operating return on equity is a useful measure for understanding the Company's profitability relative to shareholders' equity before consideration of investment-related gains/losses and foreign currency benefit/expense, both of which management excludes when evaluating operating results internally.
Forward-looking statements contained in this press release are made under "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The types of risks and uncertainties which may affect the Company are set forth in its periodic reports filed with the Securities and Exchange Commission.
CONTACT: Doug Busker, Director of Investor Relations HCC Insurance Holdings, Inc. Telephone: (713) 996-1192
Source:HCC Insurance Holdings, Inc.