HCC Insurance Holdings Reports Record Net Earnings for the First Quarter of
oNet earnings of $105.9 million, or $1.05 per diluted share
oGAAP combined ratio of 83.8%
oNet written premium increased 4% to $579.2 million
oAnnualized return on equity of 11.9%
oAnnualized 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.
(Note: If clicking on the above links does not open in a new web page, please
cut and paste the above URLs into your browser's address bar.)
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,
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
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
Press spacebar to pause and continue. Press esc to stop.