In its third quarter earnings release yesterday, Conseco announced improved earnings from operations and a series of one-time charges as new management continues to execute the turnaround of the Indianapolis-based company.
Conseco continued to show improvement in its two core business segments — insurance and finance. It reported pre-tax operating earnings from its continuing insurance operations of $192.3 million — the highest in the last four quarters and up 18 percent over the second quarter.
Similarly, pre-tax operating earnings from Conseco Finance were the highest of the previous four quarters at $40.0 million. Net income from continuing operations before the charges outlined below was $49.2 million, or $0.15 per share of common stock.
Conseco CEO Gary Wendt also disclosed that prior to undertaking the company’s debt restructuring, management sought an objective third-party evaluation of the company’s intangible assets. That actuarial study, conducted by Milliman & Robertson, examined the adequacy of the company’s reserves, the recoverability of its intangibles, and its GAAP and Statutory profitability. The results of that examination were shared with the 25 banks participating in the company’s bank consortium prior to their approval of the debt restructuring agreement. Additionally M&R’s analysis was made available to rating agencies, including A.M. Best prior to their announced change in rating outlook from “developing” to “positive.”
The company also noted that the combined risk-based capital ratio of Conseco’s insurance subsidiaries is over 250 percent of required capital. This industry measure of capital adequacy is higher than many highly regarded A-rated carriers.
Was this article valuable?
Here are more articles you may enjoy.