California-based 21st Century Insurance Group reported a net loss for the year ended Dec. 31, 2001, of $27.6 million, or $0.32 diluted loss per share, compared to net income of $12.9 million, or $0.15 diluted earnings per share, for the prior year. Fourth quarter 2001 results were a net loss of $41.0 million, or $0.48 diluted loss per share, compared to net income of $1.8 million, or $0.02 diluted earnings per share for the prior year.
The company reported fourth quarter 2001 results were impacted by $50.0 million related to earthquake claims arising out of California Senate Bill 1899. In addition, the fourth quarter 2001 included $9.6 million of costs associated with workforce reductions and the settlement of litigation matters. The impact of these items reduced net income by $0.45 per diluted share in the fourth quarter. For the full year 2001, the impact of SB 1899 totaled $70.0 million and other items discussed above totaled $13.6 million that reduced net income by $0.64 per diluted share.
Operating income (net income before investment gains or losses and before the results of the homeowner and earthquake lines of business, which are in runoff) for the year 2001 was $24.8 million, or $0.29 diluted earnings per share, on gross written premiums of $898.9 million. This compares to 2000 operating income of $19.4 million, or $0.23 diluted earnings per share, on gross written premiums of $881.2 million.
According to 21st Century President and CEO, Bruce Marlow, the company worked hard during 2001 to bring the long standing homeowners and earthquake issues to a satisfactory conclusion and to improve the effectiveness of the company’s personal auto product.
Marlow said the company entered into a marketing agreement for new homeowner customers on Jan. 1, 2002, reinsured its existing homeowners’ book of business, and challenged the constitutionality of SB 1899 throughout 2001.
He added in the company’s personal auto lines, 21st Century dramatically improved the level of customer service, licensed more than 700 of its call center professionals, raised rates and launched it’s a new marketing campaign.
Was this article valuable?
Here are more articles you may enjoy.