-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I0DW4NsniIl0i4A8lymvn4IceF8ZwDwt6ckd0ZlYCchTXqrrrRjSbmBKZHOEVpeY q2K3Ir11oIz3t2op2VuhwQ== 0001034588-99-000007.txt : 19990422 0001034588-99-000007.hdr.sgml : 19990422 ACCESSION NUMBER: 0001034588-99-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990420 ITEM INFORMATION: FILED AS OF DATE: 19990421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HSB GROUP INC CENTRAL INDEX KEY: 0001034588 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 061475343 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13135 FILM NUMBER: 99598014 BUSINESS ADDRESS: STREET 1: ONE STATE ST STREET 2: P O BOX 5024 CITY: HARTFORD STATE: CT ZIP: 06102-5024 BUSINESS PHONE: 8607221866 MAIL ADDRESS: STREET 1: ONE STATE ST STREET 2: PO BOX 5024 CITY: HARTFORD STATE: CT ZIP: 06102 8-K 1 8-K FILING SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) - April 20, 1999 HSB Group, Inc. (Exact name of registrant as specified in its charter) Connecticut 001-13135 06-1475343 (State or other (Commission (IRS Employer jurisdiction of incorporation) File Number) Identification No.) One State Street, Hartford, Connecticut 06102-5024 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code - (860-722-1866) Item 5. Other Events On April 20, 1999, HSB Group, Inc. (the "Company") issued press releases reporting its first quarter earnings, its declaration of a 42 cent per share dividend, and the details of its Annual Meeting of shareholders. Included herewith as Exhibits 99(i), 99(ii), and 99(iii) are the Company's press releases related to these announcements and such information is incorporated herein by reference. Item 7. Exhibits. 99(i) Press release dated April 20, 1999 announcing first quarter results. 99(ii) Press release dated April 20, 1999 announcing the declaration of a dividend. 99(iii) Press release dated April 20, 1999 reporting on the Company's annual meeting. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HSB Group, Inc. Dated: April 21, 1999 /s/ R. Kevin Price R. Kevin Price Senior Vice President and Corporate Secretary EX-99 2 PRESS RELEASE Exhibit 99(i) CONTACT: James C. Rowan Jr. Office: (860) 722-5180 FOR IMMEDIATE RELEASE HSB GROUP, INC. REPORTS GAINS IN FIRST QUARTER HARTFORD, Conn., April 20, 1999 -- HSB Group, Inc. (NYSE-HSB) today reported first quarter income per share from continuing operations of $.71 cents, a 20 percent increase over first quarter 1998 which, on a comparable basis, was $.59. (Including the one-time gain from the sales of the company's interests in Industrial Risk Insurers (IRI) and Radian International LLC, net income per share for the first quarter of 1998 was $2.17.) HSB Group's gross earned insurance premiums grew 16.3 percent. The combined ratio -- the sum of losses and expenses as a percentage of insurance revenue -- was 87.7 percent compared to 89.2 percent last year. Net engineering services revenues increased 40.4 percent over the first quarter of 1998. The margin was 8.4 percent. Income from investment operations was $22.8 million compared to $18.4 million in the first quarter of 1998. Realized gains were $.14 per share. Shareholders' equity declined modestly since December 31, 1998 primarily as a result of the repurchase of shares. "We enter 1999 well positioned to continue building increased value for shareholders," said Gordon W. Kreh, chairman, president and chief executive officer. HSB Group, Inc. is a global provider of insurance products and engineering management consulting services. HSB Group is the parent company of The Hartford Steam Boiler Inspection and Insurance Company, founded in 1866 to provide loss prevention service and insurance to businesses, industries and institutions. For more information about HSB, visit its website at www.hsb.com. Summary of Operations In millions, except per share amounts
Quarter Ended March 31 Percent 1999 1998 Change - ----------------------------------------------------- ------------- -------------- ------------ Gross earned premium $ 208.9 $ 179.7 16.3% Ceded premiums 112.4 80.3 ------------- -------------- ------------ Insurance premium 96.5 99.4 Claims and adjustment expenses 38.3 44.6 Policy acquisition expenses 22.6 14.6 Underwriting and inspection expenses 24.0 29.7 ------------- -------------- Insurance operating gain $ 11.6 $ 10.5 ------------- -------------- Loss ratio 39.7% 44.9% Expense ratio 48.0% 44.3% Combined ratio 87.7% 89.2% Engineering services revenues $ 27.6 $ 19.7 40.4% Engineering services expenses 25.2 17.9 ------------- -------------- ------------ Engineering services operating gain $ 2.4 $ 1.8 ------------- -------------- ------------ Engineering services operating margin 8.4% 8.9% Investment income, net of related interest expense $ 15.7 $ 15.2 3.6% Realized investment gains 7.1 3.2 ------------- -------------- ------------ Income from investment operations $ 22.8 $ 18.4 Interest expense 0.4 0.1 Gain on sale of IRI - 39.0 Income from continuing operations before income taxes and distributions on capital securities $ 36.4 $ 69.6 Income taxes 10.9 22.5 Distribution on capital securities of subsidiary trusts, net of tax 4.5 4.5 ------------- -------------- Income from continuing operations $ 21.0 $ 42.6 Discontinued operations: After tax gain on disposal of Radian International LLC, net of deferred loss - 30.3 ------------- -------------- Net income $ 21.0 $ 72.9 ------------- -------------- Earnings per share-assuming dilution: Income from continuing operations $ 0.71 $ 1.31* Net income $ 0.71 $ 2.17** Dividends declared per common share $ 0.42 $ 0.40 Average common shares outstanding and common stock equivalents 34.5 35.2
*Includes $0.72 from Gain on sale of IRI. **Includes $0.72 from Gain on sale of IRI and $0.86 from Gain on sale of Radian. Summary of Financial Position In millions, except per share amounts
March 31, 1999 December 31, Percent 1998 Change -------------------------------------------- Assets Cash and short-term investments $ 94.2 $ 80.6 Fixed maturities, at fair value 559.1 577.1 Equity securities, at fair value 426.8 437.1 ----------------- --------------- ---------- Cash and invested assets 1,080.1 1,094.8 Reinsurance assets 637.3 630.4 Insurance premiums receivable 109.7 146.7 Engineering services receivable 32.6 26.1 Fixed assets 54.7 54.9 Other assets 198.6 191.1 ----------------- --------------- ---------- Total asset $ 2,113.0 $ 2,144.0 -1.4% ----------------- --------------- ---------- Liabilities Unearned insurance premiums and ceding commissions $ 454.6 $ 477.9 Claims and adjustment expenses 558.0 550.3 Total borrowings 51.3 46.1 Other liabilities 226.0 241.5 ----------------- --------------- ---------- Total liabilities 1,289.9 1,315.8 Company obligated mandatorily redeemable capital securities of subsidiary Trust I holding solely junior subordinated deferrable interest debentures of the Company, net of unamortized discount 108.9 108.9 Company obligated mandatorily redeemable convertible capital securities of subsidiary Trust II holding solely junior subordinated deferrable interest debentures of the Company 300.0 300.0 Shareholders' equity 414.2 419.3 ----------------- --------------- ---------- Total $ 2,113.0 $ 2,144.0 ----------------- --------------- ---------- Shareholders' equity per common share $ 14.28 $ 14.53 -1.7% Based on common shares outstanding of 29.0 28.9 Pro forma shareholders' equity per common share assuming conversion of Trust II capital securities and net exercise of in the money HSB stock options $ 20.65 $ 20.77 Based on pro forma common shares outstanding 34.6 34.6
- # # # - EX-99 3 PRESS RELEASE Exhibit 99(ii) CONTACT: James C. Rowan Jr. Office: (860) 722-5180 FOR IMMEDIATE RELEASE HSB GROUP, INC. DECLARES DIVIDEND HARTFORD, Conn., April 20, 1999 -- The Board of Directors of HSB Group, Inc. (NYSE-HSB) today declared a regular quarterly dividend of 42 cents per share. The dividend will be payable on July 29, 1999, to shareholders of record at the close of business on July 9, 1999. This marks the 129th consecutive year in which Hartford Steam Boiler has paid a dividend, one of the longest records of the New York Stock Exchange. # # # EX-99 4 PRESS RELEASE Exhibit 99(iii) MEDIA CONTACT: James C. Rowan Office: (860) 722-5180 FOR IMMEDIATE RELEASE HSB GROUP, INC. HOLDS ANNUAL MEETING HARTFORD, Conn., April 20, 1999 -- HSB Group, Inc. (NYSE: HSB) announced strong results for 1998 and a positive outlook for continued growth in 1999 at its annual meeting held today at the company's headquarters. Chairman, President and Chief Executive Officer Gordon W. Kreh called 1998 a good year for HSB. "During the year, we realized continued profitable growth in our insurance businesses, excellent expansion and increased operating gains in our engineering segment, and significant investment return and appreciation of our portfolios. Net income per share was $4.21, compared to $2.20 in 1997 -- a 91 percent increase. Income from continuing operations, excluding the sale of Industrial Risk Insurers, was $2.67, compared to $2.20 in 1997, a 21 percent increase. These results confirm that our growth strategy is working." Gross earned premium grew to $770.5 million, an increase of 26 percent over 1997. This was attributable in large measure to growth in the company's global reinsurance business and formation of new alliances with other insurance companies. Kreh stated that the company's combined ratio -- the sum of losses and expenses expressed as a percentage of insurance revenue -- was 89 percent, compared to the industry average of 105 percent. Income from investment operations grew to $64 million, an increase of 74 percent over 1997. The increase reflected good performance in the portfolio, additional invested funds resulting from the IRI and Radian sales, and HSB's issuance of $300 million of capital securities on December 31, 1997. During the meeting, shareholders elected four directors for three-year terms, approved the amended 1995 Stock Option Plan, and appointed independent public accountants. Elected to three-year terms on the board of directors were: Joel B. Alvord, president and managing director of Shawmut Capital Management; Richard G. Dooley, consultant to Massachusetts Mutual Life Insurance Company; Gordon W. Kreh, chairman, president and chief executive officer of HSB Group, Inc.; and Lois D. Rice, guest scholar, Program in Economic Studies at the Brookings Institution. At the meeting, Kreh reviewed significant highlights of 1998: Conclusion of the sale of its interest in Radian International LLC to the Dow Chemical Company, and the sale of its 24-percent interest in Industrial Risk Insurers to Employers Reinsurance Corporation, a subsidiary of G.E. Capital Services. In May, HSB acquired Solomon Associates, the world's leader in defining industry performance standards and best practices for the petroleum refining industry. Also in May, HSB stock split three-for-two and the July and October regular quarterly dividend was adjusted to 40 cents a share from 60 cents a share to reflect the split. In July, HSB acquired Kemper Insurance Companies' monoline book of boiler and machinery business and their American Society Mechanical Engineers (ASME) code inspection business. HSB's greatest opportunity for growth is through HSB's relationships with other property-casualty insurers HSB calls `client companies.' Through special reinsurance agreements, HSB integrates equipment breakdown coverage into client companies' policies. "Growing reliance on equipment and technology is increasing the need for HSB's specialty insurance. This environment presents a tremendous opportunity, and we are aggressively pursuing it globally." Kreh said. Kreh projected continued domestic and international growth for HSB's Engineering Services, particularly for its engineering management consulting services. Increased demand for engineering management consulting is reflected in the continued growth of HSB Reliability Technologies, a subsidiary that provides companies with increased profitability through reliability programs. HSB Group, Inc. is a global provider of insurance products and engineering management consulting services. HSB is the parent company of The Hartford Steam Boiler Inspection and Insurance Company, founded in 1866 and the largest provider of equipment breakdown insurance in the world. -# # #- -----END PRIVACY-ENHANCED MESSAGE-----