-----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, Q9BhXcRwq5XRz2RapQ75qBnthwtBsuHXLOt2t9C3nYZrQ7PIB0k9Z3tRpZ8TqU3e arO2tjpjBS2V1+io7S4ROw== 0001034588-00-000009.txt : 20000419 0001034588-00-000009.hdr.sgml : 20000419 ACCESSION NUMBER: 0001034588-00-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000418 ITEM INFORMATION: FILED AS OF DATE: 20000418 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: 604055 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 18, 2000 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 18, 2000, HSB Group, Inc. (the "Company") issued three press releases announcing its first quarter earnings, declaring a dividend of 44 cents per share, and reporting on its Annual Meeting. 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 18, 2000 announcing first quarter results. 99(ii) Press release dated April 18, 2000 announcing the declaration of a dividend. 99(iii)Press release dated April 18, 2000 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 18, 2000 /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 FIRST QUARTER RESULTS HARTFORD, Conn., April 18, 2000 -- HSB Group, Inc. (NYSE-HSB) today reported that first quarter net income per share on a fully diluted basis was $.68 cents compared to $.35 cents in the fourth quarter of 1999 and $.71 in the first quarter of 1999. Operating income per share, which excludes realized gains, was $.43 cents and compares to $.13 in the fourth quarter and $.57 in the first quarter of last year. The combined ratio was 93.3 percent reflecting the company's disciplined approach to underwriting. Net earned premiums declined 5.4 percent as a result of the company's decision to reduce its risk-bearing position in Industrial Risk Insurers. HSB continued to experience solid growth in its domestic commercial breakdown business. The change-over to Year 2000 did not result in any substantive increase in claim activity. Net Engineering Services revenues for the first quarter increased 34 percent over the first quarter of 1999. The engineering services margin was 8 percent compared to a loss in the fourth quarter of 1999. The margin in the first quarter of last year was 8.4 percent. Income from investment operations was $28.2 million compared to $22.8 million in the first quarter of 1999. Realized gains for the quarter were $.25 cents per share and reflect the strong performance of the equity portfolio and the company's decision to somewhat reduce its exposure to common stocks. The company bought back approximately 280,000 shares or about 1 percent of its shares outstanding during the first quarter. "The results for the first quarter were in line with expectations and represent significant improvement over the fourth quarter," said Richard Booth, chairman, president and chief executive officer. "Our Engineering Services and Commercial equipment breakdown insurance businesses had strong performance during the quarter. In addition, our equity portfolio continued to provide solid returns. We will continue to focus on initiatives which will add to our operating earnings performance in the future." HSB Group, Inc. (NYSE-HSB), the parent company of The Hartford Steam Boiler Inspection and Insurance Company, is a global provider of specialty insurance products, engineering services, and management consulting. The Hartford Steam Boiler Inspection and Insurance Company was founded in 1866 to provide loss prevention service and insurance to businesses, industries and institutions. For more information about HSB, visit its web site at www.hsb.com. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are management's estimates, assumptions and projections and are not guarantees of future performance. Forward-looking statements involve known and unknown risks and uncertainties. These and other important factors, including those mentioned in various Securities and Exchange Commission filings made periodically by the company, may cause the company's actual results and performance to differ materially. Investors and prospective investors should read this news release in conjunction with the company's most recent Form 10-K, Form 10-Q and other documents filed with the Securities and Exchange Commission. Summary of Operations In millions, except per share amounts Quarter Ended March 31, Percent 2000 1999 Change - ------------------------------------------------------------------------------- Gross earned premiums..........................$ 182.1 $ 208.9 Ceded premiums................................. 90.8 112.4 -------------------- Insurance premiums..........................$ 91.3 $ 96.5 -5.4% Claims and adjustment expenses................. 38.8 38.3 Policy acquisition expenses.................... 19.8 22.6 Underwriting and inspection expenses........... 26.6 24.0 -------------------- Insurance operating gain....................$ 6.1 $ 11.6 -------------------- Loss ratio*............................... 42.4% 39.7% Expense ratio*............................ 50.9% 48.0% Combined ratio*........................... 93.3% 87.7% Engineering services revenues..................$ 37.0 $ 27.6 34.1% Engineering services expenses.................. 34.0 25.2 -------------------- Engineering services operating gain.........$ 3.0 $ 2.4 -------------------- Engineering services operating margin*.................................. 8.0% 8.4% Investment income, net of related interest expense.............................$ 14.9 $ 15.7 -5.1% Realized investment gains...................... 13.3 7.1 -------------------- Income from investment operations...........$ 28.2 $ 22.8 Interest expense............................... 0.6 0.4 Income before income taxes and distributions on capital securities.........$ 36.7 $ 36.4 Income taxes................................... 12.2 10.9 Distribution on capital securities of subsidiary trusts, net of tax................ 4.7 4.5 -------------------- Net income.....................................$ 19.8 $ 21.0 ==================== Net income per common share-assuming dilution.....................................$ 0.68 $ 0.71 Dividends declared per common share............$ 0.44 $ 0.42 Average common shares outstanding and common stock equivalents..................... 34.4 34.5 - ------------------------------------------------------------------------------ *Computation excludes rounding Summary of Financial Position In millions, except per share amounts March 31, 2000 December 31, 1999 - -------------------------------------------------------------------------------- Assets Cash and short-term investments................$ 118.1 $ 126.5 Fixed maturities, at fair value................ 488.6 489.8 Equity securities, at fair value............... 364.5 381.8 ------------------------------ Cash and invested assets..................... 971.2 998.1 Reinsurance assets............................. 713.8 850.3 Insurance premiums receivable.................. 58.2 104.4 Engineering services receivable................ 39.5 39.1 Fixed assets................................... 55.6 58.2 Other assets................................... 208.7 213.1 ------------------------------ Total assets.................................$ 2,047.0 $ 2,263.2 ============================== Liabilities Unearned insurance premiums and ceding commissions..................................$ 324.5 $ 420.1 Claims and adjustment expenses................. 735.5 782.3 Total borrowings............................... 49.6 66.6 Other liabilities.............................. 155.2 208.7 ------------------------------ Total liabilities............................ 1,264.8 1,477.7 Company obligated mandatorily redeemable capital securities of subsidiary Trust I holding solely junior subordinated deferrable interest debentures of the Company, net of unamortized discount....... 109.0 109.0 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.............................. 373.2 376.5 ------------------------------ Total..........................................$ 2,047.0 $ 2,263.2 ============================== Shareholders' equity per common share*............$ 12.92 $ 12.95 Based on common shares outstanding of............. 28.9 29.1 Pro forma shareholders' equity per common share assuming conversion of Trust II capital securities and net exercise of in the money HSB stock options*.....$ 19.70 $ 19.61 Based on pro forma common shares outstanding...... 34.2 34.5 - -------------------------------------------------------------------------------- *Computation excludes rounding 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 18, 2000 -- The Board of Directors of HSB Group, Inc. (NYSE-HSB) today declared the regular quarterly dividend of 44 cents per share. The dividend will be payable on July 27, 2000 to shareholders of record at the close of business on July 10, 2000. This marks the 130th 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) CONTACT: James C. Rowan Jr. Office: (860) 722-5180 FOR IMMEDIATE RELEASE HSB GROUP, INC. HOLDS ANNUAL MEETING HARTFORD, Conn., April 18, 2000 -- HSB Group, Inc. (NYSE-HSB) held its 135th annual meeting today at the company's headquarters. Chairman, President and Chief Executive Officer Richard H. Booth discussed the company's performance in 1999, results for the first quarter of 2000 and strategies to grow the company's operating earnings and shareholder value. The primary strategy for the company's commercial insurance business is continued growth through reinsurance arrangements with other insurers, HSB calls "client companies." By using this approach, HSB efficiently leverages the significant customer base of its client companies to increase market penetration for its equipment breakdown products. In engineering services, the company is taking steps to build on the improved profitability that was achieved during the first quarter while continuing to invest in "new economy" growth businesses, such as Integrated Process Technologies that capitalize on the trend in industry toward outsourcing management of equipment and facilities. HSB is also seeking growth through value-added contracts, such as its recent agreement with Enron Energy Services. Under this arrangement, HSB receives licensing fees and payments for services in support of Enron's asset management service business. "The engineering capabilities we have developed are attractive to other companies. We aspire to effect other agreements that utilize HSB's intellectual capital with additional customers this year," said Mr. Booth. In addition, HSB has embarked on a company-wide profit improvement process. The purpose of this program is to increase earnings over time through a combination of revenue growth, improved loss control, and the elimination of unnecessary costs. In closing, Mr. Booth said: "In the future, I see HSB as an architect of new ideas and business solutions to help our customers meet the challenges and opportunities of the `new economy.'" During the business portion of the meeting, shareholders elected three directors for three-year terms: William B. Ellis, senior fellow, Yale University School of Forestry and Environmental Studies; E. James Ferland, chairman, president and chief executive officer, Public Service Enterprise Group Inc.; and Henrietta Holsman Fore, chairman and chief executive officer, Holsman International. Shareholders also appointed independent public accountants. HSB Group, Inc. (NYSE-HSB), the parent company of The Hartford Steam Boiler Inspection and Insurance Company, is a global provider of specialty insurance products, engineering services, and management consulting. The Hartford Steam Boiler Inspection and Insurance Company was founded in 1866 to provide loss prevention service and insurance to businesses, industries and institutions. For more information about HSB, visit its web site at www.hsb.com. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are management's estimates, assumptions and projections and are not guarantees of future performance. Forward-looking statements involve known and unknown risks and uncertainties. These and other important factors, including those mentioned in various Securities and Exchange Commission filings made periodically by the company, may cause the company's actual results and performance to differ materially. Investors and prospective investors should read this news release in conjunction with the company's most recent Form 10-K, Form 10-Q and other documents filed with the Securities and Exchange Commission. # # # -----END PRIVACY-ENHANCED MESSAGE-----