EX-99 4 exh99-2.txt OHIO CASUALTY CORP - SUPPLEMENTAL FINANCIAL INFORMATION Exhibit 99.2 OHIO CASUALTY CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION FOR THE PERIOD ENDING MARCH 31, 2003 Contents: Page 1 GAAP Income Statement Data Page 2 Statutory P&C Data Page 3 P&C Accident Year Data Page 4 Supplemental Information Page 5 Stock Price and Dividend Record Ohio Casualty Corporation publishes forward-looking statements relating to such matters as anticipated financial performance, business prospects and plans, regulatory developments and similar matters. The statements contained in this release that are not historical information, are forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of 1933 and The Securities Exchange Act of 1934 for forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results for the Corporation's business and the results of the acquisition described herein, include the following: changes in property and casualty reserves; catastrophe losses; premium and investment growth; product pricing environment; availability of credit; changes in government regulation; performance of financial markets; fluctuations in interest rates; availability and pricing of reinsurance; litigation and administrative proceedings; Year 2000 issues; ability of Ohio Casualty to integrate and to retain the business acquired from the Great American Insurance Company, and general economic and market conditions. OHIO CASUALTY CORPORATION SUMMARY INCOME STATEMENT (in thousands, except per share data) FIRST QUARTER, 2003 (2003 Data Unaudited)
1ST QTR 2003 1ST QTR 2002 YEAR 2002 CONSOLIDATED ------------ ------------ --------- ------------ Premiums and finance charges earned $349,263 $361,007 $1,450,467 Investment income less expenses 53,247 50,902 207,133 Investment gains realized, net 19,293 22,831 45,192 -------- -------- ----------- Total revenues 421,803 434,740 1,702,792 Losses - GAAP basis $208,793 $211,769 $ 902,731 Loss adjustment expenses - GAAP basis 47,403 51,473 227,081 Underwriting expenses - GAAP basis 135,822 130,372 579,686 -------- -------- ----------- Total expenses 392,018 393,614 1,709,498 Income tax (benefit) expense: On investment gains realized $ 6,752 $ 7,991 $ 15,817 On all other income (loss) 3,121 6,262 (21,632) -------- -------- ----------- Total income tax (benefit) expense 9,873 14,253 (5,815) Net income (loss) $ 19,912 $ 26,873 $ (891) ======== ======== =========== Average shares outstanding - diluted 60,968 61,062 61,284 Net income (loss), per share - diluted $ 0.33 $ 0.44 $ (0.01) Ratio to Ratio to Ratio to Premiums Premiums Premiums PROPERTY AND CASUALTY - GAAP BASIS Earned Earned Earned ---------------------------------- -------- -------- -------- Premiums and finance charges earned $349,263 $361,007 $1,450,467 Investment income less expenses 51,483 50,700 205,794 Investment gains realized, net 19,221 23,481 45,371 Losses - GAAP basis 208,793 59.8% 211,769 58.7% 902,730 62.2% Loss adjustment expenses - GAAP basis 47,403 13.6% 51,473 14.3% 227,081 15.7% Underwriting expenses - GAAP basis 132,697 38.0% 127,873 35.4% 568,319 39.2% -------- ------ -------- ------ ---------- ------ Total expenses 388,893 111.4% 391,115 108.4% 1,698,130 117.1% Effective tax rate on investment income 33.1% 32.9% 33.9% CORPORATE/OTHER --------------- Investment income less expenses $ 1,764 $ 202 $ 1,339 Investment gains (losses) realized, net 72 (650) (179) Total expenses 3,125 2,499 11,368
OHIO CASUALTY CORPORATION PROPERTY AND CASUALTY INSURANCE DATA (in thousands) FIRST QUARTER, 2003 (2003 Data Unaudited)
1ST QTR 2003 1ST QTR 2002 OPERATING SEGMENTS and Statutory Statutory SELECTED PRODUCT LINES or Net Premiums Combined Net Premiums Combined MARKETS Written Ratio Written Ratio ------------------------- ------------ -------- ------------ -------- Commercial Lines $205,154 111.2% $192,815 108.3% Workers' compensation 37,637 134.8% 38,059 131.4% Commercial auto 58,857 106.0% 56,996 99.7% General liability 20,212 125.3% 20,892 144.4% CMP, fire and inland marine 88,448 101.1% 76,868 92.0% Specialty Lines $ 32,942 93.2% $ 39,450 83.4% Commercial umbrella 22,585 100.3% 28,598 85.9% Fidelity and surety 10,358 73.5% 9,472 84.6% Personal Lines $114,126 110.3% $142,636 107.3% New Jersey personal auto (616) 289.9% 24,432 116.4% Other personal lines 114,742 105.9% 118,204 104.8% Other personal auto 74,312 100.9% 78,780 102.8% Homeowners 32,686 114.5% 32,181 107.5% --------- ------ --------- ------ Total All Lines $352,222 108.8% $374,901 106.5% STATUTORY RESULTS Ratio Ratio ----------------- ----- ----- Premiums written $352,222 $374,901 Premiums earned 349,302 360,974 Losses incurred 208,222 59.6% 211,769 58.7% Loss adjustment expenses 47,403 13.6% 51,473 14.3% Underwriting expenses 125,502 35.6% 125,418 33.5% ------ ------ Underwriting gain (loss) (31,825) 108.8% (27,686) 106.5% ====== ====== Investment income 51,483 50,700 Investment gains (losses) realized 16,403 22,509 Other income (expense) - - Federal income tax expense (benefit) 8,533 2,485 --------- --------- Net income (loss) - statutory $ 27,528 $ 43,038 Included above: Dividends to policyholders 262 0.1% 88 0.0% Paid loss & loss adjustment expense 238,531 260,274
YEAR 2002 OPERATING SEGMENTS and Statutory SELECTED PRODUCT LINES or Net Premiums Combined MARKETS Written Ratio ------------------------- ------------ -------- Commercial Lines $ 762,189 115.1% Workers' compensation 143,911 129.2% Commercial auto 213,364 110.2% General liability 84,474 171.3% CMP, fire and inland marine 320,440 95.8% Specialty Lines 179,879 94.0% Commercial umbrella 132,655 97.7% Fidelity and surety 45,599 81.7% Personal Lines 506,560 114.1% New Jersey personal auto 24,172 154.8% Other personal lines 482,388 107.9% Other personal auto 297,117 107.1% Homeowners 153,678 110.3% ----------- ------ Total All Lines $1,448,628 112.8% STATUTORY RESULTS Ratio Premiums written $1,448,628 ----- Premiums earned 1,450,377 Losses incurred 902,201 62.2% Loss adjustment expenses 227,081 15.7% Underwriting expenses 506,204 34.9% ------ Underwriting gain (loss) (185,109) 112.8% ====== Investment income 205,794 Investment gains (losses) realized 53,011 Other income (expense) (7,707) Federal income tax expense (benefit) (9,159) ----------- Net income (loss) - statutory $ 75,148 =========== Included above: Dividends to policyholders (3,868) -0.3% Paid loss & loss adjustment expense 1,032,544
OHIO CASUALTY CORPORATION ADDITIONAL PROPERTY AND CASUALTY ACCIDENT YEAR DATA (in thousands) FIRST QUARTER, 2003 (Data Unaudited)
ACCIDENT ACCIDENT ACCIDENT THREE MONTHS YEAR 2003(A) YEAR 2002(A) YEAR 2002(A) ENDED Measured as Measured as Measured as MARCH 31, 2003 of March 2003 of March 2002 of March 2003 Statutory Statutory Statutory Statutory Combined Combined Combined Combined OPERATING SEGMENTS and Ratio Ratio Ratio Ratio SELECTED MAJOR PRODUCT -------------- ------------ ------------ ------------- LINES or MARKETS ---------------------- Commercial Lines 111.2% 109.7% 104.8% 103.2% Workers' compensation 134.8% 125.8% 120.4% 121.4% Commercial auto 106.0% 103.6% 100.4% 100.8% General liability 125.3% 113.8% 113.5% 113.2% CMP, fire and inland marine 101.1% 105.9% 97.6% 95.8% Specialty Lines 93.2% 103.3% 97.7% 93.8% Commercial umbrella 100.3% 111.1% 99.5% 97.7% Fidelity and surety 73.5% 80.4% 97.4% 85.3% Personal Lines 110.3% 107.1% 106.0% 110.8% New Jersey personal auto 289.9% 125.0% 113.2% 139.0% Other personal lines 105.9% 105.0% 103.9% 106.6% Other personal auto 100.9% 102.6% 102.7% 105.7% Homeowners 114.5% 115.9% 109.6% 111.2% ------ ------ ------ ------ Total All Lines 108.8% 108.0% 105.3% 105.5%
Note: (A) The loss and LAE ratio component of the accident year combined ratio measures losses and LAE arising from insured events that occurred in the respective accident year. The current accident year excludes losses and LAE for insured events that occurred in prior accident years. Accident year 2003 as of March 31, 2003 measures insured events for the first three months of 2003. Accident year 2002 as of March 31, 2002 measures insured events for the first three months of 2002. Accident year 2002 as of March 31, 2003 measures insured events for the full year 2002. Partial and complete accident periods may not be comparable due to seasonality, claim reporting and development patterns, claim settlement rates and other factors. OHIO CASUALTY CORPORATION SUPPLEMENTAL INFORMATION (in thousands) FIRST QUARTER, 2003 (2003 Data Unaudited)
3/31/2003 3/31/2002 --------- --------- ASSETS $4,828,035 $4,516,774 INVESTMENTS IN SECURITIES 3,510,294 3,320,468 AGENT RELATIONSHIPS ASSET 156,538 233,008 NOTES PAYABLE 198,226 199,067 SHAREHOLDERS' EQUITY 1,068,237 1,066,100 SHARES OUTSTANDING 60,759 60,298 BOOK VALUE PER SHARE $17.58 $17.68 PROPERTY AND CASUALTY ------------------------------------------------------------------------ Investments: GAAP Basis GAAP Basis ---------- ---------- U.S. government bonds 28,814 27,641 Tax exempt bonds 72,742 31,064 Taxable fixed maturities: Available for sale, at fair value 2,708,952 2,756,095 Held to maturity, at amortized cost 360,692 - --------- --------- Total bonds 3,171,200 2,814,800 Short Term 23,926 50,509 Preferred stocks - 321 Common stocks 270,325 437,745 --------- --------- Total investments 3,465,451 3,303,375 ========= ========= Amortized cost of bonds - available for sale 2,636,987 2,818,712 Market value of bonds - held to maturity 360,621 -
GAAP Statutory GAAP Statutory Accounting Accounting Accounting Accounting Basis Basis Basis Basis ---------- ---------- ---------- ---------- Insurance reserves Unearned premiums 675,919 628,229 676,485 640,986 Losses 2,012,237 1,660,094 1,660,094 1,593,870 Loss adjustment expense 460,271 435,723 409,181 391,083 Statutory policyholders' surplus 733,820 778,697 Ratios of net premiums written to statutory surplus 1.9 1.9
12/31/2002 ---------- ASSETS $4,778,994 INVESTMENTS IN SECURITIES 3,502,150 AGENT RELATIONSHIPS ASSET 161,324 NOTES PAYABLE 198,288 SHAREHOLDERS' EQUITY 1,058,703 SHARES OUTSTANDING 60,725 BOOK VALUE PER SHARE $17.43 PROPERTY AND CASUALTY ----------------------------------------------- Investments: GAAP Basis ---------- U.S. government bonds 29,082 Tax exempt bonds 46,788 Taxable fixed maturities: Available for sale, at fair value 3,022,676 Held to maturity, at amortized cost - --------- Total bonds 3,098,546 Short Term 49,838 Preferred stocks - Common stocks 312,537 --------- Total investments 3,460,921 ========= Amortized cost of bonds - available for sale 2,927,071 Market value of bonds - held to maturity -
GAAP Statutory Accounting Accounting Basis Basis ---------- ---------- Insurance reserves Unearned premiums 668,707 625,310 Losses 1,978,743 1,647,343 Loss adjustment expense 454,907 431,380 Statutory policyholders' surplus 725,748 Ratios of net premiums written to statutory surplus 2.0
Note: For further information on differences between statutory accounting principles and generally accepted accounting principles (GAAP), refer to Item 15 on pages 67 and 68 of the Corporation's Form 10-K for the year ended December 31, 2002. OHIO CASUALTY CORPORATION TEN YEAR BUSINESS, STOCK PRICE AND DIVIDEND RECORD FIRST QUARTER, 2003 (2003 Data Unaudited) BUSINESS The Ohio Casualty Corporation, an insurance holding company incorporated in 1969, owns The Ohio Casualty Insurance Company, which in turn owns West American Insurance Company (acquired in 1945), Ohio Security Insurance Company (acquired in 1962), American Fire and Casualty Company (acquired in 1969), Avomark Insurance Company (incorporated in 1997) and Ohio Casualty of New Jersey, Inc. (incorporated in 1998). One or more of the insurance companies are licensed in all states, including the District of Columbia. The Corporation operates in conjunction with the independent agency system and is currently active in over 40 states. The Corporation's common stock is traded on the NASDAQ National Market under the symbol "OCAS". PROPERTY AND CASUALTY NET PREMIUMS WRITTEN (in thousands) ------------------------------------------------------------------- Year Year ---- ---- 1993 $1,306,038 1998 $1,437,279 1994 1,286,443 1999 1,586,897 1995 1,250,554 2000 1,505,393 1996 1,209,202 2001 1,472,185 1997 1,207,581 2002 1,448,628 PRICE RANGE RECORD ------------------------------------------------------------------- Year High Low Year High Low ---- ---- --- ---- ---- --- 1993 $17.94 $14.38 1998 $25.56 $17.06 1994 16.88 13.25 1999 21.69 15.06 1995 19.50 14.13 2000 17.88 6.34 1996 19.63 15.19 2001 16.05 8.38 1997 25.38 17.19 2002 22.07 11.22 2003 13.12 11.57 DIVIDEND RECORD -------------------------------------------------------------------- Year Per Share Year Per Share ---- --------- ---- --------- 1993 $0.71 1998 $0.88 1994 0.73 1999 0.92 1995 0.76 2000 0.59 1996 0.80 2001 0.00 1997 0.84 2002 0.00 Visit our home page at www.ocas.com Contact: Ohio Casualty Group, Fairfield, Ohio Dennis E. McDaniel (513) 603-2197