21st Century Reports Solid Q2 Numbers

California-based 21st Century Insurance Group reported another quarter of solid operating results with net income of $21.4 million, or $0.25 per share, for the quarter ended June 30, 2004, compared to net income of $29.2 million, or $0.34 per share, for the quarter ended June 30, 2003. The 2003 quarterly results included nonrecurring nonoperational items that increased net income by $9.1 million, or $0.11 per share.

For the six months ended June 30, 2004, net income was $41.2 million, or $0.48 per share, compared to $22.4 million, or $0.26 per share, for the same period in 2003. The results for the six months ended June 30, 2003 include the second quarter nonrecurring nonoperational income items of $9.1 million after-tax, or $0.11 per share, and a first quarter after-tax charge of $24.1 million, or $0.28 per share, to strengthen reserves on the 1994 Northridge earthquake claims.

The company showed continued strength in its core personal auto lines results:

— Direct premiums written increased 7.9% to $324.8 million in the second quarter ended June 30, 2004, compared to $300.9 million in the second quarter of 2003. For the six months ended June 30, 2004, direct premiums written increased 11.9% to $665.3 million compared to $594.5 million for the same period in 2003. — The combined ratio improved to 94.5% in the second quarter of 2004 compared to 96.2% for the same quarter a year ago. For the six months ended June 30, 2004, the combined ratio improved to 95.5% from 96.6% in 2003.

— Underwriting profit increased 65.3% for the three months ended June 30, 2004 to $18.0 million from $10.9 million in the second quarter of 2003. For the six months ended June 30, 2004, underwriting profit was $28.8 million, an increase of 52.6% over underwriting profit of $18.9 million for same period in 2003.

“Our solid underwriting results, increasing cash flows from operations and improved investment results continue to strengthen our returns to shareholders. We also are pleased with progress in our new Midwest markets, technology projects and resolution of remaining SB1899/Earthquake claims,” said CEO Bruce Marlow.

Cash flow from operations increased by 25.9% to $58.5 million for the second quarter of 2004 from $46.4 million in the second quarter of 2003. For the six months ended June 30, 2004, cash flow from operations increased by 36.2% to $116.0 million from $85.2 million for the same period in 2003. This resulted in an overall increase in total assets to $1.779 billion at June 30, 2004 from $1.738 billion at Dec. 31, 2003.