Summary
The St. Paul Companies, Inc. reported a significant net loss of $659 million for the third quarter of 2001, a sharp contrast to the profit seen in the prior year. This loss was overwhelmingly driven by an estimated $866 million pretax operating loss from the September 11th terrorist attacks, which severely impacted the property-liability insurance segments. The company's balance sheet shows total assets of $37.7 billion and total liabilities of $31.3 billion as of September 30, 2001, with total shareholders' equity declining to $6.0 billion. Operationally, premiums earned increased year-over-year, but this was overshadowed by a massive increase in insurance losses and loss adjustment expenses, largely due to the September 11th events. The company has also divested its life insurance subsidiary, Fidelity and Guaranty Life Insurance Company, to Old Mutual plc, a transaction that resulted in a loss. Management has initiated a comprehensive strategic review following a change in CEO, signaling potential significant changes and restructuring charges in the upcoming quarter.
Key Highlights
- 1Reported a net loss of $659 million for Q3 2001, compared to a net income of $231 million in Q3 2000.
- 2The September 11th terrorist attacks resulted in an estimated net pretax operating loss of $866 million, significantly impacting property-liability insurance results.
- 3Premiums earned increased to $1.86 billion in Q3 2001 from $1.33 billion in Q3 2000, but were offset by a substantial rise in insurance losses and loss adjustment expenses.
- 4The company completed the sale of its subsidiary, Fidelity and Guaranty Life Insurance Company (F&G Life), to Old Mutual plc, incurring an after-tax loss of $74 million on the sale proceeds.
- 5Total assets stood at $37.7 billion and total liabilities at $31.3 billion as of September 30, 2001.
- 6Shareholders' equity decreased to $6.01 billion from $7.23 billion at the end of 2000, partly due to the net loss and share repurchases.
- 7A new CEO, Jay S. Fishman, was appointed in October 2001, initiating a strategic review likely to lead to restructuring charges and changes in segment reporting.