CHICAGO, May 8, 2000 — CNA Surety Corporation (NYSE:SUR) today reported double-digit growth in operating earnings and net written premiums for the first quarter ended March 31, 2000. Premium growth for the quarter was particularly strong in the contract segment, driven by increased public construction nationwide. Highlights of the first quarter 2000 results compared with the same period in 1999 include:
- Operating earnings, after income taxes, increased 10 percent to $14.1 million, or 33 cents per share, from $12.8 million, or 29 cents per share, in 1999.
- Net income increased 8 percent to $14.1 million, or 33 cents per share, compared to $13.0 million, or 30 cents per share, in 1999.
- Net written premiums increased 14 percent to $79.2 million and contract surety premiums increased 21 percent.
- Underwriting income increased 8 percent to $17.3 million.
- The combined ratio was 77.1 percent for the first quarter ended March 31, 2000 compared with 76.5 percent in the first quarter of 1999.
"We continue to take great pride in our strong operating and financial results. In the first quarter, net written premiums for our core direct business grew 14 percent, led by a 21 percent increase in contract surety" said Mark C. Vonnahme, President and Chief Executive Officer of CNA Surety. "The generally robust public construction markets together with our positive new account activity over the last two years contributed to our strong contract growth. In addition, our distribution partners have responded very favorably to our new value added service offerings, such as our internally developed bONdLINEŽ system and SurePath™ product available through our alliance with InSure Vision Technologies, LLC. These Internet-based solutions and other service offerings are making it easier for agents and brokers to efficiently transact business with CNA Surety".
For the first quarter ended March 31, 2000, net income increased 8 percent to $14.1 million, or 33 cents per share, compared to $13.0 million, or 30 cents per share, in 1999. Operating earnings, after income taxes, increased 10 percent to $14.1 million, or 33 cents per share, from $12.8 million, or 29 cents per share, in 1999. These increases in operating earnings were primarily attributable to underwriting results as described below and a 14% increase in investment income resulting from higher average invested assets and general interest rate increases.
For the first quarter ended March 31, 2000, net written premiums increased 14 percent to $79.2 million with contract surety up 21 percent and commercial surety up 7 percent. Continued strong demand for domestic contract surety products was supplemented by increased direct international contract premium of $3.0 million for the quarter. The commercial surety premium increase for the quarter reflects increased volume particularly in the small commercial segment. International commercial reinsurance business increased $0.8 million to $3.0 million.
Underwriting income for the first quarter ended March 31, 2000 increased $1.3 million, or 8 percent, to $17.3 million. The Company’s loss and combined ratios were 17.9 percent and 77.1 percent, respectively, for the first quarter of 2000 compared with loss and combined ratios for the comparable 1999 quarter of 17.6 percent and 76.5 percent, respectively. The loss and combined ratios for the first quarter of 2000 include favorable loss reserve development of $2.1 million compared with favorable loss reserve development of $1.7 million for the first quarter of 1999. The expense ratio increased slightly to 59.2 percent in the first quarter of 2000 compared with the expense ratio of 58.9 percent in the comparable quarter of 1999.
Through March 31, 2000, the Company has repurchased approximately 1.2 million of its shares at an aggregate cost of $13.0 million. Further repurchase activity has been suspended pending resolution of the proposed tender offer by Continental Casualty Company for the remaining CNA Surety common stock that Continental Casualty and its affiliates do not own.
CNA Surety Corporation is the largest publicly traded surety company in the country. Through its principal subsidiaries, Western Surety Company and Universal Surety of America, CNA Surety provides surety and fidelity bonds in all 50 states through a combined network of approximately 37,000 independent agencies. Visit us at www.cnasurety.com on the World Wide Web.
CNA is a registered service mark, trade name and domain name of CNA Financial Corporation.
InSure Vision Technologies, LLC is the developer of SurePath™, a single entry, multi-use automated surety bond processing system which operates over the Internet.
CNA Surety Corporation
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