Risk & Insurance Online

INSURERS DOWN IN '08

A tough fourth quarter rounded out a harsh year for many insurers. The Hartford reported a fourth-quarter loss of $806 million or $2.71 per diluted share, compared with a gain of $595 million or $1.88 per diluted share in the fourth quarter of 2007. For the full year, The Hartford lost $2.7 billion, compared with a profit of $2.9 billion in 2007.

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Profits in the fourth quarter at competitor ACE Ltd. dropped sharply in 2008, to just $20 million, down from $572 million in the same period the year before. Full-year net income dropped 54 percent to $1.19 billion, or $3.53 per diluted share, compared with $2.57 billion or $7.66 per diluted share for 2007.

But insurers' overall results often masked a relatively healthy property/casualty unit. In the fourth quarter, CNA swung to a loss of $336 million, down from net income of $164 million in the year-ago period. However, net income from the company's property/casualty operations for 2008 clocked in at $201 million, a bright spot indeed, but still well below the $1.07 billion in net income the segment delivered in 2007.

XL Capital Ltd. reported a $2.55 billion loss for 2008, compared with a net income of $275.9 million for 2007. For the fourth quarter, XL reported a $1.42 billion loss. Zurich Financial Services reported 2008 shareholder net income of $3.03 billion, down from $5.71 billion for the year-ago period. Fourth-quarter profit fell 87 percent following writedowns and losses on investments. Net income declined to $205 million from $1.53 billion in the fourth quarter of 2007.

BROKERS DO BETTER

Marsh & McLennan Cos. Inc. reported its fourth-quarter net income fell 6 percent to $80 million, compared with $85 million in the fourth quarter of 2007. Revenue fell 9 percent to $2.7 billion, while revenue at MMC's brokerage subsidiary Marsh Inc. fell 5 percent to $1.1 billion. For full year 2008, Marsh & McLennan lost $73 million, compared with a profit of $2.48 billion in 2007.

Willis Group Holdings Ltd. reported a 26 percent drop in net income to $303 million in 2008, due largely to integration costs of its acquisition of Hilb Rogal & Hobbs Co. and foreign currency movements. Willis reported growth in commissions and fees in 2008 of 12 percent to $2.8 billion.

Aon Corp. reported that net income for the fourth quarter fell 95 percent to $10 million, from $207 million in the year-ago period. Revenue for the quarter declined to $1.92 billion, from $2.01 billion in the same quarter last year. Net income for 2008 increased 71 percent to $1.5 billion, compared with $864 million for the prior year.

Arthur J. Gallagher posted fourth-quarter net income of $4.7 million, down nearly 80 percent from $23.4 million a year ago. The broker said its fourth-quarter revenues increased slightly, to $412.1 million from $410 million. For 2008, net earnings were down 44 percent, to $77.3 million from $138.8 million, while revenues increased slightly to $1.65 billion from $1.62 billion.

--Compiled by staff from news and wire reports.

March 3, 2009

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