Tower Group International, Ltd . ( TWGP ) reported net
operating income of 56 cents per share in first quarter 2013,
comfortably exceeding the Zacks Consensus Estimate of 51 cents.
Earnings improved 21.7% year over year.AXIS CAP HLDGS (AXS): Free Stock Analysis
ReportHCC INS HLDGS (HCC): Free Stock Analysis ReportHILLTOP HLDGS (HTH): Free Stock Analysis ReportTOWER GRP INTL (TWGP): Free Stock Analysis
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Including net realized gains on investments and
acquisition-related transaction costs, net income declined 23% year
over year to 33 cents in the reported quarter.
Total revenue was $475.3 million, up 1.9% year over year. The
upside was driven by higher ceding commissions from quota share
reinsurance treaty for Tower's homeowners business and higher net
realized investment gains. However, lower net investment income was
a partial offset. Results surpassed the Zacks Consensus estimate of
Gross premiums written and managed improved 17.8% to $550.4
million. The increase was primarily driven by growth in assumed
Net investment income was $30.3 million, declining 10.7% year over
Total expenses were $474.3 million, up 9.1% year over year. The
net combined ratio was 102.2% in the first quarter, down 310 basis
points year over year.
The company's Commercial segment witnessed an 18% hike in net
premium written to $377.5 million. Total revenue for the segment
increased 4% year over year to $311 million.
The Personal segment's net written premiums dipped 29% year over
year to $67.4 million. Total revenue for the segment decreased 1.8%
year over year to $126.8 million.
Revenues at the Insurance Services segment inched down 0.9% year
over year to $7.29 million, attributable to lower other
Tower's book value per share came in at $20.85 on Mar 31, 2013,
down 7.5% from $22.54 on Mar 31, 20112.
Operating return on average equity (ROE) was 9.8% in the reported
quarter compared with 7.9% in the year-ago quarter.
Dividend and Share Repurchase Update
On May 7, the board of directors of Tower approved a $50 million
share buyback program.
The board also approved a quarterly dividend of 16.5 cents per
share payable on Jun 21, 2013 to stockholders of record as of Jun
Mid March Tower closed its merger with Canopius Holdings Bermuda
Limited. Tower is now an indirect wholly owned subsidiary of
Canopius Bermuda. The latter has changed its name to Tower Group
International, Ltd. (Tower Ltd.), right after the merger
The shareowners of Tower had been given 1.1330 shares of Tower
Ltd. for each share owned.
Through the merger, Tower will gain access to the Bermuda
platform, which would provide competitive advantage to support
growth opportunities in the U.S. and international markets. Tower
expects a combined gross premium written of $2.3 billion in 2013,
taking into account business accretion from Canopius.
Tower Group expects to report 2013 operating earnings per share in
a range of $2.40 to $2.60.
Results of few other Property and Casualty
AXIS Capital Holdings Limited ( AXS ) reported
first-quarter 2013 net operating income of $1.92 per share, which
breezed past the Zacks Consensus Estimate of $1.19. Earnings surged
79% year over year.
Hilltop Holdings Inc . ( HTH ) reported
first-quarter 2013 operating earnings per share of 39 cents,
outpacing the Zacks Consensus Estimate of 31 cents and the year-ago
quarter figure of 1 cent.
HCC Insurance Holdings Inc .'s ( HCC ) first-quarter net
earnings came in at $1.08 per share, surpassing the Zacks Consensus
Estimate of 82 cents and year-ago earnings of 84 cents.
Tower Group carries a Zacks Rank #5 (Strong Sell).