Exhibit 99.2
OHIO CASUALTY CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
FOR THE PERIOD ENDING
JUNE 30, 2003
Contents: Page 1 GAAP Income Statement Data
Page 2 Statutory P&C Data
Page 3 P&C Accident Year Data
Page 4 Additinal P&C Accident Year Data
Page 5 Consolidated Balance Sheet Data and
Related Information
Page 6 Supplemental Information
Ohio Casualty Corporation publishes forward-looking statements relating to such
matters as anticipated financial performance, business prospects and plans,
regulatory developments and similar matters. The statements contained in this
release that are not historical information, are forward-looking statements.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor
under the Securities Act of 1933 and the Securities Exchange Act of 1934 for
forward-looking statements. The operations, performance and development of
the Corporation's business are subject to risks and uncertainties, which may
cause actual results to differ materially from those contained in or
supported by the forward-looking statements in this release. The risks and
uncertainties that may affect the operations, performance, development and
results of the Corporation's business include the following: changes in
property and casualty reserves; catastrophe losses; premium and investment
growth; product pricing environment; availability of credit; changes in
government regulation; performance of financial markets; fluctuations in
interest rates; availability and pricing of reinsurance; litigation and
administrative proceedings; rating agency actions; acts of war and terrorist
activities; ability of Ohio Casualty to retain business acquired from the
Great American Insurance Company; ability to achieve targeted expense savings;
ability to achieve targeted expense savings; ability to achieve premium
targets and profitability goals; and general economic and market conditions.
Ohio Casualty Corporation undertakes no obligation to publicly release any
revisions to the forward-looking statements contained in this release, or to
update them to reflect events or circumstances occurring after the date of
this release, or to reflect the occurrence of unanticipated events. Investors
are also advised to consult any further disclosures made on related subjects
in the Company's reports filed with the Securities and Exchange Commission or
in subsequent releases.
OHIO CASUALTY CORPORATION
SUMMARY INCOME STATEMENT - GAAP BASIS (in thousands, except per share data)
SECOND QUARTER, 2003
(2003 Data Unaudited)
Three Months Ended June 30
CONSOLIDATED 2003 2002
- ----------------------------------- --------------------------------------
Premiums and finance charges earned $ 351,263 $ 364,708
Investment income less expenses 51,331 50,700
Investment gains realized, net 6,838 9,491
----------- -----------
Total revenues 409,432 424,899
Losses $ 213,684 $ 223,897
Loss adjustment expenses 41,445 53,553
Underwriting expenses 126,394 118,926
Corporate and other expenses 10,711 7,924
----------- -----------
Total expenses 392,234 404,300
Income tax (benefit) expense:
On investment gains realized $ 2,394 $ 3,322
On all other income (loss) 3,794 4,213
----------- -----------
Total income tax (benefit) expense 6,188 7,535
Net income (loss) $ 11,010 $ 13,064
============ ============
Average shares outstanding - diluted 61,170 61,496
Net income (loss), per share - diluted $ 0.18 $ 0.21
Ratio to Ratio to
Premiums Premiums
PROPERTY AND CASUALTY Earned Earned
- --------------------------------------- -------- --------
Premiums and finance charges earned $ 351,263 $ 364,708
Investment income less expenses 50,579 50,434
Investment gains realized, net 6,964 9,497
Losses 213,684 60.8% 223,897 61.4%
Loss adjustment expenses 41,445 11.8% 53,553 14.7%
Underwriting expenses 126,394 36.0% 118,926 32.6%
----------- ------- ----------- -------
Total expenses 381,523 108.6% 396,376 108.7%
Effective tax rate on investment income 33.7% 33.9%
CORPORATE/OTHER
- ---------------------------------------
Investment income less expenses $ 751 $ 266
Investment gains (losses) realized, net (126) (6)
Agent relationships asset expenses 7,665 5,121
Corporate expenses 3,046 2,803
Six Months Ended June 30
CONSOLIDATED 2003 2002
- ------------------------------------- --------------------------------------
Premiums and finance charges earned $ 700,526 $ 725,715
Investment income less expenses 104,578 101,602
Investment gains realized, net 26,131 32,322
----------- -----------
Total revenues 831,235 859,639
Losses $ 422,477 $ 435,666
Loss adjustment expenses 88,848 105,026
Underwriting expenses 254,517 238,996
Corporate and other expenses 18,410 18,226
----------- -----------
Total expenses 784,252 797,914
Income tax (benefit) expense:
On investment gains realized $ 9,146 $ 11,313
On all other income (loss) 6,915 10,475
----------- -----------
Total income tax (benefit) expense 16,061 21,788
Net income (loss) $ 30,922 $ 39,937
============ ============
Average shares outstanding - diluted 61,068 61,287
Net income (loss), per share - diluted $ 0.51 $ 0.65
Ratio to Ratio to
Premiums Premiums
PROPERTY AND CASUALTY Earned Earned
- ------------------------------------- -------- --------
Premiums and finance charges earned $ 700,526 $ 725,715
Investment income less expenses 102,062 101,134
Investment gains realized, net 26,185 32,978
Losses 422,477 60.3% 435,666 60.0%
Loss adjustment expenses 88,848 12.7% 105,026 14.5%
Underwriting expenses 254,517 36.3% 238,996 32.9%
----------- ------- ----------- -------
Total expenses 765,842 109.3% 779,688 107.4%
Effective tax rate on investment income 33.4% 33.4%
CORPORATE/OTHER
Investment income less expenses $ 2,515 $ 468
Investment gains (losses) realized, net (54) (655)
Agent relationships asset expenses 12,451 13,135
Corporate expenses 5,959 5,091
CONSOLIDATED YEAR 2002
- ------------------------------------- ----------------
Premiums and finance charges earned $ 1,450,467
Investment income less expenses 207,133
Investment gains realized, net 45,192
-----------
Total revenues 1,702,792
Losses $ 902,731
Loss adjustment expenses 227,081
Underwriting expenses 489,465
Corporate and other expenses 90,221
-----------
Total expenses 1,709,498
Income tax (benefit) expense:
On investment gains realized $ 15,817
On all other income (loss) (21,632)
-----------
Total income tax (benefit) expense (5,815)
Net income (loss) $ (891)
============
Average shares outstanding - diluted 61,284
Net income (loss), per share - diluted $ (0.01)
Ratio to
Premiums
PROPERTY AND CASUALTY Earned
- --------------------------------------- --------
Premiums and finance charges earned $ 1,450,467
Investment income less expenses 205,794
Investment gains realized, net 45,371
Losses 902,730 62.2%
Loss adjustment expenses 227,081 15.7%
Underwriting expenses 489,465 33.7%
----------- -------
Total expenses 1,619,276 111.6%
Effective tax rate on investment income 33.9%
CORPORATE/OTHER
- ---------------------------------------
Investment income less expenses $ 1,339
Investment gains (losses) realized, net (179)
Agent relationships asset expenses 79,699
Corporate expenses 10,522
-1-
OHIO CASUALTY CORPORATION
PROPERTY AND CASUALTY INSURANCE DATA - STATUTORY BASIS (in thousands)
SECOND QUARTER, 2003
(2003 Data Unaudited)
Three Months Ended June 30
2003 2002
OPERATING SEGMENTS and ---------------------- ----------------------
SELECTED PRODUCT LINES or Net Premiums Combined Net Premiums Combined
MARKETS Written Ratio Written Ratio
- -------------------------- ------------ --------- ------------ ---------
Commercial Lines $ 210,005 111.6% $ 206,242 105.6%
Workers' compensation 35,697 113.3% 40,133 130.1%
Commercial auto 61,780 101.7% 58,106 106.5%
General liability 23,173 128.8% 24,600 118.5%
CMP, fire and inland marine 89,355 112.6% 83,403 88.9%
Specialty Lines $ 43,110 76.0% $ 45,316 92.7%
Commercial umbrella 31,480 85.7% 34,633 91.9%
Fidelity and surety 11,630 47.2% 10,438 87.6%
Personal Lines $ 122,751 107.7% $ 123,688 117.1%
New Jersey personal auto (336) 408.3% 1,814 201.8%
Other personal lines 123,087 108.5% 121,874 108.6%
Other personal auto 72,519 110.3% 73,745 104.0%
Homeowners 41,699 113.0% 40,012 119.5%
------------ ------ ------------ ------
Total All Lines $ 375,866 106.2% $ 375,246 109.3%
ALL LINES RESULTS Ratio Ratio
- --------------------- ----- -----
Premiums written $ 375,866 $ 375,246
Premiums earned 351,266 364,689
Losses incurred 213,685 60.8% 223,897 61.4%
Loss adjustment expenses 41,445 11.8% 53,553 14.7%
Underwriting expenses 126,305 33.6% 124,720 33.2%
------------ ------ ------------ ------
Underwriting loss (30,169) 106.2% (37,481) 109.3%
====== ======
Investment income 50,579 50,434
Investment gains realized 8,005 11,222
Other income/expense - -
Federal income tax expense 4,402 5,283
------------ ------------
Net income $ 24,013 $ 18,892
============ ============
Included above:
Dividends to policyholders 117 0.0% 115 0.0%
Paid loss & loss adjustment expense 248,056 259,447
Six Months Ended June 30
2003 2002
OPERATING SEGMENTS and ---------------------- ----------------------
SELECTED PRODUCT LINES or Net Premiums Combined Net Premiums Combined
MARKETS Written Ratio Written Ratio
- ------------------------- ------------ --------- ------------ ---------
Commercial Lines $ 415,159 111.4% $ 399,057 106.9%
Workers' compensation 73,334 124.1% 78,192 130.7%
Commercial auto 120,637 103.8% 115,102 103.1%
General liability 43,385 127.0% 45,492 131.1%
CMP, fire and inland marine 177,803 106.9% 160,271 90.4%
Specialty Lines $ 76,052 83.8% $ 84,766 88.7%
Commercial umbrella 54,065 91.8% 63,231 89.5%
Fidelity and surety 21,988 60.4% 19,910 86.1%
Personal Lines $ 236,877 108.9% $ 266,324 112.0%
New Jersey personal auto (952) 274.1% 26,246 134.4%
Other personal lines 237,829 107.2% 240,078 106.7%
Other personal auto 146,831 105.6% 152,525 103.4%
Homeowners 74,385 113.6% 72,193 113.0%
------------ ------ ------------ ------
Total All Lines $ 728,088 107.5% $ 750,147 107.8%
ALL LINES RESULTS Ratio Ratio
- -------------------- ----- -----
Premiums written $ 728,088 $ 750,147
Premiums earned 700,569 725,663
Losses incurred 421,907 60.2% 435,666 60.0%
Loss adjustment expenses 88,848 12.7% 105,026 14.5%
Underwriting expenses 251,806 34.6% 250,138 33.3%
------------ ------ ------------ ------
Underwriting loss (61,992) 107.5% (65,167) 107.8%
====== ======
Investment income 102,062 101,134
Investment gains realized 24,408 33,731
Other income/expense - -
Federal income tax expense 12,935 7,768
------------ ------------
Net income $ 51,543 $ 61,930
============ ============
Included above:
Dividends to policyholders 379 0.1% 203 0.0%
Paid loss & loss adjustment expense 486,587 519,721
Year
2002
OPERATING SEGMENTS and ----------------------
SELECTED PRODUCT LINES or Net Premiums Combined
MARKETS Written Ratio
- ------------------------- ------------ ---------
Commercial Lines $ 762,189 115.1%
Workers' compensation 143,911 129.2%
Commercial auto 213,364 110.2%
General liability 84,474 171.3%
CMP, fire and inland marine 320,440 95.8%
Specialty Lines $ 179,879 94.0%
Commercial umbrella 132,655 97.7%
Fidelity and surety 45,599 81.7%
Personal Lines $ 506,560 114.1%
New Jersey personal auto 24,172 154.8%
Other personal lines 482,388 107.9%
Other personal auto 297,117 107.1%
Homeowners 153,678 110.3%
------------ ------
Total All Lines $ 1,448,628 112.8%
ALL LINES RESULTS Ratio
- -------------------- -----
Premiums written $ 1,448,628
Premiums earned 1,450,377
Losses incurred 902,201 62.2%
Loss adjustment expenses 227,081 15.7%
Underwriting expenses 506,204 34.9%
------------ ------
Underwriting loss (185,109) 112.8%
======
Investment income 205,794
Investment gains realized 53,011
Other income/expense (7,707)
Federal income tax expense (9,159)
------------
Net income $ 75,148
============
Included above:
Dividends to policyholders (3,868) -0.3%
Paid loss & loss adjustment expense 1,032,544
-2-
OHIO CASUALTY CORPORATION
PROPERTY AND CASUALTY ACCIDENT YEAR DATA
SECOND QUARTER, 2003
(Data Unaudited)
STATUTORY COMBINED RATIO
---------------------------------------------------
Accident Accident Accident
Year 2003(A) Year 2002(A) Year 2002(A)
OPERATING SEGMENTS and Six Months Measured Measured Measured
SELECTED MAJOR PRODUCT Ended as of as of as of
LINES or MARKETS June 30, 2003 June 2003 June 2002 June 2003
- ------------------------- ------------- ------------ ------------ ------------
Commercial Lines 111.4% 108.7% 102.9% 102.6%
Workers' compensation 124.1% 119.7% 117.9% 119.3%
Commercial auto 103.8% 104.2% 100.8% 99.9%
General liability 127.0% 115.7% 104.1% 113.6%
CMP, fire and inland marine 106.9% 105.2% 96.1% 93.5%
Specialty Lines 83.8% 96.8% 99.0% 92.2%
Commercial umbrella 91.8% 100.7% 99.6% 98.4%
Fidelity and surety 60.4% 82.7% 98.0% 74.6%
Personal Lines 108.9% 107.1% 110.1% 111.0%
New Jersey personal auto 274.1% 211.9% 121.2% 138.4%
Other personal lines 107.2% 105.8% 107.2% 106.9%
Other personal auto 105.6% 102.8% 105.1% 106.4%
Homeowners 113.6% 116.7% 115.1% 111.1%
------- ------- ------- -------
Total All Lines 107.5% 106.9% 106.0% 105.1%
Note: (A) The loss and LAE ratio component of the accident year combined ratio
measures losses and LAE arising from insured events that occurred in the
respective accident year. The current accident year excludes losses and LAE
for insured events that occurred in prior accident years. Accident year 2003
as of June 30, 2003 measures insured events for the first six months of 2003.
Accident year 2002 as of June 30, 2002 measures insured events for the first
six months of 2002. Accident year 2002 as of June 30, 2003 measures insured
events for the full year 2002. Partial and complete accident periods may not
be comparable due to seasonality, claim reporting and development patterns,
claim settlement rates and other factors.
-3-
OHIO CASUALTY CORPORATION
ADDITIONAL PROPERTY AND CASUALTY ACCIDENT YEAR DATA (in millions)
SECOND QUARTER, 2003
(Data Unaudited)
Three Months Six Months
PRIOR ACCIDENT YEAR LOSS & LAE Ended June 30 Ended June 30
by SEGMENT 2003 2002 2003 2002
- ------------------------------ ----- ----- ----- -----
Commercial Lines 7.6 8.4 10.4 14.2
Specialty Lines (6.3) (2.9) (10.2) (7.1)
Personal Lines 0.5 3.6 4.3 5.9
----- ----- ----- -----
Total All Lines Accident Year
Development 1.8 9.1 4.5 13.0
PRIOR ACCIDENT YEAR LOSS & LAE
by SEGMENT Year 2002
- ------------------------------ ---------
Commercial Lines 73.9
Specialty Lines (2.2)
Personal Lines 12.7
-------
Total All Lines Accident Year
Development 84.4
Three Months Six Months
Ended June 30 Ended June 30
PRIOR ACCIDENT YEAR LOSS & LAE 2003 2002 2003 2002
- ------------------------------ ----- ----- ----- -----
Accident Year 2002 (5.5) (26.2)
Accident Year 2001 (1.6) (14.5) 7.3 (34.9)
Accident Year 2000 and Prior 8.9 23.6 23.4 47.9
------- ------- ------- -------
Total Accident Year Development 1.8 9.1 4.5 13.0
PRIOR ACCIDENT YEAR LOSS & LAE Year 2002
- ------------------------------ ---------
Accident Year 2002
Accident Year 2001 (15.8)
Accident Year 2000 and Prior 100.2
-------
Total Accident Year Development 84.4
-4-
OHIO CASUALTY CORPORATION
CONSOLIDATED BALANCE SHEET DATA AND RELATED INFORMATION
(in thousands, except share data)
SECOND QUARTER, 2003
(2003 Data Unaudited)
6/30/2003 12/31/2002
ASSETS --------- ----------
Investments:
U.S. government bonds $ 28,897 $ 29,082
Tax exempt bonds 79,137 46,788
Taxable fixed maturities:
Available for sale, at fair value 2,803,364 3,063,904
Held-to-maturity, at amortized cost 372,593 -
------------ ------------
Total bonds $ 3,283,991 $ 3,139,774
Equity securities, at fair value 307,727 312,537
Short-term investments, at fair value 21,214 49,839
------------ ------------
Total investments $ 3,612,932 $ 3,502,150
Cash 19,709 12,384
Premiums and other receivables, net of
allowance for bad debts of $5,000 and
$4,300, respectively 359,050 324,759
Deferred policy acquisition costs 179,498 181,276
Property and equipment, net of
accumulated depreciation of $147,541
and $145,863, respectively 93,232 97,798
Reinsurance recoverable 486,361 419,870
Agent relationships, net of accumulated
amortization of $35,848 and $34,100,
respectively 148,873 161,323
Interest and dividends due or accrued 43,299 45,961
Deferred income taxes - 2,411
Other assets 62,539 31,062
------------ ------------
Total assets $ 5,005,493 $ 4,778,994
============ ============
Shares outstanding 60,871,363 60,725,368
Book value per share $18.75 $17.43
FAS 115 component of book value per share $2.62 $1.76
6/30/2003 12/31/2002
LIABILITIES --------- ----------
Insurance reserves:
Losses $ 2,046,529 $ 1,978,743
Loss adjustment expenses 465,998 454,907
Unearned premiums 706,815 668,707
Debt 198,165 198,288
Other liabilities 446,676 419,646
------------ ------------
Total liabilities $ 3,864,183 $ 3,720,291
============ ============
SHAREHOLDERS' EQUITY
Common stock, $.125 par value
Authorized: 150,000,000
Issued shares: 72,418,344; 72,418,344 9,052 9,052
Common stock purchase warrants 21,138 21,138
Accumulated other comprehensive income 296,079 246,160
Retained earnings 967,448 936,687
Treasury stock, at cost:
(Shares: 11,546,981; 11,692,976) (152,407) (154,334)
------------ ------------
Total shareholders' equity 1,141,310 1,058,703
------------ ------------
Total liabilities and
shareholders' equity $ 5,005,493 $ 4,778,994
============ ============
-5-
OHIO CASUALTY CORPORATION
SUPPLEMENTAL INFORMATION (in thousands, except employee count)
SECOND QUARTER, 2003
(2003 Data Unaudited)
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
2003 2002 2003 2002
---------- ---------- ---------- ----------
Gross Premiums Written 415,438 401,338 804,696 801,104
Commercial Lines 219,389 215,089 433,191 415,742
Specialty Lines 70,119 58,853 128,598 110,809
Personal Lines 125,930 127,396 242,907 274,553
---------- ---------- ---------- ----------
Total 415,438 401,338 804,696 801,104
New Business Gross Premiums Written
Commercial Lines 51,431 50,482 95,910 89,570
Commercial Umbrella 18,902 21,399 35,254 37,100
Personal Lines 11,370 8,121 20,961 14,296
Average Renewal Price Increase
Commercial Lines 10.9% 14.5% 11.5% 15.5%
Commercial Umbrella 22.4% 41.7% 22.7% 44.1%
Amortization of Deferred Acquisition Costs 96,760 92,910 194,237 185,134
Agent Relationships Asset Expenses
Write-down 5,801 2,379 8,666 7,644
Amortization 1,864 2,742 3,785 5,491
---------- ---------- ---------- ----------
Total 7,665 5,121 12,451 13,135
</TABLE
YEAR 2002
----------
Gross Premiums Written 1,552,406
Commercial Lines 796,579
Specialty Lines 235,236
Personal Lines 520,591
----------
Total 1,552,406
New Business Gross Premiums Written
Commercial Lines 186,165
Commercial Umbrella 78,858
Personal Lines 34,593
Average Renewal Price Increase
Commercial Lines 16.3%
Commercial Umbrella 37.6%
Amortization of Deferred Acquisition Costs 376,223
Agent Relationships Asset Expenses
Write-down 69,510
Amortization 10,189
----------
Total 79,699
===============================================================================
JUNE 2003 JUNE 2002 DEC 31, 2002
---------- ---------- ------------
Statutory Insurance Reserves:
Unearned premiums 652,829 651,543 625,310
Losses 1,665,377 1,602,235 1,647,343
Loss adjustment expense 437,514 400,721 431,380
Statutory policyholders' surplus 782,713 763,235 725,748
Ratio of net premiums written to
statutory surplus 1.8 1.9 2.0
====================================================================================================
Employee Count 2,805 3,127 3,004
Note: For further information on differences between statutory accounting
principles and generally accepted accounting principles (GAAP), refer to item
15 on pages 67 and 68 of the Corporation's Form 10-K for the year ended
December 31, 2002.
-6-