Exhibit 99.2
OHIO CASUALTY CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
FOR THE PERIOD ENDING
SEPTEMBER 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)
THIRD QUARTER, 2003
(2003 Data Unaudited)
Three Months Ended Sept 30
----------------------------------------------
CONSOLIDATED 2003 2002
- ---------------------------------------- ----------------------------------------------
Premiums and finance charges earned $ 360,370 $ 356,959
Investment income less expenses 50,976 51,767
Investment gains (losses) realized, net 5,879 (5,539)
----------- -----------
Total revenues 417,225 403,187
Losses $ 220,062 $ 250,314
Loss adjustment expenses 39,398 73,596
Underwriting expenses 126,048 127,472
Corporate and other expenses 5,803 59,493
----------- -----------
Total expenses 391,311 510,875
Income tax (benefit) expense:
On investment gains (losses) realized $ 2,058 $ (1,939)
On all other income (loss) 6,702 (35,815)
----------- -----------
Total income tax (benefit) expense 8,760 (37,754)
Net income (loss) $ 17,154 $ (69,934)
============ ============
Average shares outstanding - diluted 61,414 60,643
Net income (loss), per share - diluted $ 0.28 $ (1.15)
Ratio to Ratio to
Premiums Premiums
PROPERTY AND CASUALTY Earned Earned
- --------------------------------------- -------- --------
Premiums and finance charges earned $ 360,370 $ 356,959
Investment income less expenses 50,422 51,443
Investment gains (losses) realized, net 4,209 (6,017)
Losses 220,062 61.1% 250,314 70.1%
Loss adjustment expenses 39,398 10.9% 73,596 20.6%
Underwriting expenses 126,048 35.0% 127,472 35.7%
----------- ------- ----------- -------
Total expenses 385,508 107.0% 451,382 126.4%
Effective tax rate on investment income 35.1% 33.1%
CORPORATE/OTHER
- ---------------------------------------
Investment income less expense $ 554 $ 324
Investment gains (losses) realized, net 1,671 477
Agent relationships asset expenses 2,961 56,644
Corporate expenses 2,842 2,849
Nine Months Ended Sept 30
---------------------------------------------
CONSOLIDATED 2003 2002
- ---------------------------------------- ---------------------------------------------
Premiums and finance charges earned $ 1,060,896 $ 1,082,674
Investment income less expenses 155,554 153,369
Investment gains (losses) realized, net 32,010 26,783
----------- -----------
Total revenues 1,248,460 1,262,826
Losses $ 642,539 $ 685,980
Loss adjustment expenses 128,246 178,622
Underwriting expenses 380,565 366,468
Corporate and other expenses 24,213 77,719
----------- -----------
Total expenses 1,175,563 1,308,789
Income tax (benefit) expense:
On investment gains (losses) realized $ 11,204 $ 9,374
On all other income (loss) 13,617 (25,339)
----------- -----------
Total income tax (benefit) expense 24,821 (15,965)
Net income (loss) $ 48,076 $ (29,998)
============ ============
Average shares outstanding - diluted 61,181 60,425
Net income (loss), per share - diluted $ 0.79 $ (0.50)
Ratio to Ratio to
Premiums Premiums
PROPERTY AND CASUALTY Earned Earned
- --------------------------------------- -------- --------
Premiums and finance charges earned $ 1,060,896 $ 1,082,674
Investment income less expenses 152,484 152,577
Investment gains (losses) realized, net 30,394 26,961
Losses 642,539 60.6% 685,980 63.4%
Loss adjustment expenses 128,246 12.1% 178,622 16.5%
Underwriting expenses 380,565 35.9% 366,468 33.8%
----------- ------- ----------- -------
Total expenses 1,151,350 108.6% 1,231,070 113.7%
Effective tax rate on investment income 33.9% 33.3%
CORPORATE/OTHER
- ----------------------------------------
Investment income less expense $ 3,069 $ 792
Investment gains (losses) realized, net 1,617 (178)
Agent relationships asset expenses 15,412 69,779
Corporate expenses 8,801 7,940
CONSOLIDATED YEAR 2002
- ---------------------------------------- -------------------
Premiums and finance charges earned $ 1,450,467
Investment income less expenses 207,133
Investment gains (losses) 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 (losses) 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 (losses) 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 expense $ 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)
THIRD QUARTER, 2003
(2003 Data Unaudited)
Three Months Ended Sept 30
-----------------------------------------------
2003 2002
OPERATING SEGMENTS and ---------------------- ----------------------
SELECTED PRODUCT LINES or Net Premiums Combined Net Premiums Combined
MARKETS Written Ratio Written Ratio
- -------------------------- ------------ -------- ------------ --------
Commercial Lines $ 196,765 107.6% $ 180,865 139.9%
Workers' compensation 31,493 106.7% 33,735 126.8%
Commercial auto 56,583 106.1% 50,031 123.0%
General liability 21,481 108.9% 20,057 325.4%
CMP, BOP, fire and inland marine 87,208 107.8% 77,042 106.0%
Specialty Lines $ 48,488 82.2% $ 47,905 121.9%
Commercial umbrella 37,135 85.4% 37,514 121.5%
Fidelity and surety 11,354 76.5% 10,390 116.9%
Personal Lines $ 127,091 107.8% $ 121,900 114.2%
New Jersey personal auto (103) -763.8% (1,365) 88.5%
Other personal lines 127,194 107.0% 123,265 104.1%
Other personal auto 75,297 106.6% 73,516 96.8%
Homeowners 42,923 116.1% 41,796 118.8%
------------ ------ ------------ ------
Total All Lines $ 372,344 104.7% $ 350,670 128.5%
ALL LINES RESULTS Ratio Ratio
- --------------------- ----- -----
Premiums written $ 372,344 $ 350,670
Premiums earned 360,445 356,949
Losses incurred 220,131 61.1% 249,839 70.0%
Loss adjustment expenses 39,398 10.9% 73,596 20.6%
Underwriting expenses 121,881 32.7% 132,868 37.9%
------------ ------ ------------ ------
Underwriting loss (20,965) 104.7% (99,354) 128.5%
====== ======
Investment income 50,422 51,443
Investment gains (losses) realized 3,288 (6,456)
Other income/expense - -
Federal income tax expense (benefit) 811 (18,064)
------------ ------------
Net income (loss) $ 31,934 $ (36,303)
============ ============
Included above:
Dividends to policyholders 252 0.1% (1,062) -0.3%
Paid loss & loss adjustment expense 244,143 252,158
</TABLE
Nine Months Ended Sept 30
-----------------------------------------------
2003 2002
OPERATING SEGMENTS and ---------------------- ----------------------
SELECTED PRODUCT LINES or Net Premiums Combined Net Premiums Combined
MARKETS Written Ratio Written Ratio
- -------------------------- ------------ -------- ------------ --------
Commercial Lines $ 611,924 110.1% $ 579,923 118.0%
Workers' compensation 104,827 118.4% 111,927 129.3%
Commercial auto 177,220 104.6% 165,133 109.7%
General liability 64,866 120.8% 65,549 195.7%
CMP, BOP, fire and inland marine 265,011 107.2% 237,313 95.8%
Specialty Lines $ 124,540 83.0% $ 132,672 101.4%
Commercial umbrella 91,200 89.0% 100,744 102.3%
Fidelity and surety 33,342 66.0% 30,301 96.8%
Personal Lines $ 363,968 108.4% $ 388,224 112.6%
New Jersey personal auto (1,055) 449.6% 24,880 150.1%
Other personal lines 365,023 107.1% 363,344 105.9%
Other personal auto 222,128 106.0% 226,041 101.3%
Homeowners 117,308 114.3% 113,989 114.9%
------------ ------ ------------ ------
Total All Lines $ 1,100,432 106.6% $ 1,100,819 114.6%
ALL LINES RESULTS Ratio Ratio
- --------------------- ----- -----
Premiums written $ 1,100,432 $ 1,100,819
Premiums earned 1,061,014 1,082,612
Losses incurred 642,038 60.5% 685,505 63.3%
Loss adjustment expenses 128,246 12.1% 178,622 16.5%
Underwriting expenses 373,687 34.0% 383,006 34.8%
------------ ------ ------------ ------
Underwriting loss (82,957) 106.6% (164,521) 114.6%
====== ======
Investment income 152,484 152,577
Investment gains (losses) realized 27,696 27,275
Other income/expense - -
Federal income tax expense (benefit) 13,746 (10,295)
------------ ------------
Net income (loss) $ 83,477 $ 25,626
============ ============
Included above:
Dividends to policyholders 631 0.1% (859) -0.1%
Paid loss & loss adjustment expense 730,730 771,879
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, BOP, 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 (losses) realized 53,011
Other income/expense (7,707)
Federal income tax expense (benefit) (9,159)
------------
Net income (loss) $ 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
THIRD QUARTER, 2003
(Data Unaudited)
STATUTORY COMBINED RATIO
-------------------------------------------------------
Accident Accident Accident
Year 2003(A) Year 2002(A) Year 2002(A)
OPERATING SEGMENTS and Nine Months Measured Measured Measured
SELECTED MAJOR PRODUCT Ended as of as of as of
LINES or MARKETS Sept 30, 2003 Sept 2003 Sept 2002 Sept 2003
- ----------------------------- ------------- ------------ ------------ ------------
Commercial Lines 110.1% 107.7% 105.9% 101.8%
Workers' compensation 118.4% 117.5% 121.4% 117.2%
Commercial auto 104.6% 104.5% 101.5% 99.1%
General liability 120.8% 111.5% 121.4% 112.1%
CMP, BOP, fire and
inland marine 107.2% 104.7% 96.9% 93.4%
Specialty Lines 83.0% 93.0% 96.6% 91.8%
Commercial umbrella 89.0% 96.3% 94.5% 97.8%
Fidelity and surety 66.0% 82.4% 100.5% 74.7%
Personal Lines 108.4% 106.3% 111.4% 110.9%
New Jersey personal auto 449.6% 237.9% 127.0% 136.4%
Other personal lines 107.1% 105.8% 108.6% 107.1%
Other personal auto 106.0% 102.7% 106.0% 106.9%
Homeowners 114.3% 116.7% 116.9% 110.7%
------- ------- ------- -------
Total All Lines 106.6% 105.7% 107.7% 104.6%
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 Sept 30, 2003 measures insured events for the first nine months of 2003.
Accident year 2002 as of Sept 30, 2002 measures insured events for the first
nine months of 2002. Accident year 2002 as of Sept 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 AND CATASTROPHE DATA
(in millions, except ratio data)
THIRD QUARTER, 2003
(Data Unaudited)
Three Months Nine Months
PRIOR ACCIDENT YEAR LOSS & LAE Ended Sept 30 Ended Sept 30
by SEGMENT 2003 2002 2003 2002
- ------------------------------ ----- ----- ----- -----
Commercial Lines 3.7 50.5 14.1 64.8
Specialty Lines (1.9) 12.4 (12.1) 5.3
Personal Lines 3.4 (0.7) 7.7 5.1
------ ------ ------ ------
Total All Lines Accident Year
Development 5.2 62.2 9.7 75.2
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 Nine Months
Ended Sept 30 Ended Sept 30
PRIOR ACCIDENT YEAR LOSS & LAE 2003 2002 2003 2002
- ------------------------------ ----- ----- ----- -----
Accident Year 2002 (7.3) (33.5)
Accident Year 2001 (1.2) 13.5 6.1 (21.4)
Accident Year 2000 and Prior 13.7 48.7 37.1 96.6
------ ------ ------ ------
Total Accident Year Development 5.2 62.2 9.7 75.2
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
Three Months Nine Months
Ended Sept 30 Ended Sept 30
CATASTROPHE LOSS RATIO 2003 2002 2003 2002
- ------------------------------ ----- ----- ----- -----
Commercial Lines 3.2% 0.6% 3.1% 0.5%
Specialty Lines 0.0% 0.1% 0.0% 0.5%
Homeowners 8.2% 1.9% 6.5% 3.2%
Personal Lines 23.2% 5.3% 16.6% 9.3%
Total All Lines 4.5% 1.0% 3.9% 1.6%
CATASTROPHE LOSS RATIO Year 2002
- ------------------------------ ---------
Commercial Lines 0.5%
Specialty Lines -0.2%
Homeowners 3.1%
Personal Lines 8.7%
Total All Lines 1.4%
-4-
OHIO CASUALTY CORPORATION
CONSOLIDATED BALANCE SHEET DATA AND RELATED INFORMATION
(in thousands, except share data)
THIRD QUARTER, 2003
(2003 Data Unaudited)
September 30, December 31,
2003 2002
ASSETS ------------ -----------
Investments:
U.S. government fixed maturities $ 50,196 $ 29,082
Tax exempt fixed maturities 72,546 46,788
Taxable fixed maturities:
Available for sale, at fair value 2,848,909 3,063,904
Held-to-maturity, at amortized cost 358,582 -
------------ ------------
Total fixed maturities $ 3,330,233 $ 3,139,774
Equity securities, at fair value 309,658 312,537
Short-term investments, at fair value 66,529 49,839
------------ ------------
Total investments $ 3,706,420 $ 3,502,150
Cash 17,939 12,384
Premiums and other receivables, net of
allowance for bad debts of $5,000 and
$4,300, respectively 362,197 324,759
Deferred policy acquisition costs 175,008 181,276
Property and equipment, net of
accumulated depreciation of $150,599
and $145,863, respectively 93,094 97,798
Reinsurance recoverable 518,845 419,870
Agent relationships, net of accumulated
amortization of $37,396 and $34,100,
respectively 145,912 161,323
Interest and dividends due or accrued 39,606 45,961
Deferred income taxes - 2,411
Other assets 29,045 31,062
------------ ------------
Total assets $ 5,088,066 $ 4,778,994
============ ============
Shares outstanding 60,903,878 60,725,368
Book value per share $18.71 $17.43
FAS 115 component of book value per share $2.27 $1.76
September 30, December 31,
2003 2002
LIABILITIES ------------ -----------
Insurance reserves:
Losses $ 2,096,512 $ 1,978,743
Loss adjustment expenses 455,428 454,907
Unearned premiums 722,954 668,707
Debt 198,103 198,288
Other liabilities 475,755 419,646
------------ ------------
Total liabilities $ 3,948,752 $ 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 276,526 246,160
Retained earnings 984,576 936,687
Treasury stock, at cost:
(Shares: 11,514,466; 11,692,976) (151,978) (154,334)
------------ ------------
Total shareholders' equity 1,139,314 1,058,703
------------ ------------
Total liabilities and
shareholders' equity $ 5,088,066 $ 4,778,994
============ ============
-5-
OHIO CASUALTY CORPORATION
SUPPLEMENTAL INFORMATION (in thousands, except employee count)
THIRD QUARTER, 2003
(2003 Data Unaudited)
THREE MONTHS ENDED SEPT 30 NINE MONTHS ENDED SEPT 30
2003 2002 2003 2002
------------ ------------ ----------- ------------
Gross Premiums Written 408,796 385,459 1,213,493 1,186,564
Commercial Lines 202,858 191,587 636,049 607,330
Specialty Lines 75,919 66,162 204,518 176,971
Personal Lines 130,019 127,710 372,926 402,263
---------- ---------- ---------- ----------
Total 408,796 385,459 1,213,493 1,186,564
New Business Gross Premiums Written
Commercial Lines 48,622 48,653 144,532 138,223
Commercial Umbrella 19,782 22,404 55,036 59,504
Personal Lines 11,924 10,204 32,885 24,500
Average Renewal Price Increase
Commercial Lines 10.1% 14.8% 11.8% 16.4%
Commercial Umbrella 15.7% 42.2% 19.5% 44.4%
Amortization of Deferred Acquisition Costs 97,269 94,297 291,506 279,431
Agent Relationships Asset Expenses
Write-down 1,124 53,985 9,790 61,629
Amortization 1,837 2,659 5,622 8,150
---------- ---------- ---------- ----------
Total 2,961 56,644 15,412 69,779
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
====================================================================================
SEPT 30, 2003 SEPT 30, 2002 DEC 31, 2002
------------- ------------- ------------
Statutory Insurance Reserves:
Unearned premiums 664,728 645,265 625,310
Losses 1,681,784 1,643,835 1,647,343
Loss adjustment expense 436,493 430,398 431,380
Statutory policyholders' surplus 813,921 679,879 725,748
Ratio of net premiums written to
statutory surplus 1.8 2.1 2.0
Employee Count 2,757 3,034 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-