Exhibit 99.2
OHIO CASUALTY CORPORATION & SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
FOR THE PERIODS ENDING
MARCH 31, 2006
Contents: Page 1 GAAP Summary Income Statement Data
Page 2 Property and Casualty Insurance Data
Page 3 Consolidated Balance Sheet Data and
Related Information
Page 4 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 and supplemental financial information that are not historical
information, are forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995. The operations, performance and
development of the Consolidated 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 and supplemental financial information. The risks and uncertainties
that may affect the operations, performance, development and results of the
Consolidated Corporation's business include the following: changes in
property and casualty reserves; catastrophe losses; premium and investment
growth; product pricing environment; availability of credit, change in
government regulation; performance of financial markets; fluctuations in
interest rates; availabiltiy and pricing of reinsurance; litigation and
administrative proceedings; rating agency actions; acts of war and terrorist
activities; ability to appoint and/or retain agents; 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 and
supplemental financial information, or to update them to reflect events or
circumstances occurring after the date of this release and supplemental
financial information, or to reflect the occurrence of unanticipated
events. Investors are also advised to consult any further disclosures made
on related subjects in the Ohio Casualty Corporation's reports filed with the
Securities and Exchange Commission or in subsequent releases.
OHIO CASUALTY CORPORATION & SUBSIDIARIES
SUMMARY INCOME STATEMENT - GAAP BASIS,
unless otherwise noted (in thousands,
except per share data)
FIRST QUARTER, 2006
(Data Unaudited)
THREE MONTHS ENDED MARCH 31,
-----------------------------------------------
CONSOLIDATED 2006 2005
- ---------------------------------------- -----------------------------------------------
Premiums and finance charges earned $ 357,661 $ 362,302
Investment income less expenses 50,936 48,456
Investment gains/(losses) realized, net 14,199 (6)
----------- -----------
Total revenues 422,796 410,752
Losses 189,008 191,125
Loss adjustment expenses 36,683 42,968
Underwriting expenses 113,812 112,072
Corporate and other expenses 10,130 14,849
----------- -----------
Total expenses 349,633 361,014
Income before income taxes 73,163 49,738
Income tax expense:
On investment gains/(losses) realized 4,970 (2)
On all other income 16,296 12,053
----------- -----------
Total income tax expense 21,266 12,051
Net income $ 51,897 $ 37,687
============ ============
Average shares outstanding - diluted 64,837 71,675
Net income, per share - diluted $ 0.80 $ 0.55
Operating income* $ 42,668 $ 37,691
Operating income - earnings per share* $ 0.66 $ 0.55
Operating income - return on equity* 13.7% 14.6%
Effective tax rate on investment income 26.8% 26.9%
KEY PROPERTY AND CASUALTY RATIOS GAAP Statutory GAAP Statutory
- --------------------------------------- -------- --------- -------- ---------
Losses 52.8% 52.8% 52.8% 52.8%
Loss adjustment expenses 10.3% 10.3% 11.9% 11.9%
Underwriting expenses 31.8% 31.4% 30.9% 30.0%
-------- ------- -------- -------
Combined ratio 94.9% 94.5% 95.6% 94.7%
CORPORATE/OTHER
- ---------------------------------------
Net investment income $ 3,700 $ 3,311
Investment gains/(losses) realized, net (120) -
Agent relationships asset expenses 2,870 4,395
Corporate expenses 7,260 10,454
CONSOLIDATED YEAR 2005
- ---------------------------------------- -----------------------
Premiums and finance charges earned $ 1,453,568
Investment income less expenses 201,357
Investment gains/(losses) realized, net 47,426
-----------
Total revenues 1,702,351
Losses 752,280
Loss adjustment expenses 155,033
Underwriting expenses 461,907
Corporate and other expenses 52,409
-----------
Total expenses 1,421,629
Income before income taxes 280,722
Income tax expense:
On investment gains/(losses) realized 5,871
On all other income 62,158
-----------
Total income tax expense 68,029
Net income $ 212,693
============
Average shares outstanding - diluted 67,194
Net income, per share - diluted $ 3.19
Operating income* $ 171,139
Operating income - earnings per share* $ 2.57
Operating income - return on equity* 15.3%
Effective tax rate on investment income 27.1%
KEY PROPERTY AND CASUALTY RATIOS GAAP Statutory
- --------------------------------------- -------- ---------
Losses 51.7% 51.7%
Loss adjustment expenses 10.7% 10.7%
Underwriting expenses 31.8% 31.8%
-------- -------
Combined ratio 94.2% 94.2%
CORPORATE/OTHER
- ---------------------------------------
Net investment income $ 15,071
Investment gains/(losses) realized, net 11,572
Agent relationships asset expenses 12,268
Corporate expenses 40,141
*Management of the Corporation believes the significant volatility of realized
investment gains and losses limits the usefulness of net income as a measure
of current operating performance. Accordingly, management uses the non-GAAP
financial measure of operating income to further evaluate current operating
performance. Operating income return on equity is calculated by dividing the
annualized consolidated operating income for the most recent quarter by the
average shareholders' equity for the quarter using a simple average of
beginning and ending balances for the quarter, excluding from equity after-tax
unrealized investment gains and losses. See press release dated April 26, 2006
for reconciliation of operating income both in dollar amounts and per share
amounts and operating income return on equity to net income, net income per
share and net income return on equity, respectively.
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OHIO CASUALTY CORPORATION & SUBSIDIARIES
PROPERTY AND CASUALTY INSURANCE DATA
(in thousands, except ratio data)
FIRST QUARTER, 2006
(Data Unaudited)
THREE MONTHS ENDED MARCH 31,
------------------------------------------------
2006 2005
OPERATING SEGMENTS and ----------------------- -----------------------
SELECTED PRODUCT LINES Net Premiums Combined Net Premiums Combined
GAAP BASIS: Earned Ratio Earned Ratio
- -------------------------- ------------ -------- ------------ --------
Commercial Lines $ 204,640 101.8% $ 205,598 106.3%
Workers' compensation 33,992 141.3% 33,010 148.9%
Commercial auto 56,870 85.1% 57,652 84.7%
General liability 23,575 124.9% 22,414 120.1%
CMP, fire and inland marine 90,203 91.4% 92,522 101.2%
Specialty Lines 37,263 75.2% 35,075 96.3%
Commercial umbrella 24,193 76.8% 22,578 102.1%
Fidelity and surety 13,070 71.7% 12,497 85.9%
Personal Lines 115,758 89.2% 121,629 77.2%
Personal auto incl. personal umbrella 68,083 98.2% 72,822 77.2%
Personal property 47,675 76.3% 48,807 77.1%
------------ ------ ------------ ------
Total All Lines $ 357,661 94.9% $ 362,302 95.6%
Net Premiums Combined Net Premiums Combined
STATUTORY BASIS: Written Ratio Written Ratio
- -------------------------- ------------ -------- ------------ --------
Commercial Lines $ 212,362 101.3% $ 205,596 105.9%
Workers' compensation 35,801 140.1% 35,277 147.8%
Commercial auto 59,037 84.9% 57,249 84.0%
General liability 24,914 123.7% 23,549 118.7%
CMP, fire and inland marine 92,610 91.3% 89,521 101.6%
Specialty Lines 35,784 75.5% 39,092 86.5%
Commercial umbrella 22,047 77.2% 26,808 89.7%
Fidelity and surety 13,737 68.8% 12,284 84.9%
Personal Lines 105,922 88.3% 113,780 77.3%
Personal auto incl. personal umbrella 66,857 94.4% 73,558 77.1%
Personal property 39,065 80.0% 40,222 78.8%
------------ ------ ------------ ------
Total All Lines $ 354,068 94.5% $ 358,468 94.7%
YEAR 2005
OPERATING SEGMENTS and -----------------------
SELECTED PRODUCT LINES Net Premiums Combined
GAAP BASIS: Earned Ratio
- -------------------------- ------------- ---------
Commercial Lines $ 827,440 101.9%
Workers' compensation 134,510 142.4%
Commercial auto 230,471 82.2%
General liability 93,308 111.3%
CMP, fire and inland marine 369,151 96.9%
Specialty Lines 143,151 95.3%
Commercial umbrella 92,235 101.9%
Fidelity and surety 50,916 83.2%
Personal Lines 482,977 80.8%
Personal auto incl. personal umbrella 288,340 85.8%
Personal property 194,637 73.5%
------------ ------
Total All Lines $ 1,453,568 94.2%
Net Premiums Combined
STATUTORY BASIS: Written Ratio
- -------------------------- ------------ --------
Commercial Lines $ 823,490 102.3%
Workers' compensation 138,582 142.6%
Commercial auto 227,702 82.6%
General liability 95,680 111.8%
CMP, fire and inland marine 361,526 97.6%
Specialty Lines 150,423 89.9%
Commercial umbrella 97,165 94.6%
Fidelity and surety 53,258 81.7%
Personal Lines 475,494 81.2%
Personal auto incl. personal umbrella 283,741 86.3%
Personal property 191,753 73.8%
------------ ------
Total All Lines $ 1,449,407 94.2%
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OHIO CASUALTY CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET DATA AND RELATED
INFORMATION (in thousands, except share and per share data)
FIRST QUARTER, 2006
(2006 Data Unaudited)
March 31, December 31,
2006 2005
Assets --------- ------------
Investments:
U.S. government fixed maturities $ 25,412 $ 25,940
Tax exempt fixed maturities 1,336,903 1,277,318
Taxable fixed maturities:
Available-for-sale, at fair value 2,140,270 2,224,456
Held-to-maturity, at amortized cost 259,394 264,422
------------ ------------
Total fixed maturities 3,761,979 3,792,136
Equity securities, at fair value 377,815 375,079
------------ ------------
Total investments 4,139,794 4,167,215
Cash and cash equivalents 53,117 54,575
Premiums and other receivables, net of
allowance for bad debts of $4,000
and $4,200, respectively 304,457 309,190
Deferred policy acquisition costs 151,884 153,671
Property and equipment, net of
accumulated depreciation of $179,404
and $177,239, respectively 79,439 80,079
Reinsurance recoverable, net of
allowance $3,690 732,290 741,800
Agent relationships, net of accumulated
amortization of $46,506 and $45,531,
respectively 106,856 109,726
Interest and dividends due or accrued 48,009 54,942
Deferred tax asset 20,860 14,846
Other assets 123,233 77,021
------------ ------------
Total assets $ 5,759,939 $ 5,763,065
============ ============
Shares outstanding 63,493,665 63,281,136
Book value per share $22.71 $22.54
Unrealized gain component of
book value per share* $2.57 $3.13
March 31, December 31,
2006 2005
Liabilities --------- ------------
Insurance reserves:
Losses $ 2,441,370 $ 2,435,028
Loss adjustment expenses 510,466 511,817
Unearned premiums 673,930 679,601
Debt 200,003 200,401
Reinsurance treaty funds held 146,606 150,367
Other liabilities 345,804 359,444
------------ ------------
Total liabilities 4,318,179 4,336,658
Shareholders' Equity
Common stock, $.125 par value
Authorized: 150,000,000
Issued shares: 72,418,344; 72,418,344 9,052 9,052
Additional paid-in capital 18,036 18,810
Accumulated other comprehensive income 142,279 177,992
Retained earnings 1,409,653 1,360,547
Treasury stock, at cost:
(Shares: 8,924,679; 9,137,208) (137,260) (139,994)
------------ ------------
Total shareholders' equity 1,441,760 1,426,407
------------ ------------
Total liabilities and
shareholders' equity $ 5,759,939 $ 5,763,065
============ ============
Statutory Insurance Reserves
Losses $ 1,814,420 $ 1,800,683
Loss adjustment expense 455,016 457,843
Unearned premiums 641,986 645,579
Other Statutory Data
Statutory policyholders' suplus 1,038,217 1,004,545
Ratio of net premiums written to surplus 1.4 to 1.0 1.4 to 1.0
*The unrealized gain component of book value per share excludes $9.6 million
and $10.1 million at March 31, 2006 and December 31, 2005, respectively,
which relates to the unrealized holding period gain on the transfer of
fixed maturity securities from the available-for-sale classification to
the held-to-maturity classification.
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OHIO CASUALTY CORPORATION & SUBSIDIARIES
SUPPLEMENTAL INFORMATION (in thousands,
except ratios and accident year data)
FIRST QUARTER, 2006
(Data Unaudited)
THREE MONTHS ENDED MARCH 31, YEAR
2006 2005 2005
--------------------------- ----------
Gross Premiums Written
- ----------------------
Commercial Lines $ 218,051 $ 211,177 $ 840,974
Specialty Lines 47,495 53,178 210,795
Personal Lines 107,195 114,901 478,282
---------- ---------- ----------
Total 372,741 379,256 1,530,051
New Business Gross Premiums Written
- -----------------------------------
Commercial Lines $ 43,482 $ 36,300 $ 148,890
Commercial Umbrella 7,409 8,190 33,414
Personal Lines 8,948 8,784 37,195
Average Renewal Price Increase
- ------------------------------
Commercial Lines 0.0% 2.0% 2.0%
Commercial Umbrella 1.5% 6.8% 3.7%
Catastrophe Loss Ratio
- ----------------------
Commercial Lines 0.9% 0.6% 2.2%
Specialty Lines 0.0% 0.0% 0.0%
Personal Lines 1.5% 1.0% 1.5%
Total All Lines 1.0% 0.7% 1.8%
Prior Accident Year Loss & LAE by Segment (GAAP Basis)
- ------------------------------------------------------
Commercial Lines $ 0.5 $ 12.2 $ 29.1
Specialty Lines (9.8) (2.8) (12.3)
Personal Lines (3.6) (13.2) (36.9)
---------- ---------- ----------
Total All Lines Accident Year
Development (12.9) (3.8) (20.1)
Prior Accident Year Loss & LAE (GAAP Basis)
- -------------------------------------------
Accident Year 2005 $ (2.8) $ - $ -
Accident Year 2004 (4.6) (9.3) (30.8)
Accident Year 2003 and Prior (5.5) 5.5 10.7
---------- ---------- ----------
Total Accident Year Development (12.9) (3.8) (20.1)
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