Exhibit 99
April 27, 1998 - THE ST. PAUL COMPANIES' REPORTS
FIRST-QUARTER RESULTS
St. Paul, Minn. - The St. Paul Companies (NYSE:SPC) reported
first-quarter operating earnings of $125.4 million for first-
quarter 1998, or $1.36 per share (diluted), compared with
first-quarter 1997 operating earnings of $130.2 million, or
$1.43 per share (diluted).
On Friday, April 24, the merger between The St. Paul
and USF&G was completed. Selected first-quarter financial
results for USF&G are included in this release. Beginning
with the second quarter of 1998, our report of earnings will
reflect the combined performance of The St. Paul and USF&G,
restated for all periods presented.
First-quarter net income for The St. Paul Companies was
$154.0 million, or $1.67 per share, compared with $124.5
million, or $1.37 per share, for the first quarter of 1997.
Net income included after-tax realized gains of $28.6
million, or $0.31 per share, for the first quarter of 1998,
compared with $62.1 million, or $0.67 per share, for the
first quarter of 1997. Net income in 1997 included a loss
of $67.8 million, or $0.73 per share, from discontinued
operations.
"Our first-quarter results were adversely impacted by
first-quarter storms, chiefly tornadoes in the Midwest and
South and ice storms in Canada. Lower earnings from our
medical liability operation also contributed to the decrease
in operating earnings over last year's first quarter," said
Douglas W. Leatherdale, chairman and chief executive
officer.
"Pretax catastrophe losses, at $39 million, were
substantially higher than the $5 million reported in last
year's first quarter. Medical liability results for the
first quarter were affected by higher than expected claim
costs resulting from an increase in the severity of losses.
"Our Personal Insurance and Reinsurance operations
performed well during the quarter, while our general
Commercial business held its own in a difficult
environment," Leatherdale said.
Consolidated Financial Position of The St. Paul Companies
- ---------------------------------------------------------
Consolidated assets of The St. Paul Companies as of
March 31, 1998, were $21.1 billion, compared with $21.5
billion as of Dec. 31, 1997. Common shareholders' equity
was $4.8 billion at the end of the first quarter, compared
with $4.6 billion on Dec. 31, 1997. Book value per common
share on March 31, 1998, was $57.16, compared with $55.06 on
Dec. 31, 1997.
Record Date for Stock Split May 6
- ---------------------------------
As previously announced, the board of directors intends
to vote for a two-for-one split of the common stock of The
St. Paul Companies if an increase in authorized common
shares from 240 million to 480 million shares is approved by
shareholders at the annual meeting on May 5, 1998. The date
for the split would be May 6, 1998 and the shares would be
distributed on approximately May 11, 1998.
Selected Financial Highlights for USF&G
- ---------------------------------------
Total revenues for USF&G for the first quarter of 1998
were $857.0 million, compared with $845.0 million in the
first quarter of 1997. Operating earnings were $47.5
million, compared with $47.3 million for the first quarter
of 1997. Net income was $38.1 million, compared with $45.0
million for the first quarter of 1997. The statutory
combined ratio was 106.6, compared with 104.3 in the first
quarter of 1997.
These results reflect accounting principles followed by
USF&G, which differ in certain respects from accounting
principles followed by The St. Paul. Now that the merger is
closed these accounting principles will be conformed.
THE ST. PAUL COMPANIES
CONSOLIDATED FIRST-QUARTER RESULTS
Three months ended March 31 1998 1997
- --------------------------- ---- ----
Revenues $1,467,157,000 $1,557,203,000
Pretax Operating Earnings
Underwriting $148,104,000 $148,059,000
Asset-Management -
Investment Banking $23,617,000 22,704,000
Parent and Other (23,316,000) (21,145,000)
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Total pretax operating earnings $148,405,000 $149,618,000
Income Tax Expense $23,035,000 $19,450,000
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Operating Earnings $125,370,000 $130,168,000
Per Common Share (Diluted) $1.36 $1.43
Per Common Share (Basic) $1.46 $1.53
Realized Investment Gains,
Net of Taxes $28,630,000 $62,131,000
Per Common Share (Diluted) $0.31 $0.67
Per Common Share (Basic) $0.34 $0.75
Discontinued Operations,
Net of Taxes - ($67,750,000)
Per Common Share (Diluted) - ($0.73)
Per Common Share (Basic) - ($0.82)
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Net Income $154,000,000 $124,549,000
Per Common Share (Diluted) $1.67 $1.37
Per Common Share (Basic) $1.80 $1.46
Common Shareholders' Equity $4,803,215,000 $3,884,831,000
Per Common Share $57.16 $46.51
ST. PAUL FIRST-QUARTER UNDERWRITING OPERATIONS
HIGHLIGHTS
Three months ended March 31 1998 1997
- --------------------------- ---- ----
Written premiums $1,000,847,000 $1,029,220,000
Net investment income $218,803,000 $218,269,000
Combined ratio 107.5 107.5
The St. Paul Companies, headquartered in Saint Paul, Minn., is
a group of companies providing property-liability insurance
products and services worldwide.