Exhibit 99(i) Contact: James C. Rowan, Jr (860) 722-5180 HSB GROUP, INC. REPORTS GAINS IN THIRD QUARTER RESULTS HARTFORD, CT, October 27, 1997 - HSB Group, Inc. (NYSE-HSB), the parent of The Hartford Steam Boiler Inspection and Insurance Company, today reported net income of 76 cents per common share, an increase of 31 percent compared to 58 cents per share in the third quarter of 1996. Income per share from third quarter continuing operations, excluding realized gains, was 70 cents, an increase of 37 percent from 51 cents last year. As announced earlier, HSB Group's interest in Radian International LLC is reported as a "discontinued operation." HSB Group has determined it will put its interest in the venture to The Dow Chemical Company for approximately $145 million on or about Jan. 1, 1998. HSB Group's net earned insurance premiums grew 6.6 percent in the third quarter of 1997 from the same period a year ago. "We continue to see excellent growth in our commercial client company business," said HSB Group President and Chief Executive Officer Gordon W. Kreh. "The combined ratio - the sum of our losses and expenses as a percentage of our insurance revenue - was 92.0 percent, down from 96.3 percent in the third quarter of 1996. The expense ratio for the quarter declined to 47.4 percent." The year-to-date insurance operating gain was up 129 percent over last year. HSB engineering services revenues increased 10.8 percent. The engineering services margin of 6.3 percent reflects investment of operating funds in the long-term future of the business. Investment income, net of related interest expense, was $9.1 million, compared to $7.6 million in the previous year. During the third quarter of 1997, HSB Group repurchased 645,000 shares of HSB common stock under a two million share repurchase authorization. Through the first nine months of 1997, the company had repurchased approximately one million shares of common stock. HSB Group is the parent of The Hartford Steam Boiler Inspection and Insurance Company, which has specialized in loss prevention and loss control engineering since 1866 and is the largest provider of equipment breakdown insurance in the world. HSB GROUP, INC. In millions, except per share amounts SUMMARY OF OPERATIONS Quarter Year-to-Date Ended Sept. 30 Percent Sept. 30 Percent 1997 1996** Change 1997 1996** Change ---- ------ ------ ---- ----- ------ Gross earned premium $151.6 $143.1 5.9% $456.6 $414.5 10.1% Reinsurance 30.3 29.3 95.7 79.4 ---- ------ ---- ----- Net earned premium 121.3 113.8 6.6% 360.9 335.1 Claims and adjustment expenses 54.1 54.5 157.0 155.4 Policy acquisition expenses 23.5 21.4 67.5 63.9 Underwriting and inspection expenses 34.2 34.2 105.5 102.3 ---- ------ ---- ----- Insurance operating gain $ 9.5 $ 3.7 $ 30.9 $ 13.5 ---- ------ ---- ----- Loss ratio 44.6% 47.9% 43.5% 46.4% Expense ratio* 47.4% 48.4% 47.8% 49.1% Combined ratio* 92.0% 96.3% 91.3% 95.5% Net eng. services rev. $ 15.5 $ 14.0 10.8% $ 45.2 $ 40.8 10.8% Net eng. services exp. 14.5 12.4 42.3 36.0 ----- ------ ---- ----- Engineering services operating gain $ 1.0 $ 1.6 $ 2.9 $ 4.8 ----- ------ ---- ----- Engineering services net operating margin 6.3% 11.4% 6.5% 11.8% Investment income, net of related interest expense $ 9.1 $ 7.6 19.6% $ 25.8 $ 23.5 5.0% Realized investment gains 2.3 2.5 6.2 8.5 ----- ------ ---- ----- Income from investment operations $ 11.4 $ 10.1 $ 32.0 $ 32.0 Interest expense 0.4 - 0.9 0.4 ----- ------ ---- ----- Income from continuing operations before income taxes and distributions on capital securities $ 21.5 $ 15.4 $ 64.9 $ 49.9 Income taxes 5.3 3.5 16.5 11.7 Distribution on capital securities of subsidiary trust, net of tax 1.0 - 1.0 - ----- ----- ---- ----- Income from continuing operations $ 15.2 $ 11.9 $ 47.4 $ 38.2 Discontinued operations: Income from operations of Radian International LLC - (0.3) - 3.8 ----- ----- ----- ----- Net income $ 15.2 $ 11.6 $ 47.4 $ 42.0 ===== ===== ===== ===== Income from continuing operations per common share $ 0.76 $ 0.59 28.8% $ 2.35 $ 1.88 25.0% Net income per common share $ 0.76 $ 0.58 31.0% $ 2.35 $ 2.07 13.5% Dividends declared per common share $ 0.60 $ 0.57 $ 1.74 $ 1.71 Average common shares outstanding and common stock equivalents 19.9 20.1 20.1 20.2 * 1997 and 1996 excludes goodwill amortization related to EIG. 1996 excludes minority interest related to EIG. ** Restated for the effects of discontinued operations. HSB GROUP, INC. In millions, except per share amounts SUMMARY OF FINANCIAL POSITION Sept. 30 Dec. 31 Percent 1997 1996 Change -------- ---------- -------- Assets Cash and short-term investments $ 139.9 $ 102.4 Fixed maturities, at fair value 247.6 235.8 Equity securities, at fair value 325.8 262.7 ---------- ---------- Cash and invested assets 713.3 600.9 Insurance premiums receivable 126.8 106.4 Engineering services receivable 12.9 11.7 Fixed assets 28.4 31.7 Investment in Radian 85.0 79.7 Reinsurance assets 146.4 162.9 Other assets 143.9 123.0 ---------- ---------- Total assets $ 1,256.7 $ 1,116.3 12.6% ========== ========== Liabilities Unearned premiums $ 295.8 $ 270.6 Claims and adjustment expenses 278.8 302.9 Total borrowings 43.1 28.3 Other liabilities 189.6 148.9 ---------- ---------- Total liabilities 807.3 750.7 Convertible redeemable preferred stock Series B 20.0 20.0 Company Obligated Mandatorily Redeemable Capital Securities of Subsidiary Trust Holding Solely Junior Subordinated Deferrable Interest Debentures of the Company 108.9 - Shareholders' equity 320.5 345.6 ---------- ---------- Total $ 1,256.7 $ 1,116.3 ========== ========== Common shareholders' equity per share $ 16.73 $ 17.25 (3.0%) Based on common shares outstanding of 19.2 20.0