Exhibit 99(i) CONTACT: James C. Rowan Jr. (860) 722-5180 FOR IMMEDIATE RELEASE HSB GROUP, INC. REPORTS GAINS IN FOURTH QUARTER HARTFORD, Conn., January 26, 1998 -- HSB Group, Inc. (NYSE-HSB), the parent of The Hartford Steam Boiler Inspection and Insurance Company, today reported that income per share from continuing operations on a fully diluted basis for the fourth quarter of 1997 was 96 cents per share, compared to 82 cents per share for the fourth quarter of 1996. This represents an increase of 17 percent. HSB Group's net earned insurance premiums increased 14.9 percent over the fourth quarter of 1996, and 9.5 percent for the year. "We saw profitable growth in all our businesses," said Gordon W. Kreh, president and chief executive officer of HSB Group, Inc. The insurance combined ratio -- the sum of our losses and expenses as a percentage of our insurance revenue -- was 93 percent for the quarter. For the year, the combined ratio was 91.7 percent compared to 94.7 percent in 1996. The insurance operating gain for the year was up 82.6 percent over 1996. HSB engineering services revenues increased 7.2 percent for the quarter and 9.8 percent for the year. The 7.1 percent margin for the year reflects investment of operating funds in the long term future of the business. The margin for the fourth quarter was 8.7 percent, up from 6.3 percent in the third quarter. Net investment income of $11.0 million was 24.8 percent higher than the fourth quarter of 1996 and 20.9 percent higher than the third quarter of 1997. HSB Group, Inc. is the parent company 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 Ended Year-to-Date December 31 Percent December 31 Percent 1997 1996** Change 1997 1996** Change ----- ------ ------ ----- ------ ------ Gross earned premium $152.7 $142.0 7.6% $609.3 $556.5 9.5% Reinsurance 22.3 28.5 118.1 107.9 ----- ------ ----- ------ Net earned premium 130.4 113.5 14.9% 491.2 448.6 9.5% Claims and adjustment expenses 60.9 49.0 217.9 204.4 Policy acquisition expenses 23.3 22.1 90.7 86.0 Underwriting and inspection expenses 37.3 34.1 142.8 136.4 ----- ------ ----- ------ Insurance operating gain $ 8.9 $ 8.3 $ 39.8 $ 21.8 ----- ------ ----- ------ Loss ratio 46.8% 43.2% 44.4% 45.6% Expense ratio* 46.2% 49.0% 47.3% 49.1% Combined ratio* 93.0% 92.2% 91.7% 94.7% Net engineering services revenues $ 16.0 $ 15.0 7.2% $ 61.3 $ 55.8 9.8% Net engineering services expenses 14.6 12.5 57.0 48.5 ------ ------ ----- ------ Engineering services operating gain $ 1.4 $ 2.5 $ 4.3 $ 7.3 ------ ------ ----- ------ Engineering services net operating margin 8.7% 16.8% 7.1% 13.2% Investment income, net of related interest expense $ 11.0 $ 8.8 24.8% $ 36.8 $ 32.3 14.0% Realized investment gains 7.9 3.6 14.1 12.1 ------ ------ ----- ------ Income from investment operations $ 18.9 $ 12.4 $ 50.9 $ 44.4 Interest expense 0.4 0.2 1.3 0.6 ------ ------ ----- ------ Income from continuing operations before income taxes and distributions on capital securities $ 28.8 $ 23.0 $ 93.7 $ 72.9 Income taxes 8.6 6.6 25.1 18.3 Distribution on capital securities of subsidiary trust, net of tax 1.3 - 2.3 - ------ ------ ----- ------ Income from continuing operations $ 18.9 $ 16.4 $ 66.3 $ 54.6 Discontinued operations: Loss from operations of Radian International LLC - (5.0) - (1.2) ------ ------ ----- ------ Net income $ 18.9 $ 11.4 $ 66.3 $ 53.4 ====== ====== ===== ====== Earnings per common share-diluted: Income from continuing operations per common share $ 0.96 $ 0.82 17.1% $ 3.29 $ 2.71 21.4% Net income per common share $ 0.96 $ 0.57 68.4% $ 3.29 $ 2.65 24.2% Average common shares outstanding and common stock equivalents 19.7 20.1 20.1 20.2 Dividends declared per common share $ 0.60 $ 0.57 $ 2.34 $ 2.28 *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 December 31 December 31 Percent 1997 1996 Change ----------- ----------- ------- Assets Cash and short term investments $ 424.5 $ 102.4 Fixed maturities, at fair value 248.4 235.8 Equity securities, at fair value 323.8 262.7 ----------- ----------- Cash and invested assets 996.7 600.9 Insurance premiums receivable 138.0 106.4 Engineering services receivable 12.2 11.7 Fixed assets 29.8 31.7 Investment in Radian 83.4 79.7 Reinsurance assets 124.5 162.9 Other assets 155.6 123.0 ----------- ----------- Total assets $1,540.2 $1,116.3 38.0% =========== =========== Liabilities Unearned premiums $ 290.3 $ 270.6 Claims and adjustment expenses 276.7 302.9 Total borrowings 67.4 28.3 Other liabilities 151.6 148.9 ----------- ---------- Total liabilities 786.0 750.7 Convertible redeemable preferred stock Series B - 20.0 Company obligated mandatorily redeemable capital securities of subsidiary trust I holding solely junior subordinated deferrable interest debentures of the Company, net of discount 108.9 - Company obligated mandatorily redeemable capital securities of subsidiary trust II holding solely junior subordinated deferrable interest debentures of the Company 300.0 - Shareholders' equity 345.3 345.6 ----------- ---------- Total $1,540.2 $1,116.3 =========== ========== Shareholders' equity per common share $ 17.63 $ 17.25 2.2% Based on common shares outstanding of 19.6 20.0