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Vesta Reports First Quarter Results.

Article Excerpt
Standard Property-Casualty Combined Ratio of 89.7%

Vesta Insurance Group, Inc. today reported net operating earnings from continuing operations of $14.3 million, or $0.40 per diluted share in the first quarter of 2004 compared to net operating earnings from continuing operations of $2.2 million, or $0.06 per diluted share for the corresponding period in 2003. Net income from continuing operations was $14.9 million, or $0.42 per diluted share for the quarter ending March 31, 2004 compared to net income from continuing operations of $4.5 million, or $0.13 per diluted share in the first quarter of 2003. Net operating earnings from continuing operations is a non-GAAP measure which excludes certain items, such as realized gains and losses. Net earned premiums for the quarter were $110.0 million compared to $117.5 million in the first quarter of 2003, which is reflective of Vesta's increased use of reinsurance.

"Our operating results reflect our strong position in our targeted markets," said Norman W. Gayle, III, President and CEO, Vesta Insurance Group. "We are off to a terrific start in 2004."

Operational Results

Vesta's standard property-casualty segment, which includes the residential property and standard auto businesses, posted net income from continuing operations of $6.7 million in the first quarter of 2004. The standard property-casualty segment GAAP operational ratios for the three months ended March 31, 2004 and 2003 are below:

3 Months Ended March 31, 2004 2003 Residential property combined ratio 85.0% 108.2% Standard auto combined ratio 103.8% 95.6% Standard property-casualty combined ratio 89.7% 105.3% Total catastrophe losses incurred (in millions) $ 2.2 $ 3.2 Impact of catastrophes on standard property- casualty combined ratio 3.5% 4.1%

The Company's non-standard auto underwriting business generated a GAAP combined ratio of 95.1% in the first quarter of 2004 compared to a 95.2% for the corresponding period in 2003. The non-standard agency operations produced an 18.2% pre-tax margin in the quarter....