St. Paul Says It's Back On Track

By Mark E. Ruquet

NU Online News Service, Jan. 27, 4:03 p.m.EST?The head of The St. Paul insurance company said thecompany closed out 2002 in solid financial shape and was lookingforward to becoming stronger this year as it realigns its businessand looks to put burdensome exposure behind.

The St. Paul, Minn.-based property-casualty insurer in fourthquarter and year-end financial results released today showedimproved profits over the close of 2001.

Jay Fishman, the company's chairman and chief executive officer,during an investor's conference call said the past year was achallenge as the company completed "our strategic repositioning aswell as getting a significant asbestos loss behind us."

For the fourth quarter, three months ending Dec. 31, 2002, thecompany reported net income of $244.2 million compared to a loss of$736 million in 2001. Earnings per share rose to $1.02 for thethree months compared to a loss of $3.57 in 2001. This was onrevenues of $2 billion compared to $2.4 billion for the threemonths in 2001.

For the year, St. Paul said net income stood at $217.8 millionfor 2002 compared to a loss of $1.1 billion in 2001. Earnings pershare stood at 92 cents compared to 2001 loss of $5.22 per share.Revenues remained the same at $8.9 billion.

The company said its departure from some businesses, such asreinsurance, and medical malpractice contributed to the improvedresults. The company also eliminated 1,500 positions and focused onlines it said were more profitable, such as small commercial.

The company currently has $326 million in reserve for asbestosclaims, which Mr. Fishman said he felt was a comfortablefigure.

Tim Yessman, executive vice president for claims, outlined whythe company feels its reserve figure is adequate. He said thecompany's exposure is only with small regional companies withminimal amount of liability. The company faces few bankruptcy orasbestos coverage litigation, he added.

The company's combined ratio was 101. Pricing increases ran onaverage at 27 percent for the year and 25 percent for the quarter,Mr. Fishman said.

"We feel very good about where we are and where we are going,"Mr. Fishman said.

Details of the fourth-quarter release and the company's analysisof its asbestos position are available at www.stpaul.com.