St. Paul Sees Drop; Spins Off Re

By Mark E. Ruquet

NU Online News Service, April 25, 12:17 p.m. EST?The St. Paul Companies reported a 45 percent drop in net income today compared with the first quarter of last year, and announced plans to transfer its reinsurance business to a newly-formed Bermuda company.

The St. Paul, Minn.-based company reported for the first three months ending March 31, 2002, that net income dropped $63 million from $202 million for the first quarter of 2001 to $139 million for the same period ending 2002. Earnings per share fell 41 percent, going from 87 cents for the first quarter in 2001 to 63 cents for the same period in 2002.

Net income included $21 million in after-tax investment losses and $9 million in losses from discontinued operations. The company said investment losses included $44 million in pretax realized losses from venture capital as St. Paul continues “to liquidate partnerships and re-deploy those funds into direct investments.”

Revenues increased 7 percent, rising $156 million, going from $2.2 billion for the first quarter of 2001 to $2.32 billion for the same period of 2002.

St. Paul also announced it would transfer its reinsurance operations to a newly-formed Bermuda-based reinsurer named Platinum Underwriters Holdings, Ltd. Jay Fishman, chairman and chief executive officer, said in a statement that the company would have a 25 percent stake in Platinum with anticipated capital of $1 billion.