Ohio Casualty Will Cut Up To 500 Jobs

Ohio Casualty Will Cut Up To 500 Jobs

NU Online News Service, May 5, 4:05 p.m. EDT?Ohio Casualty Corp., in its earnings report, said it plans to eliminate up to 500 jobs?nearly 20 percent of its overall workforce?in 2004 to improve efficiency.[@@]

The number includes the jobs that have already been eliminated so far this year, which number about 384. That means that potentially 116 more employees could get pink slips during the remainder of 2004.

The company, citing lower realized gains, also said its first-quarter net profit dropped slightly, to $19.2 million from $19.9 million reported during the corresponding period one year ago.

Commenting further on the employee streamlining process, Chief Executive Dan Carmichael explained that as part of Ohio Casualty's "Cost Structure Efficiency Initiative," the company is analyzing its businesses processes and is implementing efficiencies and technological advances to help reduce operating costs and improve the level of service.

The initiative is expected to reduce the company staff by a total of 400-500 positions during 2004. But among these numbers, the company has already implemented 322 staff cuts during the first quarter, with another 62 cuts taking place in April.

"Efficiencies implemented to date are projected to reduce operating expenses by $5.5 million in 2004, net of costs, with projected annualized savings of $19.7 million in 2005," Mr. Carmichael explained.

Commenting on the quarterly results, Mr. Carmichael emphasized that the net income, before net realized gains, had actually improved significantly, to $16.8 million from $7.4 million reported one year ago. Furthermore, all lines statutory combined ratio was reported at 100.7 for the quarter, an 8.1 point improvement from one year ago.

Revenue fell 2 percent to $415.3 million. Net premiums written for all lines came in at $364.0 million, up from $352.2 million one year ago.

The company's investment income minus expenses was $50.5 million for the quarter, down slightly from $53.2 million one year ago. But the company saw a significant drop in its investment gains realized, posting $3.7 million for the first quarter, compared with $19.3 million one year earlier. Ohio Casualty also observed that the first-quarter results included $5.6 million of severance and other related costs.

Ohio Casualty provides personal and commercial lines property-casualty insurance in some 40 states through more than 5,000 independent agents. In 2003, the company reported net profit of $75.8 million, on sales of $1.67 billion.