Insurance Underwriter - Earnings and Guidance
Protective Life reports lower Q3 operating income YOY
November 04, 2009 6:53 PM ET
By Jacob Geiger
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Protective Life Corp. on Nov. 4 reported third-quarter after-tax operating income of $47.9 million, or 55 cents per share, down from $62.5 million, or 88 cents per share, in the year-ago quarter. Net income in the most recent quarter was $27.6 million, or 32 cents per diluted share, compared to a net loss of $100.0 million, or $1.41 per diluted share, in the prior-year quarter. The Thomson First Call mean third-quarter earnings estimate was 76 cents per share, according to SNL Financial. Net income in the quarter included net realized after-tax investment losses of $20.3 million, or 23 cents per share, compared to net realized after-tax investment losses of $162.5 million, or $2.29 per share, in the same period a year ago. The investment losses for the third quarter of 2009 include pretax other-than-temporary impairments of $31.0 million. The company's life marketing unit reported pretax operating income of $26.5 million, down from $52.2 million in the year-ago quarter. Protective Life said the decline was primarily due to unfavorable mortality, lower investment income on the traditional life block and elevated expenses. The acquisitions segment had pretax operating income of $33.1 million in the quarter, up slightly from $33.0 million in the same quarter of 2008. Stable value products reported pretax operating income of $14.3 million, down from $28.2 million in the year-ago quarter. The company said the decline was the result of a drop in average account values and a decline in operating spreads. There were no sales for the segment during the quarter, compared to $685.0 million in sales during the previous year's quarter. Pretax operating income in the asset protection segment fell to $5.7 million from $8.2 million, which the company said was driven down by lower service contract income due to significantly lower sales volume and modestly higher loss ratios. Sales in that segment were $86.2 million, compared to $104.2 million in the year-ago period. The company's corporate and other segment posted a pretax operating loss of $22.8 million, compared to a loss of $32.2 million in the prior-year period. Book value climbed to $26.91 per share as of Sept. 30, up from $10.89 per share as of Dec. 31, 2008. Book value excluding accumulated other comprehensive loss was $31.30 as of Sept. 30, compared to $34.74 as of Dec. 31, 2008. The company said it had $1.3 billion of cash and short-term investments as of Sept. 30. | 
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