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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest
event reported): April 30, 1999
THE ST. PAUL COMPANIES, INC.
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(Exact name of Registrant as specified in its charter)
Minnesota 0-3021 41-0518860
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(State of (Commission File (I.R.S. Employer
Incorporation) Number) Identification No.)
385 Washington St., St. Paul, MN 55102
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(Address of principal (Zip Code)
executive offices)
(651) 310-7911
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(Registrant's telephone number,
including area code)
N/A
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(Former name or former address, if changed since last
report)
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Item 5. Other Events.
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The following information was derived from a press
release of The St. Paul Companies, Inc. dated April 30,
1999:
The St. Paul Companies reported first-quarter 1999
operating earnings of $152.5 million, or $0.62 per share
(diluted), compared with first-quarter 1998 operating
earnings of $162.8 million, or $0.64 per share (diluted).
First-quarter net income for The St. Paul Companies was
$164.9 million, or $0.67 per share, compared with $194.7
million, or $0.77 per share, for the first quarter of 1998.
Net income included after-tax realized gains of $42.3
million, or $0.17 per share, for the first quarter of 1999,
compared with $31.9 million, or $0.13 per share, for the
first quarter of 1998.
First-quarter 1999 net income also includes a $29.9
million after-tax expense representing the cumulative effect
of adopting a new accounting standard concerning insurance-
related assessments.
"The St. Paul's first quarter results continue an
improvement trend that began after the third quarter of
1998, when we experienced an extraordinary level of
catastrophe losses," said Douglas W. Leatherdale, chairman
and CEO. "We are doing everything within our power to
deliver on our performance objectives by taking action on
the things we can control. Within this context, the USF&G
transaction completed just one year ago is now making a
contribution."
Leatherdale said that the benefits of the merger are
showing up in expense savings and stronger market presence
for the company's U.S. underwriting operations.
"We are realizing the benefits of scale and efficiency
that were key to this merger's success," Leatherdale said.
"We are reducing costs, shedding unprofitable business and
holding the line on our prices. Our cost-saving actions
reduced our U.S. operation's first-quarter expense ratio by
1.5 percentage points compared with the same period a year
ago, and will put this company in a better position for an
improved industry pricing environment.
"I am particularly pleased by the strong first-quarter
results of our reinsurance and surety operations, both of
which had combined ratios of less than 100, by the continued
improvement in personal insurance, and by the written
premium growth we've seen in some specialty commercial
lines," he added.
Catastrophe losses in the first quarter of 1999 were
$30 million, compared with $51 million for the same period
in 1998.
Leatherdale said that The St. Paul continues to
repurchase stock as a part of its stock buyback program.
Through the end of the first quarter, The St. Paul has
repurchased a total of 11 million shares of common stock at
a cost of $365 million. The authorization to purchase up to
$500 million of common stock was approved by the company's
Board of Directors in November of 1998.
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Consolidated Financial Position of The St. Paul Companies
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Consolidated assets of The St. Paul Companies as of
March 31, 1999 were $39.22 billion, compared with $37.06
billion as of March 31, 1998. Common shareholders' equity
was $6.4 billion at the end of the first quarter of 1999,
compared with $6.8 billion at the end of the first quarter
of 1998. Book value per common share on March 31, 1999 was
$28.18, compared with $29.11 as of March 31, 1998.
Certain statements made by the company in this release
may constitute forward-looking statements. Actual results
may differ materially from those projected in the forward-
looking statements. These forward looking statements
involve risks and uncertainties including, but not limited
to, the following: the frequency and severity of
catastrophic events; changes in the demand for, pricing of,
or supply of reinsurance or insurance; increased competitive
pressure; the loss of significant customers; losses due to
foreign currency exchange rate fluctuations; general
economic conditions, including changing interest rates,
rates of inflation and the performance of financial markets;
judicial decisions and rulings; changes in domestic and
foreign laws, regulations and taxes; effects of the merger
with USF&G Corporation; and various other factors, including
the impact of the Year 2000 computer problem.
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THE ST. PAUL COMPANIES
CONSOLIDATED FIRST-QUARTER RESULTS
($ in millions, except per share amounts)
Three months ended March 31 1999 1998
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Revenues $2,244.3 $2,324.2
Pretax Operating Earnings:
Property-Liability Insurance $183.9 $209.0
Life Insurance $19.1 $18.2
Asset Management $28.7 $23.6
Parent and Other ($38.8) ($50.3)
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Total Pretax Operating Earnings $192.9 $200.5
Income Tax Expense $40.4 $37.7
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Operating Earnings $152.5 $162.8
Per Common Share (Basic) $0.65 $0.68
Per Common Share (Diluted) $0.62 $0.64
Realized Investment Gains,
Net of Taxes $42.3 $31.9
Per Common Share (Basic) $0.18 $0.14
Per Common Share (Diluted) $0.17 $0.13
Cumulative Effect of Accounting
Change, Net of Taxes ($29.9) -
Per Common Share (Basic) ($0.13) -
Per Common Share (Diluted) ($0.12) -
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Net Income $164.9 $194.7
Per Common Share (Basic) $0.70 $0.82
Per Common Share (Diluted) $0.67 $0.77
Common Shareholders' Equity $6,405.1 $6,825.9
Per Common Share $28.18 $29.11
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ST. PAUL FIRST-QUARTER UNDERWRITING OPERATIONS HIGHLIGHTS
($ in millions)
Three months ended March 31 1999 1998
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Written premiums $1,566.0 $1,654.6
Net investment income $322.0 $331.8
Statutory combined ratio 107.8 107.0
The St. Paul Companies, headquartered in Saint Paul, Minn.,
is a group of companies providing property-liability
insurance, reinsurance, and life insurance products and
services worldwide. Ranked No. 171 on the Fortune 1000 list
of largest U.S. companies, The St. Paul had 1998 revenues of
$9.1 billion.
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Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
THE ST. PAUL COMPANIES, INC.
By /s/ Bruce A. Backberg
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Bruce A. Backberg
Senior Vice President
and Chief Legal Counsel
Date: May 3, 1999
