Ullico : ULLICO Inc. Continues Momentum
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ULLICO Inc. Continues Momentum

WASHINGTON,DC,May 16,2008 - ULLICO Inc.,the labor owned multi-line holding company offering insurance and financial services,today reported pre-tax operating income of $4.1 million for the current quarter ended March 31,2008,compared to $3.4 million in the prior year's quarter. Net income for the current quarter was $2.6 million,compared to $3.3 million in the prior year's quarter.

Highlights for the quarter:

  • The Life and Health Unit contributed pretax earnings of $2.1 million from continuing operations,compared to $3.0 million for the same period last year. Earnings in the quarter were impacted by higher claims incurred for the Medical Stop Loss line; which was partially offset by favorable Direct Marketing and Specialty Health results. Revenue from continuing lines was $33.4 million,an increase of 7.4% over the same quarter in 2007,led by the core Medical Stop Loss and Group Life lines of business.
  • The Property and Casualty Business Unit contributed pretax earnings of $1.4 million,compared to $0.6 million for the same period last year. Revenue from continuing lines was $11.8 million,an increase of 64.4% over the same quarter in 2007. The increase was a result of continued strong sales in the core lines of businesses (Fiduciary,Union Liability and Workers Compensation) and a significant increase in the recently expanded Commercial lines of business.
  • Retirement Services earnings remain strong at $5.7 million,compared to $4.3 million for the same period last year,driven by continued growth in assets under management within our flagship Separate Account J (J for Jobs Fund) which grew from $2.9 billion at March 31,2007 to $3.4 billion at March 31,2008. In addition,Retirement Services benefited this quarter from $0.7 million of unexpected investment income from limited partnership investments.

    • In addition,consolidated operating income benefited from reduced corporate overhead and general expenses. As of December 31,2007,the Company determined that a valuation allowance was no longer required as a contra-asset to the deferred income tax assets. The Company recorded federal income tax expense in the amount of $1.4 million for the quarter ending March 31,2008. There was no federal income tax provision recorded for the quarter ending March 31,2007.

    Total premium and fee revenue for the quarter was $64.5 million compared to $65.8 million in the prior year's quarter. Core revenue of the Company's continuing lines was $55.0 million compared to $46.6 million last year,an increase of 18%. Revenue from our exited lines decreased to $9.6 million from $19.1 million due to the continued run-off of the Company's fully insured group health business following the decision in late 2006 to no longer actively market these products.

    Mark Singleton,ULLICO CEO stated: "The strong loss ratio results as well as continued revenue growth in our core lines of business is very encouraging,especially considering the overall soft market and aggressive pricing actions by a number of our competitors. Our strategy to broaden our product portfolio and expand our markets is clearly paying dividends by facilitating continued overall growth without sacrificing underwriting discipline and core profitability. We are optimistic that these trends will continue for the balance of the year."

    Chairman Joseph Hunt stated,"I'm pleased with ULLICO's first quarter results and its continued momentum despite the challenges that face us in our various markets . We appreciate all who actively support ULLICO by continuing to invest in the products and services we provide to organized labor."

    Quarterly Financial Results at a Glance
    (In Millions)1st Quarter 20081st Quarter 2007Variance
    Total Income$72.0$73.8($1.8)
    Total Benefits & Expenses67.970.42.5
    Pre-Tax Operating Income before Non-Recurring Transactions$4.1$3.4$0.7
    Tax Expense (benefit)1.5-(1.5)
    Net Income before Non-Recurring Transactions$2.6$3.4($0.8)
    Non-Recurring Transactions-(0.1)0.1
    Net Income$2.6$3.3($0.7)