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REGIONAL EARNINGS

20th Century Posts Rise in Profit to $14.6 Million

August 01, 1995

20th Century Industries, a Woodland Hills-based insurance holding company, reported a threefold increase in earnings for the second quarter that ended June 30, even though the company raised its estimate of Northridge earthquake losses by another $50 million.

The company reported net income of $14.6 million for the second quarter, compared to $4.9 million a year earlier. Revenue fell to $263 million, down 21% from $334 million in the second quarter of 1994.

For the first six months of the year, 20th Century reported a profit of $13.2 million on revenues of $533 million, compared to a year-earlier loss of $335 million on revenues of $624 million.

William Mellick, chief executive of 20th Century, said the second-quarter results include a revision of quake losses to $990 million, up from $940 million estimated at the end of 1994. The increased estimate was offset, however, by a $32-million reduction in the amount the company expects to return to policyholders, according to a Proposition 103 settlement agreement with the California Department of Insurance.

20th Century, which nearly collapsed under the weight of quake losses last year, also said it has purchased catastrophe reinsurance to help it cover losses caused by future disasters. The $100-million reinsurance policy went into effect July 1, and will cost the company annual premiums of $13 million.

20th Century reported an underwriting loss of $113 for every $100 collected in premiums for the second quarter. For its automobile insurance lines only, however, the company made money, paying out $92 for every $100 collected in premiums.

Still smarting from quake losses, 20th Century has said it will exit the homeowners insurance business by July 23, 1997, to focus exclusively on automobile insurance.

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