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Centris Profit Drops 74%; Insurer Is in Talks to Sell

April 01, 1999| From Bloomberg News

Centris Group Inc., a medical insurer, said Wednesday as it reported a 74% drop in fourth-quarter profit that it is in talks to sell the company.

Other insurers have asked Costa Mesa-based Centris about a purchase, the company said, but it would not identify them. Centris said it is "in discussions that could lead to a transaction" but that no sale could be assured.

Profit from continuing operations in the fourth quarter fell to $700,000, or 6 cents a share, from $2.86 million, or 23 cents, a year ago. Revenue from those operations grew 13% to $46.6 million.

The company reported a loss of $20.9 million, or $1.78 a share, contrasted with profit of $3.8 million, or 31 cents, a year ago, including the results of USF Re Insurance Co., a property casualty division that another insurer agreed to buy in January.

Centris Chairman and Chief Executive David Cargile said he was disappointed with the operating results. Centris faced mounting competition in medical insurance as its reinsurance unit suffered bigger storm losses, he said.

The company is trying to focus on sales of "stop-loss" policies, which cover medical bills in excess of $50,000 for employers who run their own group health insurance plans.

It also sells "provider excess insurance" policies that cover hospitals' and physicians' losses resulting from emergency care for patients outside the regions covered by their managed-care plans.

Centris gave a hint of what might constitute a reasonable bid two months ago, when it rebuffed an offer of $143 million, or $13.25 a share, from Houston insurer HCC Insurance Holdings Inc.

At the time, Centris stock was trading at about $14. On Wednesday, Centris shares rose 6 cents to close at $10.56 on the New York Stock Exchange.

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