DALLAS, Nov. 3 /PRNewswire-FirstCall/ -- Republic Companies Group,
Inc. (NASDAQ:RUTX) ("Republic") today reported revenues of $68.5
million and net income of $4.3 million for the quarter ended
September 30, 2005. Shareholders' equity was $160.8 million, and
the statutory surplus of our principal insurance subsidiary was
$162.6 million as of September 30, 2005. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050801/REPUBLICLOGO )
Republic's third quarter revenues of $68.5 million represent an
increase of 6.3% when compared to the third quarter of 2004. Net
income for the third quarter of 2005 was $4.3 million, compared to
net income of $5.9 million in the third quarter of 2004. This
decline of 27.4% is primarily attributable to the catastrophe
losses incurred as a result of Hurricanes Katrina and Rita and the
cost of additional catastrophe reinsurance purchased with regard to
possible future events in 2005. Net written premiums reached $73.4
million in the third quarter of 2005, 12.3% higher than in the
comparable period in 2004. Net insurance premiums earned of $64.4
million for the third quarter were higher than the $60.8 million
for the comparable period in 2004. However, net insurance premiums
earned in 2004 were negatively impacted by $3.9 million reflecting
the amortization of the purchase accounting fair value adjustment
of unearned premium reserves related to the acquisition of the
Company in 2003. Republic's expense ratio for the third quarter
2005 was 37.9% compared to 29.4% for the comparable period in 2004.
The expense ratio in 2004 was favorably impacted by $3.9 million,
also reflecting the amortization of the purchase accounting fair
value adjustment of unearned premium reserves related to the
Company's 2003 acquisition. Additionally, the 2004 expense ratio
did not include the added expenses associated with being a public
company. The net combined ratio for the third quarter was 96.1%,
7.9 points higher than the net combined ratio of 88.2% in the third
quarter of 2004. The effects of Hurricanes Katrina and Rita caused
Republic to report a net catastrophe loss ratio of 7.4% in the
third quarter 2005, against 0.9% in the third quarter of 2004 that
was virtually free of catastrophic weather events. Excluding
catastrophe losses, the net loss ratio for the quarter was 50.8% in
2005, down from 57.9% in the comparable quarter of 2004, partially
as a result of the benefits from the 2004 reunderwiting efforts in
the Independent Agents - Commercial Lines segment and as a result
of growth in the profitable low- value dwelling business in our
Independent Agents - Personal Lines segment. Year-to-date through
September 30, 2005, revenues grew to $198.2 million from $184.8
million in the comparable period in 2004, an increase of 7.3%.
Year-to-date, 2005 net income was $14.6 million, a 5.3% decline
from $15.4 million reported for the first nine months of 2004.
Substantial improvements in underwriting results (excluding
catastrophe losses) and higher investment income were offset by the
effects of Hurricanes Katrina and Rita. The year-to-date net
combined ratio was 94.6%, 2.3 points higher than the 92.3% reported
for the first nine months of 2004. Parker Rush, President and Chief
Executive Officer, commented, "The third quarter was particularly
challenging, and we are proud of Republic's response to the
devastating effects of two of the largest catastrophes to ever
impact our Company, our policyholders and our agents. The financial
effects on Republic of Hurricanes Katrina and Rita have been well
contained, and our employees and representatives were among the
first responders to the needs of our clients. "Republic and its
employees continue to work diligently to assist policyholders and
agents in their efforts to rebuild their homes, businesses and
lives. Our 102 years of experience in this region has prepared
Republic for events of this magnitude. Our ability to manage
through catastrophic events and make good on our contractual
obligations is a principal reason that agents and policyholders
trust our Company in times of need. We, therefore, clinically
manage the concentration and mix of our risks in geographic areas
that are vulnerable to wind-related catastrophes, and we have
implemented a particularly strong program of reinsurance to protect
Republic's long-term financial stability. Beyond our basic
obligation to fulfill our contractual obligations, Republic and our
employees continue to provide other financial and volunteer
assistance to our neighbors who have suffered from these events."
Financial Overview and Highlights Highlights of Republic's
condensed consolidated financial information for the third quarter
and for the first nine months of 2005 and 2004 are as follows:
Condensed Consolidated Three Three Nine Nine Third Quarter and
Months Months Months Months First Nine Months Ended Ended Ended
Ended Highlights Sept. 30, Sept. 30, Sept. 30, Sept. 30, ($ in
millions) 2005 2004 2005 2004 Gross written premiums $137.6 $127.5
$375.3 $359.7 Net written premiums 73.4 65.4 203.6 183.5 Net
insurance premiums earned 64.4 60.8 186.7 174.2 Net investment
income 3.0 2.1 8.1 6.1 Total revenues earned 68.5 64.4 198.2 184.8
Net income (loss) $4.3 $5.9 $14.6 $15.4 Net ex-catastrophe loss
ratio 50.8% 57.9% 49.5% 58.6% Net catastrophe loss ratio 7.4% 0.9%
6.5% 4.1% Net expense ratio 37.9% 29.4% 38.6% 29.6% Net combined
ratio 96.1% 88.2% 94.6% 92.3% Condensed Consolidated As of As of
Highlights ($ in millions) September 30, 2005 September 30, 2004
Total assets $835.5 $720.3 Shareholders' Equity (GAAP) 160.8 160.9
Return on average equity (GAAP) 11.6% 13.0% Statutory surplus of
principal insurance company $162.6 $149.0 Contributions by business
segment for the third quarter and year-to-date through September
2005 and 2004 can be summarized as follows: Condensed First Three
Three Nine Nine Nine Months Months Months Months Months Highlights
Ended Ended Ended Ended by Segment Sept. 30, Sept. 30, Sept. 30,
Sept. 30, ($ in millions) 2005 2004 2005 2004 Gross written Premium
Independent Agents - Personal Lines $38.1 $34.6 $105.5 $100.8
Independent Agents - Commercial Lines 21.5 17.2 62.4 49.0 Program
Management 40.0 42.4 101.8 122.0 Insurance Services and Corporate
38.0 33.3 105.6 87.9 Consolidated $137.6 $127.5 $375.3 $359.7 Net
Income Independent Agents - Personal Lines $1.2 $4.2 $7.9 $8.7
Independent Agents - Commercial Lines (0.7) (2.1) (0.2) (1.9)
Program Management 1.8 2.5 3.5 5.5 Insurance Services and Corporate
2.0 1.3 3.4 3.1 Consolidated $4.3 $5.9 $14.6 $15.4 Net Combined
Ratio (GAAP) Independent Agents - Personal Lines 94.8% 80.1% 89.8%
88.0% Independent Agents - Commercial Lines 113.6% 130.4% 105.9%
113.3% Program Management 87.9% 76.4% 94.2% 86.5% Consolidated
96.1% 88.2% 94.6% 92.3% Third Quarter Highlights In the third
quarter, gross written premiums in our Independent Agents -
Personal Lines Segment were up 10.1% over the third quarter of the
prior year. This strong growth was led by our low-value dwelling
initiative that more than offset a planned reduction in the highly
competitive market for non-standard auto business in Texas. Our
Independent Agents - Commercial Lines Segment also produced strong
growth and was up 24.5% over the third quarter of 2004. This
increase was driven by new business in selected target markets,
including our farm and ranch initiative, replacing purposeful
non-renewals in certain other classes of business in 2004. The area
in which Republic operates experienced two of the most costly
hurricanes in recorded history during the third quarter of 2005.
Republic's gross loss and loss adjustment expense before
reinsurance from Hurricane Katrina has proved to be well contained
and is presently estimated to be approximately $35.0 million
(primarily personal property losses). Hurricane Rita, while a less
damaging storm overall, was concentrated entirely in areas insured
by Republic and passed slowly through most of East Texas and
Southwest Louisiana. Republic's gross loss related to Rita is
presently estimated to be approximately $31.0 million (primarily
personal property but also including some personal auto, commercial
auto and commercial property losses). The estimates for both storms
were based on the best available data and assumptions regarding
coverage, damage and reinsurance, including claims received to
date, industry loss estimates, estimates from industry and
proprietary models, and contract language, among other factors.
Republic's financial stability is substantially protected from
catastrophic events through several excess of loss reinsurance
treaties that combine to provide a mix of coverage against various
types and combinations of catastrophe losses. These treaties
reduced Republic's combined pre-tax retention of net losses related
to Hurricanes Katrina and Rita to approximately $5.0 million. The
Company's keystone catastrophe reinsurance treaty provides coverage
for two severe events in a single year, each of which is calculated
to be a once-in-250 years event. Specifically, this treaty provides
reinsurance for up to $55.0 million of losses per event in excess
of a $5.0 million retention. The treaty is comprised of four layers
of protection: $5.0 million in losses in excess of a $5.0 million
retention by Republic; $10.0 million in excess of a $10.0 million
loss; $15.0 million in excess of a $20.0 million loss; and, $25.0
million in excess of a $35.0 million loss. A separate catastrophe
reinsurance treaty funds coverage for the reinstatement premiums
required under the keystone treaty to reinstate coverage against a
second severe event. A third treaty provides coverage against
several events in the same year. This aggregate cover provides $5.0
million of coverage after Republic has absorbed $10.0 million of
aggregate losses related to several events that each exceed $0.75
million. Participations in all of these treaties are spread among
multiple reinsurers, each with an A.M. Best financial strength
rating of A- or higher. Other than the base retention of $5.0
million, Republic retains no participations in any layers of these
treaties. In addition to the Company's $5.0 million net retention
related to losses from Katrina and Rita, the Company, during the
third quarter, purchased additional reinsurance coverage for a
possible third and a fourth large catastrophe loss in 2005. The
combined cost of these two additional catastrophe covers was $4.1
million. Net insurance premiums earned in our Independent Agents -
Personal Lines segment and our Independent Agents - Commercial
Lines segment were reduced in the third quarter by $1.5 million for
the remaining portion of reinsurance premiums on the treaty layers
impacted by the two hurricanes, and by $0.5 million for the
prorated portion of the premiums paid for the third and fourth
event covers. The remaining cost of the third and fourth event
covers will be recognized in the fourth quarter. After considering
the impact of reinsurance, the third quarter 2005 net catastrophe
loss ratio for our Independent Agents - Personal Lines segment was
13.3 points higher than the comparable period in 2004. The net
catastrophe loss ratio for our Independent Agents - Commercial
lines segment was 0.2 points higher than the comparable period in
2004. Third quarter gross written premiums for our Program
Management Segment were 5.5% lower than in 2004, primarily
reflecting the planned run-off of two programs that were terminated
by Republic in 2004. Partially offsetting this decline was a new
program and increased retention on a long-standing, commercial
auto/small casualty program. This segment of our business continued
to produce a solid net combined ratio of 87.9% for the third
quarter. The third quarter 2004 combined ratio was favorably
impacted by a $2.9 million reduction of reserves primarily related
to favorable prior period development for the two terminated
programs. Republic's Insurance Services and Corporate Segment
produced a 14.3% increase in the quarterly gross written premiums,
reflecting increased fees for fronting services provided to
national carriers on specialty programs. Net investment income grew
by 41.2% to $3.0 million for the third quarter partially due to the
larger investment portfolio coupled with continued increases in
interest rates and to lower investment expenses than in 2004 prior
to the sale of its real estate investment. Republic anticipates
that the majority of the losses associated with Hurricanes Katrina
and Rita will be paid during the fourth quarter 2005 and the first
quarter 2006. Republic anticipates that the cash flow from
reinsurance recoverables, normal operations and normal investment
maturities will be adequate to pay such losses without a need to
liquidate securities held in its investment portfolio.
Shareholders' equity as of September 30, 2005 was $160.8 million,
marginally down from $161.4 million at June 30, 2005. The principal
factors offsetting the income earned in the quarter were unrealized
losses in the investment portfolio as a result of rising interest
rates ($2.6 million) and common stock dividends ($1.7 million)
declared in the third quarter. First Nine Months Highlights Our
Independent Agent - Personal Lines segment performed well in the
first nine months of 2005. Gross written premiums of $105.5 million
in 2005 were $4.7 million higher than the comparable period in
2004, and net insurance premiums earned of $94.9 million were $2.9
million higher than in 2004. Net insurance premiums earned in 2004
were negatively impacted by $9.5 million reflecting the
amortization of the purchase accounting fair value adjustment of
unearned premium reserves related to the acquisition of the Company
in 2003. The net combined ratio increased modestly to 89.8% from
88.0% in the comparable period in 2004, despite the unusually
significant weather-related events. Independent Agents - Commercial
Lines also improved in the first nine months of 2005, producing
gross written premiums of $62.4 million and improving the net
combined ratio 7.4 points to 105.9%. In Program Management, 2005
year-to-date gross written and net earned premiums were lower as a
result of the purposeful termination of two programs in 2004. Net
year-to-date income of Insurance Services and Corporate increased
6.1% in 2005 over 2004 to $3.4 million, primarily from fees on
increased premium volume related to fronting programs. 2005
Guidance We believe our focus on underserved segments that fit
Republic's strengths continues to provide opportunities for
profitable growth and some protection against competitive
offerings. In this context, the continued implementation of our
business strategy should provide the opportunity for double digit
percentage growth in net written premium for 2005. Assuming fourth
quarter weather patterns remain broadly consistent with prior
years' experience, we anticipate producing a return on average
equity that is in the range of 12% to 14% for the full year 2005.
Investors are advised to read the precautionary statement regarding
forward-looking information included at the end of this press
release. Supplemental Consolidated Information Set forth in the
tables below are the comparative summary consolidated results of
operations and key financial measures for the three and nine-month
periods ended September 30, 2005 and 2004: Summary Results Three
Three Nine Nine of Operations - Months Months Months Months
Consolidated Ended Ended Ended Ended ($ in millions) Sept. 30,
Sept. 30, Sept. 30, Sept. 30, 2005 2004 2005 2004 (unaudited)
(unaudited) (unaudited) (unaudited) Net insurance premiums earned
$64.4 $60.8 $186.7 $174.2 Net investment income 3.0 2.1 8.1 6.1 Net
realized gains (losses) 0.1 0.7 0.1 1.0 Other income 1.0 0.8 3.3
3.5 Total revenues 68.5 64.4 198.2 184.8 Net losses and loss
adjustment expenses incurred 37.5 35.7 104.5 109.3 Underwriting,
acquisition and operating expenses Commissions 13.4 10.4 38.1 26.4
Other underwriting, acquisition and operating expenses 11.0 7.5
33.9 25.2 Total underwriting, acquisition and operating expenses
24.4 17.9 72.0 51.6 Interest expense 0.9 0.5 2.4 1.6 Total expenses
62.8 54.1 178.9 162.5 Income from continuing operations before
income taxes 5.7 10.3 19.3 22.3 Income tax expense 2.8 4.8 7.6 9.0
Equity in earnings of unconsolidated foreign insurance company, net
of income tax 1.4 0.4 2.9 2.1 Net income $4.3 $5.9 $14.6 $15.4
Three Three Nine Nine Months Months Months Months Ended Ended Ended
Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, Key Measures 2005
2004 2005 2004 ($ in millions) (unaudited) (unaudited) (unaudited)
(unaudited) Gross written premiums $137.6 $127.5 $375.3 $359.7 Net
written premiums 73.4 65.4 203.6 183.5 Net ex-catastrophe loss
ratio 50.8% 57.9% 49.5% 58.6% Net catastrophe loss ratio 7.4% 0.9%
6.5% 4.1% Net expense ratio 37.9% 29.4% 38.6% 29.6% Net combined
ratio 96.1% 88.2% 94.6% 92.3% Supplemental Segment Information Set
forth in the tables below are comparative summary results of
operations and key financial measures for the three and nine-month
periods ended September 30, 2005 and 2004 for our four business
segments, Independent Agents - Personal Lines, Independent Agents -
Commercial Lines, Program Management and Insurance Services and
Corporate. Independent Agents - Personal Lines Segment Three Three
Nine Nine Months Months Months Months Results of Operations - Ended
Ended Ended Ended Independent Agents - Sept. 30, Sept. 30, Sept.
30, Sept. 30, Personal Lines 2005 2004 2005 2004 ($ in millions)
(unaudited) (unaudited) (unaudited) (unaudited) Net insurance
premiums earned $30.8 $31.2 $94.9 $92.1 Net investment income 1.1
1.1 3.3 3.1 Net realized gains (losses) 0.0 0.3 0.1 0.4 Total
revenues 31.9 32.6 98.3 95.6 Net losses and loss adjustment
expenses incurred 17.7 17.2 53.1 59.4 Underwriting, acquisition and
operating expenses Commissions 5.9 3.8 17.1 10.2 Other
underwriting, acquisition and operating expenses 5.6 4.0 15.0 11.4
Total underwriting, acquisition and operating expenses 11.5 7.8
32.1 21.6 Total expenses 29.2 25.0 85.2 81.0 Income from continuing
operations before income taxes 2.7 7.6 13.1 14.6 Income tax expense
1.5 3.4 5.2 5.9 Net income $1.2 $4.2 $7.9 $8.7 Three Three Nine
Nine Months Months Months Months Ended Ended Ended Ended Sept. 30,
Sept. 30, Sept. 30, Sept. 30, Key Measures 2005 2004 2005 2004 ($
in millions) (unaudited) (unaudited) (unaudited) (unaudited) Gross
written premiums $38.1 $34.6 $105.5 $100.8 Net written premiums
34.1 33.5 97.7 95.6 Net ex-catastrophe loss ratio 43.8% 54.5% 44.4%
58.9% Net catastrophe loss ratio 13.8% 0.5% 11.6% 5.6% Net expense
ratio 37.2% 25.1% 33.8% 23.5% Net combined ratio 94.8% 80.1% 89.8%
88.0% Independent Agents - Commercial Lines Segment Three Three
Nine Nine Months Months Months Months Results of Operations - Ended
Ended Ended Ended Independent Agents - Sept. 30, Sept. 30, Sept.
30, Sept. 30, Commercial Lines 2005 2004 2005 2004 ($ in millions)
(unaudited) (unaudited) (unaudited) (unaudited) Net insurance
premiums earned $16.3 $13.7 $49.7 $38.0 Net investment income 1.0
0.6 2.6 1.6 Net realized gains (losses) 0.0 0.2 0.0 0.3 Total
revenues 17.3 14.5 52.3 39.9 Net losses and loss adjustment
expenses incurred 11.6 14.1 32.3 31.9 Underwriting, acquisition and
operating expenses Commissions 3.4 1.3 9.4 3.7 Other underwriting,
acquisition and operating expenses 3.5 2.4 10.9 7.4 Total
underwriting, acquisition and operating expenses 6.9 3.7 20.3 11.1
Total expenses 18.5 17.8 52.6 43.0 Income (loss) from continuing
operations before income taxes (1.2) (3.3) (0.3) (3.1) Income tax
expense (benefit) (0.5) (1.2) (0.1) (1.2) Net income (loss) $(0.7)
$(2.1) $(0.2) $(1.9) Three Three Nine Nine Months Months Months
Months Ended Ended Ended Ended Sept. 30, Sept. 30, Sept. 30, Sept.
30, Key Measures 2005 2004 2005 2004 ($ in millions) (unaudited)
(unaudited) (unaudited) (unaudited) Gross written premiums $21.5
$17.2 $62.4 $49.0 Net written premiums 17.8 15.7 53.6 41.9 Net
ex-catastrophe loss ratio 68.1% 99.9% 62.8% 78.7% Net catastrophe
loss ratio 3.2% 3.0% 2.2% 5.3% Net expense ratio 42.3% 27.5% 40.9%
29.3% Net combined ratio 113.6% 130.4% 105.9% 113.3% Program
Management Segment Three Three Nine Nine Months Months Months
Months Results of Ended Ended Ended Ended Operations - Sept. 30,
Sept. 30, Sept. 30, Sept. 30, Program Management 2005 2004 2005
2004 ($ in millions) (unaudited) (unaudited) (unaudited)
(unaudited) Net insurance premiums earned $15.6 $14.7 $37.1 $40.9
Net investment income 0.8 0.4 1.9 1.2 Net realized gains (losses)
0.0 0.1 0.0 0.2 Other income 0.5 0.5 1.8 2.2 Total revenues 16.9
15.7 40.8 44.5 Net losses and loss adjustment expenses incurred 8.1
4.4 19.1 18.0 Underwriting, acquisition and operating expenses
Commissions 4.2 5.3 11.6 12.4 Other underwriting, acquisition and
operating expenses 1.4 1.5 4.3 5.0 Total underwriting, acquisition
and operating expenses 5.6 6.8 15.9 17.4 Total expenses 13.7 11.2
35.0 35.4 Income from continuing operations before income taxes 3.2
4.5 5.8 9.1 Income tax expense 1.4 2.0 2.3 3.6 Net income $1.8 $2.5
$3.5 $5.5 Three Three Nine Nine Months Months Months Months Ended
Ended Ended Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, Key
Measures 2005 2004 2005 2004 ($ in millions) (unaudited)
(unaudited) (unaudited) (unaudited) Gross written premiums $40.0
$42.4 $101.8 $122.0 Net written premiums 19.8 15.1 47.4 42.7 Net
loss ratio 52.0% 30.2% 51.3% 44.0% Net expense ratio 35.9% 46.2%
42.9% 42.5% Net combined ratio 87.9% 76.4% 94.2% 86.5% Insurance
Services and Corporate Segment Three Three Nine Nine Months Months
Months Months Results of Operations - Ended Ended Ended Ended
Insurance Services Sept. 30, Sept. 30, Sept. 30, Sept. 30, and
Corporate 2005 2004 2005 2004 ($ in millions) (unaudited)
(unaudited) (unaudited) (unaudited) Net insurance premiums earned
$1.7 $1.2 $4.9 $3.3 Net investment income 0.1 0.1 0.3 0.1 Net
realized gains (losses) 0.0 0.0 0.0 0.0 Other income 0.5 0.2 1.6
1.3 Total revenues 2.3 1.5 6.8 4.7 Net losses and loss adjustment
expenses incurred 0.0 0.0 0.0 0.0 Underwriting, acquisition and
operating expenses Commissions 0.0 0.0 0.0 0.0 Other underwriting,
acquisition and operating expenses 0.4 (0.6) 3.7 1.4 Total
underwriting, acquisition and operating expenses 0.4 (0.6) 3.7 1.4
Interest expense 0.9 0.6 2.4 1.6 Total expenses 1.3 0.0 6.1 3.0
Income (loss) from continuing operations before income taxes 1.0
1.5 0.7 1.7 Income tax expense (benefit) 0.4 0.6 0.2 0.7 Equity in
earnings of unconsolidated foreign insurance company, net of income
tax 1.4 0.4 2.9 2.1 Net income $2.0 $1.3 $3.4 $3.1 Three Three Nine
Nine Months Months Months Months Ended Ended Ended Ended Sept. 30,
Sept. 30, Sept. 30, Sept. 30, Key Measures 2005 2004 2005 2004 ($
in millions) (unaudited) (unaudited) (unaudited) (unaudited) Gross
written premiums $38.0 $33.3 $105.6 $87.9 Conference Call The
Company will conduct a teleconference call to discuss information
included in this news release and related matters at 8:00 a.m. CST
on Friday November 4, 2005. Investors may access the call
telephonically by dialing (800) 573-4842 with pass code 29909317
approximately 10 minutes prior to the scheduled start time.
International callers may access the call telephonically by dialing
(617) 224-4327 with pass code 29909317. The conference call will be
available for replay through November 11, 2005 by dialing (888)
286-8010 with the pass code 41852297. International callers may
access the replay by dialing (617) 801-6888 with pass code
41852297. Additional information is available on our website at
http://www.republicgroup.com/ . Quiet Period The Company observes a
quiet period and will not comment on financial results or
expectations during quiet periods. The quiet period for the third
quarter started September 15, 2005 and will extend through November
7, 2005. About Republic Republic Companies Group, Inc. through a
group of insurance companies and related entities provides personal
and commercial property and casualty insurance products to
individuals and small to medium-size businesses primarily in Texas,
Louisiana, Oklahoma and New Mexico. This focus on a large, rapidly
growing region allows Republic to participate in profitable
underserved niche opportunities primarily in rural and small to
medium-size metropolitan areas. We have written insurance in Texas
consistently throughout our entire 102-year history and have
developed deep market knowledge and a loyal network of independent
agents and managing general agents who provide us with access to
what we believe are among the most profitable clients and market
segments. We are rated A- (Excellent) by A.M. Best Company, Inc.
with a stable outlook. We completed our Initial Public Offering in
early August 2005. Precautionary Statement Regarding
Forward-Looking Information Some of the statements in this press
release may include forward-looking statements, as that term is
defined in the Private Securities Litigation Reform Act of 1995
(PSLRA), that reflect our current views with respect to future
events and financial performance. These forward-looking statements,
which may apply to us specifically or the insurance industry in
general, are made pursuant to the safe harbor provisions of the
PSLRA and include estimates and assumptions related to economic,
competitive, regulatory, judicial, legislative and other
developments. Statements that include the words "expect", "intend",
"plan", "believe", "project", "estimate", "may", "should",
"anticipate", "will" and similar statements of a future or
forward-looking nature identify forward-looking statements for
purposes of the federal securities laws or otherwise. All
forward-looking statements address matters that involve risks and
uncertainties. Accordingly, there are or will be important factors
that could cause our actual results to differ materially from those
indicated in these statements. We believe that these factors
include but are not limited to the following: - greater frequency
or severity of claims and loss activity than our underwriting,
reserving or investment practices anticipate based on historical
experience or industry data, including activity resulting from
natural or man-made catastrophic events or severe weather; -
changes in general economic conditions, including inflation and
other factors; - failure to adequately price our insurance policies
and create sufficient reserves; - industry developments that
centralize and commoditize insurance products to the detriment of
agency distribution models; - lack of acceptance of our products
and services, including new products and services; - decreased
demand for our insurance products; - difficulty in expanding our
book of business; - changes in the availability, cost or quality of
reinsurance and failure of our reinsurers to pay claims timely or
at all; - the creditworthiness of our reinsurers or of the insurers
for whom we provide fronting services; - the occurrence of one or
more catastrophic events or a series of severe weather events in
the concentrated geographic area where we focus our insurance
underwriting; - loss of independent insurance agents to distribute
our products; - failure of one or more of our MGAs to appropriately
underwrite our products or administer claims; - inability to
maintain our business relationship with our largest producing MGA;
- loss of the services of any of our executive officers,
underwriters or other key personnel; - decline of our A.M. Best
Company, Inc. (A.M. Best) financial strength rating; - changes in
rating agency policies or practices; - failure of any loss
limitation method we employ; - changes in legal theories of
liability under our insurance policies; - economic or regulatory
developments in the States of Texas, Louisiana, Oklahoma, New
Mexico or other states in which we operate, that adversely affect
our financial condition and results of operations; - increased
competition on the basis of pricing, capacity, coverage terms or
other factors; - developments in the world's financial and capital
markets that adversely affect the performance of our investments; -
inability to obtain capital on acceptable terms; - changes in
regulations, laws and accounting standards applicable to us or our
subsidiaries, agents or customers; - increases in the amount of
assessments we are required to pay; - the effect our holding
company structure and regulatory constraints may have on our
ongoing cash requirements and ability to pay dividends; - failure
of our information technology systems; - the effects of future
acquisitions on our business; and - difficulty in effecting a
change of control of our company. This list of factors should not
be construed as exhaustive and should be read in conjunction with
the other cautionary statements that are included in our filings
with the Securities and Exchange Commission (available at
http://www.sec.gov/ ). Unless otherwise required by law, we
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise. If one or more of these or other
risks or uncertainties materialize, or if our underlying
assumptions otherwise prove to be incorrect, our actual results may
vary materially from what we project. Any forward-looking
statements you read in this news release reflect our views as of
the date of this press release with respect to future events and
are subject to these and other risks, uncertainties and assumptions
relating to our operations, financial condition, results of
operations, growth strategy and liquidity. All subsequent written
and oral forward-looking statements attributable to us or
individuals acting on our behalf are expressly qualified in their
entirety by this paragraph.
http://www.newscom.com/cgi-bin/prnh/20050801/REPUBLICLOGO
http://photoarchive.ap.org/ DATASOURCE: Republic Companies Group,
Inc. CONTACT: media and investors, Michael E. Ditto, Esq., Vice
President, General Counsel and Secretary of Republic Companies
Group, Inc., +1-972-788-6000 Web site: http://www.sec.gov/ Web
site: http://www.republicgroup.com/
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