(from www.sec.gov)
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USF&G Corp. |
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| '96 (in $ 000s) | % Change From '95 | |
| Revenue | 3,453,917 | 0.1 |
| Net Income | 260,977 | 24.6 |
Description:
USF&G is a holding company for a group of insurers writing coverage for private automobiles and homes and offering a variety of commercial policies and specialty products such as reinsurance fidelity-guaranty coverage. It also offers life insurance, though that is a much smaller part of the firm's overall business.
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In 1996 the company completed its restructuring into what it calls a "portfolio of strategic businesses." Its property/casualty businesses, which account for 88 percent of its revenue, are aligned into a Commercial Insurance Group, a Family and Business Insurance Group, and Specialty Businesses. Life insurance accounts for the other 12 percent of revenue.
The company has focused on reducing costs, especially in its Family and Business Insurance Group, through which it writes coverage for individuals and small businesses. The company has consolidated its agency services and is focusing on a smaller group of high-producing agents and automation of information and claims systems.
Management's goal is to reduce the group's high combined ratio of 108—meaning claims and expenses cost $1.08 for every $1 in premiums—to 101 to 103, and to expand the business to achieve better economies of scale.
Similar economies are being sought in commercial and specialty insurance, along with acquisitions when they become available. Last year, for example, USF&G acquired the largest surety insurer in Mexico.
