Catastrophe losses totaled $21 million, before tax, in fourth quarter 2013, significantly lower than fourth quarter 2012, which totaled $126 million due to Storm Sandy. On a net basis, there was no PYD in fourth quarter 2013 compared with favorable PYD of $14 million, before tax, in fourth quarter 2012, principally from homeowners.
The auto combined ratio, before catastrophes and PYD, was 102.7 in fourth quarter 2013, 2.2 points higher than 100.5 in fourth quarter 2012 due to a strengthening of current accident year auto liability reserves as frequency trends developed slightly higher than expected during the second half of the year. The combined ratio for homeowners, before catastrophes and PYD, was 70.6, 4.9 points higher than 65.7 in fourth quarter 2012, due to higher non-catastrophe weather losses compared to very favorable experience in 2012.
Fourth quarter 2013 written premiums rose 3% from fourth quarter 2012 as a result of new business premium growth, stable premium retention, and renewal written price increases. Fourth quarter 2013 premium retention for auto remained stable at 87% while homeowners increased by 1 point to 92%. Fourth quarter 2013 renewal written price increase averaged 5% in auto and 8% in homeowners, compared with 5% and 6%, respectively, in fourth quarter 2012. New business premium totaled $126 million, 18% higher than fourth quarter 2012 new business premium of $107 million due to strong auto new business across all channels, particularly AARP Agency and AARP Direct.
P&C Other OperationsFourth quarter 2013 underwriting loss was $9 million compared with $15 million in fourth quarter 2012. Fourth quarter 2013 results included unfavorable PYD of $3 million, before tax, while fourth quarter 2012 had unfavorable PYD of $5 million, before tax. GROUP BENEFITSFourth Quarter 2013 Highlights:
- Core earnings of $55 million, up 41% from $39 million in fourth quarter 2012, due to improved group long-term disability results
- Improved core earnings after-tax margin of 5.9% compared with 3.8% in fourth quarter 2012
- Loss ratio improved 4.3 points from fourth quarter 2012 to 72.7% driven by favorable long-term disability pricing and loss trends
|($ in millions)||Three Months Ended|
|Dec. 31 2013||Dec. 31 2012||Change|
|Fully insured premiums¹||$821||$915||(10%)|