Assessment, restructuring were factors in insurance company's loss.


May 02, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

Hit by an assessment for worker compensation and by restructuring charges, USF&G Corp. today reported a loss of $55 million, or 70 cents a share, during the year's first quarter. In the 1990 first quarter, the company had a profit of $51 million, or 56 cents a share.

The loss comes as the giant Baltimore insurance company is dramatically revamping its operations. As a result, the company had a loss of $569 million last year and has eliminated 2,825 jobs, about a quarter of its work force. Continuing the restructuring, USF&G took $21 million in charges in the first quarter related to streamlining its property and casualty business.

The first-quarter loss included a $20 million involuntary assessment from the National Workers' Compensation Reinsurance Pool. The pool, which is administered by the National Council on Compensation Insurance, provides extra insurance for high-risk policies that are assigned to companies that handle worker compensation insurance.

Excluding the restructuring charges and a gain on investments, USF&G had a first-quarter operating loss of $34 million, or 45 cents a share, compared with an operating profit of $41 million, or 44 cents a share, in the 1990 first quarter. Revenues were $1.1 billion, the same as a year ago.

With the exception of the special items, the results were "consistent with our strategy to strengthen the competitiveness of our insurance operation and, by so doing, build shareholder value," said Norman P. Blake Jr., USF&G chairman, president and chief executive.

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