Tower Group International, Ltd. Announces Reserve Strengthening and Goodwill Impairment
Announces Review of a Range of Strategic Options
HAMILTON, Bermuda--(BUSINESS WIRE)--
Tower Group International, Ltd. (NASDAQ:TWGP) announced today that it
has completed, with the assistance of its independent actuarial
consultants, a comprehensive review of the Company's loss reserves as of
June 30, 2013. As a result of the review, the Company expects to
strengthen loss reserves by approximately $365 million (approximately
$185 million of which was attributable to its U.S. Insurance
subsidiaries), primarily for accident years 2009 through 2011 in
commercial insurance lines of business, including workers' compensation,
commercial multi-peril, commercial auto and other liability lines. The
reserve strengthening reflects adverse loss emergence, coupled with
changes in judgment, including actuarial factors.
Since 2010, Tower has been shifting its business mix, significantly
de-emphasizing the lines that contributed to the reserve strengthening
and modifying its book of commercial lines business.
In addition, Tower expects to report a non-cash goodwill impairment
charge of approximately $215 million for the second quarter of 2013,
representing all goodwill associated with its commercial and specialty
and reinsurance segments. Tower is completing its evaluation of other
intangible assets associated with its commercial and specialty and
reinsurance segments, as well as the goodwill associated with its
personal lines segment.
Tower's U.S. insurance subsidiaries continue to maintain risk based
capital levels in excess of those required by their respective
The Company expects to announce its full results for the second quarter
promptly upon the conclusion of management's evaluation of the results.
Tower also announced that the Company's Board of Directors is reviewing
a range of strategic options with its lead financial advisor, JP Morgan
About Tower Group International, Ltd.
Tower Group International, Ltd. is a Bermuda-based global diversified
insurance and reinsurance holding company and is listed on the NASDAQ
Global Select Market under the symbol TWGP. Through our insurance and
reinsurance subsidiaries in the U.S. and Bermuda, collectively referred
to as Tower Group Companies, we deliver a broad range of commercial,
personal and specialty insurance products and services in the U.S. and
specialty reinsurance products globally through our distribution and
underwriting partners. For more information, visit Tower's website at http://www.twrgrpintl.com.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. This press release and any other
written or oral statements made by or on behalf of Tower may include
forward-looking statements that reflect Tower's current views with
respect to future events and financial performance. All statements other
than statements of historical fact included in this press release are
forward-looking statements. Forward-looking statements can generally be
identified by the use of forward-looking terminology such as "may,"
"can," "could," "will," "plan," "expect," "project," "intend,"
"estimate," "anticipate," "believe" and "continue" or their negative or
variations or similar terminology. All forward-looking statements
address matters that involve risks and uncertainties. Accordingly, there
are or will be important factors that could cause the actual results of
Tower to differ materially from those indicated in these statements.
Please refer to Tower's filings with the SEC, including among others
Tower's Annual Report on Form 10-K for the year ended December 31, 2012
and subsequent filings on Form 10-Q, for a description of the important
factors that could cause the actual results of Tower to differ
materially from those indicated in these statements. Forward-looking
statements speak only as of the date on which they are made, and Tower
undertakes no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Tower Group International, Ltd.
Managing Vice President, Investor Relations
Verbinnen & Co
Jamie Tully/David Millar, 212-687-8080
Source: Tower Group International, Ltd.
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