of planned increases to associated policyholder charges.
-- Our benefit ratios increased in the fourth quarter of 2007 on our
specified disease and Medicare supplement business. These increases
negatively affected fourth quarter 2007 earnings by approximately
$8 million compared to the same period of the prior year.
-- Earnings in the fourth quarter of 2007 were also negatively affected by
$4.2 million of trading losses related to the termination of interest
rate swap agreements held in our trading portfolio.
-- During the fourth quarter of 2007, we recognized additional operating
costs and expenses of approximately $3.0 million related to operational
initiatives and consolidation activities.
-- Earnings in the fourth quarter of 2006 were negatively affected by
$16.1 million related to the segment's life insurance results in
connection with management's intent regarding the administration of
certain policies. This compares to a similar charge in the fourth
quarter of 2007 of $2.0 million.
In our Other Business in Run-off segment, we recognized a pre-tax operating loss of $10.0 million in the fourth quarter of 2007, compared to a loss of $45.1 million in the fourth quarter of 2006. Earnings in the fourth quarter of 2006 were negatively impacted by claim reserve strengthening resulting from adverse claim experience on claims incurred in previous quarters. In the fourth quarter of 2007, there were no comparable significant adjustments for claim experience related to previous quarters.
The Corporate Operations segment includes our investment advisory subsidiary and corporate expenses.
Net realized losses of $23.0 million (net of taxes) in the fourth
quarter of 2007 consisted of losses from market value declines and from
sales of mortgage-backed securities collateralized by sub-prime residential
|SOURCE Conseco, Inc.|
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