Total Investments $ 73,802 $ 71,018 $ 58,210 $50,540 $40,324 Total Assets 134,442 130,936 101,627 83,068 66,345 Long-Term Debt 558 1,076 1,481 1,921 16 Shareholders' Equity 47,491 46,834 46,014 40,014 32,041 Book Value Per Common Share (1) 8.83 8.75 8.82 7.55 7.36 Common Shares Outstanding (1) 4,710 4,651 4,470 4,402 4,359
The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the Company's consolidated financial statements, including the notes thereto, and other financial information appearing elsewhere in this Report.
In 1997, the Company's statutory loss ratio increased to 81% from 75% in 1996 and the Company's statutory combined ratio increased to 114% from 104% in 1996. The increase in the loss ratio and combined ratio in 1997 were the result of a higher loss ratio on both property and casualty coverages. In 1996, the Company's statutory loss ratio increased to 75% from 59% in 1995 and the Company's statutory combined ratio increased to 104% from 87% in 1995. The increase in the loss ratio and combined ratio in 1996 were the result of a higher loss ratio on both property and casualty coverages.
The Company's insurance subsidiaries, Lincoln, Comp and Yorktowne, are subject to state insurance regulatory laws which restrict their ability to pay dividends. They are also subject to risk-based capital requirements which may further restrict their ability to pay dividends. See Note 11 of Notes to Consolidated Financial Statements.
Property and casualty insurance premiums are established before the amount of claims and claim settlement expenses, or the extent to which inflation may impact such expenses, is known. Consequently, in establishing premium rates, the Company attempts to anticipate the potential impact of inflation. Generally, the longer the period of time required to settle claims, the greater the impact of inflation on final settlement costs. Historically, the majority of all of the insurance written by the Company was on property risks, the losses on which tend to be reported quickly and settled within a relatively short period of time. As a result, the effect of inflation on loss development was not significant. However, as the Company writes more casualty business, the losses on which tend to be settled over a longer period of time, inflation may have more of an impact on loss development. While the Company believes that inflation in recent years has not significantly impacted operating expenses and claims, there is no assurance that inflation will remain at the levels experienced in recent years.
In February, 1998, SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits", was issued. It revises employer's disclosures about pensions and other postretirement benefit plans. It does not change the measurement or recognition of these plans. SFAS No. 132 is effective for fiscal years beginning after December 15, 1997. The Company intends to adopt SFAS No. 132 in 1998.
Many computer systems in use today were designed and developed using two digits, rather than four, to specify the year. As a result, such systems will recognize the year 2000 as "00". This could cause many computer applications to fail completely or to create erroneous results unless corrective measures are taken. The Company utilizes software and related computer technologies essential to its operations that will be affected by the Year 2000 issue. The Company has completed much of the work necessary to make its computer systems Year 2000 compliant. The additional expense associated with these actions cannot presently be determined, but it is not anticipated to be material.
The financial statements and supplementary financial information required by this item are presented following Item 14 in Part IV of this report.