Safeco Estimates Storm Losses

May 20, 2003

Seattle-based Safeco announced that claims stemming from the recent string of Midwest and Southern tornadoes, added to losses from violent hailstorms in Texas earlier in the quarter, are estimated at nearly $90 million in pretax catastrophe losses. This figure represents losses through May 16, with six weeks remaining in the quarter. The effect on second-quarter net income is currently estimated to be $0.42 per diluted share on an after-tax basis.

“Insurance is about delivering on promises,” said Mike McGavick, Safeco chairman and chief executive officer. “These horrible storms show why our product is so important. By providing fast, personalized claims service, we can help the people affected. That’s exactly what we are doing.”

Safeco’s National Catastrophe Team began assessing the situation immediately after the first tornadoes touched down on May 4. Surveyors and adjusters were in the field within hours, issuing payments to Safeco customers for emergency repairs and living expenses. As the storms continued, additional claims staff from around the country supplemented the national team to assist with the volume of claims.

In Safeco’s first-quarter earnings announcement on April 28, the company stated that losses from Texas hailstorms in early April totaled approximately $30 million, ending the recent trend of relatively low weather-related catastrophe losses. The tornadoes and other severe weather events in six states are expected to add more than $55 million in losses.

Safeco will announce its second-quarter financial results on Monday, July 28.

Was this article valuable?

Here are more articles you may enjoy.