Seattle-based Safeco reported operating earnings, after tax, which exclude net realized investment gains and loss on debt repurchases, of $174.6 million for the first quarter of 2007, compared with $199.3 million in the prior-year period. Net income for the first quarter of 2007 was $182.5 million, or $1.71 per diluted share. This compares with net income of $208.2 million, or $1.69 per diluted share, for the same quarter last year. Net realized investment gains, after tax, for the first quarter were $7.9 million, compared with $9.8 million in the same period in 2006.
“This quarter provides visibility and validity to our transformation efforts,” said Paula Rosput Reynolds, Safeco president and CEO. “We remain solidly profitable, we’ve gained momentum in growing our policy count, and we’ve delivered meaningful results
from our process improvement in our expense ratios.”
Safeco’s overall property and casualty combined ratio was 89.8 for the first quarter versus 86.9 in the same quarter last year. The combined ratio is the percentage of each premium dollar spent on claims and expenses.
Pretax catastrophe losses for the first quarter were $2.8 million, compared with $36 million a year ago. Safeco’s annualized return on equity (ROE) for the first quarter was 18.2 percent. Annualized operating ROE – measured using operating earnings and excluding from equity unrealized gains or losses on bonds – was 18.1 percent for the quarter.
Total revenues in the first quarter of 2007 were $1.51 billion, compared with $1.56 billion in 2006. Operating revenues, which exclude net realized investment gains, were $1.49 billion for
the quarter – down 3.4 percent compared with the same period in 2006.
Net written premiums were $1.39 billion for the first quarter, a 2.0 percent decrease compared with the year-ago period. Net earned premiums were $1.37 billion for the quarter, a 3.9 percent decrease from last year. Excluding from both periods the premiums from Safeco
Financial Institution Solutions (SFIS), a lender-placed property insurance business, which was sold in April 2006, net written premiums in the first quarter of 2007 were up 0.6 percent from the
first quarter of last year, and net earned premiums were down 1.2 percent from this same period.
P/C pretax net investment income for the quarter was $121.1 million, an increase of 3.6 percent compared with the same period last year. P&C after-tax net investment income was $95.8 million, an increase of 8.4 percent compared with year-ago levels.
Safeco’s senior management team will discuss the company’s first-quarter performance with analysts today at 11 a.m. EST. The conference call will be broadcast live on the Internet at www.safeco.com/irwebcast and archived later in the day.
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