Seattle-based Safeco is estimating that claims stemming from the recent California wildfires will amountto $35 million in pretax catastrophe losses. That figure represents the estimated losses both from claims received through Nov. 6, 2007, and future expected claims, the company said. The estimated effect on fourth-quarter net income is $23 million after tax, or $0.24 per diluted share.
The pretax estimated losses include:
* $30 million in personal lines property; and
* $5 million in commercial property.
Safeco estimated losses are based on the value of property in areas with fire damage, its knowledge of the severity and reporting patterns from similar catastrophes in the past, damage projections based on home values, anticipated costs for a surge in demand for goods and labor to complete repairs, and other factors requiring considerable judgment. Given the uncertainties affecting the estimation of losses, Safeco may refine its estimates and assumptions in the future.
“Safeco has been on the ground with our customers since Day One of the fires,” said Paula Rosput Reynolds, president and CEO.
The company’s National Catastrophe Team arrived on the scene shortly after the fires were reported, helping to answer questions from displaced homeowners, as well as contacting Safeco customers with information on how to file their claims. The company also announced a package of donations to local chapters of the Red Cross totaling up to $250,000.
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