Safeco Quarterly Income Rises Sharply
NU Online News Service, April 20, 4:10 p.m. EDT?Safeco Corp. reported today that its first-quarter net income rose to $236.2 million?up sharply from $90 million reported during the year-ago period?helped by higher underwriting profits.[@@]
Safeco's chief executive Mike McGavick said his company is very pleased with its first quarter. He commented the results took hard work and focus, especially given the efforts required for the transaction involving the sale of Safeco's Life & Investments business.
He noted that the Life & Investments unit had delivered strong results, demonstrating their value.
At the same time, Mr. McGavick emphasized, strong results from the company's property-casualty business demonstrate why Safeco is concentrating its energy as a p-c insurer.
"We're encouraged by the profitability and by the growth in premiums we're seeing across our p-c business," Mr. McGavick said. "Our job now is to continue building on this strong performance."
March 15, 2004, Safeco signed definitive agreements to sell its Life & Investments operation for $1.44 billion to separate investor groups. The transaction is expected to be completed in the third quarter, pending regulatory approval, the company reported. Safeco also noted that for this and future quarters, Life & Investments results will be reported as a discontinued operation.
Looking at Safeco's remaining, continuing operations, the company said first-quarter income from those units came in at $185.6 million, up from $79.5 million reported one year ago. Net realized first-quarter investment gains were reported at $27.8 million, up from $5.5 million reported one year ago.
Safeco said its overall p-c combined ratio for the quarter came in at 89.9, reflecting positive profit contributions from all primary p-c lines. In comparison, the company reported 98.2 for its p-c combined ratio during the year-ago period.
Total first-quarter revenues from continuing operations were $1.50 billion, rising from $1.29 billion reported a year ago.
Safeco's p-c net earned premiums rose 15.3 percent during the first quarter, to $1.34 billion. The first quarter's p-c net written premiums also rose, up 14.1 percent from the 2003 first quarter.
Other first-quarter highlights reported by Safeco:
? Auto, Safeco's largest business line, reported a quarterly pretax underwriting profit of $23.1 million, improving from the $6.6 million loss reported during the 2003 first quarter.
? Safeco's property insurance line?which includes homeowners, renters and related coverage?had a pretax underwriting profit of $61.4 million, outpacing the $28.0 million profit reported in the 2003 first quarter.
? Safeco's Business Insurance unit reported a pretax underwriting profit of $42.3 million in the first quarter, improving from the $1.1 million profit reported during the year-ago period.
? Surety business posted a pretax underwriting profit of $9.3 million in the first quarter, compared with a $3.7 million profit one year ago.
? Safeco's discontinued Life & Investments business reported pretax operating earnings of $61.3 million in the first quarter, compared with $74.9 million one year ago.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.