Safeco today reported net income for the first quarter of $208.2 million, compared with net income of $212 million for the same quarter last year.
"The market is not putting any wind at our back, but our plan for total business process improvement is smart tacking in turbulent waters," said Paula Rosput Reynolds, Safeco president and chief executive officer.
Safeco's overall property and casualty combined ratio was 86.9 for the quarter versus 88.5 in the same quarter last year. Pretax catastrophe losses for the first quarter were $36 million, compared with $24.8 million a year ago.
Safeco's annualized return on equity for the first quarter was 20.5 percent. Annualized operating ROE–measured using operating earnings and excluding from equity unrealized gains or losses on bonds–was 19.9 percent for the quarter.
Morgan Stanley analyst William Wilt expressed concern that most of the higher than expected profits stemmed from large risk commercial property and surety units, while auto premiums and policy counts declined.
When compared to St. Paul Travelers' 7 percent rise in auto policy counts, "investors may worry competitiveness in the agency channel is heating up rapidly."
Total revenues in the first quarter were $1.56 billion, compared with $1.58 billion in 2005. Operating revenues, which exclude net realized investment gains, were $1.55 billion for the quarter–flat when compared with the same period in 2005.
P-C net written premiums were $1.42 billion for the first quarter, down 1.2 percent compared with the year-ago period.
P-C pretax net investment income for the quarter was $116.9 million, an increase of 3.5 percent compared with the same period last year, the company said.
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