SEATTLE, Sept. 27 /PRNewswire-FirstCall/ -- Safeco (Nasdaq: SAFC) today
announced estimated after-tax catastrophe losses from Hurricane Katrina of $78
million, or $0.61 per diluted share.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030428/SFM037LOGO )
Safeco's gross pretax losses before reinsurance are estimated to be $170
million. After reinsurance, net pretax catastrophe losses from Hurricane
Katrina are estimated at $120 million.
These figures represent the estimated losses both from claims received
through Sept. 26, 2005 and from future expected claims from policyholders with
damage from the storm, as well as wind pool assessments and reinsurance
reinstatement costs.
Losses from Hurricane Rita, which hit the Texas-Louisiana border late last
week, currently are being evaluated. Safeco's National Catastrophe Team
remains in force along the Gulf Coast, helping customers in Mississippi,
Louisiana, Texas, Alabama and Florida recover from both hurricanes.
"Hurricane Katrina dealt a devastating blow to our customers and agents on
the Gulf Coast. There's no doubt that recovery efforts will command the
nation's full attention in the months and years ahead," said Mike McGavick,
Safeco chairman and chief executive officer.
"Safeco claims professionals were among the first on the ground in the
hardest-hit towns along the Mississippi and Alabama coast - operating under
difficult and sometimes dangerous conditions to help customers begin the
recovery process," McGavick said.
Safeco already has made partial or full payments on the majority of
Hurricane Katrina-related claims in areas accessible to insurance personnel.
Claims received are being processed swiftly to allow the rebuilding process to
begin. In addition, Safeco deployed customer service personnel, generators and
satellite phones to help distribution partners whose business operations were
disrupted, so they could serve their customers.
Safeco's market share in areas hit by Hurricane Katrina is relatively
small. In Mississippi, Safeco has a 1.3 percent share of the homeowners market
and a 1.4 percent share of the commercial multi-peril market. In Louisiana,
the company has a 0.6 percent share of the homeowners market and a 0.8 percent
share of the commercial multi-peril market. Safeco's loss estimate is expected
to be less than proportionate to Safeco's market share, due to strict
underwriting guidelines in areas susceptible to coastal storms.
Safeco has estimated losses for this catastrophe using its knowledge of
severity and reporting patterns from past storms as well as data and
assumptions specific to this disaster. Due to the unprecedented nature of the
event, difficulty in accessing portions of the affected areas, the complexity
of losses, and legal, regulatory and other uncertainties affecting the
estimation of losses, Safeco expects to refine its estimates and assumptions
related to Hurricane Katrina as these uncertainties are resolved.
The company will announce its third-quarter financial results on Oct. 18,
2005.
Safeco, in business since 1923, is a Fortune 500 property and casualty
insurance company based in Seattle. The company sells insurance to drivers,
home owners, and owners of small- and medium-sized businesses through a
national network of independent distribution partners. More information about
Safeco can be found at http://www.safeco.com.
Forward-looking information contained in this
news release is subject to risk and uncertainty
Forward-looking information contained in this release is subject to risk
and uncertainty. Information contained in this release that relates to
anticipated losses from recent hurricane activity, financial performance,
business prospects and plans, regulatory developments and similar matters are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Statements in this release that are not historical
information are forward-looking. Our business is subject to certain risks and
uncertainties that may cause actual results to differ materially from those
suggested by the forward-looking statements in this release. The risks and
uncertainties include, but are not limited to:
-- Risks related to the pricing and underwriting of our products, and the
subsequent establishment of reserves, such as:
- Successful implementation of the new-business entry model for
personal and commercial lines
- Our ability to appropriately price and reserve for changes in the mix
of our book of business
- Inflationary pressures on medical care costs, auto parts and repair,
construction costs and other economic factors that increase the
severity of claims
- The availability and pricing of our reinsurance, including coverage
for loss from terrorism and our ability to collect from our
reinsurers
- Our ability to price for or exclude the risk of loss from terrorism
on our policies
-- Risks related to our Property & Casualty insurance strategy, such as:
- Our ability to achieve premium targets and profitability, including
realization of growth and business retention estimates
- Our ability to achieve overall expense goals
- Our ability to run off businesses that we have exited, or intend to
exit in the future, without incurring material unexpected charges
-- The competitive pricing environment, initiatives by competitors and
other changes in the competition
-- Regulatory, judicial and legislative risks, such as:
- Our ability to freely enter and exit lines of business
- Our ability to successfully obtain regulatory approval of rates and
underwriting guidelines, including price-tiered products and the use
of insurance scores that include credit information as a component
- Interpretation of insurance policy provisions by courts or tax
authorities, court decisions regarding coverage and theories of
liability, trends in litigation and changes in claims settlement
practices
- The outcome of any litigation against us
- Legislative and regulatory developments affecting the actions of
insurers, including requirements regarding rates, taxes, agent and
broker commissions and availability of coverage
-- Unusual loss activity, such as:
- Weather conditions, including the severity and frequency of storms,
hurricanes, hail, snowfall and winter conditions
- The occurrence of significant natural disasters, including
earthquakes
- The occurrence of significant man-made disasters, such as terrorist
attacks or war
- The occurrence of bankruptcies that result in losses on insurance
products or investments
-- Financial and economic conditions, such as:
- Performance of financial markets
- Availability of bank credit facilities
- Fluctuations in interest rates
- General economic conditions
-- Operational risks, such as:
- Damage to our infrastructure or harm to our workforce resulting in a
disruption of our operations
- Internal or external fraud perpetrated against us
We assume no obligation to update any forward-looking statements contained
in this news release.
SOURCE Safeco
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Related links:
http://www.safeco.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20030428/SFM037LOGO
AP Archive: http://photoarchive.ap.org PRN Photo Desk
photodesk@prnewswire.com
CONTACT:
Neal Fuller, Investor Relations,
+1-206-545-5537, or Paul Hollie, Media Relations,
+1-206-545-3048, both of Safeco
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