Safety Insurance Group, Inc., a Massachusetts-based personal lines insurer, reported first quarter 2007 net income was $24.6 million, or $1.53 per diluted share, compared to $30.8 million, or $1.94 per diluted share, for the comparable 2006 period. Safety’s book value per share increased to $32.02 at March 31, 2007 compared to $30.84 at December 31, 2006.
Direct written premiums for the quarter increased by $3.5 million, or 2.0%, to $181.5 million from $178.0 million for the comparable 2006 period. The 2007 increase occurred primarily in the homeowners line, which experienced a 5.6% increase in average written premium. In addition, the personal automobile line’s average written premium increased by 0.7% and our commercial automobile line’s average written premium increased by 0.9%.
Net written premiums for the quarter ended March 31, 2007 increased by $0.6 million, or 0.3%, to $173.9 million from $173.3 million for the comparable 2006 period. This increase was due to the factors that increased direct written premiums combined with a decrease in premiums ceded to Commonwealth Automobile Reinsurers, and partially offset by a decrease in premiums assumed from CAR. Net earned premiums for the quarter ended March 31, 2007 decreased by $4.2 million, or 2.7%, to $153.6 million from $157.8 million for the comparable 2006 period primarily as a result of a decrease in premiums assumed from CAR. The effect of reinsurance on net written and net earned premiums is presented in the attached tables.
Net investment income for the quarter ended March 31, 2007 was $11.0 million compared to $9.4 million for the comparable 2006 period.
Loss, expense and combined ratios calculated under U.S. generally accepted accounting principles for the quarter ended were 60.3%, 26.5% and 86.8% compared to 54.3%, 25.6% and 79.9% for the comparable 2006 period. The loss ratio increased as a result of an increase in personal and commercial automobile claim frequency combined with decreases in favorable loss development in our homeowners line and CAR assumed automobile prior year results. Total prior year favorable development included in the pre-tax results for the quarter ended March 31, 2007 was $9.4 million compared to prior year favorable development of $13.3 million for the comparable 2006 period.
On May 7, 2007, the board of directors approved a $0.25 per share quarterly cash dividend on the issued and outstanding common stock, payable on June 15, 2007 to shareholders of record at the close of business on June 1, 2007.
Safety Insurance Group, Inc. is the parent of Safety Insurance Co., Safety Indemnity Insurance Co., and Safety Property and Casualty Insurance Co. which are Boston, Mass., based writers of property and casualty insurance.
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