SAFECO Announces Fourth-Quarter and Year-End 2000 Results

Safeco has reported lower profits for 2000, and an operating loss for the fourth quarter. For the full year 2000, SAFECO reported net income of $114.6 million, or $0.90 per diluted share, on revenues of $7.1 billion. Operating income, excluding realized gains from investments, was $24.2 million, or a profit of $0.19 per diluted share. This compares to operating income of $1.32 per diluted share in 1999.

During the fourth quarter, SAFECO reported net income of $10.2 million, or $0.08 per diluted share, on revenues of $1.7 billion. Operating losses, excluding realized gains from investments, were $9.6 million, or a loss of $0.08 per diluted share. This compares with an operating profit of $0.24 per diluted share in the fourth quarter 1999, and an operating profit of $0.10 per diluted share in the third quarter of 2000.

SAFECO Personal Insurance, including auto and homeowners insurance, reported a quarterly underwriting loss of $70.2 million, compared with an underwriting loss of $19.4 million during the same quarter a year earlier. The change is the result of weather-related homeowners losses, which were nearly three times higher in the fourth quarter than during the same period in 1999, and losses for SAFECO’s auto insurance lines, which increased by $5 million when compared with the fourth quarter of 1999.

SAFECO Business Insurance continued to show improvement as fourth-quarter underwriting losses declined to $26.1 million. That represents a 30 percent improvement over the $37.1 million underwriting loss reported during the same period in 1999.

SAFECO Commercial Insurance reported an underwriting loss of $51.9 million, a slight improvement over the $59.1 million loss during the fourth quarter of 1999.

SAFECO’s Surety operations generated a $1.8 million loss in the fourth quarter, its first quarterly loss in three years. This is largely attributable to reserving $5 million for a loss resulting from the bankruptcy eclaration of a customer SAFECO has bonded. For the year, Surety produced a profit of $11.7 million, compared with $15.2 million in 1999.

SAFECO Life generated a pretax operating profit of $157.6 million for the year, down from $178.6 million in 1999. In the fourth quarter, Life reported profits of $36.1 million, compared with $49.8 million a year earlier. The decline in annual profits is attributed largely to the performance of SAFECO Life’s annuity lines, which reported earnings of $56.5 million compared with $94.8 million in 1999. This was caused by several factors including lower investment income and policyholders taking advantage of an early-surrender offer. Partially offsetting this was the performance of SAFECO’s group insurance line, which earned $4.3 million, a significant improvement over the loss of $19.4 million in 1999.

SAFECO Credit produced a pretax profit of $6.1 million for the quarter, up from $5.0 million for the fourth quarter of 1999. SAFECO Asset Management operations produced profits of $1.7 million for the quarter, a decline from $4.1 million in the fourth quarter a year earlier.