Insurer SAFECO Corp. commented on Tuesday it expects fourth-quarter profits to be cut by insurance policies sold to Enron Corp., investments it held in the bankrupt energy trader, and worse-than-expected losses in its homeowner insurance business.
According to a Reuters report, Seattle-based SAFECO said its pre-tax operating income would be trimmed by about $20 million, or 10 cents per share, as a result of surety bonds issued to Enron.
SAFECO joins rival insurers Chubb Corp., CNA Financial Corp. and St. Paul Cos. in expecting to pay out on Enron-related surety bonds.
SAFECO also said its fourth-quarter operating profit would be hit by $16 million more than it expected in catastrophe losses on homeowner insurance policies.
The firm also said it is projecting $20 million of nonoperating losses due to write-downs or sales of Enron bonds held in SAFECO’s investment portfolio.
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