Safeco Estimates Losses from Hurricane Frances

Seattle-based Safeco announced that its pretax catastrophe losses stemming from Hurricane Frances are estimated at $28 million.

This figure represents the estimated losses both from claims received through Sept. 20, 2004 and future expected claims from policyholders with damage from the storm. The effect on third-quarter net income is estimated at $18 million after tax, or $0.13 per diluted share.

The estimated pretax losses include $13 million in personal lines, primarily homeowners claims and $15 million in small-business claims.

Safeco previously announced that its pretax catastrophe losses stemming from Hurricane Charley are estimated at $45 million. Hurricane Charley’s effect on third-quarter net income is estimated at $29 million after tax, or $0.22 per diluted share. The total impact of Frances and Charley on third-quarter net income per share is estimated at $0.35 per diluted share. Safeco does not anticipate reimbursements from the Florida Hurricane Catastrophe Fund or Safeco’s property catastrophe reinsurance for damages from either Hurricane Frances or Hurricane Charley.

Damages from Hurricane Ivan, which hit Gulf Coast states late last week, are being evaluated and estimated losses will be announced at a later date.

Safeco’s National Catastrophe Team remains in place in Florida, helping customers recover from Hurricanes Charley, Frances and Ivan. Additional claims professionals have been deployed to Alabama and surrounding states to support Hurricane Ivan recovery efforts.

“Hurricane Frances, coming just on the heels of Hurricane Charley, dealt a real blow to our policyholders in Florida, particularly those who were still repairing damage from the first storm. Safeco claims professionals have responded with extraordinary dedication,” said Mike McGavick, Safeco chairman and chief executive officer.

“At this point, we’ve already made partial or full payments on the vast majority of claims stemming from Charley, and claims from all three events are being processed swiftly, allowing the rebuilding process to begin,” McGavick said.

The company will announce its third-quarter financial results on Oct. 19, 2004.

Safeco, in business since 1923, is a Fortune 500 property and casualty insurance company based in Seattle. The company sells insurance to drivers, homeowners, and small- and medium-sized businesses through a national network of independent agents and brokers.

Topics Catastrophe Natural Disasters Florida Claims Profit Loss Hurricane