Seattle-based Safeco hosted a conference call on its fourth quarter and year-end results today, noting it had fourth-quarter net income of $216,4 million, or $1.96 per diluted share. Net income for the same period the previous fiscal year was $190.7 million.
For the full year ended 2006, the company reported net income of $880 million, compared with $691.1 million the previous year. Operating earnings were $207.3 million in the fourth quarter, compared with $184.3 million in the same quarter in 2005. The overall property/casualty combined ration was 87.2 for the fourth quarter, versus 89.1 the previous year. The combined ratio for the year was 87.3, compared with 91.1 one year ago.
Pretax catastrophe losses for the fourth quarter were 36.1 million, primarily due to estimated losses from the Pacific Northweat windstorm in Dec. 2006. Pretax catastrophe losses
were $51.4 million in the prior-year period, stemming largely from Hurricane Wilma. After reinsurance, pretax catastrophe losses were $155.3 million for the year, compared with $267.4 million in 2005, primarily from Hurricanes Katrina and Rita.
“The fourth-quarter and full-year results are tangible evidence that when Safeco commits to a direction, it will deliver,” said Paula Rosput Reynolds, president and CEO.
Safeco recorded $3 million in restructuring and asset impairment charges associated with the actions taken in the fourth quarter. For the full year, these charges totaled $25.7 million. For 2007, the company is targeting an additional $50 million to $75 million reduction in its annualized expense run rate by year-end. These projected savings are consistent with Safeco’s previously announced strategy to achieve greater competitiveness, the company said.
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