Safeco, while growing in some areas, is trailing competitors, an analyst said after the insurer reported first-quarter net income decreased 19 percent.
The Seattle-based carrier reported first-quarter profits of $182.5 million compared with $208 million for the same period in 2006.
Chief Executive Officer Paula Rosput Reynolds said the results provide “visibility and validity to our transformation efforts.”
The overall p-c combined ratio rose three points to 89.8. Pre-tax catastrophe losses came in at $2.8 million, compared with $36 million a year ago.
Net written premiums decreased 2 percent for the quarter to come in at $1.39 billion. Net earned premiums suffered a 3.9 decrease compared to the same year-ago period to come in at $1.37 billion.
Morgan Stanley senior property-casualty analyst William Wilt noted that the auto combined ratio of 97.4 was some eight points above its peers and above the carrier's target of 96.
“Moreover, while (auto) growth improved sequentially, it still lags behind some of its competitors,” he wrote.
In addition, Safeco still faces potential reserving issues and unfavorable loss cost trends. The company plans to raise prices a percent or two to make up for these conditions, Mr. Wilt said, but faces policyholders more sensitive than most to price.
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