Safety Insurance Group, Inc. reported that its second quarter net income was $22.9 million, or $1.42 per diluted share, compared to $29.1 million, or $1.81 per diluted share, for the comparable 2006 period. Net income for the six months ended June 30, 2007 was $47.6 million, or $2.95 per diluted share, compared to $59.9 million, or $3.75 per diluted share, for the comparable 2006 period.
Safety’s book value per share increased to $32.66 at June 30, 2007 compared to $30.84 at December 31, 2006.
The board of directors has approved an increase in the quarterly cash dividend from $0.25 to $0.40 per share on the issued and outstanding common stock, payable on Sept. 14, 2007.
The board also approved a share repurchase program of up to $30 million of Safety’s outstanding common shares. Under the program, Safety may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise, at management’s discretion. The program does not require Safety to repurchase any specific number of shares.
Direct written premiums for the quarter ended June 30, 2007 decreased by $4.0 million, or 2.4%, to $158.5 million from $162.5 million for the comparable 2006 period. Direct written premiums for the six months ended June 30, 2007 decreased by $0.5 million, or 0.1%, to $340.0 million from $340.5 million for the comparable 2006 period.
The 2007 decrease occurred primarily in personal and commercial automobile lines, which experienced decreases in average written premium of 3.3% and 2.4%, respectively. Partially offsetting these decreases was an increase in average written premium in homeowners line of 5.9%.
Net written premiums for the quarter ended June 30, 2007 decreased by $5.7 million, or 3.5%, to $156.6 million from $162.3 million for the comparable 2006 period. Net written premiums for the six months ended June 30, 2007 decreased by $5.1 million, or 1.5%, to $330.5 million from $335.6 million for the comparable 2006 period. These decreases were due to the factors that decreased direct written premiums combined with decreases in premiums assumed from Commonwealth Automobile Reinsurers, and partially offset by decreases in premiums ceded to CAR.
Net earned premiums for the quarter ended June 30, 2007 decreased by $2.4 million, or 1.5%, to $153.9 million from $156.3 million for the comparable 2006 period. Net earned premiums for the six months ended June 30, 2007 decreased by $6.5 million, or 2.1%, to $307.5 million from $314.0 million for the comparable 2006 period. These decreases were primarily as a result of decreases in premiums assumed from CAR.
Net investment income for the quarter ended June 30, 2007 was $10.8 million compared to $9.8 million for the comparable 2006 period. Net investment income for the six months ended June 30, 2007 was $21.8 million compared to $19.2 million for the comparable 2006 period.
Loss, expense and combined ratios calculated under U.S. generally accepted accounting principles (GAAP) for the quarter were 60.3%, 27.9% and 88.2% compared to 54.1%, 26.7% and 80.8% for the comparable 2006 period. Loss, expense and combined ratios calculated under GAAP for the six months ended June 30, 2007 were 60.3%, 27.2% and 87.5% compared to 54.2%, 26.2% and 80.4% for the comparable 2006 period.
The loss ratio increased as a result of an increase in personal and commercial automobile claim frequency combined with decreases in favorable loss development. Total prior year favorable development included in the pre-tax results for the quarter and six months ended June 30, 2007 was $5.4 million and $14.7 million, respectively, compared to prior year favorable development of $12.1 million and $25.4 million, respectively, for the comparable 2006 periods.
Safety Insurance Group, Inc. is the parent of Safety Insurance Co., Safety Indemnity Insurance Co., and Safety Property and Casualty Insurance Co. which are Boston, Mass., based writers of property and casualty insurance. Safety is a leading writer of personal automobile insurance in Massachusetts.
Source: Safety Insurance Group, Inc.
www.SafetyInsurance.com
Topics Trends Profit Loss Pricing Trends
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