Safety Insurance Reports 3d Quarter Dip in Net Income

Safety Insurance Group, Inc. in Boston reported third quarter net income was $29.1 million, or $1.81 per diluted share, down from to $30.5 million, or $1.92 per diluted share, for the comparable 2005 period.

But net income for year-to-date was $89.0 million, or $5.57 per diluted share, compared to $68.2 million, or $4.29 per diluted share, for the comparable 2005 period.

Direct written premiums for the quarter ended decreased by $4.9 million, or 3.0 percent, to $156.3 million from $161.2 million for the comparable 2005 period. Direct written premiums for the nine months decreased by $17.5 million, or 3.4 percent, to $496.9 million from $514.4 million for the comparable 2005 period.

The 2006 decrease occurred primarily in personal automobile line, which experienced a 6.9 percent decrease in average written premium. Partially offsetting the personal auto line decrease, were increases in the company’s commercial automobile line’s average written premium of 12.6 percent and our homeowners line’s average written premium of 6.2 percent.

Net written premiums for the quarter decreased by $1.1 million, or 0.7%, to $155.8 million from $156.9 million for the comparable 2005 period. Net written premiums for the nine months ended September 30, 2006 decreased by $19.8 million, or 3.9 percent, to $491.4 million from $511.2 million for the comparable 2005 period. These decreases were due to the factors that decreased direct written premiums combined with a decrease in premiums ceded to Commonwealth Automobile Reinsurers, the residual market.

Net earned premiums for the quarter decreased by $0.8 million to $156.7 million from $157.5 million for the comparable 2005 period. Net earned premiums for the nine months ended September 30, 2006 increased by $0.3 million to $470.8 million from $470.5 million for the comparable 2005 period.

Loss, expense and combined ratios for the quarter were 56.7%, 25.1% and 81.8% compared to 57.0%, 23.3% and 80.3% for the comparable 2005 period. Loss, expense and combined ratios calculated for the nine months ended September 30, 2006 were 55.1%, 25.8% and 80.9% compared to 62.4%, 24.1% and 86.5% for the comparable 2005 period.

The company said its loss ratio improved as a result of a decrease in personal and commercial automobile bodily injury and physical damage claim frequency and an increase in favorable loss development in its personal and commercial automobile and homeowners lines prior year results.

Source: Safety Insurance Group, Inc. is the parent of Safety Insurance Co. and Safety Indemnity Insurance Co.