Profits Shrink at Safety Insurance

Boston-based Safety Insurance Group Inc. saw third quarter profits shrink by nearly 20 percent — about $4.6 million — compared with the same period last year, according to the insurer’s latest earnings report.

Net income for the third quarter, which ended Sept. 30, was $18.4 million, down from $22.9 million in the third quarter last year.

Compared with the third quarter of 2007, direct written premiums fell by $12.8 million, or 8.4 percent, to $139.4 million. The company said the 2008 decrease occurred primarily in its personal and commercial automobile lines, which experienced decreases of 7.6 percent and 2.6 percent, respectively, in average written premium per exposure. The decrease in its personal automobile line was largely a result of a state-mandated private passenger rate decrease of 11.7 percent, which went into effect April 1, 2007, and a further rate decrease of 6.6 percent, effective in April 2008.

Net written premiums for the third quarter fell by $16.1 million, or 10.8 percent, to $132.6 million compared with the year-ago period. Safety said the decrease was due to the factors that same factors that decreased direct written premiums, as well as decreases in premiums assumed from Commonwealth Automobile Reinsurers.
Net earned premiums for the quarter decreased by $11.3 million, or 7.4 percent, to $141.3 million compared with third quarter of 2007.

Loss, expense and combined ratios for the third quarter were 62.1 percent, 30.5 percent and 92.6 percent, compared with 60.8 percent, 27.9 percent and 88.7 percent for the comparable 2007 period.

Source: Safety Insurance Group Inc.