A.M. Best Affirms Ratings of Safeco Insurance Companies.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A (Excellent) and the issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a+" of the Safeco Insurance Companies (Safeco) and its members. A.M. Best has also affirmed the ICR of "bbb+" and the debt ratings of "bbb+" and "bbb" of Safeco Corporation's (NYSE NYSE See: New York Stock Exchange : SAF SAF Safety SAF Society of American Foresters SAF Society of American Florists SAF Secretary of the Air Force SAF Second Amendment Foundation SAF Singapore Armed Forces SAF Students for Academic Freedom SAF Store And Forward ) (both of Seattle, WA) existing senior debt and capital securities, respectively. The outlook for all ratings is positive. (See link below for a detailed list of the companies and ratings.) The ratings reflect Safeco's continued solid operating performance, excellent capitalization and strong presence within the property/casualty industry. These positive rating factors are somewhat offset by the group's elevated underwriting leverage ratios and a high expense ratio. The rating outlook is based on Safeco's operating focus and the financial support of its parent, Safeco Corporation. The positive rating factors are derived from Safeco's focus on personal and small commercial lines through restructured operations. The group's operating results have benefited from numerous profitability initiatives, including aggressive rate increases, stricter underwriting guidelines, implementation of point of sale underwriting automation, broader market segmentation Market Segmentation A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. of personal automobile, homeowners and small commercial products and the termination of unprofitable agencies. As a result of the operational changes and firm market conditions, operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before have consistently improved in recent years. Safeco maintains a strong operating presence within the U.S. property/casualty industry as one of the top 20 writers as measured by net premiums written of $5.6 billion in 2006. Also, the financial leverage of Safeco Corporation is reasonable for the current rating level. The parent's improved fixed charge coverage is reflective of the earnings improvement in recent years and lower interest expense. Negative rating factors that have tempered the group's operating performance include its elevated underwriting leverage ratios and a high expense ratio. Safeco also maintains moderate gross exposure to earthquakes, particularly in California. The group's net exposure, however, is within manageable levels, given its capital position and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. protection. For a complete list of Safeco Corporation's FSRs, ICRs and debt ratings, please visit www.ambest.com/press/053008safeco.pdf. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industries, including the banking and insurance sectors. For more information, visit www.ambest.com. |
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