A.M. Best Maintains Negative Outlook on SAFECO's Property/Casualty Subsidiaries.Business & Insurance Editors OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 22, 2001 In response to SAFECO's (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SAFC SAFC South Australian Film Corporation SAFC Sunderland Association Football Club SAFC Securities America Financial Corporation SAFC South Australia Film Corporation SAFC Stirling Albion Football Club (UK) ) recently announced loss reserve strengthening, A.M. Best Co. continues to maintain a negative outlook on the property/casualty operations' financial strength rating of A (Excellent). In addition, the negative outlook remains in effect for SAFECO's debt ratings. The A (Excellent) group financial strength rating on SAFECO's life/health companies is not affected by this announcement. The reserve strengthening was based on an independent actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin study of the property/casualty reserve adequacy. As a result, SAFECO increased loss reserves to construction defect defect - bug , workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. and asbestos/environmental claims. Although the reserve strengthening was funded from the sale of SAFECO Credit and it positions loss reserves well within the actuarially acceptable range, A.M. Best remains concerned that the property/casualty operations will generate operating profitability commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with its current rating level. The proceeds from the sale of SAFECO Credit will be used to increase the surplus of the property/casualty operations; therefore, the available cash at SAFECO Corp. will be lower than A.M. Best's expectations, and the holding company will increase its leverage to pay existing cash obligations. A.M. Best will meet with management in the near future to discuss rating concerns. For additional information that substantiates the negative outlook, please visit http://www.ambest.com/press/safeco.pdf. SAFECO Corp. is a holding company whose subsidiaries are engaged in property/casualty and life/health businesses. As of September 30, 2001, SAFECO reported consolidated assets of $29.8 billion and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $3.8 billion. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion