Property and Casualty Insurers' Capital Gains Surge 181%
in First Quarter 2003

13% Increase in Premiums Leads to Improved Underwriting Results

PALM BEACH GARDENS, Fla., September 4, 2003 - The nation's property and casualty insurers reported capital gains of $1.1 billion in the first quarter of 2003, representing a $725 million, or 181 percent, increase over the $400 million recorded during the same period last year, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks. Companies within the Berkshire-Hathaway group accounted for 62.8 percent of the industry's total first-quarter capital gains, earning $706.9 million.

Insurers reporting the largest year-over-year increases in capital gains include:

Company Headquarters Weiss Safety
Capital Gain (Loss)

1st Qtr
1st Qtr
General Reinsurance Corp.* Stamford, Conn. B- 252.3 6.2 246.1
Government Employees Ins. Co.* Washington, D.C. A+ 222.8 61.7 161.1
Swiss Reinsurance America Corp. Armonk, N.Y. C 12.0 (103.3) 115.3
American Re-Insurance Co. Princeton, N.J. C- 98.6 0.7 97.9
United Services Automobile Assn. San Antonio, Texas A+ 14.0 (82.7) 96.7

Weiss Safety Rating: A = Excellent; B = Good; C = Fair; D = Weak; E = Very Weak; F=Failed

First-quarter premiums surged $11 billion, or 13 percent, to $94 billion from $83.1 billion during the same period in 2002. As a result, the industry's underwriting loss was $1.1 billion in the first quarter of 2003 compared to the $3.3 billion loss reported a year ago. Consequently, net income rose in the first three months of 2003 to $7.1 billion, compared to $5.5 billion during the same period in 2002.

Property and casualty companies reporting the largest underwriting losses during the quarter were:

Company Headquarters Weiss
Loss ($Mil)
1st Qtr 2003
Loss ($Mil)
1st Qtr 2002

Hartford Fire Insurance Co. Hartford, Conn. B+ (962.1) (15.3)
Hartford Accident & Indemnity Co. Hartford, Conn. C+ (757.8) (12.0)
State Farm Mutual Auto. Ins. Co. Bloomington, Ill. B+ (437.9) (1,020.0)
Hartford Insurance Co. of Ill. Hartford, Conn. B (234.1) (3.7)
Gulf Insurance Co. Irving, Texas B- (198.3) (1.3)
Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

"Property and casualty insurers typically operate at an underwriting loss, relying heavily on their investment portfolios for profits," commented Melissa Gannon, vice president of Weiss Ratings, Inc. "The problem with that practice is that when investment returns aren't sufficient, as they haven't been for the past three years, insurers hike up policyholder premiums to fill the gap."

Notable Upgrades and Downgrades

Among the 2,224 property and casualty insurers reviewed by Weiss, 18 companies were downgraded, while none were upgraded. Notable downgrades include:

The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, reserve adequacy, profitability, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies and risk diversification.

Weiss issues safety ratings on more than 15,000 financial institutions, including insurance companies, banks, and brokerage firms. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and more than 8,000 stocks. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $7.95 through, or starting at $15 by calling 800-289-9222.

* Company is part of the Berkshire-Hathaway group.

15430 Endeavour Drive, Jupiter, FL 33478 · (561) 627-3300 ·

Note to Editors: National and state listings of strongest and weakest property and casualty insurers are available below.