Weiss Ratings


Property and Casualty Insurers Report
Underwriting Profit for the First Time Since 1997
Net Realized Capital Gains Jump 182%

JUPITER, Fla., August 31, 2004 — Dramatic improvements in underwriting performance by the nation's property and casualty insurers led to the first underwriting gain in nearly seven years. The industry reported a $5.5 billion net underwriting gain in the first quarter of 2004, compared to the $1.1 billion loss reported during the same period a year ago, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

Property and casualty insurers reporting the largest improvement in underwriting performance include:

Company Headquarters Weiss
Safety
Rating
Underwriting Gain (Loss)
($Mil)
1st Qtr
2004
1st Qtr
2003
$
Change
Hartford Fire Insurance Co. Hartford, Conn. B+ 83.5 (962.1) 1,045.6
State Farm Mutual Automobile Ins. Co. Bloomington, Ill. B+ 529.5 (437.9) 967.3
Hartford Accident & Indemnity Co. Hartford, Conn. C+ 65.8 (757.8) 823.6
State Farm Fire & Casualty Co. Bloomington, Ill. B- 398.6 57.1 341.4
Allstate Ins. Co. Northbrook, Ill. A- 676.7 335.4 341.3

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

"The strong profitability is the result of several years of rate increases combined with stricter underwriting standards," said Melissa Gannon, vice president of Weiss Ratings, Inc. "There is a sense that the industry is trying to level out the swings in the business cycle by maintaining tighter underwriting standards going forward, rather than returning to the lax standards of the soft market. If this continues, premium rates should level off or even decline."

Net Realized Capital Gains Increase 182%

Property and casualty insurers also enjoyed a surge in net realized capital gains, earning $3.2 billion on the sale of investments in first quarter 2004, representing a 182.1 percent increase compared to the $1.1 billion reported during the same quarter in 2003. The performance in the market, coupled with insurers' solid underwriting performance, contributed to industry earnings of $13.6 billion, a $6.5 billion, or 91.5 percent, profit jump over the $7.1 billion earned in the first three months of 2003.

Insurers reporting the largest year-over-year increases in net income include:

Company Headquarters Weiss
Safety
Rating
Net Income (Loss) ($Mil)
1st Qtr
2004
1st Qtr
2003
$
Change
Hartford Fire Insurance Co. Hartford, Conn. B+ 318.4 (663.0) 981.4
State Farm Mutual Automobile Ins. Co. Bloomington, Ill. B+ 876.7 85.4 791.2
Hartford Accident & Indemnity Co. Hartford, Conn. C+ 139.9 (627.9) 767.9
State Farm Fire & Casualty Co. Bloomington, Ill. B- 557.8 134.8 422.9
Allstate Ins. Co. Northbrook, Ill. A- 1,018.9 642.7 376.2

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

Notable Upgrades and Downgrades

Among the 2,463 property and casualty insurers reviewed by Weiss, 15 companies were upgraded, while 17 were downgraded. Notable upgrades include:

• Evanston Ins. Co. (Deerfield, Ill.) from D+ to C-
• Stonington Insurance Co. (Dallas, Texas) from D to C-
• Westchester Fire Insurance Co. (Atlanta, Ga.) from D+ to C-

Notable downgrades include:

• Philadelphia Cbsp. for Ins. of Houses (Philadelphia, Penn.) from B+ to B
• Progressive Halcyon Ins. Co. (Mayfield Village, Ohio) from C to C-
• Triton Insurance Co. (Ft. Worth, Texas) from B to B-

Weiss Ratings, Inc. reviews more than 8,000 stocks daily, including all those traded on the New York Stock Exchange, the American Stock Exchange, and Nasdaq. Weiss also issues investment ratings on more than 12,000 mutual funds, covering equity, fixed-income, and closed-end funds, and provides financial safety ratings on more than 15,000 financial institutions, including banks and insurance companies. It is the only major rating agency that receives no direct or indirect compensation from the companies it rates for issuing its ratings. Revenues are derived strictly from sales of its products to consumers, institutions, businesses, libraries, and governmental agencies. Ratings and analyses, consumer financial and investment guides, and other products are available for purchase through www.weissratings.com or by calling 800-289-9222.

 

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

 

 


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