Weiss Ratings


Property and Casualty Insurers Earn $28 Billion
in First Three Quarters of 2004
Despite Decline in Underwriting Profit, Industry Posts 190% Gain over Prior Year

JUPITER, Fla., February 28, 2005 — Despite a hurricane-ravaged third quarter, property and casualty insurers reported profits of $28.1 billion in the first nine months of 2004, representing a 22.4 percent increase over the $22.9 billion earned during the same period in 2003, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

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

Company Headquarters Weiss
Safety
Rating
Capital &
Surplus
($Bil)
Net Income (Loss) ($Mil)
3rd Qtr
2004
3rd Qtr
2003
$
Change
Continental Casualty Chicago, Ill. C 6,462.4 196.6 (1,307.6) 1,504.2
State Farm Mutual Bloomington, Ill. B+ 42,644.0 2,152.4 738.8 1,413.6
State Farm Fire & Casualty Bloomington, Ill. B- 5,591.0 1,152.1 10.8 1,141.4
Allstate Ins. Co. Northbrook, Ill. A- 16,533.7 2,752.1 1,807.3 944.8
Continental Ins. Co. Concord, N.H. C- 1,567.9 2.1 (406.2) 408.3


Meanwhile, insurers reporting the largest year-over-year decreases in net income include:

Company Headquarters Weiss
Safety
Rating
Capital &
Surplus
($Bil)
Net Income (Loss) ($Mil)
3rd Qtr
2004
3rd Qtr
2003
$
Change
State Farm Florida Bloomington, Ill. C 557.4 (777.8) 62.7 (840.5)
Allstate Floridian Ins. Co. St. Petersburg, Fla. B- 253.7 (668.8) 79.9 (748.6)
Converium Reinsurance Stamford, Conn. D- 294.4 (406.6) 106.9 (513.4)
US Fidelity & Guaranty Co. St. Paul, Minn. C- 917.7 (391.0) 88.8 (479.8)
Nationwide Indemnity Columbus, Ohio C 270.6 (317.5) (9.4) (308.1)

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

Despite a Decline, Underwriting Profits Continue to Surpass 2003 Figures

The industry's impressive earnings reflect continued underwriting strength as insurers reported a $3.7 billion underwriting gain in the first three quarters of 2004, representing a 190.3 percent increase over the $4.0 billion underwriting loss reported during the same period in 2003. However, in reviewing the industry's underwriting performance, Weiss found that property and casualty insurers actually experienced a 60.3 percent decrease in net underwriting gain compared to the first two quarters of 2004, in which insurers reported a $9.2 billion profit.

"The reduced underwriting profit in the third quarter reflects the impact of four major hurricanes, although the long-term consequences appear to be negligible due to the industry's overwhelmingly strong financial position," commented Melissa Gannon, vice president of Weiss Ratings, Inc. "Historically, the industry has operated at an underwriting loss, so the fact that insurers reported a profit during a claims intensive quarter is evidence of the industry's renewed strength."

Property and casualty insurers reporting the largest underwriting losses in the first three quarters of 2004 were:

Company Headquarters Weiss
Safety
Rating
Capital &
Surplus
($Bil)
Underwriting Gain (Loss) ($Mil)
3rd Qtr
2004
3rd Qtr
2003
$
Change
State Farm Florida Ins. Co. Bloomington, Ill. C 557.4 (1,216.1) 41.5 (1,257.6)
Allstate Floridian Ins. Co. St. Petersburg, Fla. B- 253.7 (1,126.8) 77.8 (1,204.6)
US Fidelity & Guaranty Co. St. Paul, Minn. C- 917.7 (861.6) 0.2 (861.7)
St. Paul Fire & Marine Ins. Co. St. Paul, Minn. B- 4,686.1 (788.4) 56.4 (844.8)
Nationwide Indemnity Columbus, Ohio C 270.6 (641.2) (139.1) (502.1)

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


Notable Upgrades and Downgrades

Among the 2,239 property and casualty insurers reviewed by Weiss, three companies were upgraded, while 28 were downgraded. Notable upgrades include:

• Erie Insurance Exchange (Erie, Penn.) from B- to B
• Lexington National Ins. Co. (Baltimore, Md.) from D+ to C
• Camico Mutual Ins. Co. (Redwood City, Calif.) from C+ to B-

Notable downgrades include:

• Progressive Casualty (Mayfield Village, Ohio) from B to C+
• State Farm Floridian (Bloomington, Ill.) from B- to C
• Nationwide Indemnity (Columbus, Ohio) from B- to C

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 and custom research solutions 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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