Business Insurance Quotes
Safeco shrinks, plans to drop 14 types of insurance
After posting a net loss of $14.4 million for the 2nd quarter of 2001, Safeco Corp. has announced plans to exit the market for almost three-quarters of the types of specialty business insurance it sells, accounting for more than half of the company's written premiums in that niche market.
"We're keeping those segments in which we are a leader or we clearly have the capability to profitably compete."
The 14 lines of insurance that Safeco plans to exit, including medical malpractice, media liability, liability insurance for directors and officers of for-profit and nonprofit organizations, insurance for accountants, architects and engineers, attorney's insurance, insurance for equipment rental, and insurance for real estate agents, account for about $130 million in written premiums.
The five lines of specialty business insurance that Safeco will keep, including the company's surplus lines homeowners insurance — which covers earthquake damage — as well as fire and flood insurance for businesses, account for approximately $120 million in premiums, but cost the company only 1.3 cents in losses and underwriting expenses in excess of each dollar of premium.
"We are going to do more of what we do best," says Mike McGavick, president and chief executive officer of the Seattle, Wash., insurer. "We're keeping those segments in which we are a leader or we clearly have the capability to profitably compete."
Safeco also announced an agreement with GE Capital Commercial Equipment Financing for the purchase of Safeco Credit Co., a middle-market equipment financing and leasing company
The deal, which is pending regulatory approval and would allow Safeco to retain its ability to provide equipment financing for its independent insurance agents, is expected to be completed by the 3rd quarter of 2001.