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Analyst Blog

Safety Insurance Group, Inc. (SAFT) reported fourth-quarter 2012 operating earnings of $9.6 million or 62 cents per share, missing the Zacks Consensus Estimate of 63 cents. Operating earnings, however, surpassed the year-ago quarter earnings of $4.8 million or 31 cents per share.

Safety Insurance’s total revenue amounted to $181.2 million, increasing from $169.4 million in the fourth quarter of 2011. Meanwhile, total expenses increased to $168.6 million from $166.3 million in the year-ago quarter.

Net written premiums of Safety Insurance were $145.9 million, up 6.7% from $136.8 million in the year-ago quarter. Net investment income came in at $10.3 million, up 10.4% over $9.3 million in the fourth quarter of 2011.

Full Year Highlights

For 2012, Safety Insurance recorded operating earnings of $58.1 million or $3.8 per share, which surpassed the Zacks Consensus Estimate of $3.75. Operating earnings also outperformed $13.7 million or 90 cents earned in 2011.

Total revenues of Safety Insurance were $703.9 million, up from $660.2 million in 2011. Net written premiums in 2012 amounted to $663.9 million, up 7% over $620.3 million in 2011. Total expenses were $622.4 million, down from $645.9 million in 2011.

Financial Update

Cash and cash equivalents at the end of 2012 amounted to $35.4 million, down from $37.9 million at 2011-end. Safety Financial’s book value increased to $45.31 per share from $43.22 as of Dec 31, 2011.

Total assets stood at $1.57 billion as of Dec 31, 2012, compared with $1.47 billion last year. Shareholders equity increased to $694.4 million from $656.3 million as of Dec 31, 2011.

Dividend Update

Safety Insurance paid a quarterly dividend of 60 cents per share in the fourth quarter of 2012, up 20% over the year-ago quarter. The company paid total dividend of $2.20 per share in 2012, increasing 10% over 2011.

Results at Other P&C Insurers

Another property and casualty (P&C) insurer – Navigators Group Inc.’s (NAVG - Snapshot Report) fourth-quarter adjusted earnings of 59 cents breezed past the Zacks Consensus Estimate of a loss of 25 cents. Results were up 43.9% year over year from 41 cents earned in the year-ago quarter.

Cincinnati Financial Corp. (CINF - Analyst Report) reported fourth-quarter 2012 operating earnings of $1.11 per share, substantially beating the Zacks Consensus Estimate of 50 cents. On a year-over-year basis, earnings grew a substantial 32%. The upside in earnings came on the back of increased property casualty underwriting profits.

XL Group Plc’s (XL - Analyst Report) fourth-quarter 2012 operating income of 13 cents per share outpaced the Zacks Consensus Estimate of a loss of 35 cents. Earnings rebounded from a loss of 25 cents incurred in the year-ago quarter.

Zacks Rank

Safety Insurance currently carries a Zacks Rank #3 (Hold).

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