Earnings at Geico Corp., the big property-casualty insurer, surged 34.7 percent to $59 million ($3.87 a share) in the third quarter, a significant increase over the $43.8 million ($2.83) in the same period a year earlier when earnings were depressed by claims related to Hurricane Hugo.
In the first nine months of the year, earnings rose 15.5 percent to $153.6 million ($10.03) from $133 million ($8.58) the same period in 1989.
"Underwriting results were excellent," Geico Chairman William B. Snyder said in a statement. " ... Weather-related catastrophe losses were well below those experienced last year, but still more than what we consider to be a 'normal' year for weather losses."
Last year was the worst in the Chevy Chase-based company's history, said Carroll Franklin, the company's director of investor relations. "But ironically, this may be our second-worst," Franklin said. A major hail storm in Denver cost Geico $5.5 million and a number of smaller storm losses have boosted claims, he said.
In addition, the slumping stock market has reduced investment gains and the frequency and severity of automobile-related injury claims continued to climb, the company said.
But steady growth in other investment earnings, substantial gains in premiums -- along with the absence of a big hurricane -- put the company well ahead of last year.
Geico, whose main business is personal automobile and homeowners insurance, improved its underwriting ratio to 95.7 percent for the nine months, compared to 96.8 percent a year earlier. This means that Geico paid out in claims and expenses 95.7 cents for every dollar it collected in premiums, a more favorable ratio than experienced by most property-casualty insurers. The company was the seventh-largest company in the Washington area last year, ranked by revenue.