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Ahmanson Out of Some Costly Insurance Lines

August 28, 1985|BRUCE KEPPEL | Times Staff Writer

H. F. Ahmanson & Co.'s four property-casualty insurance subsidiaries earlier this month ceased writing property-casualty insurance in California, Arizona, Oregon, Texas and Florida, shrinking the companies' business to about one-tenth of its 1984 volume and limiting operations to the state of Nebraska, the parent company said Tuesday.

Property-casualty insurance sales accounted for just $99.6 million of the $2.71 billion in revenue reported last year by Los Angeles-based Ahmanson, whose major revenue producer is Home Savings. But the four insurers, grouped under the name National American Insurance Cos., generated a $17.5-million loss over the last 2 1/2 years, said F. Anthony Kurtz, Ahmanson's chief financial officer.

Ahmanson made the decision to cease such coverage on Aug. 19 but did not announce it publicly at that time. On Monday, Los Angeles-based Fremont General Corp. said it is getting out of the same business because of losses.

'Writing No New Business'

The property-casualty industry lost a record $3 billion last year, continuing a downturn marked by rampant price cutting and subsequent increases in claims losses extending back to 1979.

As with Fremont, current policies remain in force but will not be renewed. "We are writing no new business, and we're renewing none," Kurtz said.

Fremont General and Ahmanson are visible evidence of the tightening of underwriting standards and withdrawal from high-risk coverage that has marked the industry since about the middle of last year.

Ahmanson, which reported net earnings last year of $54.6 million, earned $91.8 million for the first six months of 1985, Kurtz said. Its property-casualty units lost $10.5 million last year and $1.2 million for the six months.

"There was no indication that (the property-casualty units) could operate profitably in the long run" except in Nebraska, Kurtz said.

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