Safety Insurance Group Inc. (SAFT) the second largest private passenger insurer in Massachusetts reported Q4 2009 earnings in-line with analysts expectations of $0.93.

The results are better than a quick glance conveys as the headline numbers appear disappointing due to the one off settlement with the Massachusetts Attorney General’s office. Price to book is still under one, but has narrowed to 0.94. Earnings improvement YoY continues to suggest stabilisation of business. 1.3M shares bought back at around the lows of the year.

Safety Insurance (SAFT) the second largest private passenger insurer in Massachusetts reported good earnings on November 2nd. Book value jumped 10.9% YoY and earnings again showed signs of stabilising.

Safety Insurance (SAFT) closed up 2.47% to $34.01. Book value was $39.20 at end of Q2 and will be over $40 when Q3 is announced. At some point in the future the share price is highly probably to be above book value and book value is adding around $1 a quarter.

Ten months ago I recommended SAFT. Its share price is down since then, but far from out. While I prefer absolute returns my sense of well being dictates I must look at 2008 through a relative lens. Relatively SAFT was a great performer, beating the pants off the S&P500 by 22%, SAFT is down 20% over the last ten months while the S&P500 has fallen 42%.

Safety Insurance Group Inc. (SAFT) is trading at a price to book of 1. While business is declining, it is worth more than the zero you’re paying for it.

A recent article on Seeking Alpha theorized that Safety Insurance Group (SAFT) would benefit from higher gas prices and global warming. I’m unsure whether that thesis will be proved correct, but I am certain the author is clearly a very lateral thinker. I too like to have a thesis when investing, but require hard numbers to validate it. I thought I’d see if there is any safety in Safety’s numbers.

The first important maxim I learnt about investing in insurance companies was…