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Mar 31, 2020
Selective Insurance Q1 2020 Earnings Report
Selective reported first quarter results with net income of $0.25 per diluted share and non-GAAP operating income of $0.84 per diluted share.
Key Takeaways
Selective Insurance Group reported a decrease in net premiums written by 4% compared to Q1 2019, driven by declines in both Commercial Lines and Personal Lines, and a GAAP combined ratio of 96.7%. Net income per diluted share was $0.25, and non-GAAP operating income per diluted share was $0.84.
COVID-19-related underwriting items totaled $19.3 million after-tax, reducing diluted earnings per share by $0.32.
Net premiums written decreased 4% from the first quarter of 2019.
GAAP combined ratio was 96.7%.
After-tax net investment income increased 10% to $45 million from the first quarter of 2019.
Selective Insurance
Selective Insurance
Selective Insurance Revenue by Segment
Revenue by Segment
Standard Commercial Lines Revenue
CapyFin.comStandard Personal Lines Revenue
CapyFin.com Forward Guidance
Selective has revised its full-year guidance for 2020, reflecting the current estimated full-year impact of COVID-19.
Positive Outlook
- A GAAP combined ratio, excluding catastrophe losses, of between 92% and 93%.
- An overall effective tax rate of approximately 18.5%.
- Catastrophe losses of 4.5 points on the combined ratio.
- Weighted average shares of 60.5 million on a diluted basis.
- Selective is well-positioned to provide outstanding service to its customers and distribution partners and to continue to create long-term value for its stakeholders.
Challenges Ahead
- Significant uncertainty surrounding the ultimate duration and severity of the COVID-19 pandemic.
- The depth and duration of the economic recession and market volatility.
- The impact federal, state and local actions, including insurance regulatory directives, can have on our business.
- After-tax net investment income of approximately $160 million, down from our prior guidance of $185 million.
- We now expect a range of between $10 million and $15 million in after-tax net investment losses from our alternative investments, compared to our prior estimate of a $14 million gain.
Revenue & Expenses
Visualization of income flow from segment revenue to net income