Selective Insurance Q1 2020 Earnings Report
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
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