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Mar 31, 2021
Selective Insurance Q1 2021 Earnings Report
Selective Insurance reported excellent first-quarter financial results, including a strong non-GAAP operating ROE and an impressive combined ratio.
Key Takeaways
Selective Insurance Group reported excellent first-quarter results with a net income of $1.77 per diluted common share and a non-GAAP operating income of $1.70 per diluted common share. The company's performance was driven by disciplined and profitable growth, a strong non-GAAP operating ROE of 16.2%, and an impressive combined ratio of 89.3%. Commercial lines NPW increased 28% year-over-year, and each segment generated profitable results.
Net premiums written increased 23% compared to the first quarter of 2020.
GAAP combined ratio was 89.3%.
After-tax net investment income was $56 million, up 24% compared to the first quarter of 2020.
Book value per common share was $42.38.
Revenue by Segment
Forward Guidance
Selective has revised its full-year guidance for 2021, including a GAAP combined ratio, excluding catastrophe losses, of 90%, catastrophe losses of 4.0 points on the combined ratio, after-tax net investment income of $195 million, an overall effective tax rate of approximately 20.5%, and weighted average shares of 60.5 million on a fully diluted basis.
Positive Outlook
- GAAP combined ratio, excluding catastrophe losses, of 90% (prior guidance 91%) that assumes no additional prior-year casualty reserve development.
- Catastrophe losses of 4.0 points on the combined ratio.
- After-tax net investment income of $195 million (prior guidance $182 million) that includes $31 million (prior guidance of $16 million) in after-tax net investment income from our alternative investments.
- An overall effective tax rate of approximately 20.5%, that includes an effective tax rate of 19.0% for net investment income and 21.0% for all other items.
- Weighted average shares of 60.5 million on a fully diluted basis.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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