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Mar 31, 2023
Selective Insurance Q1 2023 Earnings Report
Reported net income of $1.48 per diluted common share and non-GAAP operating income of $1.44 per diluted common share.
Key Takeaways
Selective Insurance Group reported strong first quarter 2023 results, with net income per diluted common share of $1.48 and non-GAAP operating income per diluted common share of $1.44. The combined ratio was a profitable 95.7%, inclusive of 6.1 points of catastrophe losses. Net premiums written increased 12% year-over-year, driven by renewal pure price increases, solid retention, new business, and strong exposure growth.
Net premiums written increased 12% compared to the first quarter of 2022.
GAAP combined ratio of 95.7%, compared to 93.1% in the first quarter of 2022.
Commercial Lines renewal pure price increases averaged 7.0%, compared to 4.8% in the first quarter of 2022.
After-tax net investment income of $73 million, up 25% compared to the first quarter of 2022.
Revenue by Segment
Forward Guidance
For 2023, the full-year expectations remained unchanged.
Positive Outlook
- A GAAP combined ratio of 96.5%, including net catastrophe losses of 4.5 points.
- Combined ratio estimate assumes no additional prior year casualty reserve development.
- After-tax net investment income of $300 million that includes after-tax net investment income from alternative investments of $30 million.
- An overall effective tax rate of approximately 21%, which assumes an effective tax rate of 20% for net investment income and 21% for all other items.
- Weighted average shares of 61 million on a fully diluted basis.
Challenges Ahead
- Difficult conditions in global capital markets, the banking sector, commercial real estate, and the economy, including prolonged higher inflation
- Deterioration in the public debt and equity markets and private investment marketplace
- Frequency and severity of catastrophic events, including natural events and man-made events
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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