Selective Insurance Q3 2022 Earnings Report
Key Takeaways
Selective Insurance Group reported a profitable third quarter with a combined ratio of 96.8%, driven by strong NPW growth across Standard Commercial Lines, Standard Personal Lines, and Excess & Surplus segments. The company effectively navigated through capital markets volatility and economic inflation, maintaining disciplined underwriting and risk-based pricing.
Net premiums written increased 11% compared to the third quarter of 2021.
GAAP combined ratio was a profitable 96.8%.
Commercial Lines renewal pure price increases averaged 5.8%, compared to 5.3% in the second quarter of 2022.
After-tax net investment income was $52 million, down 31% compared to the third quarter of 2021.
Selective Insurance
Selective Insurance
Selective Insurance Revenue by Segment
Forward Guidance
Selective Insurance provided full-year expectations, including a GAAP combined ratio, excluding net catastrophe losses, of 91.5%, net catastrophe losses of 3.5 points on the combined ratio, and after-tax net investment income of $215 million.
Positive Outlook
- GAAP combined ratio, excluding net catastrophe losses, of 91.5%.
- Net catastrophe losses of 3.5 points on the combined ratio.
- After-tax net investment income of $215 million.
- Effective tax rate of approximately 20.5%.
- Weighted average shares of 61 million on a fully diluted basis.
Challenges Ahead
- Difficult conditions in global capital markets and the economy, including the risk of prolonged higher inflation, could increase loss costs and negatively impact investment portfolios.
- Deterioration in the public debt and equity markets and private investment marketplace that could lead to investment losses and interest rate fluctuations.
- Ratings downgrades on individual securities we own could affect investment values and, therefore, statutory surplus.
- The adequacy of our loss reserves and loss expense reserves.
- Frequency and severity of catastrophic events, including natural events such as hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, floods, and fires and man-made events such as criminal and terrorist acts, including cyber-attacks, explosions, and civil unrest.
Revenue & Expenses
Visualization of income flow from segment revenue to net income