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Sep 30, 2022
Selective Insurance Q3 2022 Earnings Report
Selective Insurance reported third quarter 2022 results, with a net income of $0.66 per diluted common share and a non-GAAP operating income of $0.99 per diluted common share.
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
Revenue by Segment
Standard Commercial Lines Revenue
CapyFin.comStandard Personal Lines Revenue
CapyFin.com 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