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Sep 30, 2024
Selective Insurance Q3 2024 Earnings Report
Selective Insurance reported net income of $1.47 per diluted common share and non-GAAP operating income of $1.40 per diluted common share for Q3 2024.
Key Takeaways
Selective Insurance Group reported a strong third quarter with net income per diluted common share at $1.47 and non-GAAP operating income per diluted common share at $1.40. The company faced elevated catastrophe losses, but underlying performance remained excellent due to disciplined underwriting and pricing.
Net premiums written increased 9% from the third quarter of 2023.
The GAAP combined ratio was 99.5%, impacted by net catastrophe losses.
Commercial Lines renewal pure price increases averaged 9.1%.
After-tax net investment income was $93 million, up 16% from the third quarter of 2023.
Selective Insurance
Selective Insurance
Selective Insurance Revenue by Segment
Revenue by Segment
Standard Commercial Revenue
CapyFin.comStandard Personal Revenue
CapyFin.com Forward Guidance
Selective Insurance increased its expected GAAP combined ratio for 2024 to 102.5%, reflecting elevated catastrophe losses. They anticipate after-tax net investment income of $360 million and an effective tax rate of approximately 21.0%.
Positive Outlook
- After-tax net investment income of $360 million that includes $32 million from alternative investments.
- An overall effective tax rate of approximately 21.0%, which assumes an effective tax rate of 20.5% for net investment income and 21% for all other items.
- Weighted average shares of 61.5 million on a fully diluted basis.
- Combined ratio estimate assumes no additional prior year casualty reserve development
- Expect losses from Hurricane Milton, which made landfall on October 9, 2024, to be immaterial.
Challenges Ahead
- A GAAP combined ratio of 102.5%, up 1 point from our prior guidance of 101.5%.
- Our combined ratio estimate includes net catastrophe losses of 7.5 points, up from prior guidance of 5.5 points.
- Challenging conditions in the economy, global capital markets, the banking sector, and commercial real estate, including prolonged higher inflation, could increase loss costs and negatively impact investment portfolios
- Deterioration in the public debt, public equity, or private investment markets that could lead to investment losses and interest rate fluctuations
- Frequency and severity of catastrophic events, including natural events that may be impacted by climate change, such as hurricanes, severe convective storms, 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