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Dec 31, 2020
Selective Insurance Q4 2020 Earnings Report
Reported net income of $2.10 per diluted common share and non-GAAP operating income of $1.84 per diluted common share.
Key Takeaways
Selective Insurance Group reported excellent financial results for Q4 2020, including an 18.0% non-GAAP operating ROE and an 88.1% combined ratio. Strong commercial lines NPW growth of 10% was driven by renewal pure price increases, solid retention, and new business growth.
Net premiums written growth of 8% compared to the fourth quarter of 2019.
GAAP combined ratio of 88.1%.
Annualized return on common equity of 20.6% and non-GAAP operating ROE of 18.0%.
After-tax net investment income of $55 million, up 18% compared to the fourth quarter of 2019.
Selective Insurance
Selective Insurance
Selective Insurance Revenue by Segment
Revenue by Segment
Standard Commercial Lines Revenue
CapyFin.comStandard Personal Lines Revenue
CapyFin.comExcess and Surplus Lines Revenue
CapyFin.com Forward Guidance
For 2021, Selective Insurance Group expects a GAAP combined ratio, excluding catastrophe losses, of 91.0% and after-tax net investment income of $182.0 million.
Positive Outlook
- A GAAP combined ratio, excluding catastrophe losses, of 91.0%.
- Our combined ratio estimate assumes no prior-year casualty reserve development.
- Catastrophe losses of 4.0 points on the combined ratio.
- After-tax net investment income of $182.0 million that includes $16.0 million in after-tax net investment income from our alternative investments.
- An overall effective tax rate of approximately 20.5%, which includes an effective tax rate of 19.0% for net investment income and 21.0% for all other items.
Challenges Ahead
- Governmental directives to contain or delay the spread of the COVID-19 pandemic have disrupted ordinary business commerce and impacted financial markets.
- Difficult conditions in global capital markets and the economy.
- 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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income