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Dec 31, 2022
Selective Insurance Q4 2022 Earnings Report
Reported net income of $1.38 per diluted common share and non-GAAP operating income of $1.46 per diluted common share for Q4 2022.
Key Takeaways
Selective Insurance Group, Inc. reported a profitable fourth quarter with a combined ratio of 94.7%. Despite challenges like Winter Storm Elliott, the company achieved a non-GAAP operating ROE of 15.6%. NPW increased 14% year-over-year, driven by growth across all underwriting segments.
Net premiums written increased 14% compared to the fourth quarter of 2021.
GAAP combined ratio was 94.7%, compared to 93.1% in the fourth quarter of 2021.
Commercial Lines renewal pure price increases averaged 5.6%, compared to 5.0% in the fourth quarter of 2021.
After-tax net investment income was $65 million, up 1% compared to the fourth quarter of 2021.
Revenue by Segment
Forward Guidance
For 2023, Selective expects a GAAP combined ratio of 96.5%, including net catastrophe losses of 4.5 points, after-tax net investment income of $300 million, an overall effective tax rate of approximately 21%, and weighted average shares of 61 million on a fully diluted basis.
Positive Outlook
- Expects a GAAP combined ratio of 96.5%
- Net catastrophe losses of 4.5 points
- After-tax net investment income of $300 million
- Effective tax rate of approximately 21%
- Weighted average shares of 61 million on a fully diluted basis
Challenges Ahead
- Combined ratio estimate assumes no prior-year casualty reserve development
- Difficult conditions in global capital markets and the economy, including 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
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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