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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.
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
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
- Frequency and severity of catastrophic events
- The ongoing Russian war against Ukraine is impacting global economic, banking, commodity, and financial markets
Revenue & Expenses
Visualization of income flow from segment revenue to net income