Selective Insurance Q4 2022 Earnings Report
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
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