Fourth Quarter Net Income of $1.52 per
Diluted Common Share and Non-GAAP Operating Income1 of $1.62 per
Diluted Common Share; Return on Common Equity ("ROE") of 12.7% and
Non-GAAP Operating ROE1 of 13.5%
Full Year 2024 ROE of 7.0% and Non-GAAP
Operating of ROE1 7.1%
In the fourth quarter of 2024:
- Net premiums written ("NPW") increased 10% from the fourth
quarter of 2023;
- The GAAP combined ratio was 98.5%, compared to 93.7% in the
fourth quarter of 2023;
- Commercial Lines renewal pure price increases averaged 8.8%, up
1.5 points from 7.3% in the fourth quarter of 2023;
- After-tax net investment income was $97 million, up 24% from
the fourth quarter of 2023;
- Book value per common share was $47.99, down 2% from last
quarter; and
- Adjusted book value per common share1 was $52.10, up 3% from
last quarter.
Selective Insurance Group, Inc. (NASDAQ: SIGI) reported
financial results for the fourth quarter ended December 31, 2024,
with net income per diluted common share of $1.52 and non-GAAP
operating income1 per diluted common share of $1.62. Return on
common equity was 12.7% and non-GAAP operating ROE1 was 13.5%.
For the quarter, Selective reported a combined ratio of 98.5%.
Net unfavorable prior year casualty reserve development of $100
million increased the combined ratio by 8.8 points. NPW increased
10% from a year ago driven by renewal pure price increases of
10.7%. Net investment income generated 13.2 points of annualized
ROE in the quarter, increasing to $97 million after-tax, up 24%
from a year ago.
For the year, Selective reported net income per diluted common
share of $3.23 and non-GAAP operating income1 per diluted common
share of $3.27. The 2024 combined ratio was 103.0% including prior
year casualty reserve strengthening of $311 million, which
increased the combined ratio by 7.1 points. NPW increased 12% with
renewal pure price increases of 9.5%. After-tax net investment
income was $363 million, up 17% from a year ago, and generated 12.8
points of ROE.
“Despite strong investment results, overall financial
performance in 2024 did not meet our expectations. Within insurance
operations, we delivered solid underlying profitability but took
meaningful actions to strengthen casualty reserves in response to
social inflation. We also increased Standard Commercial Lines
renewal pure pricing, achieving 8.8% in the fourth quarter and 8.3%
for the year. We continue to focus on returning our performance to
the combination of growth and profitability investors expect of us
and we expect of ourselves. With these pricing actions and our
ability to manage renewal pure price and retention at a granular
level, we are well positioned to capitalize on our competitive
strengths. These include our unique field model, the strength of
our distribution partner relationships, and our customer experience
focus,” said John J. Marchioni, Chairman, President and Chief
Executive Officer.
“In 2024, we advanced important strategic initiatives that
position Selective for long-term, profitable growth. We exceeded
$500 million of NPW in Excess & Surplus Lines, added five
states to our Standard Commercial Lines operating footprint, and
took significant actions to reposition and drive our Personal Lines
business toward improved profitability,” concluded Mr.
Marchioni.
Operating Highlights
Consolidated Financial Results
Quarter ended December
31,
Change
Year-to-Date December
31,
Change
$ and shares in millions, except
per share data
2024
2023
2024
2023
Net premiums written
$
1,089.6
991.5
10
%
$
4,630.0
4,134.5
12
%
Net premiums earned
1,133.0
1,001.2
13
4,376.4
3,827.6
14
Net investment income earned
122.8
98.6
25
457.1
388.7
18
Net realized and unrealized gains
(losses), pre-tax
(8.0)
5.4
(248)
(2.9)
(3.6)
(17)
Total revenues
1,256.4
1,110.7
13
4,861.7
4,232.1
15
Net underwriting income (loss),
after-tax
13.3
50.2
(74)
(104.7)
104.9
(200)
Net investment income, after-tax
97.3
78.4
24
362.6
309.5
17
Net income (loss) available to common
stockholders
93.2
122.5
(24)
197.8
356.0
(44)
Non-GAAP operating income (loss)1
99.6
118.3
(16)
200.1
358.8
(44)
Combined ratio
98.5
%
93.7
4.8
pts
103.0
%
96.5
6.5
pts
Loss and loss expense ratio
67.8
62.4
5.4
72.3
64.9
7.4
Underwriting expense ratio
30.6
31.1
(0.5)
30.6
31.4
(0.8)
Dividends to policyholders ratio
0.1
0.2
(0.1)
0.1
0.2
(0.1)
Net catastrophe losses
(0.9)
pts
2.5
(3.4)
6.5
pts
6.4
0.1
Non-catastrophe property losses and loss
expenses
15.7
17.2
(1.5)
15.6
17.0
(1.4)
(Favorable) unfavorable prior year reserve
development on casualty lines
8.8
1.0
7.8
7.1
(0.2)
7.3
Current year casualty loss costs
44.2
41.7
2.5
43.1
41.7
1.4
Net income (loss) available to common
stockholders per diluted common share
$
1.52
2.01
(24)
%
$
3.23
5.84
(45)
%
Non-GAAP operating income (loss) per
diluted common share1
1.62
1.94
(16)
3.27
5.89
(44)
Weighted average diluted common shares
61.3
61.0
—
61.3
61.0
1
Book value per common share
$
47.99
45.42
6
$
47.99
45.42
6
Adjusted book value per common share1
52.10
50.03
4
52.10
50.03
4
Overall Insurance Operations
For the fourth quarter, overall NPW increased 10% from a year
ago. Average renewal pure price increased 10.7%, up 3.3 points from
a year ago. Our 98.5% combined ratio was 4.8 points higher than a
year ago. We recorded $100 million of unfavorable prior year
casualty reserve development driven by recent accident years in
general liability and excess and surplus lines. This was partially
offset by lower catastrophe and non-catastrophe property losses and
a lower expense ratio. Overall, our insurance segments contributed
1.8 points of ROE in the fourth quarter of 2024.
Standard Commercial Lines Segment
For the fourth quarter, Standard Commercial Lines premiums
(representing 76% of total NPW) grew 9% from a year ago. The
premium growth reflected average renewal pure price increases of
8.8% and stable retention of 85%. The fourth quarter combined ratio
was 100.2%, up 7.1 points from a year ago. This was driven by net
unfavorable prior year casualty reserve development of $75 million,
partially offset by lower catastrophe and non-catastrophe losses.
The fourth quarter 2024 prior year casualty reserve development
included unfavorable development of $100 million in general
liability. This was partially offset by favorable development of
$25 million in workers compensation.
The following table shows the variances in key quarter-to-date
and year-to date measures:
Standard Commercial Lines
Segment
Quarter ended December
31,
Change
Year-to-Date December
31,
Change
$ in millions
2024
2023
2024
2023
Net premiums written
$
833.4
764.3
9
%
$
3,632.1
3,281.3
11
%
Net premiums earned
884.6
792.1
12
3,447.6
3,071.8
12
Combined ratio
100.2
%
93.1
7.1
pts
104.2
%
94.9
9.3
pts
Loss and loss expense ratio
68.5
61.0
7.5
72.5
62.5
10.0
Underwriting expense ratio
31.6
31.9
(0.3)
31.5
32.2
(0.7)
Dividends to policyholders ratio
0.1
0.2
(0.1)
0.2
0.2
—
Net catastrophe losses
(0.9)
pts
2.0
(2.9)
5.3
pts
4.9
0.4
Non-catastrophe property losses and loss
expenses
14.0
15.4
(1.4)
13.3
15.0
(1.7)
(Favorable) unfavorable prior year reserve
development on casualty lines
8.5
0.6
7.9
8.3
(0.5)
8.8
Current year casualty loss costs
46.9
43.0
3.9
45.6
43.1
2.5
Standard Personal Lines Segment
For the fourth quarter, Standard Personal Lines premiums
(representing 10% of total NPW) decreased 3% from a year ago with
renewal pure price of 27.3% and higher average policy sizes.
Retention was 75%, down 12 points from a year ago, and new business
decreased 49% due to deliberate profit improvement actions. The
fourth quarter 2024 combined ratio decreased 25.2 points from a
year ago to 91.7%. The improvement reflects the benefit of renewal
pure price increases in recent quarters, along with lower
catastrophe and non-catastrophe property losses.
The following table shows the variances in key quarter-to-date
and year-to-date measures:
Standard Personal Lines Segment
Quarter ended December
31,
Change
Year-to-Date December
31,
Change
$ in millions
2024
2023
2024
2023
Net premiums written
$
103.6
107.0
(3)
%
$
430.7
414.6
4
%
Net premiums earned
107.1
101.0
6
424.9
365.2
16
Combined ratio
91.7
%
116.9
(25.2)
pts
109.3
%
121.7
(12.4)
pts
Loss and loss expense ratio
67.9
91.7
(23.8)
85.8
96.7
(10.9)
Underwriting expense ratio
23.8
25.2
(1.4)
23.5
25.0
(1.5)
Net catastrophe losses
1.0
pts
9.1
(8.1)
18.8
pts
19.0
(0.2)
Non-catastrophe property losses and loss
expenses
36.3
42.4
(6.1)
38.6
43.0
(4.4)
Unfavorable prior year reserve development
on casualty lines
4.7
5.0
(0.3)
1.2
3.8
(2.6)
Current year casualty loss costs
25.9
35.2
(9.3)
27.2
30.9
(3.7)
Excess and Surplus Lines Segment
For the fourth quarter, Excess and Surplus Lines premiums
(representing 14% of total NPW) increased 27% compared to the
prior-year period, driven by new business growth of 29% and average
renewal pure price increases of 8.2%. The fourth quarter 2024
combined ratio was 93.1%, up 16.9 points compared to a year ago.
Unfavorable prior year casualty reserve development was $20
million, or 14.2 points on the combined ratio, compared to no prior
year casualty reserve development a year ago.
The following table shows the variances in key quarter-to-date
and year-to-date measures:
Excess and Surplus Lines
Segment
Quarter ended December
31,
Change
Year-to-Date December
31,
Change
$ in millions
2024
2023
2024
2023
Net premiums written
$
152.6
120.2
27
%
$
567.2
438.6
29
%
Net premiums earned
141.3
108.1
31
504.0
390.6
29
Combined ratio
93.1
%
76.2
16.9
pts
89.7
%
86.0
3.7
pts
Loss and loss expense ratio
63.6
45.9
17.7
59.2
54.3
4.9
Underwriting expense ratio
29.5
30.3
(0.8)
30.5
31.7
(1.2)
Net catastrophe losses
(2.0)
pts
(0.7)
(1.3)
4.6
pts
6.3
(1.7)
Non-catastrophe property losses and loss
expenses
10.8
6.8
4.0
11.5
8.2
3.3
(Favorable) prior year reserve development
on casualty lines
14.2
—
14.2
4.0
(1.3)
5.3
Current year casualty loss costs
40.6
39.8
0.8
39.1
41.1
(2.0)
Investments Segment
For the fourth quarter, after-tax net investment income of $97
million was up 24% from a year ago. The after-tax income yield
averaged 4.0% for the overall and fixed income securities
portfolios. With this and invested assets per dollar of common
stockholders' equity of $3.31 as of December 31, 2024, net
investment income generated 13.2 points of annualized ROE.
Investments Segment
Quarter ended December
31,
Change
Year-to-Date December
31,
Change
$ in millions, except per share data
2024
2023
2024
2023
Net investment income earned,
after-tax
$
97.3
78.4
24
%
$
362.6
309.5
17
%
Net investment income per common share
1.59
1.29
23
5.92
5.08
17
Effective tax rate
20.7
%
20.4
0.3
pts
20.7
%
20.4
0.3
pts
Average yields:
Portfolio:
Pre-tax
5.1
4.7
0.4
5.0
4.7
0.3
After-tax
4.0
3.7
0.3
4.0
3.7
0.3
Fixed income securities:
Pre-tax
5.1
%
5.1
—
pts
5.0
%
4.9
0.1
pts
After-tax
4.0
4.0
—
4.0
3.9
0.1
Annualized ROE contribution
13.2
12.1
1.1
12.8
12.4
0.4
Balance Sheet
$ in millions, except per share data
December 31, 2024
December 31, 2023
Change
Total assets
$
13,514.2
11,802.5
15 %
Total investments
9,651.3
8,693.7
11
Long-term debt
507.9
503.9
1
Stockholders’ equity
3,120.1
2,954.4
6
Common stockholders' equity
2,920.1
2,754.4
6
Invested assets per dollar of common
stockholders’ equity
3.31
3.16
5
Net premiums written to policyholders'
surplus
1.60
1.51
6
Book value per common share
47.99
45.42
6
Adjusted book value per common share1
52.10
50.03
4
Debt to total capitalization
14.0
%
14.6
%
(0.6)
pts
Book value per common share increased by $2.57, or 6%, during
2024. The increase was primarily attributable to $3.23 of net
income per diluted common share and a $0.47 decrease in after-tax
net unrealized losses on our fixed income securities portfolio,
partially offset by $1.43 in common stockholder dividends. The
decrease in after-tax net unrealized losses on our fixed income
securities portfolio was primarily driven by a tightening of credit
spreads, partially offset by an increase in interest rates. In the
fourth quarter of 2024, the Company did not repurchase any shares
of common stock. During 2024, the company repurchased 103,000
shares of common stock at an average price of $84.34 for $8.7
million. Capacity under the existing repurchase authorization was
$75.5 million as of December 31, 2024.
Selective's Board of Directors declared:
- A quarterly cash dividend on common stock of $0.38 per common
share that is payable March 3, 2025, to holders of record on
February 14, 2025; and
- A quarterly cash dividend of $287.50 per share on our 4.60%
Non-Cumulative Preferred Stock, Series B (equivalent to $0.28750
per depositary share) payable on March 17, 2025, to holders of
record as of February 28, 2025.
Guidance
For 2025, our full-year expectations are as follows:
- A GAAP combined ratio of 96% to 97%, including net catastrophe
losses of 6 points. Our combined ratio estimate assumes no prior
year casualty reserve development;
- After-tax net investment income of $405 million;
- An overall effective tax rate of 21.5%; and
- Weighted average shares of 61.5 million on a fully diluted
basis.
The supplemental investor package, with financial information
not included in this press release, is available on the Investors
page of Selective’s website at www.Selective.com.
Selective’s quarterly analyst conference call will be simulcast
at 8:30 AM ET, on Thursday, January 30, 2025, on www.Selective.com.
The webcast will be available for rebroadcast until the close of
business on February 28, 2025.
About Selective Insurance Group, Inc. Selective Insurance
Group, Inc. (Nasdaq: SIGI) is a holding company for 10 property and
casualty insurance companies rated "A+" (Superior) by AM Best.
Through independent agents, the insurance companies offer standard
and specialty insurance for commercial and personal risks and flood
insurance through the National Flood Insurance Program's Write Your
Own Program. Selective's unique position as both a leading
insurance group and an employer of choice is recognized in a wide
variety of awards and honors, including listing in Forbes Best
Midsize Employers in 2024 and certification as a Great Place to
Work® in 2024 for the fifth consecutive year. For more information
about Selective, visit www.Selective.com.
1Reconciliation of Net Income (Loss) Available to Common
Stockholders to Non-GAAP Operating Income (Loss) and Certain Other
Non-GAAP Measures Non-GAAP operating income (loss), non-GAAP
operating income (loss) per diluted common share, and non-GAAP
operating return on common equity differ from net income (loss)
available to common stockholders, net income (loss) available to
common stockholders per diluted common share, and return on common
equity, respectively, by the exclusion of after-tax net realized
and unrealized gains and losses on investments included in net
income (loss). Adjusted book value per common share differs from
book value per common share by excluding total after-tax unrealized
gains and losses on investments included in accumulated other
comprehensive income (loss). These non-GAAP measures are used as
important financial measures by management, analysts, and
investors, because the timing of realized and unrealized investment
gains and losses on securities in any given period is largely
discretionary. In addition, net realized and unrealized gains and
losses on investments could distort the analysis of trends. These
operating measurements are not intended to be a substitute for net
income (loss) available to common stockholders, net income (loss)
available to common stockholders per diluted common share, return
on common equity, and book value per common share prepared in
accordance with U.S. generally accepted accounting principles
(GAAP). Reconciliations of net income (loss) available to common
stockholders, net income (loss) available to common stockholders
per diluted common share, return on common equity, and book value
per common share to non-GAAP operating income (loss), non-GAAP
operating income (loss) per diluted common share, non-GAAP
operating return on common equity, and adjusted book value per
common share, respectively, are provided in the tables below.
Note: All amounts included in this release exclude intercompany
transactions.
Reconciliation of Net Income (Loss) Available to Common
Stockholders to Non-GAAP Operating Income (Loss)
$ in millions
Quarter ended December
31,
Year-to-Date December
31,
2024
2023
2024
2023
Net income (loss) available to common
stockholders
$
93.2
122.5
197.8
356.0
Net realized and unrealized investment
(gains) losses included in net income, before tax
8.0
(5.4
)
2.9
3.6
Tax on reconciling items
(1.7
)
1.1
(0.6
)
(0.7
)
Non-GAAP operating income (loss)
$
99.6
118.3
200.1
358.8
Reconciliation of Net Income (Loss) Available to Common
Stockholders per Diluted Common Share to Non-GAAP Operating Income
(Loss) per Diluted Common Share
Quarter ended December
31,
Year-to-Date December
31,
2024
2023
2024
2023
Net income (loss) available to common
stockholders per diluted common share
$
1.52
2.01
3.23
5.84
Net realized and unrealized investment
(gains) losses included in net income, before tax
0.13
(0.09
)
0.05
0.06
Tax on reconciling items
(0.03
)
0.02
(0.01
)
(0.01
)
Non-GAAP operating income (loss) per
diluted common share
$
1.62
1.94
3.27
5.89
Reconciliation of Return on Common Equity to Non-GAAP
Operating Return on Common Equity
Quarter ended December
31,
Year-to-Date December
31,
2024
2023
2024
2023
Return on Common Equity
12.7
%
18.9
7.0
14.3
Net realized and unrealized investment
(gains) losses included in net income, before tax
1.1
(0.8
)
0.1
0.1
Tax on reconciling items
(0.3
)
0.1
—
—
Non-GAAP Operating Return on Common
Equity
13.5
%
18.2
7.1
14.4
Reconciliation of Book Value per Common Share to Adjusted
Book Value per Common Share
Quarter ended December
31,
Year-to-Date December
31,
2024
2023
2024
2023
Book value per common share
$
47.99
45.42
47.99
45.42
Total unrealized investment (gains) losses
included in accumulated other comprehensive (loss) income, before
tax
5.21
5.83
5.21
5.83
Tax on reconciling items
(1.10
)
(1.22
)
(1.10
)
(1.22
)
Adjusted book value per common share
$
52.10
50.03
52.10
50.03
Note: Amounts in the tables above may not foot due to
rounding.
Forward-Looking Statements
Certain statements in this report, including information
incorporated by reference, are “forward-looking statements” defined
in the Private Securities Litigation Reform Act of 1995 ("PSLRA").
The PSLRA provides a forward-looking statement safe harbor under
the Securities Act of 1933 and the Securities Exchange Act of 1934.
These statements discuss our intentions, beliefs, projections,
estimations, or forecasts of future events and financial
performance. They involve known and unknown risks, uncertainties,
and other factors that may cause our or our industry’s actual
results, activity levels, or performance to materially differ from
those in or implied by the forward-looking statements. In some
cases, forward-looking statements include the words “may,” “will,”
“could,” “would,” “should,” “expect,” “plan,” “anticipate,”
“attribute,” “confident,” “strong,” “target,” “project,” “intend,”
“believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,”
“likely,” “continue,” or comparable terms. Our forward-looking
statements are only predictions; we cannot guarantee or assure that
such expectations will prove correct. We undertake no obligation to
publicly update or revise any forward-looking statements for any
reason, except as may be required by law.
Factors that could cause our actual results to differ materially
from what we project, forecast, or estimate in forward-looking
statements include, without limitation:
- 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;
- Ratings downgrades on individual securities we own could affect
investment values and, therefore, statutory surplus;
- The development and adequacy of our loss reserves and loss
expense reserves;
- 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;
- Adverse market, governmental, regulatory, legal, political, or
judicial rulings, conditions or actions, including the impact of
social inflation;
- The significant geographic concentration of our business in the
eastern portion of the United States;
- The cost, terms and conditions, and availability of
reinsurance;
- Our ability to collect on reinsurance and the solvency of our
reinsurers;
- The impact of changes in U.S. trade policies and imposition of
tariffs on imports that may lead to higher than anticipated
inflationary trends for our loss and loss expenses;
- Related to COVID-19, we have successfully defended against
payment of COVID-19-related business interruption losses based on
our policies' terms, conditions, and exclusions. However, should
the highest courts determine otherwise, our loss and loss expenses
may increase, our related reserves may not be adequate, and our
financial condition and liquidity may be materially impacted.
- Ongoing wars and conflicts impacting global economic, banking,
commodity, and financial markets, exacerbating ongoing economic
challenges, including inflation and supply chain disruption, which
influences insurance loss costs, premiums, and investment
valuations;
- Uncertainties related to insurance premium rate increases and
business retention;
- Changes in insurance regulations that impact our ability to
write and/or cease writing insurance policies in one or more
states;
- The effects of data privacy or cyber security laws and
regulations on our operations;
- Major defect or failure in our internal controls or information
technology and application systems that result in harm to our brand
in the marketplace, increased senior executive focus on crisis and
reputational management issues, and/or increased expenses,
particularly if we experience a significant privacy breach;
- Potential tax or federal financial regulatory reform provisions
that could pose certain risks to our operations;
- Our ability to maintain favorable financial ratings, which may
include sustainability considerations, from rating agencies,
including AM Best, Standard & Poor’s, Moody’s, and Fitch;
- Our entry into new markets and businesses; and
- Other risks and uncertainties we identify in filings with the
United States Securities and Exchange Commission, including our
Annual Report on Form 10-K and other periodic reports.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250129294563/en/
Investor Contact: Brad B. Wilson 973-948-1283
Brad.Wilson@Selective.com
Media Contact: Jamie M. Beal 973-948-1234
Jamie.Beal@Selective.com
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