Financial Performance - Direct written premiums for the three months ended June 30, 2023, increased to $260,157, a growth of 21.3% compared to $214,576 in the same period of 2022[130]. - Non-GAAP operating income for the three months ended June 30, 2023, was $11,993, compared to a non-GAAP operating loss of $803 for the same period in 2022[134]. - Net income for Q2 2023 was $17,001, up from $7,901 in Q2 2022, representing a 115.5% increase[157]. - Earnings per diluted share for Q2 2023 were $1.15, compared to $0.53 in Q2 2022[157]. - Total revenue for Q2 2023 was $229,443, an increase from $183,605 in Q2 2022[157]. - Non-GAAP operating income for Q2 2023 was $11,993, down from $28,230 in Q2 2022[157]. Losses and Expenses - Losses and loss adjustment expenses for the three months ended June 30, 2023, rose by $30,808, or 27.3%, totaling $143,523 compared to $112,715 in the same period of 2022[132]. - The combined ratio for the three months ended June 30, 2023, was 101.9%, up from 92.1% in the same period of 2022[140]. - The GAAP loss ratio for the three months ended June 30, 2023 increased to 71.0% from 59.8% for the comparable 2022 period[176]. - Losses and loss adjustment expenses for Q2 2023 were $143,523, compared to $112,715 in Q2 2022[157]. Premiums and Policy Growth - The average written premium per policy increased by 9.4%, 5.2%, and 3.9% in Private Passenger Automobile, Commercial Automobile, and Homeowners lines, respectively, for the six months ended June 30, 2023, compared to the same period in 2022[133]. - The company achieved policy count growth of 13.5%, 4.0%, and 9.1% in Private Passenger Automobile, Commercial Automobile, and Homeowners lines, respectively, for the six months ended June 30, 2023[133]. - Direct written premiums for Q2 2023 increased by $45,581, or 21.2%, to $260,157 compared to $214,576 in Q2 2022[157]. - Net written premiums for Q2 2023 rose by $42,245, or 20.8%, to $244,969 from $202,724 in Q2 2022[159]. - Net earned premiums for Q2 2023 increased by $13,892, or 7.4%, to $202,225 compared to $188,333 in Q2 2022[160]. Investment and Cash Flow - Net investment income for Q2 2023 increased by $2,201, or 18.9%, to $13,836 from $11,635 in Q2 2022[161]. - Net cash used for operating activities was $13,438 for the six months ended June 30, 2023, compared to $275 for the same period in 2022[186]. - Net cash provided by investing activities was $45,694 for the six months ended June 30, 2023, compared to $17,117 for the comparable prior year period[187]. - As of June 30, 2023, the total fair value of the fixed income security portfolio was $1,017,467, with U.S. Treasury securities comprising 22.0% of the portfolio[167]. Reserves and Dividends - The estimated total net reserves for losses and loss adjustment expenses (LAE) as of June 30, 2023, was $468,247,000, with a range of estimations between $437,459,000 and $495,670,000[212]. - The company plans to continue declaring and paying quarterly cash dividends in 2023, contingent on its financial position and cash flow regularity[196]. - In 2023, the company paid quarterly dividends of $0.90 per share, totaling $13,247,000 in February and $13,283,000 in May[196]. - The maximum dividend available for 2023 without prior approval of the Commissioner was $78,220, based on the statutory surplus of $782,200 as of December 31, 2022[193]. Share Repurchase and Capital - As of June 30, 2023, the company had repurchased 3,215,690 shares at a total cost of $155,240,000, with 74,213 shares repurchased in the second quarter at a cost of $5,240,000[198]. - The share repurchase program was cumulatively authorized for up to $200,000,000, allowing flexibility in timing and number of shares repurchased[197]. - The company’s total capital as of December 31, 2022, was $782,200,000, exceeding the minimum statutory capital requirement of $200,196,000[201]. Forward-Looking Statements - Forward-looking statements include projections of revenues, income, and capital expenditures, and are subject to risks and uncertainties that could cause actual results to differ significantly[242]. - The company does not undertake any obligation to update forward-looking statements after the date they are made, cautioning readers against placing undue reliance on them[245].

Premiums and Growth - Direct written premiums for the three months ended March 31, 2023, increased to $217,852, a growth of 15.0% compared to $189,493 in the same period of 2022 [115]. - The company achieved a 13.9% growth in net written premiums for the quarter, driven by new business production and improved retention [118]. - Direct written premiums increased by $28,359, or 15.0%, to $217,852 for the three months ended March 31, 2023, compared to $189,493 for the same period in 2022 [144]. - Net written premiums rose by $24,832, or 13.9%, to $202,884 for the three months ended March 31, 2023, from $178,052 in the comparable 2022 period [145]. Losses and Expenses - Losses and loss adjustment expenses for the quarter increased by $43,987, or 35.7%, to $167,153 from $123,166 in the comparable period, primarily due to the February Winter Freeze and inflation [117]. - Losses and loss adjustment expenses increased by $43,987, or 35.7%, to $167,153 for the three months ended March 31, 2023, compared to $123,166 for the same period in 2022, primarily due to the February Winter Freeze and inflation [159]. - GAAP loss ratio for Q1 2023 increased to 87.2% from 65.8% in Q1 2022; excluding loss adjustment expenses, it was 76.2% compared to 55.2% in the prior year [160]. Financial Performance - Non-GAAP operating loss for the quarter was $12,796, translating to a loss of $0.87 per diluted share, compared to non-GAAP operating income of $14,809, or $0.99 per diluted share, in the same period of 2022 [119]. - The company reported a net loss of $12,337 for the three months ended March 31, 2023, compared to a net income of $7,838 for the same period in 2022 [144]. - Basic and diluted loss per share was $(0.84) for the three months ended March 31, 2023, compared to earnings of $0.53 per share for the same period in 2022 [144]. - Non-GAAP operating loss income was $(12,796) for the three months ended March 31, 2023, compared to $14,809 for the same period in 2022 [144]. - Net investment income grew by $3,064, or 28.9%, to $13,654 for the three months ended March 31, 2023, from $10,590 in the comparable 2022 period [147]. - Finance and other service income rose by $823, or 24.8%, to $4,140 for the three months ended March 31, 2023, from $3,317 in the comparable 2022 period [158]. Reserves and Loss Estimates - As of March 31, 2023, the total net reserves for losses and LAE were $474,239, with a range of estimations between $443,086 and $496,959 [196]. - The recorded reserves for private passenger automobile were $181,497, with low and high estimations of $172,673 and $191,753 respectively [196]. - The total net reserves for commercial automobile were $103,334, with low and high estimations of $95,526 and $106,960 respectively [196]. - The homeowners line recorded reserves of $104,784, with low and high estimations of $99,238 and $107,952 respectively [196]. - The prior year reserves decreased by $11,533 during the three months ended March 31, 2023 [214]. - The 2023 decrease in reserves included reductions of $3,207 million in private passenger automobile reserves, $2,286 million in commercial automobile reserves, $2,570 million in homeowners reserves, and $3,470 million in other lines reserves [215]. Capital and Liquidity - Total capital of Insurance Subsidiaries was $782,200 as of December 31, 2022, exceeding the minimum statutory capital requirement of $200,196 [182]. - The company has no outstanding debt under its credit facility as of March 31, 2023, indicating a strong liquidity position [231]. - Management believes current cash flow from operations is sufficient to meet operating needs over the next 12 months [181]. Market and Regulatory Environment - The Massachusetts private passenger automobile insurance rate was increased by 4.3% effective July 1, 2023, following a 3.5% increase in December 2022 [121]. - The company is the third largest private passenger automobile carrier in Massachusetts, with a market share of approximately 7.9% [112]. - The company maintains an "A (Excellent)" rating from A.M. Best, reaffirmed on May 26, 2022 [113]. Investment Strategy and Risks - The company has significant exposure to interest rate risk, with a potential increase in interest expense of approximately $600 million for 2023 if prevailing interest rates on variable rate debt increase by 2.0% [231]. - The company does not plan to enter into derivative financial instruments for trading or speculative purposes, focusing instead on managing market risks through active portfolio review [227]. - The company expects to continue purchasing additional equity securities while managing equity price risk through diversification and asset allocation techniques [233]. - The company’s investment impairment evaluation methodology includes assessing the financial condition and prospects of issuers, which ensures disciplined evaluation of declines in fair value [219]. Cash Flow and Financing Activities - Net cash used for operating activities was $12,892 in Q1 2023, down from $15,276 in Q1 2022; positive operating cash flows are expected in the future [169]. - Net cash provided by investing activities was $6,655 in Q1 2023, compared to $15,124 in Q1 2022; purchases of invested assets were $43,292 in Q1 2023, down from $84,965 in the prior year [170]. - Net cash used for financing activities was $3,747 in Q1 2023, significantly lower than $28,220 in Q1 2022; included dividend payments to shareholders [171]. - Safety Insurance paid dividends of $8,056 to Safety in Q1 2023; maximum dividend available without prior approval is $78,220 for 2023 [175].

Company Overview - The company operates as the fifth largest private passenger auto premium insurance carrier, the second largest commercial auto insurance carrier, and the third largest homeowner insurance carrier in Massachusetts[20]. - The company is the second largest writer of commercial automobile insurance in Massachusetts with a market share of 12.6% in 2022[119]. - The company is the third largest writer of homeowners insurance in Massachusetts, holding a market share of 6.5% in 2021[120]. Financial Performance - In 2022, direct written premiums totaled $823.3 million, with private passenger automobile insurance contributing 52.0%, commercial automobile 17.4%, and homeowners 25.3%[26]. - The combined ratio is typically maintained below industry averages, indicating effective cost management and underwriting practices[20]. - In 2022, the bad debt expense as a percentage of direct written premiums was 0.1%, indicating effective credit management[74]. - The total incurred losses and LAE for the current year 2022 amounted to $491,979, compared to $461,727 in 2021, reflecting an increase of approximately 6.5%[99]. - The statutory surplus of Safety Insurance was $782,200, with a net income of $66,197 for 2022, allowing for a maximum of $78,220 in dividends without prior approval[159]. Market Strategy - The company aims to further penetrate the Massachusetts, New Hampshire, and Maine markets across all lines of business[27]. - The company focuses on developing interdependent relationships with agents in Massachusetts, New Hampshire, and Maine to increase market share[50]. - Competitive commissions and incentives are offered to agents, with a focus on attracting profitable new business[52]. Technology and Innovation - The investment in technology aims to provide agents with advanced tools, enhancing the ease of doing business[20]. - The Innovation Lab has been active in 2022, conducting research and developing new technologies to enhance customer experience and competitiveness[71]. - The company introduced the Safety Commercial Express system in 2021, which was updated in 2022 to improve agent processing capabilities[70]. Claims Management - The claims department utilizes stringent settlement procedures, with approximately 58% of bodily injury claims in 2022 being soft tissue injuries[82]. - The company employs automated systems for claims processing, which streamline operations and improve customer service[87]. - Reserves for unpaid losses are reviewed quarterly, with annual certification required from a qualified actuary to ensure reasonableness[92]. Investment Portfolio - As of December 31, 2022, the company's investment portfolio was valued at $1,403,160, with 74.9% in fixed maturity securities and 17.1% in equity securities[137]. - The company’s fixed maturity investments primarily consist of investment grade corporate securities, U.S. government securities, and asset-backed securities[134]. - The estimated fair value of asset-backed securities was $443,164, representing 42.3% of the total fixed income security portfolio[149]. Risk Management - The Company has adopted a comprehensive risk management approach to assess its current and prospective solvency positions under various stress scenarios[173]. - The Company has significant exposure to interest rate risk due to its holdings of fixed rate investments, with estimated fair values of $1,092,151, $1,261,399, and changes in fair value of $41,996 and $43,120 for the years ending December 31, 2022, and 2021 respectively[394]. - The Company manages equity price risk through diversification and asset allocation techniques, with plans to purchase additional equity securities in the future[396]. Corporate Governance - The Company has a Code of Business Conduct and Ethics that applies to all employees and directors, ensuring compliance and ethical standards[192]. - The Company’s executive officers have extensive experience, with the President and CEO, George M. Murphy, having over 34 years in the industry[176]. - The Company’s Vice President of Claims, Paul J. Narciso, has 36 years of claims experience, contributing to the Company’s operational expertise[181]. Audit and Compliance - The Company reported a fair presentation of its financial position as of December 31, 2022, and 2021, in accordance with generally accepted accounting principles[400]. - The Company maintained effective internal control over financial reporting as of December 31, 2022[400]. - The audit procedures included testing the effectiveness of controls related to loss reserves and evaluating the methods and assumptions used in estimating these reserves[411].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to ______ Commission File Number: 000-50070 SAFETY INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) 20 Custom Hou ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to ______ Commission File Number: 000-50070 SAFETY INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 13-418169 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to ______ Commission File Number: 000-50070 SAFETY INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 13-41816 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-50070 SAFETY INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 13-4181699 (State or other ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to ______ Commission File Number: 000-50070 SAFETY INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 13-4 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to ______ Commission File Number: 000-50070 SAFETY INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 13-418169 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 For the transition period from ______to ______ Commission File Number: 000-50070 SAFETY INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 13-4181699 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identificat ...