Core Insights - Selective Insurance Group, Inc. (SIGI) reported fourth-quarter 2024 operating income of $1.62 per share, missing the Zacks Consensus Estimate by 18.1% and reflecting a 16% decrease from the previous year [1] - Total revenues reached $1.3 billion, a 14.4% increase year-over-year, primarily driven by higher premiums earned and net investment income, although it missed the Zacks Consensus Estimate by 1% [3] - The company experienced a 10% rise in net premiums written (NPW) to $1.1 billion, supported by renewal pure price increases of 10.7% [4] Financial Performance - After-tax net underwriting income fell to $13.3 million, a 73.5% decrease year-over-year, with catastrophe events favorably impacting results [5] - The combined ratio deteriorated to 98.5%, worsening by 480 basis points year-over-year, while the loss and loss expense ratio increased to 67.8% [6] - Total expenses rose by 19.2% year-over-year to $1.1 billion, attributed to higher loss expenses and other insurance costs [6] Segmental Results - Standard Commercial Lines' NPW increased by 9% year-over-year to $833.4 million, with average renewal pure price increases of 8.8% [7] - Standard Personal Lines' NPW decreased by 3% year-over-year to $103.6 million, with retention dropping to 75% [9] - Excess & Surplus Lines' NPW surged by 27% year-over-year to $152.6 million, driven by new business growth of 29% [10] Full-Year Highlights - For the full year, operating earnings were $3.27 per share, down 44% year-over-year, with NPW reaching a record $4.6 billion, up 12% [11] - The combined ratio for the year deteriorated to 103%, with an underwriting loss of $104.7 million [11] Financial Update - As of the end of 2024, total assets stood at $13.5 billion, a 15% increase from the previous year, while long-term debt rose by 1% to $507.9 million [12] - Book value per share increased by 6% year-over-year to $47.99 [12] Shareholder Returns - In 2024, SIGI repurchased shares worth $8.7 million and had $75.5 million remaining under authorization [13] - A quarterly cash dividend of 38 cents per share was authorized, payable on March 3, 2025 [13] 2025 Guidance - SIGI anticipates a GAAP combined ratio of 96% to 97% for 2025, including net catastrophe losses of 6 points [14] - The company projects after-tax net investment income of $405 million and an effective tax rate of 21.5% [14]

Core Insights - Selective Insurance reported revenue of $1.26 billion for the quarter ended December 2024, reflecting a year-over-year increase of 14.4% [1] - The company's EPS was $1.62, down from $1.94 in the same quarter last year, indicating a decline in profitability [1] - The reported revenue fell short of the Zacks Consensus Estimate of $1.28 billion, resulting in a surprise of -0.99% [1] - EPS also missed the consensus estimate of $1.98, leading to an EPS surprise of -18.18% [1] Financial Performance Metrics - Underwriting expense ratio was reported at 30.6%, matching the five-analyst average estimate [4] - Combined ratio stood at 98.5%, higher than the five-analyst average estimate of 96.1% [4] - Loss and loss expense ratio was 67.8%, compared to the five-analyst average estimate of 65.3% [4] - Standard Commercial Lines combined ratio was 100.2%, exceeding the three-analyst average estimate of 96.2% [4] - Standard Personal Lines combined ratio was 91.7%, better than the three-analyst average estimate of 102% [4] - Excess and Surplus Lines combined ratio was 93.1%, above the three-analyst average estimate of 85.2% [4] Revenue Breakdown - Net premiums earned totaled $1.13 billion, slightly below the $1.15 billion average estimate from five analysts, with a year-over-year increase of 13.2% [4] - Net investment income earned was $122.80 million, surpassing the five-analyst average estimate of $119.38 million, reflecting a year-over-year change of 24.5% [4] - Excess and Surplus Lines net premiums earned reached $141.30 million, exceeding the four-analyst average estimate of $134.43 million, with a year-over-year increase of 30.7% [4] - Standard Commercial Lines net premiums earned were $884.60 million, below the four-analyst average estimate of $904.13 million, with a year-over-year increase of 11.7% [4] - Other income was reported at $8.50 million, significantly higher than the $5.53 million estimated by four analysts, representing a year-over-year change of 54.6% [4] - Standard Personal Lines net premiums earned were $107.10 million, lower than the $113.58 million average estimate from four analysts, with a year-over-year increase of 6% [4] Stock Performance - Shares of Selective Insurance returned +1.8% over the past month, slightly outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Selective Insurance reported quarterly earnings of $1.62 per share, missing the Zacks Consensus Estimate of $1.98 per share, representing an earnings surprise of -18.18% [1][2] Financial Performance - The company posted revenues of $1.26 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.99%, compared to year-ago revenues of $1.11 billion [2] - Over the last four quarters, Selective Insurance has not surpassed consensus EPS or revenue estimates [2] Stock Performance - Selective Insurance shares have increased by approximately 1.8% since the beginning of the year, while the S&P 500 has gained 3.2% [3] - The current Zacks Rank for Selective Insurance is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $1.97 on revenues of $1.3 billion, and for the current fiscal year, it is $7.84 on revenues of $5.36 billion [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable [6] Industry Context - The Insurance - Property and Casualty industry is currently in the bottom 44% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions [5]

Premiums and Revenues - Gross premiums written for Q4 2024 were $1,275.9 million, an increase of 11% compared to $1,149.7 million in Q4 2023[8] - Net premiums written for Q4 2024 reached $1,089.6 million, reflecting a 10% increase from $991.5 million in the same quarter last year[8] - Net premiums earned for Q4 2024 increased to $1,133.0 million, up from $1,001.2 million in Q4 2023, representing a growth of 13.1% year-over-year[11] - Total revenues for Q4 2024 reached $1,256.4 million, a 13.1% increase compared to $1,110.7 million in Q4 2023[11] - Year-to-date net premiums written for 2024 reached $3,632.1 million, a 10.7% increase from $3,281.3 million in 2023[22] Underwriting Performance - Underwriting income before tax for Q4 2024 was $16.8 million, a significant recovery from a loss of $173.7 million in Q2 2024[8] - The GAAP combined ratio improved to 98.5% in Q4 2024 from 116.1% in Q2 2024, reflecting better underwriting performance[8] - The combined ratio for Q4 2024 improved to 98.5%, down from 116.1% in Q2 2024, indicating better underwriting performance[19] - The combined ratio for Q4 2024 was 100.2%, slightly up from 93.1% in Q4 2023, primarily due to increased loss expenses[22] - The underwriting income for Q4 2024 was a loss of $1.8 million, a decline from a profit of $54.9 million in Q4 2023[22] Investment Income - Net investment income earned before tax was $122.8 million in Q4 2024, up from $98.6 million in Q4 2023, marking a 24% increase[8] - The net investment income earned in Q4 2024 was $122.8 million, up from $98.6 million in Q4 2023, indicating a growth of 24.5%[11] - Total net investment income after-tax for Q4 2024 was $97.3 million, up from $78.4 million in Q4 2023, representing a 24.1% increase[40] - Investment income for the year-to-date 2024 reached $478.1 million, compared to $406.9 million for the same period in 2023, reflecting a 17.5% growth[40] Net Income and Stockholder Equity - Net income available to common stockholders for Q4 2024 was $93.2 million, compared to $122.5 million in Q4 2023, indicating a decrease of 24%[8] - Net income available to common stockholders for Q4 2024 was $93.2 million, compared to $122.5 million in Q4 2023, reflecting a decrease of 23.9%[11] - Stockholders' equity increased to $3,120.1 million in Q4 2024, compared to $2,954.4 million in Q4 2023, representing a growth of 5.6%[8] - The company’s total stockholders' equity as of Dec. 31, 2024, was $3,120.1 million, an increase from $2,954.4 million year-over-year, representing a growth of 5.6%[13] Loss Ratios and Expenses - The loss and loss expense ratio for Q4 2024 was 67.8%, an improvement from 85.7% in Q2 2024[8] - Total expenses for Q4 2024 were $1,137.3 million, up from $953.7 million in Q4 2023, marking an increase of 19.3%[11] - Losses and loss expenses incurred in Q4 2024 totaled $606.3 million, compared to $482.6 million in Q4 2023, indicating a significant increase of 25.6%[22] - The loss and loss expense ratio for Q4 2024 was 68.5%, compared to 61.0% in Q4 2023, reflecting higher claims costs[22] Assets and Book Value - Total assets at the end of Q4 2024 were $13,514.2 million, up from $11,802.5 million at the end of Q4 2023[8] - Total assets as of Dec. 31, 2024, amounted to $13,514.2 million, up from $11,802.5 million in the previous year, reflecting a growth of 14.5%[13] - The book value per common share increased to $47.99 as of December 31, 2024, compared to $45.42 a year earlier, marking a growth of 5.5%[50] Direct Business and Pricing - Direct new business written in Q4 2024 amounted to $232.0 million, consistent with $232.7 million in Q4 2023[19] - Renewal pure price increases for Q4 2024 were 8.8%, up from 7.3% in Q4 2023, indicating improved pricing power[22] - Direct new business for the quarter was $13.3 million, down from $26.0 million in the same quarter of 2023[31] - The company achieved a renewal pure price increase of 27.3% for the quarter, compared to 8.9% in the same quarter of 2023[31] Other Financial Metrics - The effective tax rate on net investment income was 20.7% for Q4 2024, unchanged from the previous quarter[40] - Non-GAAP operating income for Q4 2024 was $99.6 million, up from $81.5 million in Q4 2023, representing an increase of 22.2%[50] - Non-GAAP operating return on equity (ROE) for Q4 2024 was 13.5%, compared to 11.7% in Q4 2023[50]

Core Viewpoint - Selective Insurance Group, Inc. (SIGI) is currently trading at a premium compared to the Zacks Property and Casualty Insurance industry, with a price-to-book value of 1.90X versus the industry average of 1.49X [1] Company Performance - Selective Insurance has a market capitalization of $5.64 billion, with an average trading volume of 0.3 million shares over the last three months [2] - Over the past six months, SIGI shares have declined by 7.3%, underperforming the industry, sector, and the Zacks S&P 500 composite, which grew by 1.7%, 4.2%, and 3.4% respectively [3] - The stock closed at $92.89, which is 15.2% below its 52-week high of $109.58, and is trading below both the 50-day and 200-day simple moving averages of $95.97 and $94.67, indicating downward momentum [5] Growth Projections - The Zacks Consensus Estimate for SIGI's 2025 earnings per share indicates a significant increase of 117%, while revenues are projected to grow by 9.8% from 2024 estimates [6] - One of the five analysts covering SIGI has raised estimates for 2025 in the past 60 days, resulting in a 1% upward adjustment in the Zacks Consensus Estimate for 2025 [9] Factors Supporting Growth - Factors such as exposure growth, solid retention rates, and higher new business gains in standard commercial and excess and surplus (E&S) lines are expected to drive premium growth [10] - The E&S Lines segment is anticipated to improve due to renewal pure price increases and favorable marketplace conditions [11] - Selective Insurance estimates an after-tax net investment income of $360 million for 2024, benefiting from higher income on fixed-income securities due to improved book yields in a higher interest rate environment [12] Dividend and Return Metrics - Selective Insurance has a strong dividend history, with a nine-year CAGR of nearly 8.8% from 2015 to 2023, and a recent 9% hike in the quarterly cash dividend approved in Q3 2024 [13] - The company's return on equity in the trailing 12 months was 8.1%, surpassing the industry average of 7.5%, indicating efficient use of shareholders' funds [14] Conclusion - Despite facing challenges such as exposure to catastrophe loss and rising expenses, SIGI is well-positioned for growth due to strong renewal rates and favorable market conditions [15] - The company is considered a hold at present, benefiting from favorable growth estimates and prudent capital deployment, despite its expensive valuation [16]

Core Viewpoint - Selective Insurance Group, Inc. (SIGI) has underperformed compared to the industry and major indices, despite a recent stock price increase and positive growth factors [1][4]. Financial Performance - The market capitalization of Selective Insurance is $5.88 billion, with an average trading volume of 0.3 million shares over the last three months [2]. - Total revenues have shown a compound annual growth rate (CAGR) of 8% from 2017 to 2023, indicating steady topline improvement [7]. - The company estimates an after-tax net investment income of $360 million for 2024, benefiting from higher income on fixed-income securities due to improved book yields [8][9]. Operational Challenges - Selective Insurance faces higher expenses due to increasing loss and loss expenses and amortization of deferred policy acquisition costs [2]. - The company is exposed to catastrophe losses from natural disasters, with a GAAP combined ratio projected at 101.5%, up from a previous estimate of 96.5% [3]. Analyst Sentiment - Mixed analyst sentiment exists, with two out of five analysts lowering estimates for 2024 by 0.5%, while one analyst raised estimates for 2025 by 1% [6]. Growth Factors - Factors favoring SIGI include growth in exposure, solid retention rates, and higher new business gains in standard commercial and excess and surplus (E&S) lines [7]. - The E&S lines segment is expected to improve due to renewal pure price increases and favorable market conditions [8]. Dividend and Return Metrics - Selective Insurance has a strong dividend history, with a nine-year CAGR of nearly 8.8% and a recent 9% hike in quarterly cash dividends [10]. - The return on equity over the trailing 12 months is 8.1%, surpassing the industry average of 7.5% [11]. Valuation Concerns - The stock is considered overvalued with a trailing 12-month price-to-book (P/B) ratio of 1.98, compared to the industry average of 1.55 [12]. Conclusion - Despite challenges such as exposure to catastrophe losses and rising expenses, Selective Insurance is positioned to benefit from favorable growth estimates and prudent capital deployment, suggesting a hold strategy for investors [13][14].

Core Viewpoint - Selective Insurance Group, Inc. reported a decline in Q3 earnings, missing estimates, while increasing its dividend and showing revenue growth driven by higher premiums and investment income [2][3][11]. Financial Performance - Q3 2024 operating income was $1.40 per share, missing the Zacks Consensus Estimate by 17.1% and down 7% year-over-year [2]. - Total revenues reached $1.2 billion, a 13.9% increase from the previous year, but missed estimates by 0.4% [3]. - Net premiums written (NPW) increased 9% year-over-year to $1.15 billion, driven by renewal price increases and stable retention [3]. - Net investment income rose 17% year-over-year to $117.8 million, exceeding estimates [3]. Underwriting and Losses - After-tax net underwriting income fell 83% year-over-year to $4.1 million, with pre-tax catastrophe losses more than doubling to $148.8 million [4]. - The combined ratio deteriorated to 99.5, an increase of 270 basis points year-over-year, primarily due to elevated catastrophe losses [4]. Segment Performance - Standard Commercial Lines NPW increased 8% year-over-year to $903.9 million, with a combined ratio of 99.2 [6]. - Standard Personal Lines NPW decreased 2% year-over-year to $111 million, with retention dropping to 75% [7]. - Excess & Surplus Lines NPW rose 28% year-over-year to $142.7 million, with a combined ratio improving to 83.2 [8]. Financial Position - Total assets were $13.4 billion, down 14% from December 2023, while long-term debt increased 1% to $508.2 million [9]. - Book value per share was $48.82, up 9% year-over-year, with an annualized non-GAAP operating return on equity of 12.1% [10]. Shareholder Returns - The company repurchased shares worth $8.7 million and announced a 9% increase in the quarterly cash dividend to 38 cents per share [11]. Guidance - The company estimates a GAAP combined ratio of 102.5% for 2024, reflecting an increase in expected net catastrophe losses [12]. Market Position - Selective Insurance is part of the Zacks Insurance - Property and Casualty industry, with a Zacks Rank 3 (Hold) indicating an expected in-line return in the coming months [15].

Financial Performance - Revenues for Q3 2024 reached $1,244,306, a 15% increase from $1,081,081 in Q3 2023[85] - After-tax net investment income for Q3 2024 was $93,379, up 16% from $80,227 in Q3 2023[85] - Net income available to common stockholders for Q3 2024 was $89,978, a 4% increase from $86,908 in Q3 2023[85] - Diluted net income per share for Q3 2024 was $1.47, a 4% increase from $1.42 in Q3 2023[87] - Non-GAAP operating income for Q3 2024 was $85,720, a decrease of 7% from $92,343 in Q3 2023[86] - The combined ratio for Q3 2024 was 99.5%, an increase of 2.7 points from 96.8% in Q3 2023[85] - The combined ratio for the first nine months of 2024 was 105.6%, an increase of 10.1 points compared to 95.5% in the same period of 2023[106] - The combined ratio increased by 8.4 points in Q3 2024 and 34.1 points in the first nine months of 2024, primarily due to unfavorable prior year casualty reserve development of $216.0 million[114] Investment Performance - The annualized after-tax yield on the investment portfolio for Q3 2024 was 4.0%, up 0.1 points from 3.9% in Q3 2023[85] - Total invested assets increased by 11% to $9,635,288 thousand as of September 30, 2024, compared to $8,693,729 thousand as of December 31, 2023[147] - Net investment income earned after tax increased by 16% to $93,379 thousand in Q3 2024 compared to $80,227 thousand in Q3 2023[148] - Net realized gains on disposals were $2,147 thousand in Q3 2024, a significant recovery from $(4,897) thousand in Q3 2023[149] - Total net realized and unrealized investment gains for Q3 2024 amounted to $5,389 thousand, compared to a loss of $6,880 thousand in Q3 2023, reflecting a change of 178%[149] Underwriting and Loss Ratios - The loss and loss expense ratio increased by 4.8 points in Q3 2024 and 11.0 points in the first nine months of 2024 compared to the same prior-year periods, primarily driven by net catastrophe losses and non-catastrophe property losses[109] - Net catastrophe losses in Q3 2024 were $100.4 million, impacting the loss and loss expense ratio by 11.5 points, compared to $36.7 million in Q3 2023, which impacted the ratio by 4.7 points[109] - The loss and loss expense ratio decreased by 5.8 points in Q3 2024 and 6.9 points in the first nine months of 2024 compared to the same prior-year periods[131] - The underwriting expense ratio decreased by 0.3 points in Q3 2024 and 0.9 points in the first nine months of 2024, attributed to a decrease in expected profit-based employee compensation and premium growth outpacing underwriting expenses[112] Premium Growth and Pricing - NPW grew by 9% in Q3 2024 and 13% in the first nine months, driven by overall renewal pure price increases and higher direct new business[97] - Standard Commercial Lines renewal pure price increase was 9.1% in Q3 2024, up from 7.9% in the previous quarter[93] - Standard Personal Lines renewal pure price increase reached 22.8% in Q3 2024, up from 17.7% in the previous six months[94] - Renewal pure price increases accelerated to 10.2% in Q3 2024, up from 7.6% in the previous quarter[116] Capital Management and Shareholder Returns - The company declared a 9% increase in the quarterly cash dividend on common stock to $0.38 per share, payable on December 2, 2024[170] - The Parent's total investments and cash decreased to $433,876 thousand as of September 30, 2024, from $507,994 thousand as of December 31, 2023[153] - The company repurchased 103,000 shares of common stock for $8.7 million, with $75.5 million of remaining capacity under the share repurchase program as of September 30, 2024[164] - The effective tax rate for Nine Months 2024 was 20.8%, compared to 20.7% for the same period in 2023[150] Operational Efficiency - Operating cash flows during Nine Months 2024 were 22% of net premium written (NPW)[147] - Net cash provided by operating activities increased to $767.7 million in Nine Months 2024, compared to $522.3 million in Nine Months 2023[174] - The underwriting expense ratio decreased by 1.3 points in Q3 2024 and 1.4 points in the first nine months of 2024, primarily due to premium growth outpacing underwriting expense growth[140] Catastrophe Impact - The company experienced higher net catastrophe losses due to Hurricane Helene, which resulted in estimated losses of $85.0 million in Q3 2024 and impacted the ratio by 7.6 points[101] - Net catastrophe losses totaled $189.8 million for the first nine months of 2024, impacting the ratio by 7.4 points, compared to $134.4 million in the same period of 2023, which impacted the ratio by 5.9 points[109] Future Outlook and Expansion - The company plans to expand its geographic footprint, entering new states including West Virginia, Maine, Washington, Nevada, and Oregon in 2024[93] - The expected GAAP combined ratio for 2024 was increased to 102.5%, reflecting elevated catastrophe losses[96]

Financial Data and Key Metrics Changes - The company reported fully diluted net income of $1.47 per share and non-GAAP operating income of $1.40 per share for Q3 2024, with a year-to-date return on equity (ROE) of 5% and operating ROE of 4.8% [18][22] - The GAAP combined ratio for the quarter was 99.5%, including 13.4 points of catastrophe losses, with an underlying combined ratio of 87.7%, which is 2.7 points lower than the previous year [18][14] - The company expects a GAAP combined ratio of 102.5% for 2024, up from previous guidance of 101.5%, reflecting higher catastrophe loss assumptions [23] Business Line Data and Key Metrics Changes - In standard commercial lines, net premiums written grew 8% in the quarter, driven by a 13.4% renewal premium change, with a combined ratio of 99.2% [14][12] - Excess and surplus lines represented 12% of net premiums written, with a 28% increase in net premiums written and an 83.2% combined ratio [15] - Personal lines net premiums written decreased by 2%, with renewal pure pricing at 22.8% and an average policy size increase of 19% [16] Market Data and Key Metrics Changes - The company added Washington, Oregon, and Nevada as standard commercial line states, bringing the total to 35 states since 2017 [13] - The company achieved a meaningful increase in general liability pricing from 7.6% in Q2 to 10.2% in Q3, while commercial property renewal pure pricing was 12% [12] - Commercial lines pricing, excluding workers' compensation, increased by 10.2%, with exposure growth contributing 3.9 points to total renewal premium change [13] Company Strategy and Development Direction - The company aims to deliver combined ratios in line with or better than the 95% target in each insurance segment, focusing on stability for distribution partners and long-term returns for shareholders [9] - The company is willing to trade growth for profitability in the current loss trend environment, emphasizing disciplined underwriting and claims management [11] - The strategic focus includes expanding into new states while managing catastrophe exposure through strict guidelines and conservative reinsurance programs [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges of social inflation impacting severity trends and emphasized the importance of continued underwriting discipline [10] - The company remains confident in its ability to create value despite elevated catastrophe losses, with a strong capital position providing flexibility [17] - Management highlighted the stability of their portfolio and the proactive measures taken to address loss trends, particularly in commercial auto [34] Other Important Information - The company repurchased approximately 103,000 shares of common stock at an average price of $84.34, with $75.5 million remaining under the share repurchase authorization [23] - A quarterly dividend of $0.38 per common share was declared, an increase of 9% [23] - The investment portfolio remains conservatively positioned, with 92% in fixed income and short-term investments, and after-tax net investment income of $93 million for the quarter [22] Q&A Session Summary Question: Clarification on commercial auto reserves - The company confirmed a $10 million addition to the current year for commercial auto reserves [26][30] Question: Impact of social inflation on commercial auto - Management noted that commercial auto pricing has been stable and strong, with a long-term track record of consistent pricing responses [28][29] Question: Future of personal lines and growth strategy - Management indicated a focus on executing successfully in the current target market before considering expansion, with potential for state expansion in the future [76] Question: Rate trajectory in personal lines - The company expects to continue filing for rate increases until achieving target combined ratios, with a blended rate of 22.8% in the quarter [55][56] Question: Impact of elevated catastrophe losses on incentive compensation - The incentive compensation program includes catastrophe losses, which can put downward pressure on financial performance-related compensation [71]

Selective Insurance Group, Inc. (SIGI) reported third-quarter 2024 operating income of $1.40 per share, which missed the Zacks Consensus Estimate by 17.1%. The bottom line decreased 7% from the year-ago quarter.The quarterly results reflected average renewal pure price increases and stable retention across Standard Commercial Lines and Excess & Surplus Lines. Soft performance at Standard Personal Lines, higher catastrophe losses and poor underwriting income were offsets.Behind the Headlines  Total revenues ...