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Selective(SIGI) - 2025 Q1 - Quarterly Report
SIGISelective(SIGI)2025-04-25 16:06
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Financial Performance - Revenues for Q1 2025 reached 1,285,186,a101,285,186, a 10% increase from 1,164,959 in Q1 2024[73] - After-tax net investment income rose to 95,621,reflectinga1295,621, reflecting a 12% increase compared to 85,640 in the previous year[73] - Net income available to common stockholders increased by 34% to 107,596from107,596 from 80,218 in Q1 2024[73] - Non-GAAP operating ROE for Q1 2025 was 14.4%, exceeding the 12% target and up from 11.7% in Q1 2024[75] - Net Premiums Written (NPW) increased by 7% to 1,240,443,andNetPremiumsEarned(NPE)grewby101,240,443, and Net Premiums Earned (NPE) grew by 10% to 1,158,757 in Q1 2025 compared to Q1 2024[81] - Underwriting income rose significantly by 140% to 45,637inQ12025,comparedto45,637 in Q1 2025, compared to 19,031 in Q1 2024[81] - Net cash provided by operating activities increased to 284.0millioninFirstQuarter2025,comparedto284.0 million in First Quarter 2025, compared to 114.2 million in First Quarter 2024[154] Combined Ratio and Underwriting Performance - The combined ratio improved to 96.1%, down 2.1 points from 98.2% in Q1 2024[73] - The combined ratio improved to 96.1%, down from 98.2%, reflecting a 2.1-point decrease year-over-year[81] - The combined ratio improved by 2.6 points to 97.3% in Q1 2025, reflecting a decrease in the loss and loss expense ratio to 66.6%[102] - The loss and loss expense ratio for Standard Commercial Lines improved to 63.8%, down from 66.7% in Q1 2024[91] - The combined ratio for Commercial Property decreased by 10.2 points to 83.9% in Q1 2025, with net catastrophe losses significantly lower at 16.4million[104]−ThecombinedratioforWorkersCompensationincreasedby26.6pointsto105.916.4 million[104] - The combined ratio for Workers Compensation increased by 26.6 points to 105.9% in Q1 2025, impacted by higher current year casualty loss costs[106] - The loss and loss expense ratio for Standard Personal Lines improved by 7.3 points to 73.9% in Q1 2025, aided by a favorable prior year casualty reserve development of 5 million[110] - The combined ratio for E&S Lines increased by 4.9 points to 92.5% in Q1 2025, with loss and loss expense incurred rising by 37% to 87,990[113]BusinessGrowthandStrategy−Newbusinessmoderatedasrateincreasesaccelerated,butpolicyretentionremainedstrong[79]−Thecompanyadded30agencylocationsinQ12025,contributingtoanetincreaseof200agencylocationsin2024[79]−ThecompanyexpectstowritenewbusinessinKansas,Montana,andWyomingbytheendof2026[80]−Overallrenewalpurepricingacrossinsurancesegmentswas10.387,990[113] Business Growth and Strategy - New business moderated as rate increases accelerated, but policy retention remained strong[79] - The company added 30 agency locations in Q1 2025, contributing to a net increase of 200 agency locations in 2024[79] - The company expects to write new business in Kansas, Montana, and Wyoming by the end of 2026[80] - Overall renewal pure pricing across insurance segments was 10.3%, up 2.2 points from the previous year[80] - The thirteen states added since 2017 produced 350 million in premium, representing approximately 10% of Standard Commercial Lines NPW[80] Investment Performance - Total invested assets grew by 7% to 10,295,310thousandasofMarch31,2025,upfrom10,295,310 thousand as of March 31, 2025, up from 9,651,297 thousand at December 31, 2024[119] - Net investment income earned increased by 12% to 95,621thousandinQ12025from95,621 thousand in Q1 2025 from 85,640 thousand in Q1 2024[121] - Net unrealized losses before tax decreased by 26% to (232,510)thousandinQ12025from(232,510) thousand in Q1 2025 from (314,680) thousand in Q1 2024[119] - The annualized after-tax yield on the investment portfolio decreased slightly to 3.8% in Q1 2025 from 3.9% in Q1 2024[121] - Net unrealized gains on equity securities increased by 52% to 1,050,000inQ12025from1,050,000 in Q1 2025 from 692,000 in Q1 2024[122] Capital Management - The company maintains a solid capital base and high-quality underwriting portfolio, enhancing financial strength and underwriting capacity[152] - The company may take various actions to manage capital, including contributing capital to Insurance Subsidiaries and repurchasing shares[151] - The company issued 400millionof5.90400 million of 5.90% Senior Notes due 2035, resulting in net proceeds of 395.9 million, which includes a 200millioncapitalcontributiontotheInsuranceSubsidiaries[139]−Thecompanyrepurchased233,611sharesofcommonstockfor200 million capital contribution to the Insurance Subsidiaries[139] - The company repurchased 233,611 shares of common stock for 19.4 million, with 56.1millionofremainingcapacityunderthesharerepurchaseprogramasofMarch31,2025[140]−AsofMarch31,2025,thecompanyhadGAAPstockholders′equityof56.1 million of remaining capacity under the share repurchase program as of March 31, 2025[140] - As of March 31, 2025, the company had GAAP stockholders' equity of 3.3 billion and a debt-to-capital ratio of 21.7%[144] Tax and Regulatory - Federal income tax expense for Q1 2025 was 28,990,000,upfrom28,990,000, up from 20,048,000 in Q1 2024, resulting in an effective tax rate of 21.2%[123]