Selective(US:SIGI)2024-10-25 15:38Financial 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]