Safety Insurance(US:SAFT)2024-05-09 18:30Financial Performance - For the three months ended March 31, 2024, direct written premium growth was 22.7%, and net written premium growth was 23.4% compared to the same period in 2023[119]. - Direct written premiums increased by $49,487, or 22.7%, to $267,339 for the three months ended March 31, 2024, compared to $217,852 in 2023[143]. - Net written premiums rose by $47,411, or 23.4%, to $250,295 for the three months ended March 31, 2024, from $202,884 in 2023[144]. - Net earned premiums increased by $44,318, or 23.1%, to $236,053 for the three months ended March 31, 2024, compared to $191,735 in 2023[145]. - Total revenue for the three months ended March 31, 2024, was $268,233, an increase from $213,759 in 2023[143]. - Net income for the three months ended March 31, 2024, was $20,078, compared to a net loss of $12,337 in 2023[143]. - Basic and diluted earnings per share were $1.36 for the three months ended March 31, 2024, compared to a loss of $0.84 in 2023[143]. - Non-GAAP operating income for the three months ended March 31, 2024 was $13,746, compared to a non-GAAP operating loss of $12,796 for the comparable 2023 period[121]. Loss and Expense Management - Losses and loss adjustment expenses incurred increased by $1,246 or 0.7% to $168,399 for the three months ended March 31, 2024, with a loss ratio improvement to 71.3% from 87.2% in the comparable 2023 period[120]. - The combined ratio improved to 101.9% for the three months ended March 31, 2024, down from 118.5% in the comparable 2023 period[126]. - GAAP loss ratio for Q1 2024 decreased to 71.3% from 87.2% in Q1 2023; GAAP loss ratio excluding loss adjustment expenses was 62.2% compared to 76.2% in Q1 2023[159]. - Underwriting, operating, and related expenses increased by $12,234, or 20.4%, to $72,267 in Q1 2024 from $60,033 in Q1 2023[160]. Market Position and Ratings - The company has established a strong market position, being the third largest private passenger automobile carrier and the second largest commercial automobile insurance carrier in Massachusetts, with market shares of approximately 8.7% and 12.7%, respectively[116]. - A.M. Best currently assigns the company an "A (Excellent)" rating, reaffirmed on June 15, 2023[117]. Investment and Cash Flow - Net investment income grew by $1,577, or 11.5%, to $15,231 for the three months ended March 31, 2024, from $13,654 in 2023[146]. - Finance and other service income increased by $1,214, or 29.3%, to $5,354 for the three months ended March 31, 2024, compared to $4,140 in 2023[157]. - Net cash used for operating activities was $21,135 in Q1 2024, up from $12,892 in Q1 2023[168]. - Net cash provided by investing activities was $27,399 in Q1 2024, compared to $6,655 in Q1 2023; proceeds from securities were $81,665 in Q1 2024 versus $50,561 in Q1 2023[169]. - Net cash used for financing activities was $13,615 in Q1 2024, compared to $3,747 in Q1 2023, primarily for dividend payments[170]. Reserves and Loss Estimates - As of March 31, 2024, the total net reserves for losses and LAE were estimated at $482,292, with a range of reasonably possible estimations between $443,575 and $502,699[193]. - The recorded reserves for the private passenger automobile line of business were $206,306, with low and high estimations of $187,291 and $213,573 respectively[195]. - The total net reserves for homeowners were recorded at $99,564, with low and high estimations of $93,589 and $101,319 respectively[195]. - The company recorded a decrease in prior year reserves of $10,958 during the three months ended March 31, 2024[212]. - The decrease in prior years' reserves for the three months ended March 31, 2024, was $10,958 million, compared to $11,533 million in 2023, indicating a reduction of approximately 5%[214]. Risk Management - The company has no outstanding debt under its credit facility as of March 31, 2024, and a 2.0% increase in prevailing interest rates on variable rate debt would result in an approximate $600 increase in interest expense for 2024[230]. - The company is exposed to market risks, particularly interest rate risk, due to significant holdings in fixed rate investments[226]. - The company anticipates that future performance may be affected by various risks, including competition, regulatory changes, and economic conditions[219]. - Forward-looking statements regarding the company's strategy for growth and financial results are subject to risks and uncertainties that could cause actual results to differ significantly[218].