Q4 2024 Selective Insurance Group Inc Earnings Call Transcript
Key Points
- Selective Insurance Group Inc (SIGI) reported a 90-basis-point improvement in their 2024 underlying combined ratio, excluding catastrophe losses and prior year casualty development.
- The company achieved strong price changes in recent years, with commercial lines renewal pure pricing at 8.8% and retention at 85%.
- Excess and surplus lines experienced a robust year with 29% growth, exceeding $500 million of net premiums written for the first time.
- After tax net investment income for the fourth quarter was $97 million, up 24% from a year ago, and for the year, it was $363 million, slightly above their 2024 guidance.
- Selective Insurance Group Inc (SIGI) successfully renewed their property catastrophe reinsurance program with improved terms and conditions, maintaining a $100 million retention while increasing coverage exhaustion point to $1.4 billion.
- The company's fully diluted EPS for the full year was $3.23, down 44% from the previous year, with a return on equity of 7.0%, which was disappointing after 10 consecutive years of double-digit operating ROE.
- The GAAP combined ratio for the quarter was 98.5%, including 8.8 points of prior year reserve strengthening, which was higher than their original guidance.
- Catastrophe losses exceeded original guidance by 1.5 points, contributing to a full-year combined ratio of 103%, 7.5 points higher than expected.
- Net prior year casualty reserve strengthening was $100 million, with significant strengthening in general liability and E&S lines.
- The expense ratio for the year was 30.6%, and the 2025 guidance assumes an increase to approximately 31.5%, partially due to greater profit-based compensation from expected underwriting improvement.
(audio in progress) measure for our insurance operations.
Our 2024 underlying combined ratio, which excludes catastrophe losses and prior year casualty development, was 89.4%, a 90-basis-point improvement from 2023. Standard commercial lines and excess and surplus lines reported to underlying combined ratios in line with 2023, despite actions to increase current year loss cost expectations. The personal lines underlying combined ratio improved 90.6 points in 2024, as we implemented significant price increases, took meaningful underwriting actions to address underperforming business, and continued transitioning to the mass affluent market.
We remain comfortable with the overall composition and quality of our underwriting portfolio despite the adverse emergence in general liability. While rate increases will continue to be our primary focus for profitability improvement, we also have been making underwriting refinements, including managing limits and coverage grants in challenging
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
