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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 1, 2024
SELECTIVE INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
New Jersey 001-33067 22-2168890
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
40 Wantage Avenue
,
Branchville
,
New Jersey
07890
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (
973
)
948-3000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol (s) Name of each exchange on which registered
Common Stock, par value $2 per share SIGI The Nasdaq Stock Market LLC
Depositary Shares, each representing SIGIP The Nasdaq Stock Market LLC
a 1/1,000th interest in a share
of 4.60% Non-Cumulative Preferred
Stock, Series B, without par value
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
-------------------------------------------------------------------------------
Section 2 - Financial Information
Item 2.02. Results of Operations and Financial Condition.
On May 1, 2024, Selective Insurance Group, Inc. (the "Company") issued a press
release announcing results for the first quarter ended March 31, 2024. The
press release is attached hereto as Exhibit 99.1.
Section 7 - Regulation FD
Item 7.01. Regulation FD Disclosure.
Attached as Exhibit 99.2 is supplemental financial information about the
Company.
The information contained in Item 2.02 and Item 7.01 of this Current Report on
Form 8-K, including the exhibits attached hereto, is being furnished and shall
not be deemed "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, except as shall be expressly set forth
by specific reference in such filing. The Company makes no admission as to the
materiality of any information in this report or the exhibits attached hereto.
Important information may be disseminated initially or exclusively via the
Company's corporate website, www.selective.com/investors. Investors should
consult the site to access this information. Any website addresses included
herein are inactive textual references only. The information contained on any
such website referenced herein is not incorporated into this Current Report on
Form 8-K.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
Exhibit No. Description of Exhibit
99.1
Press Release of Selective Insurance Group, Inc. dated May 1, 2024
99.2
Financial Supplement, First Quarter 2024
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL
-------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SELECTIVE INSURANCE GROUP, INC.
Date: May 1, 2024 By: /s/ Michael H. Lanza
Michael H. Lanza
Executive Vice President and General Counsel
Exhibit 99.1
Selective Reports First Quarter 2024 Results
Net Income of $1.31 per Diluted Common Share and Non-GAAP Operating Income
1
of $1.33 per
Diluted Common Share
Return on Common Equity ("ROE") of 11.5% and Non-GAAP Operating ROE
1
of
11.7%
Selective's Quarterly Analyst Conference Call to be Held at 8:00 AM ET, on
Thursday, May 2, 2024
In the first quarter of 2024:
.
Net premiums written ("NPW") increased 16% compared to the first quarter of
2023;
.
The GAAP combined ratio was 98.2%, compared to 95.7% in the first quarter of
2023;
.
Commercial Lines renewal pure price increases aver
aged 7.6%, up 0.6 points from 7.0% in the
first
quarter of
2023
;
.
After-tax net investment income was
$86 million, up 17% compared to the
first
quarter of
2023
;
.
Book value per common share was $46.17, up 2% from last quarter; and
.
Adjusted book value per common share^1 was $50.97, up 2% from last quarter.
Branchville, NJ - May 1, 2024 -
Selective Insurance Group, Inc. (NASDAQ: SIGI) reported financial results for
the first quarter ended March 31, 2024, with net income per diluted common
share of $1.31 and non-GAAP operating income
1
per diluted com
mon share of $1.33.
For the quarter, Selective reported a combined ratio of 98.2%, including
3.3
points of unfavorable prior year casualty reserve development and
5.3
points of catastrophe losses. NPW grew 16% from a year ago, with strong
top-line growth across all three insurance segments. After-tax net investment
income was
$86
million, up
17%
from a year ago. Non-GAAP operating ROE
1
was
11.7%
.
"Our organization is committed to disciplined underwriting and enterprise risk
management. Our detailed planning and reserving, specific underwriting and
pricing actions, and results monitoring process allow us to quickly identify
and respond to risks, opportunities, and trends. This positions us as a stable
market for our customers and distribution partners," said John J. Marchioni,
Chairman, President and Chief Executive Officer.
"During the quarter, we strengthened general liability reserves for recent
accident years due to increased severities. We primarily attribute the
elevated and uncertain loss trends to the impacts of social inflation, which
we have discussed in recent quarters. Our fundamentals remain strong with a
profitable combined ratio, average renewal pure price increase of 8.1%, and
double-digit operating ROE in the quarter."
"Our strong financial position allows us to continue executing profitable
growth strategies across our insurance segments. We successfully launched
Standard Commercial Lines in Maine and West Virginia in early April, and we
expect Nevada, Washington, and Oregon to follow later this year. We believe
our prospects for profitable growth within our existing appetite and operating
states are excellent, complemented by continued geographic expansion,"
concluded Mr. Marchioni.
1
-------------------------------------------------------------------------------
Operating Highlights
Consolidated Quarter ended March 31, Change
Financial Results
$ and shares in millions, 2024 2023
except per share data
Net premiums $ 1,156.6 999.8 16 %
written
Net premiums 1,050.9 902.3 16
earned
Net investment 107.8 91.5 18
income earned
Net realized and unrealized (1.6) 3.3 (149)
gains (losses), pre-tax
Total 1,165.0 999.8 17
revenues
Net underwriting income 15.0 31.0 (51)
(loss), after-tax
Net investment 85.6 73.1 17
income, after-tax
Net income available 80.2 90.3 (11)
to common stockholders
Non-GAAP 81.5 87.6 (7)
operating income
1
Combined 98.2 % 95.7 2.5 pts
ratio
Loss and loss 67.0 62.9 4.1
expense ratio
Underwriting 30.9 32.6 (1.7)
expense ratio
Dividends to 0.3 0.2 0.1
policyholders ratio
Net catastrophe 5.3 pts 6.1 (0.8)
losses
Non-catastrophe property 16.3 16.4 (0.1)
losses and loss expenses
(Favorable) unfavorable prior year 3.3 (1.4) 4.7
reserve development on casualty lines
Net income available to common $ 1.31 1.48 (11) %
stockholders per diluted common share
Non-GAAP operating income 1.33 1.44 (8)
per diluted common share
1
Weighted average 61.2 60.9 1
diluted common shares
Book value per $ 46.17 40.82 13
common share
Adjusted book value 50.97 46.61 9
per common share
1
Overall Insurance Operations
For the
first
quarter, overall NPW increased
16%
, or $157 million, from a year ago, reflecting new business growth and
effective management of our renewal portfolio. Average renewal pure price
increased
8.1%
, up 1.5 points from a year ago, with stable retention and increased exposure.
Selective's 98.2% combined ratio in the quarter deteriorated 2.5 points from a
year ago, primarily due to prior year casualty reserve development, partially
offset by an improved expense ratio and lower catastrophe losses. Net
unfavorable prior year casualty reserve development totaled
$35
million, increasing the combined ratio by
3.3
points. A year ago, prior year casualty reserve development was a favorable
$13 million, reducing the combined ratio by 1.4 points. The combined ratio,
excluding net catastrophe losses and prior year reserve development on
casualty lines, was
89.6%,
1.4 points better than a year ago.
Overall, our insurance segments contributed
2.2
points of ROE in the first quarter of 2024.
Standard Commercial Lines Segment
For the first quarter, Standard Commercial Lines premiums (
representing
80%
of
total NPW) grew 15% from a year ago. The premium growth reflected average
renewal pure price increases of 7.6%, new business growth of 17%, strong
exposure growth, and stable retention of 86%. The first quarter combined ratio
was 98.8%, up 4.1 points compared to a year ago, primarily due to prior year
casualty reserve development, partially offset by an improved expense ratio
and lower catastrophe losses.
Prior year casualty reserve development in the quarter was an unfavorable $35
million, or 4.2 points, compared to $10 million, or 1.4 points, of favorable
development a year ago. This quarter's prior year casualty reserve development
included unfavorable general liability development of $50 million, primarily
from increased severities in accident years 2020 through 2023, and favorable
workers compensation development of $15 million. A year ago, workers
compensation was the source of the favorable prior year casualty reserve
development.
2
-------------------------------------------------------------------------------
The following table shows the variances relative to the 94.7% combined ratio a
year ago:
Standard Commercial Quarter ended March 31, Change
Lines Segment
$ in millions 2024 2023
Net premiums $ 931.7 813.3 15 %
written
Net premiums 834.1 731.6 14
earned
Combined 98.8 % 94.7 4.1 pts
ratio
Loss and loss 66.7 61.2 5.5
expense ratio
Underwriting 31.7 33.3 (1.6)
expense ratio
Dividends to 0.4 0.2 0.2
policyholders ratio
Net catastrophe 4.6 pts 4.8 (0.2)
losses
Non-catastrophe property 13.8 14.4 (0.6)
losses and loss expenses
(Favorable) unfavorable prior year 4.2 (1.4) 5.6
reserve development on casualty lines
Standard Personal Lines Segment
For the
first
quarter, Standard Personal Lines premiums (representing
9%
of total NPW) increased 17% from a year ago due to renewal pure price
increases of 14.3% and higher average policy sizes. Retention was 83%, down 4
points from a year ago, and new business decreased 19% due to
deliberate actions as part of our profit improvement plan.
The
first
quarter 2024 combined ratio improved by 10.9 points to 105.1%, including 11.4
points of catastrophe losses.
The following table shows the variances
relative to the 116.0% combined ratio
a year ago:
Standard Personal Lines Segment Quarter ended March 31, Change
$ in millions 2024 2023
Net premiums written $ 99.9 85.3 17 %
Net premiums earned 103.8 81.9 27
Combined ratio 105.1 % 116.0 (10.9) pts
Loss and loss expense ratio 81.2 89.4 (8.2)
Underwriting expense ratio 23.9 26.6 (2.7)
Net catastrophe losses 11.4 pts 17.9 (6.5)
Non-catastrophe property losses and loss expenses 40.3 41.3 (1.0)
Unfavorable prior year reserve development on casualty lines - 2.4 (2.4)
Excess and Surplus Lines Segment
For the first quarter, Exc
ess and Surplus Lines premiums (representing
11%
of total NPW) increased 24% compared to the prior-year period, driven by new
business growth of 57% and average renewal pure price increases of 5.2%. The
first
quarter 2024 combined ratio was 87.6%, up 2.6 points compared to a year ago.
The following table shows the variances
relative to the 85.0% combined ratio
a year ago:
Excess and Surplus Lines Segment Quarter ended March 31, Change
$ in millions 2024 2023
Net premiums written $ 125.0 101.2 24 %
Net premiums earned 113.0 88.9 27
Combined ratio 87.6 % 85.0 2.6 pts
Loss and loss expense ratio 56.7 52.8 3.9
Underwriting expense ratio 30.9 32.2 (1.3)
Net catastrophe losses 4.3 pts 6.3 (2.0)
Non-catastrophe property losses and loss expenses 12.6 10.1 2.5
(Favorable) prior year reserve development on casualty lines - (5.6) 5.6
3
-------------------------------------------------------------------------------
Investments Segment
For the first quarter,
after-tax
net investment inc
ome of $86 million was up 17% from a year ago. Similarly, pre-tax investment
income from the
fixed income securities portfolio increased 17% compared to the first quarter
of 2023. For the quarter, the after-tax income yield averaged 3.9% for the
overall portfolio and 4.0% for the fixed income securities portfolio.
With the increased portfolio yield and i
nvested assets per dollar of common stockholders' equity of $3.12 as of March
31, 2024, the Investments segment generated 12.3 points of non-GAAP operating
ROE in the quarter.
Investments Segment Quarter ended March 31, Change
$ in millions, except per share data 2024 2023
Net investment income earned, after-tax $ 85.6 73.1 17 %
Net investment income per common share 1.40 1.20 17
Effective tax rate 20.6 % 20.2 0.4 pts
Average yields:
Portfolio:
Pre-tax 4.9 4.6 0.3
After-tax 3.9 3.7 0.2
Fixed income securities:
Pre-tax 5.0 % 4.7 0.3 pts
After-tax 4.0 3.8 0.2
Annualized ROE contribution 12.3 12.2 0.1
Balance Sheet
$ in millions, except per share data March 31, 2024 December 31, 2023 Change
Total assets $ 12,056.1 11,802.5 2 %
Total investments 8,745.7 8,693.7 1
Long-term debt 503.3 503.9 -
Stockholders' equity 3,006.5 2,954.4 2
Common stockholders' equity 2,806.5 2,754.4 2
Invested assets per dollar of common stockholders' equity 3.12 3.16 (1)
Net premiums written to policyholders' surplus 1.55 1.51 3
Book value per common share 46.17 45.42 2
Adjusted book value per common share 50.97 50.03 2
1
Debt to total capitalization 14.3 % 14.6 % (0.3) pts
Book value per common share increased by $0.75, or 2% during the quarter. The
increase was primarily attributable to $1.31 of net income per diluted common
share, partially offset by a $0.22 increase in after-tax net
unrealized losses on our fixed income securities portfolio and $0.35 in common
stock dividends paid to shareholders
. The increase in after-tax net unrealized losses on our fixed income
securities portfolio primarily related to rising interest rates in the first
quarter.
During the first quarter, the Company did not repurchase any shares of common
stock. Capacity under the existing repurchase authorization was $84.2 million
as of
March 31, 2024
.
Selective's Board of Directors declared:
. A quarterly cash dividend on common stock of
$0.35
per common share that is payable June
3, 2024, to holders of record on May 15, 2024; and
. A quarterly cash dividend of $287.50 per share on our 4.60% Non-Cumulative
Preferred Stock, Series B (equivalent to $0.28750 per depositary share)
payable on June 17, 2024, to holders of record as of June 3, 2024.
Guidance
For 2024, we increased our expectation for the GAAP combined ratio reflecting
unfavorable prior year casualty reserve development and current year loss cost
increases in the first quarter, while maintaining other full-year expectations
as follows:
.
A GAAP combined ratio of 96.5%, up from prior guidance of 95.5%, including net
catastrophe losses of 5.0 points. Our combined ratio estimate assumes no
additional prior year casualty reserve development;
.
After-tax net investment income of $360 million that includes after-tax net
investment income from alternative investments of $32 million;
4
-------------------------------------------------------------------------------
.
An overall effective tax rate of approximately 21.0%, which assumes an
effective tax rate of 20.5% for net investment income and 21% for all other
items; and
.
Weighted average shares of 61.5 million on a fully diluted basis.
The s
upplemental investor package, with financial information not included in this
press release, is available on the Investors page of Selective's website at
www.Selective.com.
For scheduling reasons, Selective's quarterly analyst conference call has been
brought forward and will now be simulcast at 8:
00 AM ET,
on Thursday, May 2, 2024, on www.Selective.com. The webcast will be available
for rebroadcast until the close of business on May 31, 2024. Moving forward,
the Company intends to continue to hold earnings calls before the U.S. stock
markets open.
About Selective Insurance Group, Inc.
Selective Insurance Group, Inc. (Nasdaq: SIGI) is a holding company for 10
property and casualty insurance companies rated "A+" (Superior) by AM Best.
Through independent agents, the insurance companies offer standard and
specialty insurance for commercial and personal risks and flood insurance
through the National Flood Insurance Program's Write Your Own Program.
Selective's unique position as both a leading insurance group and an employer
of choice is recognized in a wide variety of awards and honors, including
listing in Forbes Best Midsize Employers in 2024 and certification as a Great
Place to Work
(R)
in 2024 for the fifth consecutive year. For more information about Selective,
visit www.Selective.com.
1
Reconciliation of Net Income Available to Common Stockholders to Non-GAAP
Operating Income and Certain Other Non-GAAP Measures
Non-GAAP operating income, non-GAAP operating income per diluted common share,
and non-GAAP operating return on common equity differ from net income
available to common stockholders, net income available to common stockholders
per diluted common share, and return on common equity, respectively, by the
exclusion of after-tax net realized and unrealized gains and losses on
investments included in net income. Adjusted book value per common share
differs from book value per common share by excluding total after-tax
unrealized gains and losses on investments included in accumulated other
comprehensive (loss) income. These non-GAAP measures are used as important
financial measures by management, analysts, and investors, because the timing
of realized and unrealized investment gains and losses on securities in any
given period is largely discretionary. In addition, net realized and
unrealized gains and losses on investments could distort the analysis of
trends. These operating measurements are not intended to be a substitute for
net income available to common stockholders, net income available to common
stockholders per diluted common share, return on common equity, and book value
per common share prepared in accordance with U.S. generally accepted
accounting principles (GAAP). Reconciliations of net income available to
common stockholders, net income available to common stockholders per diluted
common share, return on common equity, and book value per common share to
non-GAAP operating income, non-GAAP operating income per diluted common share,
non-GAAP operating return on common equity, and adjusted book value per common
share, respectively, are provided in the tables below.
Note: All amounts included in this release exclude intercompany transactions.
Reconciliation of Net Income Available to Common Stockholders to Non-GAAP
Operating Income
$ in millions Quarter ended March 31,
2024 2023
Net income available $ 80.2 90.3
to common stockholders
Net realized and unrealized investment (gains) 1.6 (3.3)
losses included in net income, before tax
Tax on reconciling (0.3) 0.7
items
Non-GAAP $ 81.5 87.6
operating income
Reconciliation of Net Income Available to Common Stockholders per Diluted
Common Share to Non-GAAP Operating Income per Diluted Common Share
Quarter ended March 31,
2024 2023
Net income available to common $ 1.31 1.48
stockholders per diluted common share
Net realized and unrealized investment (gains) 0.03 (0.05)
losses included in net income, before tax
Tax on reconciling (0.01) 0.01
items
Non-GAAP operating income $ 1.33 1.44
per diluted common share
5
-------------------------------------------------------------------------------
Reconciliation of Return on Common Equity to Non-GAAP Operating Return on
Common Equity
Quarter ended March 31,
2024 2023
Return on 11.5 % 15.1
Common Equity
Net realized and unrealized investment (gains) 0.2 (0.6)
losses included in net income, before tax
Tax on reconciling - 0.1
items
Non-GAAP Operating 11.7 % 14.6
Return on Common Equity
Reconciliation of Book Value per Common Share to Adjusted Book Value per
Common Share
Quarter ended March 31,
2024 2023
Book value per $ 46.17 40.82
common share
Total unrealized investment (gains) losses included in 6.08 7.32
accumulated other comprehensive (loss) income, before tax
Tax on reconciling (1.28) (1.53)
items
Adjusted book value 50.97 46.61
per common share
Note: Amounts in the tables above may not foot due to rounding.
6
-------------------------------------------------------------------------------
Forward-Looking Statements
Certain statements in this report, including information incorporated by
reference, are "forward-looking statements" defined in the Private Securities
Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a forward-looking
statement safe harbor under the Securities Act of 1933 and the Securities
Exchange Act of 1934. These statements discuss our intentions, beliefs,
projections, estimations, or forecasts of future events and financial
performance. They involve known and unknown risks, uncertainties, and other
factors that may cause our or our industry's actual results, activity levels,
or performance to materially differ from those in or implied by the
forward-looking statements. In some cases, forward-looking statements include
the words "may," "will," "could," "would," "should," "expect," "plan,"
"anticipate," "target," "project," "intend," "believe," "estimate," "predict,"
"potential," "pro forma," "seek," "likely," "continue," or comparable terms.
Our forward-looking statements are only predictions; we cannot guarantee or
assure that such expectations will prove correct. We undertake no obligation
to publicly update or revise any forward-looking statements for any reason,
except as may be required by law.
Factors that could cause our actual results to differ materially from what we
project, forecast, or estimate in forward-looking statements include, without
limitation:
.
Challenging conditions in the economy, global capital markets, the banking
sector, and commercial real estate, including prolonged higher inflation,
could increase loss costs and negatively impact investment portfolios;
.
Deterioration in the public debt, public equity, or private investment markets
that could lead to investment losses and interest rate fluctuations;
.
Ratings downgrades on individual securities we own could affect investment
values and, therefore, statutory surplus;
.
The adequacy of our loss reserves and loss expense reserves;
.
Frequency and severity of catastrophic events, including natural events that
may be impacted by climate change, such as hurricanes, severe convective
storms, tornadoes, windstorms, earthquakes, hail, severe winter weather,
floods, and fires, and man-made events such as criminal and terrorist acts,
including cyber-attacks, explosions, and civil unrest;
.
Adverse market, governmental, regulatory, legal, political, or judicial
conditions or actions, including social inflation;
.
The significant geographic concentration of our business in the eastern
portion of the United States;
.
The cost, terms and conditions, and availability of reinsurance;
.
Our ability to collect on reinsurance and the solvency of our reinsurers;
.
The impact of changes in U.S. trade policies and imposition of tariffs on
imports that may lead to higher than anticipated inflationary trends for our
loss and loss expenses;
.
Related to COVID-19, we have successfully defended against payment of
COVID-19-related business interruption losses based on our policies' terms,
conditions, and exclusions. However, should the highest courts determine
otherwise, our loss and loss expenses may increase, our related reserves may
not be adequate, and our financial condition and liquidity may be materially
impacted.
.
Ongoing wars and conflicts impacting global economic, banking, commodity, and
financial markets, exacerbating ongoing economic challenges, including
inflation and supply chain disruption, which influences insurance loss costs,
premiums, and investment valuations;
.
Uncertainties related to insurance premium rate increases and business
retention;
.
Changes in insurance regulations that impact our ability to write and/or cease
writing insurance policies in one or more states;
.
The effects of data privacy or cyber security laws and regulations on our
operations;
.
Major defect or failure in our internal controls or information technology and
application systems that result in harm to our brand in the marketplace,
increased senior executive focus on crisis and reputational management issues,
and/or increased expenses, particularly if we experience a significant privacy
breach;
.
Potential tax or federal financial regulatory reform provisions that could
pose certain risks to our operations;
.
Our ability to maintain favorable financial ratings, which may include
sustainability considerations, from rating agencies, including AM Best,
Standard & Poor's, Moody's, and Fitch;
.
Our entry into new markets and businesses; and
.
Other risks and uncertainties we identify in filings with the United States
Securities and Exchange Commission, including our Annual Report on Form 10-K
and other periodic reports.
Investor Contact: Media Contact:
Brad B. Wilson Jamie M. Beal
973-948-1283 973-948-1234
Brad.Wilson@Selective.com Jamie.Beal@Selective.com
Selective Insurance Group, Inc.
40 Wantage Avenue
Branchville, New Jersey 07890
www.Selective.com
7
Exhibit 99.2
FINANCIAL SUPPLEMENT
FIRST QUARTER 2024
-------------------------------------------------------------------------------
Forward-Looking Statements
Certain statements in this report, including information incorporated by
reference, are "forward-looking statements" defined in the Private Securities
Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a forward-looking
statement safe harbor under the Securities Act of 1933 and the Securities
Exchange Act of 1934. These statements discuss our intentions, beliefs,
projections, estimations, or forecasts of future events and financial
performance. They involve known and unknown risks, uncertainties, and other
factors that may cause our or our industry's actual results, activity levels,
or performance to materially differ from those in or implied by the
forward-looking statements. In some cases, forward-looking statements include
the words "may," "will," "could," "would," "should," "expect," "plan,"
"anticipate," "target," "project," "intend," "believe," "estimate," "predict,"
"potential," "pro forma," "seek," "likely," "continue," or comparable terms.
Our forward-looking statements are only predictions; we cannot guarantee or
assure that such expectations will prove correct. We undertake no obligation
to publicly update or revise any forward-looking statements for any reason,
except as may be required by law.
Factors that could cause our actual results to differ materially from what we
project, forecast, or estimate in forward-looking statements include, without
limitation:
.
Challenging conditions in the economy, global capital markets, the banking
sector, and commercial real estate, including prolonged higher inflation,
could increase loss costs and negatively impact investment portfolios;
.
Deterioration in the public debt, public equity, or private investment markets
that could lead to investment losses and interest rate fluctuations;
.
Ratings downgrades on individual securities we own could affect investment
values and, therefore, statutory surplus;
.
The adequacy of our loss reserves and loss expense reserves;
.
Frequency and severity of catastrophic events, including natural events that
may be impacted by climate change, such as hurricanes, severe convective
storms, tornadoes, windstorms, earthquakes, hail, severe winter weather,
floods, and fires, and man-made events such as criminal and terrorist acts,
including cyber-attacks, explosions, and civil unrest;
.
Adverse market, governmental, regulatory, legal, political, or judicial
conditions or actions, including social inflation;
.
The significant geographic concentration of our business in the eastern
portion of the United States;
.
The cost, terms and conditions, and availability of reinsurance;
.
Our ability to collect on reinsurance and the solvency of our reinsurers;
.
The impact of changes in U.S. trade policies and imposition of tariffs on
imports that may lead to higher than anticipated inflationary trends for our
loss and loss expenses;
.
Related to COVID-19, we have successfully defended against payment of
COVID-19-related business interruption losses based on our policies' terms,
conditions, and exclusions. However, should the highest courts determine
otherwise, our loss and loss expenses may increase, our related reserves may
not be adequate, and our financial condition and liquidity may be materially
impacted.
.
Ongoing wars and conflicts impacting global economic, banking, commodity, and
financial markets, exacerbating ongoing economic challenges, including
inflation and supply chain disruption, which influences insurance loss costs,
premiums, and investment valuations;
.
Uncertainties related to insurance premium rate increases and business
retention;
.
Changes in insurance regulations that impact our ability to write and/or cease
writing insurance policies in one or more states;
.
The effects of data privacy or cyber security laws and regulations on our
operations;
.
Major defect or failure in our internal controls or information technology and
application systems that result in harm to our brand in the marketplace,
increased senior executive focus on crisis and reputational management issues,
and/or increased expenses, particularly if we experience a significant privacy
breach;
.
Potential tax or federal financial regulatory reform provisions that could
pose certain risks to our operations;
.
Our ability to maintain favorable financial ratings, which may include
sustainability considerations, from rating agencies, including AM Best,
Standard & Poor's, Moody's, and Fitch;
.
Our entry into new markets and businesses; and
.
Other risks and uncertainties we identify in filings with the United States
Securities and Exchange Commission, including our Annual Report on Form 10-K
and other periodic reports.
-------------------------------------------------------------------------------
Selective Insurance Group, Inc. & Consolidated Subsidiaries
TABLE OF CONTENTS
Page
Consolidated Financial Highlights 1
Consolidated Statements of Operations 2
Consolidated Balance Sheets 3
Financial Metrics 4
Consolidated Insurance Operations Statement of Operations 5
Standard Commercial Lines Statement 6
of Operations and Supplemental Data
Standard Commercial Lines GAAP Line of Business Results 7
Standard Personal Lines Statement 8
of Operations and Supplemental Data
Standard Personal Lines GAAP Line of Business Results 9
Excess and Surplus Lines Statement 10
of Operations and Supplemental Data
Excess and Surplus Lines GAAP Line of Business Results 11
Consolidated Investment Income 12
Consolidated Composition of Invested Assets 13
Credit Quality of Invested Assets 14
Reconciliation of Net Income Available to Common Stockholders to 15
Non-GAAP Operating Income and Certain Other Non-GAAP Measures
Ratings and Contact Information 16
-------------------------------------------------------------------------------
Selective Insurance Group, Inc. & Consolidated Subsidiaries
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
Quarter ended
Mar. Dec. Sept. June Mar.
31, 31, 30, 30, 31,
($ and shares in millions, 2024 2023 2023 2023 2023
except per share data)
For Period
Ended
Gross premiums $ 1,321.9 1,149.7 1,223.5 1,238.1 1,138.2
written
Net premiums 1,156.6 991.5 1,058.3 1,084.9 999.8
written
Change in net premiums written, 16 % 17 17 17 12
from comparable prior year period
Underwriting income $ 19.0 63.6 31.6 (1.5) 39.2
(loss), before-tax
Net investment income 107.8 98.6 100.9 97.7 91.5
earned, before-tax
Net realized and unrealized (1.6) 5.4 (6.9) (5.4) 3.3
investment gains (losses), before-tax
Net $ 82.5 124.8 89.2 58.6 92.6
income
Net income available 80.2 122.5 86.9 56.3 90.3
to common stockholders
(1)
Non-GAAP 81.5 118.3 92.3 60.6 87.6
operating income
(2)
At Period
End
Total 12,056.1 11,802.5 11,428.0 11,217.2 11,015.0
assets
Total invested 8,745.7 8,693.7 8,195.9 8,133.2 8,029.4
assets
Stockholders' 3,006.5 2,954.4 2,644.4 2,671.4 2,669.4
equity
Common stockholders' 2,806.5 2,754.4 2,444.4 2,471.4 2,469.4
equity
(3)
Common shares 60.8 60.6 60.6 60.6 60.5
outstanding
Per Share and
Share Data
Net income available to common $ 1.31 2.01 1.42 0.92 1.48
stockholders per common share (diluted)
Non-GAAP operating income 1.33 1.94 1.51 0.99 1.44
per common share (diluted)
(2)
Weighted average common 61.2 61.0 61.0 60.9 60.9
shares outstanding (diluted)
Book value per $ 46.17 45.42 40.35 40.81 40.82
common share
Adjusted book value 50.97 50.03 48.54 47.34 46.61
per common share
(2)
Dividends paid 0.35 0.35 0.30 0.30 0.30
per common share
Financial
Ratios
Loss and loss 67.0 % 62.4 65.8 68.6 62.9
expense ratio
Underwriting 30.9 31.1 30.9 31.4 32.6
expense ratio
Dividends to 0.3 0.2 0.1 0.2 0.2
policyholders ratio
GAAP combined 98.2 % 93.7 96.8 100.2 95.7
ratio
Return on common 11.5 18.9 14.1 9.1 15.1
stockholders' equity ("ROE")
Non-GAAP 11.7 18.2 15.0 9.8 14.6
operating ROE
(2)
Debt to total 14.3 14.6 16.0 15.9 15.9
capitalization
Net premiums written to 1.55 1.51 1.53 1.52 1.46
policyholders' surplus
Invested assets per dollar of $ 3.12 3.16 3.35 3.29 3.25
common stockholders' equity
(1) Net income available to common stockholders is
net income reduced by preferred stock dividends.
(2) Non-GAAP measure. Refer to
Page 15 for definition.
(3) Excludes equity related
to preferred stock.
Page 1
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. June 30, Mar. 31,
30,
($ and shares in millions, 2024 2023 2023 2023 2023
except per share data)
Revenues
Net premiums $ 1,050.9 1,001.2 981.9 942.2 902.3
earned
Net investment 107.8 98.6 100.9 97.7 91.5
income earned
Net realized and (1.6) 5.4 (6.9) (5.4) 3.3
unrealized gains (losses)
Other 7.8 5.5 5.2 6.1 2.6
income
Total 1,165.0 1,110.7 1,081.1 1,040.5 999.8
revenues
Expenses
Loss and loss 704.3 624.8 645.9 646.1 567.4
expense incurred
Amortization of deferred 219.4 210.5 201.1 194.8 189.8
policy acquisition costs
Other insurance 116.0 107.8 108.5 108.9 108.6
expenses
Interest 7.2 7.2 7.2 7.3 7.2
expense
Corporate 15.5 3.4 5.9 9.3 12.1
expenses
Total 1,062.4 953.7 968.6 966.4 885.1
expenses
Income before 102.6 157.0 112.5 74.2 114.8
federal income tax
Federal income 20.0 32.1 23.3 15.5 22.2
tax expense
Net 82.5 124.8 89.2 58.6 92.6
Income
Preferred stock 2.3 2.3 2.3 2.3 2.3
dividends
Net income available 80.2 122.5 86.9 56.3 90.3
to common stockholders
Net realized and unrealized 1.3 (4.3) 5.4 4.3 (2.6)
investment (gains) losses, after tax
(1)
Non-GAAP $ 81.5 118.2 92.3 60.6 87.6
operating income
(2)
Weighted average common 61.2 61.0 61.0 60.9 60.9
shares outstanding (diluted)
Net income available to common $ 1.31 2.01 1.42 0.92 1.48
stockholders per common share (diluted)
Non-GAAP operating income $ 1.33 1.94 1.51 0.99 1.44
per common share (diluted)
(2)
(1) Amounts are provided to reconcile net income available
to common stockholders to non-GAAP operating income.
(2) Non-GAAP measure. Refer to
Page 15 for definition.
Note: Amounts may not
foot due to rounding.
Page 2
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
($ in millions, except 2024 2023 2023 2023 2023
per share data)
ASSETS
Investments
Fixed income securities, held-to-maturity, $ 20.3 22.7 23.2 23.7 24.7
net of allowance for credit losses
Fixed income securities, available-for-sale, at 7,583.5 7,499.2 7,027.1 7,032.3 6,964.5
fair value, net of allowance for credit losses
Commercial mortgage loans, net 208.0 188.4 185.9 175.4 157.2
of allowance for credit losses
Equity securities, 194.3 187.2 125.6 121.6 132.2
at fair value
Short-term 247.9 309.3 315.0 319.5 302.8
investments
Alternative 402.7 395.8 446.8 389.2 380.0
investments
Other 89.0 91.2 72.2 71.5 68.1
investments
Total 8,745.7 8,693.7 8,195.9 8,133.2 8,029.4
investments
Cash 0.1 0.2 0.1 0.4 0.1
Restricted 11.7 13.1 13.2 20.9 35.5
cash
Accrued 68.0 66.3 62.2 59.4 57.3
investment income
Premiums receivable, net of 1,439.1 1,313.1 1,330.0 1,286.5 1,154.2
allowance for credit losses
Reinsurance recoverable, net 651.4 656.8 685.3 646.8 667.0
of allowance for credit losses
Prepaid reinsurance 208.0 203.3 205.2 190.4 174.6
premiums
Deferred federal 144.7 140.2 199.3 171.9 158.1
income tax
Property and equipment, net of accumulated 82.7 83.3 81.4 81.3 83.4
depreciation and amortization
Deferred policy 448.3 424.9 425.8 413.8 387.9
acquisition costs
Goodwill 7.8 7.8 7.8 7.8 7.8
Other 248.5 199.8 221.7 204.8 259.5
assets
Total $ 12,056.1 11,802.5 11,428.0 11,217.2 11,015.0
assets
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities
Reserve for loss $ 5,501.8 5,336.9 5,301.4 5,177.0 5,099.5
and loss expense
Unearned 2,441.0 2,330.7 2,342.2 2,251.0 2,092.4
premiums
Long-term 503.3 503.9 504.6 503.6 504.2
debt
Current federal 26.5 6.3 2.5 2.6 20.3
income tax
Accrued salaries 97.9 122.0 114.2 92.0 88.8
and benefits
Other 479.1 548.4 518.6 519.6 540.5
liabilities
Total $ 9,049.6 8,848.2 8,783.5 8,545.8 8,345.6
liabilities
Stockholders'
Equity
Preferred stock of $0 $ 200.0 200.0 200.0 200.0 200.0
par value per share
Common stock of $2 210.9 210.4 210.3 210.3 210.1
par value per share
Additional 534.3 522.7 516.9 512.0 502.7
paid-in capital
Retained 3,088.2 3,029.4 2,928.2 2,859.6 2,821.6
earnings
Accumulated other (385.0) (373.0) (575.9) (475.7) (430.3)
comprehensive income (loss)
Treasury (641.9) (635.2) (635.1) (634.8) (634.7)
stock, at cost
Total stockholders' $ 3,006.5 2,954.4 2,644.4 2,671.4 2,669.4
equity
Commitments and
contingencies
Total liabilities and $ 12,056.1 11,802.5 11,428.0 11,217.2 11,015.0
stockholders' equity
Note: Amounts may not
foot due to rounding.
Page 3
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
FINANCIAL METRICS
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. June 30, Mar. 31,
30,
($ and shares in millions, 2024 2023 2023 2023 2023
except per share data)
Book value per
common share
Common stockholders' $ 2,806.5 2,754.4 2,444.4 2,471.4 2,469.4
equity
Common shares issued and 60.8 60.6 60.6 60.6 60.5
outstanding, at period end
Book value per $ 46.17 45.42 40.35 40.81 40.82
common share
Adjusted book value 50.97 50.03 48.54 47.34 46.61
per common share
(2)
Financial results
(after-tax)
Underwriting 15.0 50.2 25.0 (1.2) 31.0
income (loss)
Net investment 85.6 78.4 80.2 77.8 73.1
income
Interest expense and (8.0) (8.0) (8.0) (8.0) (8.0)
preferred stock dividends
Corporate (11.2) (2.4) (4.9) (8.0) (8.4)
expense
Net realized and unrealized (1.3) 4.3 (5.4) (4.3) 2.6
investment gains (losses)
Total after-tax net income 80.2 122.5 86.9 56.3 90.3
available to common stockholders
Return on
average equity
Insurance 2.2 % 7.7 4.1 (0.2) 5.2
segments
Net investment 12.3 12.1 13.1 12.6 12.2
income
Interest expense and (1.1) (1.2) (1.3) (1.3) (1.3)
preferred stock dividends
Corporate (1.7) (0.4) (0.9) (1.3) (1.5)
expense
Net realized and unrealized (0.2) 0.7 (0.9) (0.7) 0.5
investment gains (losses)
ROE 11.5 18.9 14.1 9.1 15.1
Net realized and 0.2 (0.7) 0.9 0.7 (0.5)
unrealized (gains) losses
(1)
Non-GAAP 11.7 % 18.2 15.0 9.8 14.6
Operating ROE
(2)
Debt and total
capitalization
Notes
payable:
3.03% Borrowings from Federal 60.0 60.0 60.0 60.0 60.0
Home Loan Bank of Indianapolis
7.25% Senior 49.8 49.8 49.8 49.8 49.8
Notes
6.70% Senior 99.4 99.3 99.3 99.3 99.3
Notes
5.375% 292.2 292.2 292.1 292.0 292.0
Senior Notes
Finance Lease 1.9 2.6 3.4 2.5 3.1
Obligations
Total 503.3 503.9 504.6 503.6 504.2
debt
Stockholders' 3,006.5 2,954.4 2,644.4 2,671.4 2,669.4
equity
Total $ 3,509.8 3,458.3 3,149.0 3,175.0 3,173.6
capitalization
Ratio of debt to 14.3 % 14.6 16.0 15.9 15.9
total capitalization
Policyholders' $ 2,777.3 2,742.3 2,612.5 2,525.2 2,518.3
surplus
(1) Amounts are provided to reconcile
ROE to non-GAAP operating ROE.
(2) Non-GAAP measure. Refer to
Page 15 for definition.
Note: Amounts may not
foot due to rounding.
Page 4
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
CONSOLIDATED INSURANCE OPERATIONS
STATEMENT OF OPERATIONS
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
($ in 2024 2023 2023 2023 2023
millions)
Underwriting
results
Net $ 1,156.6 991.5 1,058.3 1,084.9 999.8
premiums
written
Change in net 16 % 17 17 17 12
premiums written,
from comparable
prior year period
Net $ 1,050.9 1,001.2 981.9 942.2 902.3
premiums
earned
Losses 704.3 624.8 645.9 646.1 567.4
and loss
expenses
incurred
Net 324.4 311.1 303.1 295.7 293.9
underwriting
expenses
incurred
Dividends 3.3 1.8 1.4 1.8 1.8
to
policyholders
GAAP $ 19.0 63.6 31.6 (1.5) 39.2
underwriting
income
(loss)
Net $ 55.2 24.6 64.6 100.0 55.3
catastrophe
losses
(Favorable) 35.0 10.0 - (3.5) (13.0)
unfavorable prior
year casualty
reserve development
Underwriting
ratios
Loss and 67.0 % 62.4 65.8 68.6 62.9
loss
expense
ratio
Underwriting 30.9 31.1 30.9 31.4 32.6
expense
ratio
Dividends 0.3 0.2 0.1 0.2 0.2
to
policyholders
ratio
Combined 98.2 % 93.7 96.8 100.2 95.7
ratio
Net 5.3 pts 2.5 6.6 10.6 6.1
catastrophe
losses
(Favorable) 3.3 1.0 - (0.4) (1.4)
unfavorable prior
year casualty
reserve development
Combined 92.9 % 91.2 90.2 89.6 89.6
ratio before
net catastrophe
losses
Combined ratio before 89.6 % 90.2 90.2 90.0 91.0
net catastrophe
losses and prior year
casualty development
Other
Statistics
Non-catastrophe $ 171.2 172.1 172.8 157.2 148.2
property
loss and loss
expenses
Non-catastrophe 16.3 pts 17.2 17.6 16.7 16.4
property
loss and loss
expenses
Direct $ 260.8 232.7 232.3 241.6 216.9
new
business
Renewal 8.1 % 7.4 7.0 6.4 6.6
pure
price
increases
Note: Amounts
may not
foot due to
rounding.
Page 5
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
STANDARD COMMERCIAL LINES
STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
($ in 2024 2023 2023 2023 2023
millions)
Underwriting
results
Net $ 931.7 764.3 833.6 870.1 813.3
premiums
written
Change in net 15 % 13 15 14 10
premiums written,
from comparable
prior year period
Net $ 834.1 792.1 785.3 762.7 731.6
premiums
earned
Losses 555.8 482.6 493.8 495.5 447.3
and loss
expenses
incurred
Net 264.6 252.9 248.9 243.2 243.6
underwriting
expenses
incurred
Dividends 3.3 1.8 1.4 1.8 1.8
to
policyholders
GAAP $ 10.4 54.9 41.3 22.1 38.9
underwriting
income
(loss)
Net $ 38.5 16.1 36.7 62.6 35.1
catastrophe
losses
(Favorable) 35.0 5.0 (3.0) (7.5) (10.0)
unfavorable prior
year casualty
reserve development
Underwriting
ratios
Loss and 66.7 % 61.0 62.8 65.0 61.2
loss
expense
ratio
Underwriting 31.7 31.9 31.7 31.9 33.3
expense
ratio
Dividends 0.4 0.2 0.2 0.2 0.2
to
policyholders
ratio
Combined 98.8 % 93.1 94.7 97.1 94.7
ratio
Net 4.6 pts 2.0 4.7 8.2 4.8
catastrophe
losses
(Favorable) 4.2 0.6 (0.4) (1.0) (1.4)
unfavorable prior
year casualty
reserve development
Combined 94.2 % 91.1 90.0 88.9 89.9
ratio before
net catastrophe
losses
Combined ratio before 90.0 % 90.5 90.4 89.9 91.3
net catastrophe
losses and prior year
casualty development
Other
Statistics
Non-catastrophe $ 115.0 122.0 122.8 111.4 105.5
property
loss and loss
expenses
Non-catastrophe 13.8 pts 15.4 15.6 14.6 14.4
property
loss and loss
expenses
Direct $ 172.1 145.2 145.5 159.1 147.7
new
business
Renewal 7.6 % 7.3 7.1 6.7 7.0
pure
price
increases
Retention 86 86 86 85 86
Note: Amounts
may not
foot due to
rounding.
Page 6
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
STANDARD COMMERCIAL LINES
GAAP LINE OF BUSINESS RESULTS
(Unaudited)
Quarter ended
March 31, 2024
General Commercial Commercial Workers General Commercial
($ in Liability Auto Property Compensation BOP Bonds Other Total Liability Auto
millions) (1)
Net $ 307.4 285.6 174.5 98.8 44.7 12.4 8.2 931.7 272.1 240.2
premiums
written
Net 273.4 251.7 161.6 87.8 39.9 12.1 7.6 834.1 243.3 217.4
premiums
earned
Loss 78.8 % 69.7 59.0 52.2 51.9 27.6 0.7 66.7 56.0 74.3
and
loss
expense
ratio
Underwriting 31.7 29.9 34.6 26.2 34.5 55.2 43.4 31.7 32.8 31.0
expense
ratio
Dividend 0.3 0.3 0.5 0.9 - - (0.1) 0.4 0.1 0.1
ratio
Combined 110.8 % 99.9 94.1 79.3 86.4 82.8 44.0 98.8 88.9 105.4
ratio
Underwriting $ (29.4) 0.3 9.6 18.2 5.4 2.1 4.3 10.4 27.1 (11.7)
income
(loss)
(1)
Includes
Inland
Marine.
Note:
Amounts
may not
foot
due to
rounding.
Quarter ended
March 31, 2023
Commercial Workers
Property Compensation BOP Bonds Other Total
(1)
151.6 93.4 36.6 11.8 7.6 813.3
135.3 84.2 33.2 11.4 6.9 731.6
55.1 54.0 80.3 24.8 (0.3) 61.2
37.3 27.4 38.6 57.4 54.6 33.3
0.2 1.3 - - 0.1 0.2
92.6 82.7 118.9 82.2 54.4 94.7
10.1 14.6 (6.3) 2.0 3.1 38.9
Page 7
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
STANDARD PERSONAL LINES
STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
($ in 2024 2023 2023 2023 2023
millions)
Underwriting
results
Net $ 99.9 107.0 113.2 109.1 85.3
premiums
written
Change in net 17 % 27 30 32 31
premiums written,
from comparable
prior year period
Net $ 103.8 101.0 95.2 87.2 81.9
premiums
earned
Losses 84.3 92.5 99.5 88.0 73.2
and loss
expenses
incurred
Net 24.8 25.5 21.8 22.2 21.8
underwriting
expenses
incurred
GAAP $ (5.3) (17.0) (26.1) (23.1) (13.1)
underwriting
income
(loss)
Net $ 11.8 9.2 24.4 21.2 14.6
catastrophe
losses
(Favorable) - 5.0 3.0 4.0 2.0
unfavorable prior
year casualty
reserve development
Underwriting
ratios
Loss and 81.2 % 91.7 104.5 101.0 89.4
loss
expense
ratio
Underwriting 23.9 25.2 22.9 25.5 26.6
expense
ratio
Combined 105.1 % 116.9 127.4 126.5 116.0
ratio
Net 11.4 pts 9.1 25.6 24.3 17.9
catastrophe
losses
(Favorable) - 5.0 3.2 4.6 2.4
unfavorable prior
year casualty
reserve development
Combined 93.7 % 107.8 101.8 102.2 98.1
ratio before
net catastrophe
losses
Combined ratio before 93.7 % 102.8 98.6 97.6 95.7
net catastrophe
losses and prior year
casualty development
Other
Statistics
Non-catastrophe $ 41.9 42.8 42.5 37.8 33.8
property
loss and loss
expenses
Non-catastrophe 40.3 pts 42.4 44.7 43.3 41.3
property
loss and loss
expenses
Direct $ 21.3 26.0 31.6 32.5 26.3
new
business
Renewal 14.3 % 8.9 6.1 3.4 1.8
pure
price
increases
Retention 83 87 88 88 87
Note: Amounts
may not
foot due to
rounding.
Page 8
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
STANDARD PERSONAL LINES
GAAP LINE OF BUSINESS RESULTS
(Unaudited)
Quarter ended March 31, 2024 Quarter ended March 31, 2023
Personal Personal
($ in Auto Homeowners Other Total Auto Homeowners Other Total
millions)
Net premiums $ 55.0 42.2 2.8 99.9 49.0 34.3 2.0 85.3
written
Net premiums 57.0 44.1 2.8 103.8 44.9 35.0 1.9 81.9
earned
Loss and loss 94.2 % 68.2 20.0 81.2 87.3 95.7 23.8 89.4
expense ratio
Underwriting 26.0 28.2 (85.9) 23.9 30.1 29.7 (110.6) 26.6
expense ratio
Combined 120.2 % 96.4 (65.9) 105.1 117.4 125.4 (86.8) 116.0
ratio
Underwriting $ (11.5) 1.6 4.6 (5.3) (7.8) (8.9) 3.6 (13.1)
income (loss)
Note: Amounts may not
foot due to rounding.
Page 9
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
EXCESS AND SURPLUS LINES
STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
($ in 2024 2023 2023 2023 2023
millions)
Underwriting
results
Net $ 125.0 120.2 111.6 105.7 101.2
premiums
written
Change in net 24 % 36 25 20 16
premiums written,
from comparable
prior year period
Net $ 113.0 108.1 101.4 92.3 88.9
premiums
earned
Losses 64.1 49.7 52.6 62.6 46.9
and loss
expenses
incurred
Net 34.9 32.7 32.4 30.2 28.6
underwriting
expenses
incurred
GAAP $ 14.0 25.7 16.4 (0.6) 13.3
underwriting
income
(loss)
Net $ 4.9 (0.7) 3.5 16.3 5.6
catastrophe
losses
(Favorable) - - - - (5.0)
unfavorable prior
year casualty
reserve development
Underwriting
ratios
Loss and 56.7 % 45.9 51.9 67.9 52.8
loss
expense
ratio
Underwriting 30.9 30.3 32.0 32.8 32.2
expense
ratio
Combined 87.6 % 76.2 83.9 100.7 85.0
ratio
Net 4.3 pts (0.7) 3.5 17.6 6.3
catastrophe
losses
(Favorable) - - - - (5.6)
unfavorable prior
year casualty
reserve development
Combined 83.3 % 76.9 80.4 83.1 78.7
ratio before
net catastrophe
losses
Combined ratio before 83.3 % 76.9 80.4 83.1 84.3
net catastrophe
losses and prior year
casualty development
Other
Statistics
Non-catastrophe $ 14.3 7.3 7.5 8.1 8.9
property
loss and loss
expenses
Non-catastrophe 12.6 pts 6.8 7.4 8.8 10.1
property
loss and loss
expenses
Direct $ 67.4 61.5 55.2 50.0 42.9
new
business
Renewal 5.2 % 6.1 6.6 7.5 7.4
pure
price
increases
Note: Amounts
may not
foot due to
rounding.
Page 10
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
EXCESS & SURPLUS LINES
GAAP LINE OF BUSINESS RESULTS
(Unaudited)
Quarter ended March 31, 2024 Quarter ended March 31, 2023
($ in millions) Casualty Property Total Casualty Property Total
Net premiums written $ 77.1 47.9 125.0 68.7 32.5 101.2
Net premiums earned 71.6 41.4 113.0 60.8 28.0 88.9
Loss and loss expense ratio 62.7 % 46.4 56.7 53.3 51.8 52.8
Underwriting expense ratio 31.0 30.7 30.9 32.3 31.9 32.2
Combined ratio 93.7 % 77.1 87.6 85.6 83.7 85.0
Underwriting income (loss) $ 4.5 9.5 14.0 8.8 4.6 13.3
Note: Amounts may not foot due to rounding.
Page 11
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
CONSOLIDATED INVESTMENT INCOME
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
($ in 2024 2023 2023 2023 2023
millions)
Net
investment
income
Fixed
income
securities
Taxable $ 91.4 88.8 86.7 80.4 75.4
Tax-exempt 2.7 3.1 3.4 3.6 4.7
Total 94.1 91.9 90.0 83.9 80.1
fixed
income
securities
Commercial 2.8 2.7 2.5 2.2 2.0
mortgage
loans
Equity 4.9 3.9 2.1 2.2 1.2
securities
Alternative 6.9 1.1 6.5 11.4 7.8
investments
Other 0.3 0.1 0.3 0.2 -
investments
Short-term 3.5 3.3 3.9 2.9 4.7
investments
Investment 112.5 103.0 105.3 102.8 95.7
income
Investment (4.6) (4.4) (4.4) (5.1) (4.2)
expenses
Investment (22.2) (20.1) (20.6) (19.9) (18.5)
tax
expense
Total net $ 85.6 78.4 80.2 77.8 73.1
investment
income,
after-tax
Net realized $ (1.6) 5.4 (6.9) (5.4) 3.3
and unrealized
investment gains
(losses), pre-tax
Change in unrealized gains $ (16.1) 275.4 (127.5) (58.2) 84.9
(losses) recognized
in other comprehensive
income, pre-tax
Average
investment
yields
Fixed 5.0 % 5.1 5.1 4.9 4.7
income
investments,
pre-tax
Fixed 4.0 4.0 4.1 3.9 3.8
income
investments,
after-tax
Total 4.9 % 4.7 4.9 4.9 4.6
portfolio,
pre-tax
Total 3.9 3.7 3.9 3.9 3.7
portfolio,
after-tax
Effective 20.6 % 20.4 20.5 20.4 20.2
tax rate on
net investment
income
New money purchase 5.8 6.7 6.4 5.9 5.5
rates for fixed
income investments,
pre-tax
New money purchase 4.6 5.3 5.0 4.6 4.4
rates for fixed
income investments,
after-tax
Effective duration 4.0 4.0 4.1 4.0 4.1
of fixed income
investments including
short-term (in years)
Note: Amounts
may not
foot due to
rounding.
Page 12
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
CONSOLIDATED COMPOSITION OF INVESTED ASSETS
(Unaudited)
Mar. 31, Dec. 31, Sept. 30, June 30,
2024 2023 2023 2023
($ in Amount Percent Amount Percent Amount Percent Amount Percent Amou
millions)
Fixed $ 7,602.7 87 % 7,521.1 87 7,049.0 86 7,054.7 87 6,98
income
securities,
at
fair
value
Commercial 197.8 2 178.9 2 171.4 2 163.1 2 14
mortgage
loans,
at
fair
value
Total 7,800.5 89 7,700.0 89 7,220.4 88 7,217.8 89 7,13
fixed
income
investments
Short-term 247.9 3 309.3 4 315.0 4 319.5 4 30
investments
Total 8,048.4 92 8,009.3 92 7,535.4 92 7,537.2 93 7,43
fixed
income
and
short-term
investments
Equity 194.3 2 187.2 2 125.6 2 121.6 1 13
securities,
at
fair
value
Alternative 402.7 5 395.8 5 446.8 5 389.2 5 38
investments
Other 89.0 1 91.2 1 72.2 1 71.5 1 6
investments
Total $ 8,734.3 100 % 8,683.5 100 8,180.0 100 8,119.6 100 8,01
investments
Fixed
income
investments,
at carry
value
U.S. $ 141.8 2 % 205.0 2 226.7 3 293.0 4 34
government
obligations
Foreign 9.2 - 9.8 - 9.3 - 9.8 -
government
obligations
Obligations 539.0 7 586.0 8 614.8 8 658.0 9 68
of
state
and
political
subdivisions
Corporate 2,815.3 36 2,733.9 35 2,463.4 34 2,408.6 33 2,47
securities
Collateralized 1,897.1 24 1,834.8 24 1,713.7 24 1,634.3 23 1,53
loan
obligations
and
other
asset-backed
securities
Residential 1,512.0 19 1,477.5 19 1,384.5 19 1,407.8 19 1,30
mortgage-backed
securities
Commercial 689.4 9 674.8 9 638.0 9 644.4 9 64
mortgage-backed
securities
Commercial 208.0 3 188.4 2 185.9 3 175.5 2 15
mortgage
loans
Total $ 7,811.8 100 % 7,710.3 100 7,236.3 100 7,231.4 100 7,14
fixed
income
investments
Expected
maturities
of fixed
income
investments
at carry
value
Due $ 607.9 8 % 526.6 7 446.4 6 385.6 5 36
in
one
year
or
less
Due 3,558.5 45 3,569.2 46 3,308.7 46 3,163.1 44 3,15
after
one
year
through
five
years
Due 2,882.5 37 2,862.5 37 2,511.0 35 2,956.0 41 2,86
after
five
years
through
10
years
Due 762.9 10 751.9 10 970.1 13 726.7 10 77
after
10
years
Total $ 7,811.8 100 % 7,710.3 100 7,236.3 100 7,231.4 100 7,14
fixed
income
investments
Weighted
average
credit
quality
of fixed
income
and
short-term
investments
Investment $ 7,747.0 96 % 7,721.4 96 7,250.8 96 7,257.9 96 7,16
grade
credit
quality
Non-investment 301.4 4 287.9 4 284.6 4 279.3 4 27
grade
credit
quality
Total $ 8,048.4 100 % 8,009.3 100 7,535.4 100 7,537.2 100 7,43
fixed
income
and
short-term
investments,
at
fair
value
Weighted A+ AA- A+ AA-
average
credit
quality
of fixed
income and
short-term
investments
Alternative March 31,
investments 2024
Current
Number of Original Remaining Market
Strategy Funds Commitment Commitment Value
Private 61 $ 410.2 138.0 306.4
equity
Private 18 154.9 90.6 53.4
credit
Real 10 72.5 31.1 42.9
assets
Total 89 $ 637.7 259.7 402.7
Note:
Amounts
may not
foot
due to
rounding.
Mar. 31,
2023
nt Percent
8.0 87
7.5 2
5.6 89
2.8 4
8.3 93
2.2 2
0.0 5
8.1 1
8.7 100
3.4 5
9.9 -
2.1 10
2.6 35
0.1 21
1.7 18
9.4 9
7.2 2
6.4 100
2.4 5
1.2 44
1.0 40
1.8 11
6.4 100
7.0 96
1.3 4
8.3 100
AA-
Page 13
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
CREDIT QUALITY OF INVESTED ASSETS
(Unaudited)
At March 31, 2024
($ in Amortized Fair % of Yield Effective Average AAA AA A BB
millions) Cost Value Invested to Duration Life
Assets Worst in in
Years Years
Fixed
income
investments:
U.S. 161 142 1.6 4.8 6.4 9.4 - 142
government
obligations
Foreign 11 9 0.1 5.4 5.7 6.8 1 2
government
obligations
State 570 539 6.2 4.3 5.3 7.1 77 242
and
municipal
obligations
Corporate 2,951 2,814 32.2 5.7 4.4 5.8 49 287
securities
Mortgage-backed
securities:
Residential
mortgage-backed
securities
("RMBS"):
Agency 1,112 1,031 11.8 5.1 5.4 8.1 - 1,031
RMBS
Non-agency 512 481 5.5 6.1 4.1 6.0 422 36
RMBS
Total 1,624 1,512 17.3 5.5 5.0 7.4 423 1,067
RMBS
Commercial
mortgage-backed
securities
("CMBS")
Agency 185 177 2.0 5.0 4.3 5.5 35 141
CMBS
Non-agency 543 513 5.9 6.5 3.2 4.0 463 30
CMBS
Total 728 689 7.9 6.1 3.5 4.3 499 171
CMBS
Total 2,352 2,201 25.2 5.7 4.5 6.5 921 1,237
mortgage-backed
securities
Collateralized
loan
obligations
("CLO")
and
other
asset-backed
securities
("ABS"):
Auto 166 167 1.9 6.1 2.2 2.3 160 3
Aircraft 46 41 0.5 8.9 2.7 3.1 - -
CLOs 842 815 9.3 8.5 1.2 2.4 397 263
Credit 17 17 0.2 4.7 2.3 2.4 16 1
cards
Other 887 857 9.8 6.4 4.5 5.8 266 124
ABS
Total 1,959 1,897 21.7 7.3 2.8 3.9 838 392
CLOs
and
ABS
Total 4,310 4,098 46.9 6.4 3.7 5.3 1,759 1,629
securitized
assets
Commercial 208 198 2.3 5.3 3.4 5.0 - 11
mortgage
loans
Total 8,212 7,800 89.3 6.0 4.1 5.7 1,885 2,312
fixed
income
investments
Short-term 248 248 2.8 5.3 0.0 0.0 247 1
investments
Total 8,460 8,048 92.1 5.9 4.0 5.5 2,132 2,312
fixed
income
and
short-term
investments
Total 26.5 % 28.7 %
fixed
income
securities
and
short-term
investments
by
credit
rating
percentage
Equity
securities:
Common 188 193 2.2 - - - - -
stock
(1)
Preferred 2 2 - - - - - -
stock
Total 190 194 2.2 - - - - -
equity
securities
Alternative
investments
Private 306 306 3.5 - - - - -
equity
Private 53 53 0.6 - - - - -
credit
Real 43 43 0.5 - - - - -
assets
Total 403 403 4.6 - - - - -
alternative
investments
Other 89 89 1.0 - - - - -
investments
Total $ 9,141 $ 8,734 100.0 % - - - $ 2,132 $ 2,312 $
invested
assets
(1)
Includes
investments
in exchange
traded funds,
mutual
funds,
business
development
corporations,
and
real estate
investment
trusts.
Note: Amounts
may not
foot due to
rounding.
Credit Rating
B Non-Investment Not
Grade Rated
- - - -
4 3 - -
203 18 - -
1,245 1,041 191 1
- - - -
22 - - -
22 - - -
- - - -
20 - - -
20 - - -
42 - - -
4 - - -
20 16 5 -
45 40 57 14
- - - -
370 66 8 22
439 122 69 37
481 123 69 37
78 106 2 -
2,012 1,291 263 38
- - - -
2,012 1,291 263 38
25.0 % 16.0 % 3.3 % - %
- - - 193
- 2 - -
- 2 - 193
- - - 306
- - - 53
- - - 43
- - - 403
- - - 89
2,012 $ 1,293 $ 263 $ 722
Page 14
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Selective Insurance Group, Inc. & Consolidated Subsidiaries
RECONCILIATION OF NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO NON-GAAP
OPERATING INCOME AND CERTAIN OTHER NON-GAAP MEASURES
(Unaudited)
Quarter ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
($ in millions, 2024 2023 2023 2023 2023
except
per share
data)
Reconciliation of net
income available to common
stockholders to non-GAAP
operating income
Net income $ 80.2 122.5 86.9 56.3 90.3
available
to common
stockholders
Net realized and unrealized 1.6 (5.4) 6.9 5.4 (3.3)
investment (gains)
losses included in net
income, before tax
Tax on (0.3) 1.1 (1.4) (1.1) 0.7
reconciling
items
Non-GAAP $ 81.5 118.3 92.3 60.6 87.6
operating
income
Reconciliation of net income available
to common stockholders per diluted
common share to non-GAAP operating
income per diluted common share
Net income available $ 1.31 2.01 1.42 0.92 1.48
to common
stockholders per
diluted common share
Net realized and unrealized 0.03 (0.09) 0.11 0.09 (0.05)
investment (gains)
losses included in net
income, before tax
Tax on (0.01) 0.02 (0.02) (0.02) 0.01
reconciling
items
Non-GAAP $ 1.33 1.94 1.51 0.99 1.44
operating income
per diluted
common share
Reconciliation
of ROE to
non-GAAP
operating ROE
ROE 11.5 % 18.9 14.1 9.1 15.1
Net realized and unrealized 0.2 (0.8) 1.1 0.9 (0.6)
investment (gains)
losses included in net
income, before tax
Tax on - 0.1 (0.2) (0.2) 0.1
reconciling
items
Non-GAAP 11.7 % 18.2 15.0 9.8 14.6
operating
ROE
Reconciliation of book
value per common share
to adjusted book value
per common share
Book value $ 46.17 45.42 40.35 40.81 40.82
per
common
share
Total unrealized investment 6.08 5.83 10.38 8.27 7.32
(gains) losses included in
accumulated other comprehensive
income (loss), before tax
Tax on (1.28) (1.22) (2.19) (1.74) (1.53)
reconciling
items
Adjusted $ 50.97 50.03 48.54 47.34 46.61
book value
per common
share
Non-GAAP operating income, non-GAAP operating income per diluted common share, and non-GAAP operating return on common
equity are measures comparable to net income available to common stockholders, net income available to common
stockholders per diluted common share, and return on common equity, respectively, but excludes after-tax net realized
and unrealized gains and losses on investments included in net income. Adjusted book value per common share is a
measure comparable to book value per common share, but excludes total after-tax unrealized gains and losses on
investments included in accumulated other comprehensive income (loss). These non-GAAP measures are used as important
financial measures by management, analysts, and investors, because the timing of realized and unrealized investment
gains and losses on securities in any given period is largely discretionary. In addition, net realized and unrealized
gains and losses on investments could distort the analysis of trends. These operating measurements are not intended as
a substitute for net income available to common stockholders, net income available to common stockholders per diluted
common share, return on common equity, and book value per common share prepared in accordance with U.S. generally
accepted accounting principles (GAAP). Reconciliations of net income available to common stockholders, net income
available to common stockholders per diluted common share, return on common equity, and book value per common share to
non-GAAP operating income, non-GAAP operating income per diluted common share, non-GAAP operating return on common
equity, and adjusted book value per common share, respectively, are provided in the tables above.
Note: Amounts
may not
foot due to
rounding.
Page 15
-------------------------------------------------------------------------------
Selective Insurance Group, Inc. & Consolidated Subsidiaries
RATINGS AND CONTACT INFORMATION
Address: As of March 31, 2024
40 Wantage Avenue AM Best Standard & Poor's Moody's Fitch
Branchville, NJ 07890 Financial Strength Ratings: A+ A A2 A+
Preferred Stock Rating: n/a BB+ Ba1 BBB-
Corporate Website: Long-Term Debt Credit Rating: a- BBB Baa2 BBB+
www.Selective.com
Investor Contact: REGISTRAR AND TRANSFER AGENT
Brad B. Wilson EQ Shareowner Services
Senior Vice President P.O. Box 64854
Investor Relations & Treasurer St. Paul, MN 55164
Phone: 973-948-1283 866-877-6351
Brad.Wilson@Selective.com
Media Contact:
Jamie M. Beal
Vice President
Director of Communications
Phone: 973-948-1234
Jamie.Beal@Selective.com
Page 16
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