Selective Insurance Group (SIGI) Q2 2024 earnings summary

Executive summary

• Q2 2024 was challenging, with a net loss of $1.08 per share and a combined ratio of 116.1%, driven by $176 million in unfavorable prior year casualty reserve development and elevated catastrophe losses, especially in general liability.

• Net premiums written increased 13% year-over-year, with growth across all segments, while after-tax net investment income rose 11% to $86 million.

• Underlying combined ratio was 91.4% year-to-date, positioning for future profitability as corrective actions are implemented.

• Book value per share was $44.74 at June 30, 2024, down 1% from year-end but up 10% year-over-year.

• Social inflation and higher severity trends in general liability continue to drive reserve strengthening.

Financial highlights

• Total revenues for Q2 2024 were $1.2 billion, up 15% year-over-year.

• Fully diluted net loss of $1.08 per share and non-GAAP operating loss of $1.10 per share in Q2.

• GAAP combined ratio of 116.1% in Q2, including 16.3 points from prior year casualty reserve development and 8.4 points from catastrophe losses.

• After-tax net investment income was $86 million, up 11% year-over-year.

• Book value per share was $44.74 at June 30, 2024.

Outlook and guidance

• 2024 GAAP combined ratio guidance raised to 101.5% from 96.5%, reflecting reserve development and higher catastrophe loss assumptions.

• After-tax net investment income for 2024 expected at $360 million, including $32 million from alternative investments.

• Operating ROE for 2024 expected in the high single digits, below the 12% target.

• Effective tax rate projected at 21.0%; weighted average diluted shares expected at 61.5 million.

• Continued focus on price increases, underwriting discipline, and geographic expansion to improve profitability.