Selective Insurance Group (SIGI) Q3 2024 earnings summary

Executive summary

• Operating earnings per share were $1.40, with an operating ROE of 12.1% and net income per diluted share of $1.47 for Q3 2024, despite elevated catastrophe losses adding 13.4 points to the combined ratio.

• Net premiums written increased 9% year-over-year, driven by higher renewal pure price increases and stable retention in Standard Commercial Lines.

• Book value per share increased 21% year-over-year to $48.82, with adjusted book value per share up 5% to $50.80.

• Catastrophe losses, especially from Hurricane Helene, significantly impacted results, but underlying profitability and investment income remained strong.

• Leadership transition completed with Patrick Brennan joining as CFO and Tony Harnett returning as Chief Accounting Officer.

Financial highlights

• Net premiums written for Q3 2024 were $1,157.6M, up 9% year-over-year; net premiums earned rose 13%.

• Fully diluted net income was $1.47 per share; non-GAAP operating income was $1.40 per share.

• After-tax net investment income was $93.4M in Q3, up 16% year-over-year, contributing 13.1 points of ROE.

• Combined ratio was 99.5% for Q3 2024, up 2.7 points from Q3 2023, mainly due to elevated catastrophe losses.

• Book value per share increased 21% year-over-year to $48.82; adjusted book value per share up 5% to $50.80.

Outlook and guidance

• 2024 GAAP combined ratio guidance raised to 102.5% due to higher catastrophe loss assumptions; net catastrophe losses expected at 7.5 points.

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

• Effective tax rate guidance is 21% overall.

• Losses from Hurricane Milton in Q4 2024 expected to be immaterial.

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