weak insurance players have sold out or closed down. Capital has left the marketplace leading to a scarcity of underwriting capacity and tighten down of eligibilty on new business. Yes there will be continuing claims coming from the bad economy, that includes fraud and lower property values reported for coverage and premium pricing. But just maybe a slim ray of hope on the horizon, publications starting to report that the tight underwriting has started to turn premium pricing up and of course when economy recovers we will see increases in property values an retail sales which drive premium levels up..I may be early by 6-8 months but time to start looking for values and SIGI may be a value candidate at this share price..not saying buy but start thinking about it..good luck to all.
9/16/2010 Liberty Mutual announces today they are taking their brokerage and agency operations public to raise 1.2Billion$; funds raised will be used to strengthen and expand P&C underwriting presence. There some early signs appearing that premium pricing is on the rise industrywide. I believe there will be more consolidation in the P&C business and ultimately SIGI will be considered as a buyout target. Ohio Casualty sold to Liberty and that is a likely scenario for SIGI's future. Safeco was taken out also. Some of the major players like Allstate ect. are trying to rejuvenate and expand their presence in market territories or certain business segments and SIGI could fill that need. When it happens it will be done quickly (discussions over a weekend) and you'll wake up with a buy out offer on the table. As I noted earlier in a posting the share price is at 80% of book value and remember SIGI's assets are very liquid and easily valued. For long term investors this is the time to think about the future and the potential for SIGI share price to reach $26 to $28..question is how long is the wait? start nibbling now?
continuing my one man discussion..today 10/18 SIGI is strong and making an attempt to pop above $18. I believe 18 has been a real support/resistance level over the long term...share price may not make the pop this time but it will continue to test and eventually pop over 18. Awaiting earnings news. The 3% yield remains safe and is an attraction for long term holders of shares....
I believe that you are probably 6-8 months early, especially for the commercial classes that Selective writes a lot of, e.g. contracting. While all the indicators would point to the need for a hardening market, the economic realities of struggling businesses have not allowed companies to increase rates the way that results would have suggested.
As long as you have peerless insurance and the like using bottom feeder pricing without any underwriting dicipline, the market won't harden any time soon. As history repeats itself, and it will, they will be looking for double digit price increases, but it won't be in the near future. Hartford is also looking to book premium not worrying about the effect until later.