It's hard to know what there is new to say, except simply to note that hard times bring out the principles that are so easy to dismiss in easy times.
I mean, that was no great earnings report last week, obviously. And yet, the insurance fundamentals and pricing trends were something to feel good about for holders of this stock. The market immediately recognized that. Remember, the market still wouldn't reward it if there weren't the protection of a strong balance sheet. But that's in place, too -- and not something you can cook up in a jiffy, either.
And ... of course ... no problem maintaining the dividend. One of the analysts even noted the "nice yield" of SIGI stock. You gotta chuckle over that if you know the history of this message board! Management's answer to the ensuing question about dividend pretty much tells you all you need to know about having this in place. This is in contrast to SOOOOOO many other stocks (and I'm not just talking about commercial banks). This is what that argument was about all that time on this board! The capital management policy has paid off in spades. Did I wish for an economic tsunami to prove the point -- no, but it happened, and we see SIGI is solid.
Congrats also to those on this board who have been calling the change in the insurance market, however slow it may seem!
This man Murphy is incredible. He holds on to a job that any competent Board of Directors would have relieved him of months ago.
Again, he did not achieve even expected earnings much less earnings which might have been above that. And when you read his commentary, you become nauseus! The man talks about how he has held the line on commercial premiums and then reports writings have declined. Well la de da!!!
The man simnply can't impropve operating earnings and his record with investments is an out right travesty.
What is it with this stupid Selected Board? How do they justify their seats on the Board?
Shareholders,wake up!! This company is going nowhere with this CEO and this Board?
Personally, I don't see anything to be proud of here. Want to see effective results? How about Travelers:
The Travelers Companies, Inc. net income for the first quarter of 2009 fell more than 30 percent to $662 million, for the quarter ended March 31, 2009, compared to $967 million, for the quarter ended March 31, 2008. Operating income in the current quarter was $799 million, compared to $1.008 billion, in the prior year quarter.
Selective's results were: Net income decreased in First Quarter 2009 to a net loss of $12.9 million from net income of $20.5 million in First Quarter 2008
So, although Travelers net income was down significantly, it is not operating at a loss like Selective.
Despite difficult economic and investment environments, Travelers delivered a net and operating return on equity of 10.2 percent and 12.4 percent, respectively, said Jay Fishman, Chairman and CEO.
"These results reflect a solid underwriting performance, as evidenced by our 90.6 percent combined ratio," he said.
Selectives' results: GAAP combined ratio 100.8 % Statutory combined ratio 100.2
So, Travelers is generating an underwriting profit while Selective is losing 8 cents for every dollar of insurance it writes.
Travelers reported net written premiums of $5.203 billion, an increase from $5.188 billion in the prior year quarter.
Selective's results: NPW decreased in First Quarter 2009 compared to First Quarter 2008 due to an insurance marketplace that is still very competitive and the economic recession. These factors are evidenced by the following: � A $14.4 million decrease in endorsement and audit activity; and
� A $4.6 million decrease in net renewals, reflecting a one-point drop in retention to 77% in our Commercial Lines.
So, Travelers is increasing its market share while Selective is losing the battle.
While I know that it is somewhat unfair to compare Selective to Travelers, I think that it is fair to show what the competition is doing in the marketplace.
SIGI reported a net loss in the first quarter. The stock also went up very substantially after the report, and in a way well beyond the general recent rise in the market. That deserves an explanation and I provided a brief one.
I'm glad for Travelers' shareholders, of which one of whom just so happens to be ... well, I hate to make after-the-fact claims on a message board, but I've long said I believe in diversification within and among sectors. My SIGI holdings are far larger, however.
Of course the comparison has flaws, but that's fine, I'll take your point to the extent of noting that ANY time you buy a small-cap company in a competitive industry you run the risk of a lesser brand name. I'd be happy to see the other insurance folks comment on the factors here. Surely SIGI is always in a dogfight, and it costs money too to maintain happy agents. Surely also SIGI has competitive pull within the "supply chain" of the insurance industry. Agree or disagree, I'd love to hear it.
The bottom line is -- THIS stock was dramatically undervalued, and is still a compelling buy. No one on this board was commenting on it since earnings came out, so I did.