Here's my read of the earnings release and the stock price movement on Friday. Like many insurance companies, SIGI had pre-announced catastrophe claims and investment losses. Compared to most others, these losses were very mild. Nevertheless, implicit in SIGI's announcement was a resulting reduction in full-year earnings, but they did not actually change guidance in that pre-announcement. That came only in the third quarter earnings release itself.
So, if you thought the new guidance was new information, you would have been a seller early Friday. You also would have been a fool. In fact, SIGI hit estimates for operating earnings right on the nail. More rational players appeared to come into the market for SIGI stock later on Friday with the knowledge that there was nothing new to be concerned about that hadn't been disclosed. The stock ended up for the day.
It's unusual for me to discuss one day's price action but many people in the market are clearly acting on a fear hair-trigger. The fact is, SIGI has been an unusually stable financial stock, for good reason -- it's an unusually stable company with a strong balance sheet and solid internal metrics on its insurance business. It is of course a fascinating time in the markets, and it is clear to me the solid place that SIGI should hold in investors' portfolios through all the incredible level of noise and volatility.