Selective Insurance Group Inc (SIGI) Reports 17% Increase in Net Premiums Written in Q3 2023
Net premiums written increased by 17% compared to Q3 2022.
Net income per diluted common share rose to $1.42, with non-GAAP operating income of $1.51 per diluted common share.
Quarterly dividend increased by 17% to $0.35 per common share.
After-tax net investment income was $80 million, up 56% compared to Q3 2022.
On November 1, 2023, Selective Insurance Group Inc (NASDAQ:SIGI) released its financial results for the third quarter ending September 30, 2023. The company reported a net income per diluted common share of $1.42 and a non-GAAP operating income of $1.51 per diluted common share. The GAAP combined ratio was 96.8%, consistent with Q3 2022.
Financial Highlights
Net premiums written (NPW) increased by 17% compared to the same period in 2022. Commercial Lines renewal pure price increases averaged 7.1%, up from 5.8% in Q3 2022. After-tax net investment income was $80 million, a 56% increase compared to Q3 2022. The book value per common share was $40.35, a 1% decrease in the third quarter, while the adjusted book value per common share was $48.54, up 3% in the third quarter.
Company Performance and Strategy
John J. Marchioni, Chairman, President, and CEO of SIGI, commented on the company's performance, stating,
With a non-GAAP operating ROE of 15.0% in the quarter and 13.2% year to date, we are well positioned to achieve our 10th consecutive year of double-digit operating ROEs. Our disciplined underwriting strategy and commitment to uniquely servicing our customers continue to drive our performance in a challenging external environment with uncertain loss trends and elevated inflation."
Mr. Marchioni also highlighted the company's growth strategy, including plans to extend its Commercial Lines footprint into West Virginia and Maine in early 2024, followed by Washington, Oregon, and Nevada later in the year.
Financial Tables Summary
For the third quarter, SIGI reported net premiums written of $1,058.3 million, a 17% increase from Q3 2022. Net investment income earned was $100.9 million, up 58% from the same period last year. Total revenues for the quarter were $1,081.1 million, a 21% increase from Q3 2022. Net income available to common stockholders was $86.9 million, a significant increase of 116% from Q3 2022.
The company's combined ratio remained stable at 96.8%, with a loss and loss expense ratio of 65.8%, up 1.7 points from Q3 2022. The underwriting expense ratio was 30.9%, down 1.7 points from the same period last year.
Outlook
For 2023, SIGI expects a GAAP combined ratio of 96.5%, unchanged from the last quarter, including net catastrophe losses of 6.5 points. The company also anticipates after-tax net investment income of $310 million, up from the previous guidance of $300 million.
Explore the complete 8-K earnings release (here) from Selective Insurance Group Inc for further details.
This article first appeared on GuruFocus.
