Selective Insurance Group Inc. reported $27.1 million net income for its 2013 second quarter, improving from $0.3 million net income during the same period a year ago.
The Branchville, N.J.-based insurer said it achieved a 7.2 percent renewal pure price increase in standard commercial lines and an 8.3 percent renewal pure price increase in personal lines for the quarter.
The net income for the first six months of 2013 was $48.4 million, up 163 percent compared to $18.4 million net income for the first six months of 2012.
The GAAP combined ratio was the second quarter improved to 98.9 percent, compared to 106.9 percent during the prior-year quarter. The GAAP combined ratio for the first six months of 2013 came in at 98.0 percent, improving from 103.7 percent a year ago.
Catastrophe losses for the latest quarter were $19.6 million, pre-tax, compared to $30.2 million. Catastrophe losses for the first half of the year also narrowed to $21.2 million, compared to $37.1 million last year.
Favorable prior year statutory reserve development on casualty lines for the second quarter totaled $2 million, pre-tax, compared to $5 million a year ago. Favorable prior year statutory reserve development on casualty lines for the first half of 2013 was $3 million, pre-tax, compared to $8 million a year ago.
Total net premiums written (NPW) for the second quarter were $462.2 million, an 8.6 percent increase from $425.6 million a year ago. Standard Commercial Lines NPW were $350.6 million, up 9.4 percent from $320.5 million a year ago. Standard Personal Lines NPW were $78.9 million, up 2.7 percent from $76.8 million a year ago. Excess and Surplus Lines NPW were $32.7 million, up 15.5 percent from $28.3 million last year.
Total net premiums written (NPW) for the first half of 2013 were $912.3 million, an increase of 7.9 percent from $845.7 million a year ago. Standard Commercial Lines NPW were $703.8 million, up 8.4 percent from $649.2 million a year ago. Standard Personal Lines NPW were $147.4 million, up 3.5 percent from $142.4 million ago. Excess and Surplus Lines NPW were $61.1 million, up 13 percent from $54.1 million a year ago.
The net investment income, after tax, was $25.7 million for the second quarter and $50.5 million for the first half of the year, both remaining flat compared to last year. The company said higher dividend income and alternative investment returns were offset by lower yields on fixed maturity securities portfolio.
“We had a very strong quarter due to improvements in our underwriting operations as our granular pricing approach and sophisticated underwriting tools continue to be a key to success,” said CEO Gregory Murphy.
Overall net premiums written grew due to standard lines renewal pure price increases of 7.4 percent and new business that was up 17 percent to $84 million. Standard lines retention remained steady at 84 percent, an indication of market stability, Murphy said.
Murphy said the improved combined ratio reflects an improving loss ratio due to earning rate increases above loss trend as well as lower property and catastrophe losses.
In standard commercial lines, the insurer achieved a 7.2 percent renewal pure price increase in the quarter, while retention remained at 83 percent and new business was up 25 percent to $73 million.
In personal lines, Murphy added, “our profitability initiatives for both homeowners and auto, pushing rate and improving the mix of business, helped us achieve an 8.3 percent renewal pure price increase with retention remaining high at 87 percent.”
Murphy said Selective continues to execute on its three-year statutory combined ratio improvement plan, which started in 2012 and includes renewal pure price increases of 5-to-8 percent per year. “We expect to achieve, excluding catastrophes, a statutory combined ratio of 92 percent for 2014,” said Murphy.
“Standard commercial and personal lines renewal pure price increases are driving our success with an increase of 7.5 percent for the first six months of 2013 leading to an overall statutory combined ratio of 94.8 percent, excluding catastrophes.”
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