Selective Insurance Reports $37M Q1 Net Income

May 6, 2016

Selective Insurance Group in Branchville, New Jersey, posted $37.0 million net income for the 2016 first quarter, down 7 percent from $39.7 million net income in the first quarter of 2015.

Selective’s net income was lower than a year ago because this year’s first quarter earnings contained $1.8 million net realized losses compared to a $12.3 million net realized gains a year ago. (Last year’s net realized gains were driven by strategic reallocation within the insurer’s equity portfolio and the sale of certain equity securities.)

The operating income for the first quarter rose to $38.8 million, a 41 percent increase from $27.4 million a year ago.

The GAAP combined ratio for the first quarter was 92.2 percent, improving from 94.5 percent in the prior-year quarter.

After-tax investment income in the first quarter was $24 million, up 11 percent from $21.2 million a year ago.

Overall net premiums written for the first quarter were $565.4 million, up 9 percent from $518.1 million a year ago.

The Standard Commercial Lines net premiums written, which represents 80 percent of the overall net premiums written, were $455.1 million for the first quarter, up 10 percent from $415.3 million a year ago. The company said the increase was driven by the 85 percent retention rate, renewal pure price increases of 2.8 percent, and stable new business production.

The GAAP combined ratio for the Standard Commercial Lines was 92.3 percent, compared to 91.8 percent a year ago.

The Standard Personal Lines net premiums written, which represents 11 percent of overall net premiums written, were $62.0 million, down 5 percent from $65.0 million a year ago. The company said the decline was driven by new business that was on par with a year ago but not sufficient to offset premium that was not retained. Retention of 82 percent remained consistent with the prior-year period and renewal pure price was at 5.1 percent.

The GAAP combined ratio for Standard Personal Lines improved from 103.4 percent a year ago to 87.7 percent, as the company saw lower catastrophe losses during the latest quarter.

The Excess and Surplus Lines net premiums written, representing 9 percent of net premiums written, were $48.3 million, up 28 percent from $37.8 million a year ago. The company said the increase was driven by a 3.3 percent price increase for this segment of business coupled with higher audit premium.

The GAAP combined ratio for E&S Lines improved to 97.1 percent from 104.1 percent a year ago.

Selective Chairman and CEO Gregory E. Murphy said the company’s growth in the first three months of the year was strong.

“Overall net premiums written increased 9 percent driven by solid renewal pure price increases of 3.1 percent and increased retention in standard lines, and stable overall new business production,” Murphy said.

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