Selective Insurance Group (SIGI) Tops Q2 EPS by 4c, Revenues Beat

Selective Insurance Group (NASDAQ: SIGI) reported Q2 EPS of $0.40, $0.04 better than the analyst estimate of $0.36. Revenue for the quarter came in at $682.4 million versus the consensus estimate of $673.33 million.

In the second quarter of 2020:

• Net premiums written ("NPW") increased 3% from the second quarter of 2019;
• GAAP combined ratio was 98.4%;
• Annualized return on equity ("ROE") was 6.2% and non-GAAP operating ROE1 was 4.4%;
• Overall renewal pure price increased 3.9%; and
• Book value per share increased 9.5% in the quarter.

"Our strong underlying results for the second quarter were obscured by elevated catastrophe losses reflecting heightened activity for the industry, and a decline in alternative investment income, which we report on a one-quarter lag. We incurred a significant level of catastrophe losses in the quarter totaling $83 million mainly due to: (i) $43 million of losses related to two April storms; and (ii) $20 million of losses related to civil unrest claims," said John Marchioni, President and CEO. "In addition, we incurred COVID-19-related underwriting items totaling $9.6 million in the quarter, which increased the combined ratio by 1.3 points. Despite these losses, the combined ratio in the quarter was a profitable 98.4%, reflecting excellent underlying profitability. Our non-GAAP operating ROE was 4.4% in the quarter and 6.7% year-to-date. While our overall results through the first half of this year have not met our expectations, events such as these reinforce the value we bring to our customers as our claims teams continue to work tirelessly to help our policyholders get their businesses and lives back in order."

"I cannot be more proud of our employees who have transitioned seamlessly into a work from home environment, and have continued to provide excellent service to our customers and distribution partners," continued Mr. Marchioni. "We achieved overall NPW growth of 3% in the quarter despite a challenging economic backdrop and the personal and commercial automobile credits that reduced our NPW by $19.7 million and our growth rate by three percentage points. During these difficult times, our distribution partners demonstrate the value they bring to our customers - and I want to personally thank them for their hard work and dedication. Our capital and liquidity position remains extremely strong, providing us with the flexibility to invest in areas where we see opportunities for profitable growth."

For earnings history and earnings-related data on Selective Insurance Group (SIGI) click here.

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