Selective Insurance Group (SIGI) Prelim. Q4 EPS Tops Consensus

Selective Insurance Group, Inc. (Nasdaq: SIGI) today announced preliminary fourth quarter 2022 results and pre-tax net catastrophe loss estimates.

Selective expects to report fourth quarter diluted earnings per share of $1.38 and non-GAAP operating earnings per share of $1.461, with the difference principally reflecting after-tax net realized and unrealized investment losses. The Company expects its fourth quarter combined ratio to be 94.7%, inclusive of catastrophe losses of 5.2 points and net prior year favorable casualty reserve development of 4.4 points. Net investment income, after-tax, is expected to be $65.5 million, inclusive of $0.1 million of after-tax alternative investment income.

(Consensus sees Q4 EPS of $1.41)

The Company expects pre-tax net catastrophe losses to total approximately $45.7 million. The catastrophe losses include $46.1 million of net losses from Winter Storm Elliott, which impacted 37 states, 26 of which are in the Company's Standard Lines footprint. Losses from Winter Storm Elliott primarily impacted the Standard Commercial Lines segment. Selective recorded an additional $11.7 million in ceded earned reinstatement premium from the winter storm, for a total negative impact to fourth quarter 2022 underwriting results of $57.8 million, pre-tax, or $0.75 per share. Catastrophe losses from Winter Storm Elliott were offset in part by modest favorable emergence on prior quarters' catastrophe losses.

"Winter Storm Elliott impacted the majority of our standard lines footprint in late December with freezing temperatures, strong winds, and blizzard conditions, resulting in widespread and severe water-related property losses. Despite Winter Storm Elliott, we delivered strong financial results for the quarter with a 94.7% combined ratio, highlighting the earnings power of Selective's business. For the year, we will report another year of double-digit growth in net premiums written, strong underwriting profitability, and a double-digit non-GAAP operating ROE that exceeded our target," said Chairperson, President and Chief Executive Officer John J. Marchioni.

We expect to release our fourth quarter and full-year 2022 results after the market close on February 2, 2023. Any changes in our preliminary estimates, including changes in the net loss from Winter Storm Elliott, will be reflected in these results. Our Winter Storm Elliott loss estimates are subject to change due to the recent occurrence of the event, the widespread nature of loss activity, and the complexity of claims, including large losses.

Selective will release its fourth quarter 2022 earnings on Thursday, February 2, 2023. A conference call to discuss the results will be held on Friday, February 3, 2023, at 10:00 a.m. (ET). This call will be webcast live accessible on Selective's website at www.Selective.com, where a replay also will be available from February 3 to March 5, 2023.

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