Selective Insurance Group (SIGI) Tops Q4 EPS by 64c

January 28, 2021 4:19 PM EST
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Price: $76.37 --0%

EPS Growth %: -100.0%

Financial Fact:
Total expenses: 526.25M

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Selective Insurance Group (NASDAQ: SIGI) reported Q4 EPS of $1.84, $0.64 better than the analyst estimate of $1.20.

"We delivered excellent financial results this quarter with an 18.0% non-GAAP operating ROE, non-GAAP operating income per diluted common share of $1.84, and an 88.1% combined ratio. We had strong commercial lines NPW growth of 10% despite a challenging macroeconomic backdrop, driven by 5.1% renewal pure price increases, solid 86% retention, and new business growth of 2% - a continued testament to our franchise distribution partner relationships, superior underwriting tools, and talented employees. Our insurance and investment segments were both strong contributors to our results in the quarter," said John Marchioni, President and CEO.

"For the year, despite the significant economic and social impacts created by COVID-19 as well as the elevated catastrophe losses totaling 8.0 points on the combined ratio, we generated our seventh consecutive year of double-digit non-GAAP operating ROEs, a truly impressive achievement. By assisting our customers through the challenges posed by COVID-19, and our superior claims handling and customer service related to the numerous catastrophic losses, we once again reinforced the value we bring to the market. Our ability to generate consistent and superior financial performance over time is based on our longstanding commitment to serving all of our stakeholders. Our franchise relationships with best-in-class distribution partners, sophisticated underwriting tools, unique operating model, and customer experience focus position us well for continued profitable growth," continued Mr. Marchioni.

As an ongoing demonstration of our corporate success, on December 2, 2020, Selective issued $200 million of perpetual preferred stock, which was well received by the capital markets as evidenced by the attractive 4.60% dividend rate. Proceeds from the offering will be used for general corporate purposes, which may include the repurchase of common stock. This marks the first preferred stock offering in the Company's 94-year history. In conjunction with the offering, the Company announced that its Board of Directors authorized a new $100 million share repurchase program. Mr. Marchioni stated, "With the preferred stock transaction, we continued to enhance the Company's financial flexibility and optimize our capital structure. Our share repurchase program gives us the option to opportunistically buy back shares when it is in the best interest of our shareholders."

Guidance

For 2021, our full-year guidance is as follows:

  • A GAAP combined ratio, excluding catastrophe losses, of 91.0%. Our combined ratio estimate assumes no prior-year casualty reserve development;
  • Catastrophe losses of 4.0 points on the combined ratio;
  • After-tax net investment income of $182.0 million that includes $16.0 million in after-tax net investment income from our alternative investments;
  • An overall effective tax rate of approximately 20.5%, which includes an effective tax rate of 19.0% for net investment income and 21.0% for all other items; and
  • Weighted average shares of 60.5 million on a fully diluted basis.

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



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