Selective Insurance Group (SIGI) Tops Q3 EPS by 10c, Revenues Beat

Selective Insurance Group (NASDAQ: SIGI) reported Q3 EPS of $0.99, $0.10 better than the analyst estimate of $0.89. Revenue for the quarter came in at $664.5 million versus the consensus estimate of $633.17 million.

"In the third quarter, we generated a 94.6% GAAP combined ratio, or 90.0% excluding catastrophe losses," said Gregory E. Murphy, Chairman and Chief Executive Officer. "Although Hurricane Florence added 2.4 points to our combined ratio, our financial results this quarter reflect our disciplined underwriting franchise and strong underlying insurance operations performance. Superior service is always a focus at Selective and never more important than in the wake of devastating storms like Hurricane Florence. We are proud of the work performed by our claims team in helping our customers rebuild their homes and businesses in the days and weeks following the storm. Growth in the quarter remains solid, as net premiums written increased 8%, driven by steady standard lines retention at 84% and commercial lines renewal pure price increases of 3.7%. Our strong relationships with our 'ivy league' distribution partners, investments in our sophisticated technology, underwriting capabilities, and focus on a superior experience for our customers and agents position us well for continued financial outperformance relative to the industry."

Mr. Murphy continued, "For the quarter, our annualized non-GAAP operating return on average equity1 was an excellent 13.8%, and 11.3% for the first nine months of 2018, compared to our financial target of 12% for 2018, which for 2018 we established as 300 basis points over our estimated weighted average cost of capital. Our results were particularly strong in the context of an above-average quarter in terms of catastrophe loss activity for the industry. We again generated superior investment performance in the quarter with after-tax net investment income up 45% from a year ago, to $43 million, benefiting from improved alternative investment returns, higher interest rates, active portfolio management and security selection, as well as the lower Federal income tax rate."

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

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