NASDAQ$SIGI

Selective Insurance Group Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Selective reported first quarter results with net income of $0.25 per diluted share and non-GAAP operating income of $0.84 per diluted share.

Selective Insurance Group reported a decrease in net premiums written by 4% compared to Q1 2019, driven by declines in both Commercial Lines and Personal Lines, and a GAAP combined ratio of 96.7%. Net income per diluted share was $0.25, and non-GAAP operating income per diluted share was $0.84.

  • COVID-19-related underwriting items totaled $19.3 million after-tax, reducing diluted earnings per share by $0.32.
  • Net premiums written decreased 4% from the first quarter of 2019.
  • GAAP combined ratio was 96.7%.
  • After-tax net investment income increased 10% to $45 million from the first quarter of 2019.

Headline financials

Total Revenue

$665M

Previous: $699M-4.9%
EPS (adj)

$0.84

Previous: $0.90-6.7%
Combined Ratio

96.7%

Previous: 94.7%+2.1%
Std Commercial Lines Combined Ratio

96.7%

Previous: 94.8%+2.0%
Std Personal Lines Combined Ratio

99.5%

Previous: 95.9%+3.8%
E&S Lines Combined Ratio

93.5%

Previous: 92.1%+1.5%
Capital Expenditures

-$8.42M

Previous: $7.96M-205.8%
Free Cash Flow

$6.82M

Previous: $61.3M-88.9%
Net Income

$15.2M

Previous: $61.3M-75.2%
Operating Income

$12.3M

Previous: $70.7M-82.6%
Gross Profit

$656M

Previous: $687M-4.5%
Cash & Equivalents

$9.43M

Previous: $516K+1727.3%
Total Assets

$8.98B

Previous: $8.28B+8.4%
Stock-Based Comp

$7.04M

Previous: $6.68M+5.4%

Revenue & EPS history

Selective Insurance · Revenue · Quarterly

$665M

Q1 2020-4.9%vs Q1 2019
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Selective Insurance · $593M total across 2 segments · Q1 2020

  • Standard Commercial Lines
    $517M
  • Standard Personal Lines
    $76.1M

Forward guidance

Selective has revised its full-year guidance for 2020, reflecting the current estimated full-year impact of COVID-19.

Tailwinds

  • A GAAP combined ratio, excluding catastrophe losses, of between 92% and 93%.
  • An overall effective tax rate of approximately 18.5%.
  • Catastrophe losses of 4.5 points on the combined ratio.
  • Weighted average shares of 60.5 million on a diluted basis.
  • Selective is well-positioned to provide outstanding service to its customers and distribution partners and to continue to create long-term value for its stakeholders.

Headwinds

  • Significant uncertainty surrounding the ultimate duration and severity of the COVID-19 pandemic.
  • The depth and duration of the economic recession and market volatility.
  • The impact federal, state and local actions, including insurance regulatory directives, can have on our business.
  • After-tax net investment income of approximately $160 million, down from our prior guidance of $185 million.
  • We now expect a range of between $10 million and $15 million in after-tax net investment losses from our alternative investments, compared to our prior estimate of a $14 million gain.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-0.4%

Avg return

Earnings day

-0.3%

Avg return

5 days after

+1.4%

Avg return

30 days after

51%

35 / 69 earnings

Positive

+9.7%

Q1 2017

Best reaction

-18.9%

Q2 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+8.8%+10.3%+16.8%
Q4 2025+0.3%+6.0%-0.0%
Q3 2025-5.7%-6.9%-4.0%
Q2 2025-1.9%-0.4%+1.0%
Q1 2025-1.8%-2.8%-5.1%
Q4 2024-12.6%-11.2%-8.5%
Q3 2024-5.4%-7.4%-2.7%
Q2 2024-18.9%-14.7%-12.1%
Q1 2024-5.8%-3.4%-4.0%
Q4 2023-8.9%-6.7%-2.2%
Q3 2023+1.2%+0.3%-2.7%
Q2 2023-1.5%+1.0%-3.6%
Q1 2023+5.1%+6.2%+1.4%
Q4 2022+7.7%+2.9%+11.3%
Q3 2022-2.1%-3.2%-0.5%
Q2 2022+0.2%+2.5%+4.8%
Q1 2022-4.6%-4.9%-6.6%
Q4 2021-3.8%+0.7%+4.9%
Q3 2021-4.2%-3.1%-2.9%
Q2 2021+2.0%+2.7%+7.7%
Q1 2021+0.5%+0.7%-1.8%
Q4 2020-2.9%-3.2%+1.4%
Q3 2020-0.2%-0.8%+18.0%
Q2 2020-2.7%-3.3%+5.3%
Q1 2020-5.8%+0.3%+13.5%
Q4 2019+0.7%+3.1%-15.2%
Q3 2019-3.7%-4.3%-7.7%
Q2 2019+4.4%+2.8%+6.3%
Q1 2019-2.3%+0.8%+0.5%
Q4 2018+3.9%+5.7%+9.8%
Q3 2018+3.6%+11.6%+6.5%
Q2 2018+5.0%+4.3%+7.4%
Q1 2018-5.4%-5.7%-2.6%
Q4 2017+1.8%-1.6%-1.7%
Q3 2017+6.4%+5.7%+7.8%
Q2 2017-3.1%-1.3%-0.7%
Q1 2017+9.7%+7.1%+3.6%
Q4 2016+4.9%+5.0%+10.3%
Q3 2016-8.7%-7.2%+6.2%
Q2 2016+1.5%-1.1%-1.7%
Q1 2016+0.8%
Q4 2015+6.5%
Q3 2015+1.5%
Q2 2015+3.2%
Q1 2015-3.8%
Q4 2014-3.2%
Q3 2014+2.5%
Q2 2014-3.6%
Q1 2014+0.3%
Q4 2013-2.5%
Q3 2013-2.6%
Q2 2013+3.9%
Q1 2013-1.6%
Q4 2012+7.5%
Q3 2012-0.9%
Q2 2012-2.8%
Q4 2011-2.0%
Q1 2012+1.7%
Q3 2011+3.7%
Q2 2011-0.1%
Q1 2010+4.3%
Q1 2011+2.1%
Q4 2010+3.1%
Q4 2008+3.1%
Q3 2009-2.5%
Q3 2010-2.5%
Q4 2009+0.4%
Q2 2009+0.4%
Q2 2010+0.4%

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