NASDAQ$SIGI

Selective Insurance Group Inc · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Reported net income of $1.48 per diluted common share and non-GAAP operating income of $1.44 per diluted common share.

Selective Insurance Group reported strong first quarter 2023 results, with net income per diluted common share of $1.48 and non-GAAP operating income per diluted common share of $1.44. The combined ratio was a profitable 95.7%, inclusive of 6.1 points of catastrophe losses. Net premiums written increased 12% year-over-year, driven by renewal pure price increases, solid retention, new business, and strong exposure growth.

  • Net premiums written increased 12% compared to the first quarter of 2022.
  • GAAP combined ratio of 95.7%, compared to 93.1% in the first quarter of 2022.
  • Commercial Lines renewal pure price increases averaged 7.0%, compared to 4.8% in the first quarter of 2022.
  • After-tax net investment income of $73 million, up 25% compared to the first quarter of 2022.

Headline financials

Total Revenue

$1B

Previous: $846M+18.2%
EPS (adj)

$1.44

Previous: $1.41+2.1%
Combined Ratio

95.7%

Previous: 93.1%+2.8%
Std Commercial Lines Combined Ratio

94.7%

Previous: 93.6%+1.2%
Std Personal Lines Combined Ratio

116.0%

Previous: 91.0%+27.5%
E&S Lines Combined Ratio

85.0%

Previous: 91.1%-6.7%
Capital Expenditures

-$5.51M

Previous: -$7.68M+28.2%
Free Cash Flow

$87.1M

Previous: $48.7M+78.9%
Net Income

$92.6M

Previous: $56.3M+64.3%
Operating Income

$677M

Previous: $560M+20.9%
Gross Profit

$988M

Previous: $835M+18.3%
Cash & Equivalents

$35.7M

Previous: $17.9M+99.4%
Total Assets

$11B

Previous: $10.3B+6.8%
Stock-Based Comp

$7.72M

Previous: $7.03M+9.8%

Revenue & EPS history

Selective Insurance · Revenue · Quarterly

$1B

Q1 2023+18.2%vs Q1 2022
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Revenue by segment

Selective Insurance · $899M total across 2 segments · Q1 2023

  • Standard Commercial Lines
    $813M+10.3%
  • Standard Personal Lines
    $85.3M+31.0%

Forward guidance

For 2023, the full-year expectations remained unchanged.

Tailwinds

  • A GAAP combined ratio of 96.5%, including net catastrophe losses of 4.5 points.
  • Combined ratio estimate assumes no additional prior year casualty reserve development.
  • After-tax net investment income of $300 million that includes after-tax net investment income from alternative investments of $30 million.
  • An overall effective tax rate of approximately 21%, which assumes an effective tax rate of 20% for net investment income and 21% for all other items.
  • Weighted average shares of 61 million on a fully diluted basis.

Headwinds

  • Difficult conditions in global capital markets, the banking sector, commercial real estate, and the economy, including prolonged higher inflation
  • Deterioration in the public debt and equity markets and private investment marketplace
  • Frequency and severity of catastrophic events, including natural events and man-made events
  • Adverse market, governmental, regulatory, legal, or judicial conditions or actions
  • The geographic concentration of our business in the eastern portion of the United States

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 2023

Historical avgQ1 2023

-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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