NASDAQ$SIGI

Selective Insurance Group Inc · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Selective Insurance reported solid results in Q3 2021, including net income of $1.18 per diluted common share and a combined ratio of 98.6%.

Selective Insurance Group, Inc. reported a solid third quarter with a net income per diluted common share of $1.18 and a non-GAAP operating income per diluted common share of $1.18. The combined ratio was a profitable 98.6%, despite $76 million in net catastrophe losses. Overall net premiums written increased by 13% year-over-year.

  • Net premiums written increased 13% compared to Q3 2020.
  • GAAP combined ratio was 98.6%.
  • After-tax net investment income was $75 million, up 35% compared to Q3 2020.
  • Book value per common share was $45.27, up 1% in Q3.

Headline financials

Total Revenue

$865M

Previous: $777M+11.4%
EPS (adj)

$1.18

Previous: $1.06+11.3%
Combined Ratio

98.6%

Previous: 97.0%+1.6%
Std Commercial Lines Combined Ratio

97.2%

Previous: 92.3%+5.3%
Std Personal Lines Combined Ratio

115.2%

Previous: 119.0%-3.2%
E&S Lines Combined Ratio

93.7%

Previous: 112.0%-16.3%
Capital Expenditures

-$15.1M

Previous: -$17.9M+15.3%
Free Cash Flow

$58.6M

Previous: $52M+12.6%
Net Income

$73.7M

Previous: $69.9M+5.5%
Operating Income

$601M

Previous: $537M+11.9%
Gross Profit

$861M

Previous: $773M+11.4%
Cash & Equivalents

$34.8M

Previous: $785K+4331.7%
Total Assets

$10.4B

Previous: $9.51B+9.7%
Stock-Based Comp

$2.5M

Previous: $2.74M-8.5%

Revenue & EPS history

Selective Insurance · Revenue · Quarterly

$865M

Q3 2021+11.4%vs Q3 2020
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Revenue by segment

Selective Insurance · $813M total across 3 segments · Q3 2021

  • Standard Commercial Lines
    $653M+16.9%
  • Excess and Surplus Lines
    $82.1M+35.7%
  • Standard Personal Lines
    $78.2M+2.9%

Forward guidance

Selective has revised its full-year guidance for 2021.

Tailwinds

  • A GAAP combined ratio, excluding net catastrophe losses, of 88% that assumes no fourth quarter prior-year casualty reserve development
  • After-tax net investment income of $240 million that includes $75 million in after-tax net investment income from our alternative investments
  • An overall effective tax rate of approximately 20.5% that includes an effective tax rate of 19.5% for net investment income and 21.0% for all other items
  • Net catastrophe losses of 5.0 points on the combined ratio
  • Weighted average shares of 60.5 million on a fully diluted basis

Headwinds

  • Difficult conditions in global capital markets and the economy, including the risk of prolonged higher inflation, could increase loss costs and negatively impact investment portfolios
  • Deterioration in the public debt and equity markets and private investment marketplace that could lead to investment losses and interest rate fluctuations
  • Ratings downgrades on individual securities we own could affect investment values and, therefore, statutory surplus
  • Frequency and severity of natural and man-made catastrophic events
  • Adverse market, governmental, regulatory, legal, or judicial conditions or actions

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 Q3 2021

Historical avgQ3 2021

-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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