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Selective Insurance (SIGI) Q1 Earnings and Revenues Beat
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Selective Insurance Group, Inc. (SIGI - Free Report) reported first-quarter 2021 operating income of $1.70 per share, which beat the Zacks Consensus Estimate by 75.2%. Moreover, the bottom line improved 102.4% from the year-ago period.
The reported quarter witnessed higher premiums written and improved net investment income, offset by higher expenses.
Selective Insurance Group, Inc. Price, Consensus and EPS Surprise
Total revenues of $799 million were up 12.5% from the year-ago quarter’s figure. Moreover, the top line beat the Zacks Consensus Estimate by 2.6%.
Net premiums written increased 23.3% year over year to $798.2 million attributable to increase in both Standard Commercial Lines and Excess and Surplus Lines. Net investment income rose 24% year over year to $56.3 million, driven by alternative investment gains of $16 million after-tax, which are reported on a one-quarter lag.
Total expenses increased 3% year over year to $668.3 million, primarily due to higher loss and loss expense incurred, amortization of deferred policy acquisition costs and corporate expenses.
Combined ratio improved 740 basis points (bps) on a year-over-year basis to 89.3%.
Segmental Results
Standard Commercial Lines net premiums written were up 28% year over year to $665.6 million, driven by renewal pure price increases of 5.7% and strong retention of 86%.
Combined ratio improved 850 bps to 88.2% from the prior-year quarter’s level due to lower non-catastrophe property losses and loss expenses, and lower catastrophe losses.
Standard Personal Lines net premiums written were down 4% year over year to $65.1 million due to a reduction in new business. Combined ratio improved 990 bps to 89.6% from the year-ago period’s count due to lower catastrophe losses.
Excess & Surplus Lines net premiums written grew 10% year over year to $67.5 million, driven by strong new business growth of 14% and renewal pure price increases of 7.3%. Combined ratio deteriorated 571 bps to 99.2% from the prior-year quarter’s level due to higher non-catastrophe property losses and loss expenses, and higher catastrophe losses.
Financial Update
Selective Insurance exited the first quarter with total assets of $9.8 billion, which climbed 2% above the level at the end of December 2020.
As of Mar 31, 2021, book value per share was $42.38, flat from the level as of 2020 end.
Annualized operating return on equity was 16.8% in the quarter under review, up 1400 points year over year.
2021 Guidance
Catastrophe loss of 4 points on the combined ratio has been estimated.
The company projects an after-tax net investment income of approximately $195 million, up from the previous outlook of $182 million. It includes $31 million in after-tax net investment income from alternative investments.
The company expects an overall effective tax rate of approximately 20.5% that includes an effective tax rate of 19.0% for net investment income and 21.0% for all other items.
The company expects GAAP combined ratio, excluding catastrophe losses, of 90% (prior guidance 91%) that assumes no additional prior year casualty reserve development;
Cincinnati Financial Corporation (CINF - Free Report) first-quarter 2021 earnings per share of $1.37 beat the Zacks Consensus Estimate of $1.05.
The Travelers Companies’ (TRV - Free Report) first-quarter 2021 earnings per share of $2.73 beat the Zacks Consensus Estimate of $2.44.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2021 earnings per share of $1.08 beat the Zacks Consensus Estimate by 21.3%.
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Selective Insurance (SIGI) Q1 Earnings and Revenues Beat
Selective Insurance Group, Inc. (SIGI - Free Report) reported first-quarter 2021 operating income of $1.70 per share, which beat the Zacks Consensus Estimate by 75.2%. Moreover, the bottom line improved 102.4% from the year-ago period.
The reported quarter witnessed higher premiums written and improved net investment income, offset by higher expenses.
Selective Insurance Group, Inc. Price, Consensus and EPS Surprise
Selective Insurance Group, Inc. price-consensus-eps-surprise-chart | Selective Insurance Group, Inc. Quote
Behind the Headlines
Total revenues of $799 million were up 12.5% from the year-ago quarter’s figure. Moreover, the top line beat the Zacks Consensus Estimate by 2.6%.
Net premiums written increased 23.3% year over year to $798.2 million attributable to increase in both Standard Commercial Lines and Excess and Surplus Lines. Net investment income rose 24% year over year to $56.3 million, driven by alternative investment gains of $16 million after-tax, which are reported on a one-quarter lag.
Total expenses increased 3% year over year to $668.3 million, primarily due to higher loss and loss expense incurred, amortization of deferred policy acquisition costs and corporate expenses.
Combined ratio improved 740 basis points (bps) on a year-over-year basis to 89.3%.
Segmental Results
Standard Commercial Lines net premiums written were up 28% year over year to $665.6 million, driven by renewal pure price increases of 5.7% and strong retention of 86%.
Combined ratio improved 850 bps to 88.2% from the prior-year quarter’s level due to lower non-catastrophe property losses and loss expenses, and lower catastrophe losses.
Standard Personal Lines net premiums written were down 4% year over year to $65.1 million due to a reduction in new business. Combined ratio improved 990 bps to 89.6% from the year-ago period’s count due to lower catastrophe losses.
Excess & Surplus Lines net premiums written grew 10% year over year to $67.5 million, driven by strong new business growth of 14% and renewal pure price increases of 7.3%. Combined ratio deteriorated 571 bps to 99.2% from the prior-year quarter’s level due to higher non-catastrophe property losses and loss expenses, and higher catastrophe losses.
Financial Update
Selective Insurance exited the first quarter with total assets of $9.8 billion, which climbed 2% above the level at the end of December 2020.
As of Mar 31, 2021, book value per share was $42.38, flat from the level as of 2020 end.
Annualized operating return on equity was 16.8% in the quarter under review, up 1400 points year over year.
2021 Guidance
Catastrophe loss of 4 points on the combined ratio has been estimated.
The company projects an after-tax net investment income of approximately $195 million, up from the previous outlook of $182 million. It includes $31 million in after-tax net investment income from alternative investments.
The company expects an overall effective tax rate of approximately 20.5% that includes an effective tax rate of 19.0% for net investment income and 21.0% for all other items.
The company expects GAAP combined ratio, excluding catastrophe losses, of 90% (prior guidance 91%) that assumes no additional prior year casualty reserve development;
Zacks Rank
Selective Insurance currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Cincinnati Financial Corporation (CINF - Free Report) first-quarter 2021 earnings per share of $1.37 beat the Zacks Consensus Estimate of $1.05.
The Travelers Companies’ (TRV - Free Report) first-quarter 2021 earnings per share of $2.73 beat the Zacks Consensus Estimate of $2.44.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2021 earnings per share of $1.08 beat the Zacks Consensus Estimate by 21.3%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>