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Selective Insurance (SIGI) Q2 Earnings Top Estimates, Up Y/Y
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Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2018 operating income of $1.01 per share, beating the Zacks Consensus Estimate by 12.2%. Also, the bottom line surged 48.5% from the year-ago period’s number.
Selective Insurance Group, Inc. Price, Consensus and EPS Surprise
Notably, the company delivered record operating income per share and also witnessed better investment results and improved premiums across its segments such as, Standard Commercial Lines and Standard Personal Lines. This uptrend is however, partially offset by a decline in premiums at Excess & Surplus Lines.
Including one-time items, net income of 99 cents per share jumped 41.4% year over year.
Behind Second-Quarter Headlines
Total revenues of $651.9 million rose 6.1% from the year-ago quarter’s figure.
Net investment income gained 24.1% year over year to $37.6 million owing to higher interest rates, lower tax rate as well as active portfolio management and security selection.
Net premiums written climbed 6.7% year over year to $655.2 million. Combined ratio improved 100 basis points (bps) on a year-over-year basis to 93.7%.
Segment Results
Standard Commercial Lines net premiums written was up 7.5 % year over year to $514.9 million on the back of solid renewal pure price improvement, a substantially positive retention and new business growth. Combined ratio improved 80 bps to 91.4% from the prior-year quarter’s level.
Standard Personal Lines net premiums written grew 7.4% year over year to $83.9 million, mainly driven by a strong renewal pure price increase, positive retention and new business strength. Combined ratio improved 1430 bps to 93.7% from the year-ago period’s count.
Excess & Surplus Lines net premiums written dipped 0.7% year over year to $56.4 million due to decline in new business, which reflected a highly competitive marketplace and targeted underwriting actions undertaken to improve profitability. Combined ratio deteriorated 1720 bps to 114.7%. An increase in current-year loss costs together with higher non-catastrophe property loss induced this deterioration.
Financial Update
Selective Insurance exited the second quarter with total assets of $7.7 billion, which inched up 0.3% from the year-ago period’s level.
As of Jun 30, 2018, book value per share was $28.86, down 1.4% year over year.
Annualized return on equity was 14.3% in the reported quarter compared with 9.9% in the prior-year quarter.
Dividend Update
Selective Insurance’s board of directors approved a dividend of 18 cents per share, payable Sep 4 to stockholders of record as of Aug 15, 2018.
2018 Guidance Reiterated
Selective Insurance anticipates delivering a combined ratio (excluding catastrophe loss) of about 92%.
The company projects an after-tax investment income of $150 million, which will include $8 million of after-tax net investment income from alternative investments.
The P&C insurer estimates an overall effective tax rate of nearly 18% including the same of 17% for net investment income, which reflects a tax rate of 5.25% for tax-advantaged municipal bonds and a tax rate of approximately 21% for all other investments.
Weighted average shares outstanding of 59.6 million have been projected.
Among other players from the insurance industry, which have already reported second-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) earnings missed the same.
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Selective Insurance (SIGI) Q2 Earnings Top Estimates, Up Y/Y
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2018 operating income of $1.01 per share, beating the Zacks Consensus Estimate by 12.2%. Also, the bottom line surged 48.5% from the year-ago period’s number.
Selective Insurance Group, Inc. Price, Consensus and EPS Surprise
Selective Insurance Group, Inc. Price, Consensus and EPS Surprise | Selective Insurance Group, Inc. Quote
Notably, the company delivered record operating income per share and also witnessed better investment results and improved premiums across its segments such as, Standard Commercial Lines and Standard Personal Lines. This uptrend is however, partially offset by a decline in premiums at Excess & Surplus Lines.
Including one-time items, net income of 99 cents per share jumped 41.4% year over year.
Behind Second-Quarter Headlines
Total revenues of $651.9 million rose 6.1% from the year-ago quarter’s figure.
Net investment income gained 24.1% year over year to $37.6 million owing to higher interest rates, lower tax rate as well as active portfolio management and security selection.
Net premiums written climbed 6.7% year over year to $655.2 million. Combined ratio improved 100 basis points (bps) on a year-over-year basis to 93.7%.
Segment Results
Standard Commercial Lines net premiums written was up 7.5 % year over year to $514.9 million on the back of solid renewal pure price improvement, a substantially positive retention and new business growth. Combined ratio improved 80 bps to 91.4% from the prior-year quarter’s level.
Standard Personal Lines net premiums written grew 7.4% year over year to $83.9 million, mainly driven by a strong renewal pure price increase, positive retention and new business strength. Combined ratio improved 1430 bps to 93.7% from the year-ago period’s count.
Excess & Surplus Lines net premiums written dipped 0.7% year over year to $56.4 million due to decline in new business, which reflected a highly competitive marketplace and targeted underwriting actions undertaken to improve profitability. Combined ratio deteriorated 1720 bps to 114.7%. An increase in current-year loss costs together with higher non-catastrophe property loss induced this deterioration.
Financial Update
Selective Insurance exited the second quarter with total assets of $7.7 billion, which inched up 0.3% from the year-ago period’s level.
As of Jun 30, 2018, book value per share was $28.86, down 1.4% year over year.
Annualized return on equity was 14.3% in the reported quarter compared with 9.9% in the prior-year quarter.
Dividend Update
Selective Insurance’s board of directors approved a dividend of 18 cents per share, payable Sep 4 to stockholders of record as of Aug 15, 2018.
2018 Guidance Reiterated
Selective Insurance anticipates delivering a combined ratio (excluding catastrophe loss) of about 92%.
The company projects an after-tax investment income of $150 million, which will include $8 million of after-tax net investment income from alternative investments.
The P&C insurer estimates an overall effective tax rate of nearly 18% including the same of 17% for net investment income, which reflects a tax rate of 5.25% for tax-advantaged municipal bonds and a tax rate of approximately 21% for all other investments.
Weighted average shares outstanding of 59.6 million have been projected.
Zacks Rank
Selective Insurance 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
Among other players from the insurance industry, which have already reported second-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) earnings missed the same.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>