icon
icon
icon
icon
$300 Off
$300 Off

News /

Articles /

Selective Insurance Group's Q4 2024: Unpacking Contradictions in Reserves, Trends, and Risk Management

Earnings DecryptThursday, Jan 30, 2025 3:17 pm ET
3min read
These are the key contradictions discussed in Selective Insurance Group's latest 2024Q4 earnings call, specifically including: Reserving Methods and Risk Margin, Commercial Auto Reserves, General Liability (GL) Reserve Charges, Reserve Review Process and Assumptions, and Loss Trend Assumptions:

SII Total Revenue YoY, P/E(TTM)...


Operating Results and Reserve Actions:
- Selective Insurance Group reported an operating ROE of 7.1% for 2024, below its target of 12%, and a combined ratio of 103%.
- The company took casualty reserving actions totaling $411 million, with $311 million related to prior accident years.
- The actions were primarily due to elevated severities in recent accident years, particularly in general liability.

Underlying Combined Ratio and Strategic Initiatives:
- The company's underlying combined ratio improved to 89.4% in 2024, a 90 basis point improvement from the previous year.
- Standard Commercial Lines and Excess and Surplus lines both performed in line with 2023 despite reserve actions.
- The improvement was due to significant price increases and underwriting actions in Personal Lines and strategic enhancements in technology.

Investment Performance and Capital Position:
- After-tax net investment income for 2024 was $363 million, contributing 12.8 points of return on equity.
- The company maintained a strong capital position with $3.1 billion of GAAP equity and a debt-to-capital ratio of 14%.
- Investment performance was supported by conservative portfolio positioning and growth in the invested asset base.

2025 Guidance and Strategic Positioning:
- For 2025, Selective expects a GAAP combined ratio of 96% to 97%, including 6 points of catastrophe losses.
- The guidance reflects an expected loss trend of approximately 7% for casualty and 3.5% for property.
- The company is well-positioned to meet its return targets, supported by strategic initiatives and rate response to elevated severity trends.

Comments

Add a public comment...
Post
No Comment Yet
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
You Can Understand News Better with AI.
Whats the News impact on stock market?
Its impact is
fork
logo
AInvest
Aime Coplilot
Invest Smarter With AI Power.
Open App