Selective plans to introduce 5 new states in the next 2 to 3 years

Selective hosted its Q2’23 earnings call on Aug 3, 2023. Select highlights:

  • Second quarter property casualty industry results impacted by elevated catastrophe losses.
  • Selective well-positioned to navigate uncertain loss trends with strong balance sheet and risk management.
  • Operating ROE at 12.2% in the first half of the year, slightly above the 12% target.
  • Net premiums written growth at 17% in the quarter.
  • Strong written premium growth driven by new business premiums up 33% and renewal premiums with a pure price change of 6.4%.
  • Underlying combined ratio at 90% in the quarter and 90.5% year-to-date, improved by lower non-catastrophe property losses, renewal pure rate benefit, and expense discipline.
  • Strong investment income and profitability maintaining full year combined ratio guidance despite increased catastrophe loss assumption.
  • Pursuing growth opportunities, including increasing agency market share, expanding excess and surplus lines capabilities, transitioning to a mass affluent portfolio in personal lines, and targeted geographic expansion.
  • Adding 8 states to Standard Commercial Lines footprint since 2017, planning to introduce 5 new states over the next 2 to 3 years.
  • Plan to write standard commercial lines in most of the contiguous US.
  • Ability to underwrite at a granular level with sophisticated tools, strong talent, and distribution partner relationships.
  • Consistent achievement of renewal pure rate and increased renewal retention levels.
  • Property renewal pure rate up 11.7% with exposure increase of 5.8%, resulting in 18.2% total renewal premium increase.
  • Commercial auto renewal pure rate at 9.5% with exposure increase of 4.3%, resulting in 14.3% total renewal premium increase.
  • Excess and surplus lines with 20% premium growth and excellent underlying combined ratio.
  • Personal Lines facing challenges with elevated combined ratio driven by catastrophe losses and pressure on personal auto margins.