Selective Quarterly Income Down 22 Percent

Selective Quarterly Income Down 22 Percent

NU Online News Service, May 7, 2:47 p.m. EDT?Selective Insurance Group's first-quarter income dropped by 22 percent to $8 million, or 29 cents per share, driven down by catastrophe losses from East Coast storms this past winter.

In the same period last year, the Branchville, N.J.-based insurer had a net profit of $10.3 million, or 39 cents per share.

The company said its first-quarter catastrophe losses, on an after-tax basis, were around $7.7 million, up from the $1.1 million loss figure for 2002 first quarter.

Selective's statutory combined ratio for this year's first quarter also deteriorated, to 104.4 percent from 102.7 percent one year ago. Included in the first-quarter 2003 ratio, Selective added, is 4.4 points of CAT losses, compared with 0.7 points for last year's first quarter.

Gregory E. Murphy, chairman and chief executive officer at Selective, offered a positive forecast for the rest of 2003 despite the decline in the first-quarter earnings on the year-over-year basis.

"Although property results were impacted by extreme weather in January and February, we continue to expect solid premium growth in 2003, building off our strong 2002 performance," Mr. Murphy said.

He added that the 2003 first quarter was the twelfth straight quarter of double-digit price increases. "There is still pricing power in commercial lines, which accounts for over 83 percent of our total premium volume," he said.

Mainly targeting small- and mid-sized businesses and government entities, Selective's commercial policies include workers' compensation, commercial auto, property and liability insurance, while the company's personal lines include homeowners and auto. It also offers flood insurance and managed care services.