Selective Insurance Group Net Up 46% In Quarter

Selective Insurance Group Net Up 46% In Quarter

NU Online News Service July 28, 2 :48 p.m. EDT?Branchville, N.J.-based Selective Insurance Group, Inc. reported yesterday that second quarter net income had increased by $9.1 million or 46 percent to $28.9 million as premium increases outpaced loss trends.

The second quarter net increase amounted to 92 cents a share compared with $19.7 million, or 72 cents a share, for the same period last year.

Operating income increased 64 percent, to $28.8million, or 92 cents a share, for the second quarter, compared with $17.6 million or 64 cents a share, for the period last year.

Net premiums written increased 14 percent to $349.3 million compared with the same period last year.

Selective said its combined ratio for the quarter improved more than five points to 95.7, compared with 100.9 in 2003. For the same period, the statutory combined ratio improved to 95 compared with 99.6.

The company said weather-related catastrophe losses accounted for 0.8 points of the statutory combined ratio for the quarter, or $1.7 million after taxes. There were no catastrophe losses in the second quarter of 2003.

Selective Insurance Group Chairman, President and Chief Executive Officer Gregory E. Murphy said in a statement that the results were "driven by ongoing improvements in both our commercial lines and personal lines operations."

"Our strategy to become the market of choice for our agents is producing more profitable business and increasing commercial lines market share throughout our 20-state footprint," he said.

Mr. Murphy added that good relations with agents includes a "high-tech, high-touch" business approach that makes it easy for agents and customers to do business with us. We believe that ongoing advances in our technology and processing capability, coupled with our field-based business model, will continue to accelerate Selective's competitive position in the property and casualty insurance sector."

For the quarter, commercial lines premiums, which represent 83 percent of Selective's business, were up 16 percent; commercial renewal pricing was up 9 percent; retention improved two points to 83 percent from yearend.

The company said commercial lines statutory combined ratio dropped almost four points, to 95.5, compared with second quarter 2003.

"With increases in premiums continuing to outpace loss trends, the outlook for commercial business remains favorable," Mr. Murphy said.

He added that the company's personal lines operation had showed significant improvement for the period. The statutory combined ratio, which includes the flood operation, fell 8.3 points, to 92.2, compared with the same period last year, driven by solid gains in both the automobile and homeowners' lines.

In New Jersey, Mr. Murphy said the company's personal automobile business generated a statutory combined ratio of 93.3 for the quarter, down from 100.6 for the period last year.

He said positive trends also continue in Selective personal lines expansion states.

Revenue for the second quarter increased 15 percent to $382.1 million, compared with second quarter 2003. Revenue at the Company's Diversified Insurance Services was up 12 percent, to $26.4 million, while return on revenue increased to 8.5 percent, compared with 7.6 percent in 2003.

The company reported net income of $56.4 million, or $1.80 per share, for the six months ended June 30. Operating income1 was $52.8 million, or $1.69 per diluted share, for the six-month period. For the comparable period last year, the company reported net income of $27.8 million, or $1.01 per share, and operating income of $23 million, or 84 cents per share.

Selective's board declared a 17 cents a share quarterly cash dividend on its common stock payable Sept. 1, to stockholders of record as of Aug. 16.