Selective Insurance Group reported second quarter net income declined 20 percent compared to the period in 2007, but management called the results solid considering challenging market conditions and above average catastrophe losses.
Net income for the quarter was $28.7 million, compared to $35.9 million during the same period a year ago.
Net premiums dropped from $405 million in 2007 to $387.2 million.
Gregory E. Murphy, Selective chief executive officer, said, "Overall, net premiums written declined four percent in the quarter, as we continued to maintain pricing discipline in the face of significant under-pricing by many competitors, particularly for mid- and large-sized accounts."
Commercial lines net premiums written dropped six percent to $331 million, while personal lines net premiums written rose five percent to $56.2 million.
Mr. Murphy specifically mentioned the company's improvement in the area of workers' compensation.
He said, "Selective's second quarter results were favorably impacted by ongoing improvements to our workers' compensation business that resulted in nearly a four point drop in the workers' compensation statutory combined ratio to 98.6, compared to second quarter 2007."
The company's statutory combined ratio rose to 98.7 for the quarter compared to 97.1 a year ago. Selective chief financial officer Dale Thatcher said that catastrophe losses due to storms in the company's south and mid-west regions affected quarterly results. Out of 16 named storms in the quarter, Mr. Thatcher said, Selective was affected by six.
The company reported catastrophe losses at $8.7 million, compared to $4.7 million a year ago.
Investment income dropped to $30.1 million in the quarter compared to $31.8 million in the second quarter of 2007.
Based on results from the first half of the year, Selective said that it is tightening its 2008 earnings guidance to a range of $2 to $2.20 per diluted share, down from a range of $2 to $2.30.
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