EXHIBIT 99.2
® | ||
Supplemental Investor Package _____________________________________________________________ Fourth Quarter and Full Year 2014 | ||
Investor Contact: Jennifer DiBerardino Senior Vice President, Investor Relations and Treasurer Tel: 973-948-1364 jennifer.diberardino@selective.com |
Selective Insurance Group, Inc. & Consolidated Subsidiaries
Selected Balance Sheet Data
(unaudited)
December 31, | December 31, | |||||||||||||||||||||||
($ in thousands, except per share data) | 2014 | 2013 | ||||||||||||||||||||||
Unrecognized/ | Unrecognized/ | |||||||||||||||||||||||
Balance | Market | Unrealized | Balance | Market | Unrealized | |||||||||||||||||||
Sheet | Value | Gain | Sheet | Value | Gain | |||||||||||||||||||
Invested Assets: | ||||||||||||||||||||||||
Corporate bonds 1 | $ | 2,693,324 | 2,697,332 | 47,437 | $ | 2,595,256 | 2,601,556 | 27,812 | ||||||||||||||||
Government and Municipal bonds | 1,690,935 | 1,702,751 | 59,680 | 1,513,159 | 1,530,961 | 38,106 | ||||||||||||||||||
Total fixed income securities | 4,384,259 | 4,400,083 | 107,117 | 4,108,415 | 4,132,517 | 65,918 | ||||||||||||||||||
Equities | 191,400 | 191,400 | 32,389 | 192,771 | 192,771 | 37,420 | ||||||||||||||||||
Short-term investments | 131,972 | 131,972 | - | 174,251 | 174,251 | - | ||||||||||||||||||
Other investments | 99,203 | 99,203 | - | 107,875 | 107,875 | - | ||||||||||||||||||
Total invested assets | $ | 4,806,834 | 4,822,658 | 139,506 | $ | 4,583,312 | 4,607,414 | 103,338 | ||||||||||||||||
Invested assets per $ of stockholders' equity | 3.77 | 3.97 | ||||||||||||||||||||||
Total assets | 6,581,550 | 6,270,170 | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Reserve for loss and loss expenses | 3,477,870 | 3,349,770 | ||||||||||||||||||||||
Unearned premium reserve | 1,095,819 | 1,059,155 | ||||||||||||||||||||||
Total liabilities | 5,305,964 | 5,116,242 | ||||||||||||||||||||||
Stockholders' equity | 1,275,586 | 1,153,928 | ||||||||||||||||||||||
Total debt to capitalization ratio | 22.9 | % | 25.4 | % | ||||||||||||||||||||
Book value per share | 22.54 | 20.63 | ||||||||||||||||||||||
Book value per share excluding unrealized gain or loss on bond portfolio | 21.49 | 20.15 | ||||||||||||||||||||||
NPW per insurance segment employee | 908 | 908 | ||||||||||||||||||||||
Statutory premiums to surplus ratio | 1.4 | x | 1.4 | x | ||||||||||||||||||||
Statutory surplus | 1,307,842 | 1,256,431 |
1 Includes mortgage-backed and asset-backed securities.
Selective Insurance Group, Inc. & Consolidated Subsidiaries
Selected Income Statement Data
(unaudited)
Quarter Ended December 31, | Year-to-Date December 31, | |||||||||||||||||||||||||||||||||
($ in thousands, except per share amounts) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Per diluted share | Per diluted share | Per diluted share | Per diluted share | |||||||||||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||||||||||
Revenue | $ | 503,583 | $ | 488,034 | $ | 2,034,861 | $ | 1,903,741 | ||||||||||||||||||||||||||
Operating income | 41,603 | 0.72 | 26,120 | 0.45 | 124,538 | 2.17 | 93,939 | 1.65 | ||||||||||||||||||||||||||
Net realized (losses) gains, after tax | (253 | ) | - | (785 | ) | (0.01 | ) | 17,289 | 0.30 | 13,476 | 0.24 | |||||||||||||||||||||||
Income from continuing operations | 41,350 | 0.72 | 25,335 | 0.44 | 141,827 | 2.47 | 107,415 | 1.89 | ||||||||||||||||||||||||||
Loss on discontinued operations, after tax | - | - | - | - | - | - | (997 | ) | (0.02 | ) | ||||||||||||||||||||||||
Net income | 41,350 | 0.72 | 25,335 | 0.44 | 141,827 | 2.47 | 106,418 | 1.87 | ||||||||||||||||||||||||||
Operating return on equity | 13.1 | % | 9.2 | % | 10.3 | % | 8.4 | % | ||||||||||||||||||||||||||
Total Insurance Operations | ||||||||||||||||||||||||||||||||||
Gross premiums written | 512,046 | 491,675 | 2,254,576 | 2,177,443 | ||||||||||||||||||||||||||||||
Net premiums written | 433,586 | 405,110 | 1,885,280 | 1,810,159 | ||||||||||||||||||||||||||||||
Net premiums earned | 469,850 | 451,312 | 1,852,609 | 1,736,072 | ||||||||||||||||||||||||||||||
Underwriting gain | - before tax | 38,637 | 11,971 | 78,143 | 38,766 | |||||||||||||||||||||||||||||
- after tax | 25,114 | 0.44 | 7,781 | 0.14 | 50,793 | 0.89 | 25,198 | 0.44 | ||||||||||||||||||||||||||
GAAP combined ratio | 91.8 | % | 97.3 | % | 95.8 | % | 97.8 | % | ||||||||||||||||||||||||||
Standard Commercial Lines | ||||||||||||||||||||||||||||||||||
Net premiums earned | 359,621 | 345,155 | 1,415,712 | 1,316,619 | ||||||||||||||||||||||||||||||
GAAP combined ratio | 94.1 | % | 97.3 | % | 95.7 | % | 97.4 | % | ||||||||||||||||||||||||||
Standard Personal Lines | ||||||||||||||||||||||||||||||||||
Net premiums earned | 73,008 | 73,034 | 296,747 | 294,332 | ||||||||||||||||||||||||||||||
GAAP combined ratio | 77.5 | % | 94.1 | % | 94.4 | % | 97.1 | % | ||||||||||||||||||||||||||
Excess and Surplus Lines | ||||||||||||||||||||||||||||||||||
Net premiums earned | 37,221 | 33,123 | 140,150 | 125,121 | ||||||||||||||||||||||||||||||
GAAP combined ratio | 97.8 | % | 104.7 | % | 99.7 | % | 103.0 | % | ||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||
Net investment income | - before tax | 32,108 | 35,313 | 138,708 | 134,643 | |||||||||||||||||||||||||||||
- after tax | 24,535 | 0.43 | 26,361 | 0.46 | 104,207 | 1.82 | 101,410 | 1.79 | ||||||||||||||||||||||||||
Effective tax rate | 23.6 | % | 25.4 | % | 24.9 | % | 24.7 | % | ||||||||||||||||||||||||||
Annualized after-tax yield on investment portfolio | 2.2 | % | 2.3 | % | ||||||||||||||||||||||||||||||
Annualized after-tax, after-interest expense yield | 1.9 | % | 1.9 | % | ||||||||||||||||||||||||||||||
Invested assets per $ of stockholders' equity | 3.77 | 3.97 | ||||||||||||||||||||||||||||||||
Other expenses (net of other income) | ||||||||||||||||||||||||||||||||||
Interest expense | - before tax | (5,542 | ) | (5,567 | ) | (22,086 | ) | (22,538 | ) | |||||||||||||||||||||||||
- after tax | (3,602 | ) | (0.06 | ) | (3,619 | ) | (0.06 | ) | (14,356 | ) | (0.25 | ) | (14,650 | ) | (0.26 | ) | ||||||||||||||||||
Other Expense - after tax | $ | (4,444 | ) | (0.09 | ) | $ | (4,403 | ) | (0.09 | ) | $ | (16,106 | ) | (0.29 | ) | $ | (18,019 | ) | (0.32 | ) | ||||||||||||||
Diluted weighted avg shares outstanding | 57,539 | 57,065 | 57,351 | 56,810 |
Selective Insurance Group, Inc. & Consolidated Subsidiaries
GAAP Insurance Operations Results
(unaudited)
Fourth Quarter | ||||||||||||||||||||||||||||||||
($ in thousands) | Quarter Ended December 31, 2014 | Quarter Ended December 31, 2013 | ||||||||||||||||||||||||||||||
Standard Commercial Lines | Standard Personal Lines | Excess & Surplus Lines | Grand Total | Standard Commercial Lines | Standard Personal Lines | Excess & Surplus Lines | Grand Total | |||||||||||||||||||||||||
Net Premiums Written | 321,399 | 67,494 | 44,693 | 433,586 | 300,527 | 69,542 | 35,041 | �� | 405,110 | |||||||||||||||||||||||
Net Premiums Earned | 359,621 | 73,008 | 37,221 | 469,850 | 345,155 | 73,034 | 33,123 | 451,312 | ||||||||||||||||||||||||
Loss and Loss Expense Incurred | 209,495 | 35,155 | 23,578 | 268,228 | 217,035 | 48,728 | 23,215 | 288,978 | ||||||||||||||||||||||||
Net Underwriting Expenses Incurred | 126,510 | 21,412 | 12,824 | 160,746 | 118,004 | 20,021 | 11,457 | 149,482 | ||||||||||||||||||||||||
Dividends to Policyholders | 2,239 | - | - | 2,239 | 881 | - | - | 881 | ||||||||||||||||||||||||
GAAP Underwriting Gain (Loss) | 21,377 | 16,441 | 819 | 38,637 | 9,235 | 4,285 | (1,549 | ) | 11,971 | |||||||||||||||||||||||
GAAP Ratios | ||||||||||||||||||||||||||||||||
Loss and Loss Expense Ratio | 58.3 | % | 48.2 | % | 63.3 | % | 57.1 | % | 62.9 | % | 66.7 | % | 70.1 | % | 64.0 | % | ||||||||||||||||
Underwriting Expense Ratio | 35.2 | % | 29.3 | % | 34.5 | % | 34.2 | % | 34.1 | % | 27.4 | % | 34.6 | % | 33.1 | % | ||||||||||||||||
Dividends to Policyholders Ratio | 0.6 | % | 0.0 | % | 0.0 | % | 0.5 | % | 0.3 | % | 0.0 | % | 0.0 | % | 0.2 | % | ||||||||||||||||
Combined Ratio | 94.1 | % | 77.5 | % | 97.8 | % | 91.8 | % | 97.3 | % | 94.1 | % | 104.7 | % | 97.3 | % | ||||||||||||||||
Year-to-Date | ||||||||||||||||||||||||||||||||
($ in thousands) | Year-to-Date December 31, 2014 | Year-to-Date December 31, 2013 | ||||||||||||||||||||||||||||||
Standard Commercial Lines | Standard Personal Lines | Excess & Surplus Lines | Grand Total | Standard Commercial Lines | Standard Personal Lines | Excess & Surplus Lines | Grand Total | |||||||||||||||||||||||||
Net Premiums Written | 1,441,047 | 292,061 | 152,172 | 1,885,280 | 1,380,740 | 297,757 | 131,662 | 1,810,159 | ||||||||||||||||||||||||
Net Premiums Earned | 1,415,712 | 296,747 | 140,150 | 1,852,609 | 1,316,619 | 294,332 | 125,121 | 1,736,072 | ||||||||||||||||||||||||
Loss and Loss Expense Incurred | 870,018 | 197,182 | 90,301 | 1,157,501 | 831,261 | 206,450 | 84,027 | 1,121,738 | ||||||||||||||||||||||||
Net Underwriting Expenses Incurred | 478,291 | 83,029 | 49,463 | 610,783 | 447,228 | 79,237 | 44,829 | 571,294 | ||||||||||||||||||||||||
Dividends to Policyholders | 6,182 | - | - | 6,182 | 4,274 | - | - | 4,274 | ||||||||||||||||||||||||
GAAP Underwriting Gain (Loss) | 61,221 | 16,536 | 386 | 78,143 | 33,856 | 8,645 | (3,735 | ) | 38,766 | |||||||||||||||||||||||
GAAP Ratios | ||||||||||||||||||||||||||||||||
Loss and Loss Expense Ratio | 61.5 | % | 66.4 | % | 64.4 | % | 62.5 | % | 63.1 | % | 70.1 | % | 67.2 | % | 64.6 | % | ||||||||||||||||
Underwriting Expense Ratio | 33.8 | % | 28.0 | % | 35.3 | % | 33.0 | % | 34.0 | % | 27.0 | % | 35.8 | % | 33.0 | % | ||||||||||||||||
Dividends to Policyholders Ratio | 0.4 | % | 0.0 | % | 0.0 | % | 0.3 | % | 0.3 | % | 0.0 | % | 0.0 | % | 0.2 | % | ||||||||||||||||
Combined Ratio | 95.7 | % | 94.4 | % | 99.7 | % | 95.8 | % | 97.4 | % | 97.1 | % | 103.0 | % | 97.8 | % | ||||||||||||||||
Selective Insurance Group, Inc. and Consolidated Subsidiaries
GAAP Investment Income
December 2014 (unaudited)
Quarter Ended | % | Year-to-Date | % | ||||||||||||||||||||||
December | December | Increase/ | December | December | Increase/ | ||||||||||||||||||||
($ in thousands, except per share data) | 2014 | 2013 | (Decrease) | 2014 | 2013 | (Decrease) | |||||||||||||||||||
Investment Income: | |||||||||||||||||||||||||
Interest: | |||||||||||||||||||||||||
Fixed Income Securities | $ | 30,974 | 30,626 | 1.1 | $ | 126,489 | 121,582 | 4.0 | |||||||||||||||||
Short-term | 18 | 15 | 20.0 | 66 | 117 | (43.6 | ) | ||||||||||||||||||
Other Investments: | |||||||||||||||||||||||||
Alternative Investments | 903 | 5,098 | (82.3 | ) | 13,580 | 15,846 | (14.3 | ) | |||||||||||||||||
Other | - | - | N/M | - | (638 | ) | N/M | ||||||||||||||||||
Dividends | 2,355 | 1,718 | 37.1 | 7,449 | 6,140 | 21.3 | |||||||||||||||||||
34,250 | 37,457 | (8.6 | ) | 147,584 | 143,047 | 3.2 | |||||||||||||||||||
Investment Expense | 2,142 | 2,144 | (0.1 | ) | 8,876 | 8,404 | 5.6 | ||||||||||||||||||
Net Investment Income Before Tax | 32,108 | 35,313 | (9.1 | ) | 138,708 | 134,643 | 3.0 | ||||||||||||||||||
Tax | 7,573 | 8,952 | (15.4 | ) | 34,501 | 33,233 | 3.8 | ||||||||||||||||||
Net Investment Income After Tax | $ | 24,535 | 26,361 | (6.9 | ) | $ | 104,207 | 101,410 | 2.8 | ||||||||||||||||
Net Investment Income per Share | $ | 0.43 | 0.46 | (6.5 | ) | $ | 1.82 | 1.79 | 1.7 | ||||||||||||||||
Effective Tax Rate | 23.6 | % | 25.4 | % | 24.9 | % | 24.7 | % | |||||||||||||||||
Average Yields : | |||||||||||||||||||||||||
Fixed Income Securities: | |||||||||||||||||||||||||
Pre Tax | 2.98 | % | 3.06 | % | |||||||||||||||||||||
After Tax | 2.24 | % | 2.31 | % | |||||||||||||||||||||
Portfolio: | |||||||||||||||||||||||||
Pre Tax | 2.95 | % | 3.02 | % | |||||||||||||||||||||
After Tax | 2.22 | % | 2.28 | % | |||||||||||||||||||||
Quarter Ended: | Year-to-date: | ||||||||||||||||||||||||
December | December | December | December | ||||||||||||||||||||||
Net Realized Gains (Losses) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Fixed Income Securities | 82 | 831 | 1,528 | 3,019 | |||||||||||||||||||||
Equity Securities | 109 | (1,919 | ) | 25,650 | 20,620 | ||||||||||||||||||||
Other Investments | (580 | ) | (120 | ) | (579 | ) | (2,907 | ) | |||||||||||||||||
Total | (389 | ) | (1,208 | ) | 26,599 | 20,732 | |||||||||||||||||||
Net of Tax | (253 | ) | (785 | ) | 17,289 | 13,476 |
As of December 31, 2014 year-to-date new money rates for fixed income securities were 2.5% on a pre-tax basis and 2.0% on an after tax-basis.
Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
2014 Statutory Results by Line of Business
Quarter Ended December 2014 (unaudited)
Net | Net | Underwriting | Dividends to | |||||||||||||||||||||||||||||||||||||||||
Premiums | Percent | Premiums | Percent | Loss | LAE | Expense | Policyholders | Combined Ratio | Combined Ratio | Underwriting | ||||||||||||||||||||||||||||||||||
($ in thousands) | Written | Change | Earned | Change | Ratio | Ratio | Ratio | Ratio | 2014 | 2013 | Gain/(Loss) | |||||||||||||||||||||||||||||||||
Standard Personal Lines: | ||||||||||||||||||||||||||||||||||||||||||||
Homeowners | $ | 31,787 | (0.9 | )% | $ | 33,442 | 2.0 | % | 12.2 | % | 7.9 | % | 35.3 | % | 0.0 | % | 55.3 | % | 85.1 | % | $ | 15,528 | ||||||||||||||||||||||
Auto | 34,198 | (2.6 | )% | 37,374 | (1.5 | )% | 65.7 | % | 5.9 | % | 33.2 | % | 0.0 | % | 104.8 | % | 115.1 | % | (730 | ) | ||||||||||||||||||||||||
Other (including flood) | 1,510 | (59.3 | )% | 2,192 | (40.5 | )% | 52.9 | % | 6.0 | % | (124.5 | )% | 0.0 | % | (65.6 | )% | (19.5 | )% | 2,780 | |||||||||||||||||||||||||
Total | $ | 67,494 | (4.8 | )% | $ | 73,008 | (1.9 | )% | 40.8 | % | 6.8 | % | 30.6 | % | 0.0 | % | 78.2 | % | 94.9 | % | $ | 17,578 | ||||||||||||||||||||||
Standard Commercial Lines: | ||||||||||||||||||||||||||||||||||||||||||||
Commerical property | $ | 55,436 | 8.6 | % | $ | 62,076 | 5.1 | % | 31.4 | % | 4.9 | % | 41.5 | % | 0.3 | % | 78.1 | % | 82.7 | % | $ | 16,361 | ||||||||||||||||||||||
Workers compensation | 62,209 | (0.8 | )% | 69,448 | (1.0 | )% | 64.9 | % | 13.2 | % | 31.2 | % | 2.7 | % | 112.1 | % | 127.3 | % | (6,168 | ) | ||||||||||||||||||||||||
General liability | 98,183 | 8.2 | % | 113,635 | 6.3 | % | 31.9 | % | 20.6 | % | 38.2 | % | 0.0 | % | 90.7 | % | 98.5 | % | 16,506 | |||||||||||||||||||||||||
Auto | 74,792 | 9.9 | % | 84,086 | 4.1 | % | 60.4 | % | 8.1 | % | 35.7 | % | 0.2 | % | 104.4 | % | 96.4 | % | (353 | ) | ||||||||||||||||||||||||
Business owners policies | 23,244 | 7.9 | % | 21,991 | 8.3 | % | 58.7 | % | 1.3 | % | 38.2 | % | 0.0 | % | 98.2 | % | 90.0 | % | (92 | ) | ||||||||||||||||||||||||
Bonds | 4,387 | 21.1 | % | 5,007 | 5.3 | % | 16.1 | % | 5.2 | % | 71.5 | % | 0.0 | % | 92.8 | % | 100.4 | % | 802 | |||||||||||||||||||||||||
Other | 3,149 | 10.2 | % | 3,378 | 7.3 | % | 3.0 | % | 0.4 | % | 55.4 | % | 0.0 | % | 58.8 | % | 54.6 | % | 1,517 | |||||||||||||||||||||||||
Total | $ | 321,399 | 6.9 | % | $ | 359,621 | 4.2 | % | 46.0 | % | 12.0 | % | 37.4 | % | 0.6 | % | 96.0 | % | 100.2 | % | $ | 28,573 | ||||||||||||||||||||||
E&S | $ | 44,693 | 27.5 | % | $ | 37,221 | 12.4 | % | 15.6 | % | 48.1 | % | 32.9 | % | 0.0 | % | 96.6 | % | 105.6 | % | $ | (1,207 | ) | |||||||||||||||||||||
Total Insurance Operations | $ | 433,586 | 6.7 | % | $ | 469,850 | 3.8 | % | 42.8 | % | 14.0 | % | 35.9 | % | 0.5 | % | 93.2 | % | 99.6 | % | $ | 44,943 | ||||||||||||||||||||||
Note: Some amounts may not foot due to rounding. | ||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||
Losses Paid | $ | 210,724 | $ | 204,847 | ||||||||||||||||||||||||||||||||||||||||
LAE Paid | 48,313 | 51,322 | ||||||||||||||||||||||||||||||||||||||||||
Total Paid | $ | 259,037 | $ | 256,169 |
Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
2014 Statutory Results by Line of Business
Year-to-date December 2014 (unaudited)
Net | Net | Underwriting | Dividends to | |||||||||||||||||||||||||||||||||||||||||
Premiums | Percent | Premiums | Percent | Loss | LAE | Expense | Policyholders | Combined Ratio | Combined Ratio | Underwriting | ||||||||||||||||||||||||||||||||||
($ in thousands) | Written | Change | Earned | Change | Ratio | Ratio | Ratio | Ratio | 2014 | 2013 | Gain/(Loss) | |||||||||||||||||||||||||||||||||
Standard Personal Lines: | ||||||||||||||||||||||||||||||||||||||||||||
Homeowners | $ | 135,825 | 2.7 | % | $ | 134,273 | 4.9 | % | 55.5 | % | 7.9 | % | 33.5 | % | 0.0 | % | 96.9 | % | 95.0 | % | $ | 3,576 | ||||||||||||||||||||||
Auto | 149,093 | (2.3 | )% | 151,317 | (1.3 | )% | 61.3 | % | 8.5 | % | 31.7 | % | 0.0 | % | 101.5 | % | 110.1 | % | (1,632 | ) | ||||||||||||||||||||||||
Other (including flood) | 7,143 | (49.9 | )% | 11,157 | (22.2 | )% | 55.5 | % | (1.0 | )% | (149.0 | )% | 0.0 | % | (94.5 | )% | (29.9 | )% | 15,730 | |||||||||||||||||||||||||
Total | $ | 292,061 | (2.4 | )% | $ | 296,747 | 0.4 | % | 58.4 | % | 7.9 | % | 28.2 | % | 0.0 | % | 94.5 | % | 96.9 | % | $ | 17,675 | ||||||||||||||||||||||
Standard Commercial Lines: | ||||||||||||||||||||||||||||||||||||||||||||
Commerical property | $ | 253,625 | 6.8 | % | $ | 244,792 | 9.1 | % | 55.0 | % | 5.2 | % | 37.0 | % | 0.1 | % | 97.3 | % | 78.9 | % | $ | 3,366 | ||||||||||||||||||||||
Workers compensation | 269,130 | (2.9 | )% | 274,585 | 2.6 | % | 64.8 | % | 15.1 | % | 28.2 | % | 2.0 | % | 110.1 | % | 120.6 | % | (26,294 | ) | ||||||||||||||||||||||||
General liability | 453,594 | 6.4 | % | 444,938 | 9.8 | % | 31.8 | % | 17.9 | % | 34.2 | % | 0.0 | % | 83.9 | % | 96.2 | % | 68,739 | |||||||||||||||||||||||||
Auto | 341,926 | 4.9 | % | 333,310 | 7.2 | % | 56.3 | % | 7.8 | % | 32.0 | % | 0.1 | % | 96.2 | % | 96.4 | % | 9,758 | |||||||||||||||||||||||||
Business owners policies | 89,248 | 8.6 | % | 85,788 | 11.3 | % | 63.5 | % | 8.1 | % | 37.1 | % | 0.0 | % | 108.7 | % | 86.6 | % | (8,792 | ) | ||||||||||||||||||||||||
Bonds | 19,928 | 3.9 | % | 19,288 | 1.5 | % | 16.3 | % | 6.0 | % | 62.6 | % | 0.0 | % | 84.9 | % | 83.5 | % | 2,514 | |||||||||||||||||||||||||
Other | 13,597 | 8.3 | % | 13,011 | 6.8 | % | 0.6 | % | 0.3 | % | 51.0 | % | 0.0 | % | 51.9 | % | 48.5 | % | 5,959 | |||||||||||||||||||||||||
Total | $ | 1,441,047 | 4.4 | % | $ | 1,415,712 | 7.5 | % | 49.4 | % | 11.9 | % | 33.8 | % | 0.4 | % | 95.5 | % | 97.1 | % | $ | 55,250 | ||||||||||||||||||||||
E&S | $ | 152,172 | 15.6 | % | $ | 140,150 | 12.0 | % | 40.8 | % | 23.7 | % | 34.7 | % | 0.0 | % | 99.2 | % | 102.9 | % | $ | (3,105 | ) | |||||||||||||||||||||
Total Insurance Operations | $ | 1,885,280 | 4.1 | % | $ | 1,852,609 | 6.6 | % | 50.2 | % | 12.2 | % | 33.0 | % | 0.3 | % | 95.7 | % | 97.5 | % | $ | 69,818 | ||||||||||||||||||||||
Note: Some amounts may not foot due to rounding. | ||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||||||||||||||
Losses Paid | $ | 873,159 | $ | 793,495 | ||||||||||||||||||||||||||||||||||||||||
LAE Paid | 187,491 | 184,870 | ||||||||||||||||||||||||||||||||||||||||||
Total Paid | $ | 1,060,650 | $ | 978,365 |
Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
2014 Net Catastrophe Losses and Prior Year Casualty Reserve Development
Statutory Results by Line of Business
(unaudited)
Quarter Ended | Year-to-Date | |||||||||||||||||||||||||||||||
Net Catastrophe Losses Incurred | December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||
($ in thousands) | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | ||||||||||||||||||||||||
Standard Personal Lines | $ | (3,334 | ) | (4.6 | )% | $ | 2,668 | 3.6 | % | $ | 19,284 | 6.5 | % | $ | 19,807 | 6.7 | % | |||||||||||||||
Standard Commercial Lines | $ | (4,065 | ) | (1.1 | )% | $ | 10,882 | 3.2 | % | $ | 37,881 | 2.7 | % | $ | 23,010 | 1.7 | % | |||||||||||||||
E&S | $ | 420 | 1.1 | % | $ | 755 | 2.3 | % | $ | 2,805 | 2.0 | % | $ | 4,598 | 3.7 | % | ||||||||||||||||
Total Insurance Operations | $ | (6,979 | ) | (1.5 | )% | $ | 14,305 | 3.2 | % | $ | 59,971 | 3.2 | % | $ | 47,415 | 2.7 | % | |||||||||||||||
Prior Year Casualty Reserve Development | Quarter Ended | Year-to-Date | ||||||||||||||||||||||||||||||
(Favorable) / Unfavorable | December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||
($ in thousands) | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | Loss and Loss Expense Incurred | Impact on Loss and Loss Expense Ratio | ||||||||||||||||||||||||
Standard Personal Lines | $ | (3,000 | ) | (4.1 | )% | $ | (2,000 | ) | (2.7 | )% | $ | (9,000 | ) | (3.0 | )% | $ | (5,500 | ) | (1.9 | )% | ||||||||||||
Standard Commercial Lines | $ | (8,000 | ) | (2.2 | )% | $ | (5,500 | ) | (1.6 | )% | $ | (45,500 | ) | (3.2 | )% | $ | (11,500 | ) | (0.9 | )% | ||||||||||||
E&S | $ | 2,000 | 5.4 | % | $ | - | 0.0 | % | $ | 6,000 | 4.3 | % | $ | 2,500 | 2.0 | % | ||||||||||||||||
Total Insurance Operations | $ | (9,000 | ) | (1.9 | )% | $ | (7,500 | ) | (1.7 | )% | $ | (48,500 | ) | (2.6 | )% | $ | (14,500 | ) | (0.8 | )% |
Note: Some amounts may not foot due to rounding.
Selective Insurance Group, Inc. & Consolidated Subsidiaries | ||||||||
Consolidated Balance Sheets | ||||||||
December 31, | Unaudited | |||||||
($ in thousands, except share amounts) | 2014 | 2013 | ||||||
ASSETS | ||||||||
Investments: | ||||||||
Fixed income securities, held-to-maturity – at carrying value (fair value: $333,961 – 2014; $416,981 – 2013) | $ | 318,137 | 392,879 | |||||
Fixed income securities, available-for-sale – at fair value (amortized cost: $3,975,786 – 2014; $3,675,977 – 2013) | 4,066,122 | 3,715,536 | ||||||
Equity securities, available-for-sale – at fair value (cost: $159,011 – 2014; $155,350 – 2013) | 191,400 | 192,771 | ||||||
Short-term investments (at cost which approximates fair value) | 131,972 | 174,251 | ||||||
Other investments | 99,203 | 107,875 | ||||||
Total investments | 4,806,834 | 4,583,312 | ||||||
Cash | 23,959 | 193 | ||||||
Interest and dividends due or accrued | 38,901 | 37,382 | ||||||
Premiums receivable, net of allowance for uncollectible accounts of: $4,137 – 2014; $4,442 – 2013 | 558,778 | 524,870 | ||||||
Reinsurance recoverable, net | 581,548 | 550,897 | ||||||
Prepaid reinsurance premiums | 146,993 | 143,000 | ||||||
Current federal income tax | — | 512 | ||||||
Deferred federal income tax | 98,449 | 122,613 | ||||||
Property and equipment – at cost, net of accumulated depreciation and amortization of: $172,183 – 2014; $179,192 – 2013 | 59,416 | 50,834 | ||||||
Deferred policy acquisition costs | 185,608 | 172,981 | ||||||
Goodwill | 7,849 | 7,849 | ||||||
Other assets | 73,215 | 75,727 | ||||||
Total assets | $ | 6,581,550 | 6,270,170 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Liabilities: | ||||||||
Reserve for loss and loss expenses | $ | 3,477,870 | 3,349,770 | |||||
Unearned premiums | 1,095,819 | 1,059,155 | ||||||
Notes payable | 379,297 | 392,414 | ||||||
Current federal income tax | 3,921 | — | ||||||
Accrued salaries and benefits | 158,382 | 111,427 | ||||||
Other liabilities | 190,675 | 203,476 | ||||||
Total liabilities | $ | 5,305,964 | 5,116,242 | |||||
Stockholders’ Equity: | ||||||||
Preferred stock of $0 par value per share: | ||||||||
Authorized shares 5,000,000; no shares issued or outstanding | $ | — | — | |||||
Common stock of $2 par value per share: | ||||||||
Authorized shares: 360,000,000 | ||||||||
Issued: 99,947,933 – 2014; 99,120,235 – 2013 | 199,896 | 198,240 | ||||||
Additional paid-in capital | 305,385 | 288,182 | ||||||
Retained earnings | 1,313,440 | 1,202,015 | ||||||
Accumulated other comprehensive income | 19,788 | 24,851 | ||||||
Treasury stock – at cost (shares: 43,353,181– 2014; 43,198,622 – 2013) | (562,923 | ) | (559,360 | ) | ||||
Total stockholders’ equity | 1,275,586 | 1,153,928 | ||||||
Commitments and contingencies | ||||||||
Total liabilities and stockholders’ equity | $ | 6,581,550 | 6,270,170 |
Selective Insurance Group, Inc. & Consolidated Subsidiaries Consolidated Statements of Income | ||||||||||||||||
Unaudited Quarter Ended December 31, | Year Ended December 31, | |||||||||||||||
Unaudited | ||||||||||||||||
($ in thousands, except per share amounts) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues: | ||||||||||||||||
Net premiums earned | $ | 469,850 | 451,312 | 1,852,609 | 1,736,072 | |||||||||||
Net investment income earned | 32,108 | 35,313 | 138,708 | 134,643 | ||||||||||||
Net realized gains: | ||||||||||||||||
Net realized investment gains | 9,333 | 1,251 | 37,703 | 26,375 | ||||||||||||
Other-than-temporary impairments | (9,722 | ) | (2,459 | ) | (11,104 | ) | (5,566 | ) | ||||||||
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income | — | — | — | (77 | ) | |||||||||||
Total net realized (losses) gains | (389 | ) | (1,208 | ) | 26,599 | 20,732 | ||||||||||
Other income | 2,014 | 2,617 | 16,945 | 12,294 | ||||||||||||
Total revenues | $ | 503,583 | 488,034 | 2,034,861 | 1,903,741 | |||||||||||
Expenses: | ||||||||||||||||
Loss and loss expenses incurred | 268,228 | 288,978 | 1,157,501 | 1,121,738 | ||||||||||||
Policy acquisition costs | 161,930 | 151,407 | 624,470 | 579,977 | ||||||||||||
Interest expense | 5,542 | 5,567 | 22,086 | 22,538 | ||||||||||||
Other expenses | 10,683 | 7,834 | 33,673 | 35,686 | ||||||||||||
Total expenses | $ | 446,383 | 453,786 | 1,837,730 | 1,759,939 | |||||||||||
Income from continuing operations, before federal income tax | $ | 57,200 | 34,248 | 197,131 | 143,802 | |||||||||||
Federal income tax expense: | ||||||||||||||||
Current | $ | 5,723 | 4,106 | 28,415 | 24,147 | |||||||||||
Deferred | 10,127 | 4,807 | 26,889 | 12,240 | ||||||||||||
Total federal income tax expense | 15,850 | 8,913 | 55,304 | 36,387 | ||||||||||||
Net income from continuing operations | $ | 41,350 | 25,335 | 141,827 | 107,415 | |||||||||||
Loss on disposal of discontinued operations, net of tax of $(538) - 2013 | — | — | — | (997 | ) | |||||||||||
Net income | $ | 41,350 | 25,335 | 141,827 | 106,418 | |||||||||||
Earnings per share: | ||||||||||||||||
Basic net income from continuing operations | $ | 0.73 | 0.45 | 2.52 | 1.93 | |||||||||||
Basic net loss from discontinued operations | — | — | — | (0.02 | ) | |||||||||||
Basic net income | $ | 0.73 | 0.45 | 2.52 | 1.91 | |||||||||||
Diluted net income from continuing operations | $ | 0.72 | 0.44 | 2.47 | 1.89 | |||||||||||
Diluted net loss from discontinued operations | — | — | — | (0.02 | ) | |||||||||||
Diluted net income | $ | 0.72 | 0.44 | 2.47 | 1.87 | |||||||||||
Dividends to stockholders | $ | 0.14 | 0.13 | 0.53 | 0.52 |
Selective Insurance Group, Inc. & Consolidated Subsidiaries | ||||||||||||
Consolidated Statements of Comprehensive Income | ||||||||||||
December 31, | Unaudited | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | |||||||||
Net income | $ | 141,827 | 106,418 | 37,963 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||
Unrealized gains (losses) on investment securities: | ||||||||||||
Unrealized holding gains (losses) arising during period | 47,411 | (54,557 | ) | 30,937 | ||||||||
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income | — | 50 | 1,660 | |||||||||
Amount reclassified into net income: | ||||||||||||
Held-to-maturity securities | (844 | ) | (1,025 | ) | (1,581 | ) | ||||||
Non-credit other-than-temporary impairments | 1,085 | 9 | 182 | |||||||||
Realized gains on available for sale securities | (18,762 | ) | (15,301 | ) | (6,118 | ) | ||||||
Total unrealized gains (losses) on investment securities | 28,890 | (70,824 | ) | 25,080 | ||||||||
Defined benefit pension and post-retirement plans: | ||||||||||||
Net actuarial (loss) gain | (35,189 | ) | 38,775 | (17,268 | ) | |||||||
Amounts reclassified into net income: | ||||||||||||
Net actuarial loss | 1,236 | 2,843 | 3,837 | |||||||||
Prior service cost | — | 6 | 97 | |||||||||
Curtailment expense | — | 11 | — | |||||||||
Total defined benefit pension and post-retirement plans | (33,953 | ) | 41,635 | (13,334 | ) | |||||||
Other comprehensive (loss) income | (5,063 | ) | (29,189 | ) | 11,746 | |||||||
Comprehensive income | $ | 136,764 | 77,229 | 49,709 |
Selective Insurance Group, Inc. & Consolidated Subsidiaries | ||||||||||||
Consolidated Statements of Stockholders’ Equity | ||||||||||||
December 31, | Unaudited | |||||||||||
($ in thousands, except share amounts) | 2014 | 2013 | 2012 | |||||||||
Common stock: | ||||||||||||
Beginning of year | $ | 198,240 | 196,388 | 194,494 | ||||||||
Dividend reinvestment plan (shares: 58,309 – 2014; 63,349 – 2013; 90,110 – 2012) | 117 | 127 | 180 | |||||||||
Stock purchase and compensation plans (shares: 769,389 – 2014; 862,662 – 2013; 857,403 – 2012) | 1,539 | 1,725 | 1,714 | |||||||||
End of year | 199,896 | 198,240 | 196,388 | |||||||||
Additional paid-in capital: | ||||||||||||
Beginning of year | 288,182 | 270,654 | 257,370 | |||||||||
Dividend reinvestment plan | 1,306 | 1,396 | 1,419 | |||||||||
Stock purchase and compensation plans | 15,897 | 16,132 | 11,865 | |||||||||
End of year | 305,385 | 288,182 | 270,654 | |||||||||
Retained earnings: | ||||||||||||
Beginning of year | 1,202,015 | 1,125,154 | 1,116,319 | |||||||||
Net income | 141,827 | 106,418 | 37,963 | |||||||||
Dividends to stockholders ($0.53 per share – 2014; $0.52 per share – 2013 and 2012) | (30,402 | ) | (29,557 | ) | (29,128 | ) | ||||||
End of year | 1,313,440 | 1,202,015 | 1,125,154 | |||||||||
Accumulated other comprehensive income: | ||||||||||||
Beginning of year | 24,851 | 54,040 | 42,294 | |||||||||
Other comprehensive (loss) income | (5,063 | ) | (29,189 | ) | 11,746 | |||||||
End of year | 19,788 | 24,851 | 54,040 | |||||||||
Treasury stock: | ||||||||||||
Beginning of year | (559,360 | ) | (555,644 | ) | (552,149 | ) | ||||||
Acquisition of treasury stock (shares: 154,559 – 2014; 167,846 – 2013; 194,575 – 2012) | (3,563 | ) | (3,716 | ) | (3,495 | ) | ||||||
End of year | (562,923 | ) | (559,360 | ) | (555,644 | ) | ||||||
Total stockholders’ equity | $ | 1,275,586 | 1,153,928 | 1,090,592 |
Selective Insurance Group, Inc. | ||||||||||||
Consolidated Statements of Cash Flow | ||||||||||||
December 31, | Unaudited | |||||||||||
($ in thousands) | 2014 | 2013 | 2012 | |||||||||
Operating Activities: | ||||||||||||
Net Income | $ | 141,827 | 106,418 | 37,963 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 45,346 | 43,461 | 38,963 | |||||||||
Sale of renewal rights | (8,000 | ) | — | — | ||||||||
Loss on disposal of discontinued operations | — | 997 | — | |||||||||
Stock-based compensation expense | 8,702 | 8,630 | 6,939 | |||||||||
Undistributed (income) losses of equity method investments | (153 | ) | 202 | 1,651 | ||||||||
Net realized gains | (26,599 | ) | (20,732 | ) | (8,988 | ) | ||||||
Net gain on disposal of property and equipment | (104 | ) | — | — | ||||||||
Retirement income plan curtailment expense | — | 16 | — | |||||||||
Changes in assets and liabilities: | ||||||||||||
Increase in reserves for loss and loss expenses, net of reinsurance recoverables | 97,449 | 151,037 | 64,763 | |||||||||
Increase in unearned premiums, net of prepaid reinsurance | 32,671 | 74,086 | 82,764 | |||||||||
Decrease (increase) in net federal income taxes | 31,323 | 14,834 | (7,812 | ) | ||||||||
Increase in premiums receivable | (33,908 | ) | (40,482 | ) | (18,094 | ) | ||||||
Increase in deferred policy acquisition costs | (12,627 | ) | (17,458 | ) | (19,762 | ) | ||||||
(Increase) decrease in interest and dividends due or accrued | (1,536 | ) | (1,372 | ) | 468 | |||||||
(Decrease) increase in accrued salaries and benefits | (7,182 | ) | 18,685 | 6,533 | ||||||||
(Decrease) increase in accrued insurance expenses | (956 | ) | 14,444 | 8,831 | ||||||||
(Decrease) increase in other assets and other liabilities | (33,490 | ) | (16,642 | ) | 32,750 | |||||||
Net adjustments | 90,936 | 229,706 | 188,736 | |||||||||
Net cash provided by operating activities | 232,763 | 336,124 | 226,699 | |||||||||
Investing Activities: | ||||||||||||
Purchase of fixed income securities, available-for-sale | (843,616 | ) | (1,069,387 | ) | (884,911 | ) | ||||||
Purchase of equity securities, available-for-sale | (186,019 | ) | (118,072 | ) | (83,833 | ) | ||||||
Purchase of other investments | (10,617 | ) | (9,332 | ) | (12,990 | ) | ||||||
Purchase of short-term investments | (1,410,123 | ) | (2,056,576 | ) | (1,735,691 | ) | ||||||
Purchase of subsidiary, net of cash acquired | — | — | 255 | |||||||||
Sale of subsidiary | — | 1,225 | 751 | |||||||||
Sale of fixed maturity securities, available-for-sale | 51,002 | 20,126 | 103,572 | |||||||||
Sale of short-term investments | 1,452,402 | 2,096,805 | 1,738,255 | |||||||||
Redemption and maturities of fixed income securities, held-to-maturity | 73,415 | 116,584 | 118,260 | |||||||||
Redemption and maturities of fixed income securities, available-for-sale | 482,816 | 513,804 | 439,957 | |||||||||
Sale of equity securities, available-for-sale | 208,008 | 115,782 | 101,740 | |||||||||
Distributions from other investments | 20,774 | 12,039 | 24,801 | |||||||||
Sale of other investments | — | — | 1 | |||||||||
Purchase of property and equipment | (15,510 | ) | (14,023 | ) | (12,879 | ) | ||||||
Sale of renewal rights | 8,000 | — | — | |||||||||
Net cash used in investing activities | (169,468 | ) | (391,025 | ) | (202,712 | ) | ||||||
Financing Activities: | ||||||||||||
Dividends to stockholders | (28,428 | ) | (27,416 | ) | (26,944 | ) | ||||||
Acquisition of treasury stock | (3,563 | ) | (3,716 | ) | (3,495 | ) | ||||||
Net proceeds from stock purchase and compensation plans | 7,283 | 7,119 | 4,840 | |||||||||
Proceeds from issuance of notes payable, net of debt issuance costs | — | 178,435 | — | |||||||||
Repayment of borrowings | (13,000 | ) | — | — | ||||||||
Repayment of notes payable | — | (100,000 | ) | — | ||||||||
Excess tax benefits from share-based payment arrangements | 1,020 | 1,545 | 1,060 | |||||||||
Repayment of capital lease obligations | (2,841 | ) | (1,083 | ) | — | |||||||
Net cash (used in) provided by financing activities | (39,529 | ) | 54,884 | (24,539 | ) | |||||||
Net increase (decrease) in cash | 23,766 | (17 | ) | (552 | ) | |||||||
Cash, beginning of year | 193 | 210 | 762 | |||||||||
Cash, end of year | $ | 23,959 | 193 | 210 |
Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
Statutory Balance Sheets
(unaudited)
December 31, | December 31, | |||||||
($ in thousands) | 2014 | 2013 | ||||||
ASSETS | ||||||||
Bonds | $ | 4,241,580 | 4,010,464 | |||||
Common stocks | 191,400 | 192,771 | ||||||
Affiliated mortgage loan | 35,961 | 36,721 | ||||||
Other investments | 152,154 | 173,856 | ||||||
Short-term investments | 115,342 | 158,827 | ||||||
Total investments | 4,736,437 | 4,572,639 | ||||||
Cash on hand and in banks | 12,381 | (31,186 | ) | |||||
Interest and dividends due and accrued | 38,908 | 37,267 | ||||||
Premiums receivable | 556,086 | 522,907 | ||||||
Reinsurance recoverable on paid losses and expenses | 9,570 | 10,059 | ||||||
Deferred tax recoverable | 147,610 | 154,320 | ||||||
EDP equipment | 518 | 913 | ||||||
Equities and deposits in pools and associations | 9,915 | 9,555 | ||||||
Receivable for sold securities | 34 | 7 | ||||||
Other assets | 26,629 | 30,671 | ||||||
Total assets | $ | 5,538,088 | 5,307,152 | |||||
LIABILITIES | ||||||||
Reserve for losses | $ | 2,398,531 | 2,341,476 | |||||
Reinsurance payable on paid loss and loss expense | 2,957 | 2,557 | ||||||
Reserve for loss expenses | 493,510 | 455,983 | ||||||
Unearned premiums | 948,826 | 916,155 | ||||||
Reserve for commissions payable | 70,259 | 63,482 | ||||||
Ceded balances payable | 29,624 | 33,721 | ||||||
Federal income tax payable | 20,524 | 27,749 | ||||||
Premium and other taxes payable | 20,137 | 27,870 | ||||||
Borrowed money | 45,027 | 58,044 | ||||||
Reserve for dividends to policyholders | 3,895 | 2,070 | ||||||
Reserves for unauthorized reinsurance | 7,661 | 2,735 | ||||||
Payable for securities | 19,950 | - | ||||||
Funds withheld on account of others | 7,473 | 6,623 | ||||||
Accrued salaries and benefits | 64,207 | 65,053 | ||||||
Other liabilities | 97,665 | 47,203 | ||||||
Total liabilities | 4,230,246 | 4,050,721 | ||||||
POLICYHOLDERS' SURPLUS | ||||||||
Capital | 42,725 | 42,725 | ||||||
Paid in surplus | 492,869 | 492,869 | ||||||
Unassigned surplus | 772,248 | 720,837 | ||||||
Total policyholders' surplus | 1,307,842 | 1,256,431 | ||||||
Total liabilities and policyholders' surplus | $ | 5,538,088 | 5,307,152 |
Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
Statutory Statements Of Income
(unaudited)
Quarter Ended | Year-to-Date | |||||||||||||||||||||||||||||||
December | December | |||||||||||||||||||||||||||||||
($ in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
UNDERWRITING | ||||||||||||||||||||||||||||||||
Net premiums written | $ | 433,586 | 406,475 | 1,885,280 | 1,811,524 | |||||||||||||||||||||||||||
Net premiums earned | 469,850 | 452,677 | 1,852,609 | 1,737,437 | ||||||||||||||||||||||||||||
Net losses paid | 210,724 | 204,847 | 873,159 | 793,495 | ||||||||||||||||||||||||||||
Change in reserve for losses | (9,756 | ) | 24,515 | 57,055 | 114,618 | |||||||||||||||||||||||||||
Net losses incurred | 200,968 | 42.8 | % | 229,362 | 50.7 | % | 930,214 | 50.2 | % | 908,113 | 52.2 | % | ||||||||||||||||||||
Net loss expenses paid | 48,313 | 51,322 | 187,491 | 184,870 | ||||||||||||||||||||||||||||
Change in reserve for loss expenses | 17,577 | 8,145 | 37,526 | 28,423 | ||||||||||||||||||||||||||||
Net loss expenses incurred | 65,890 | 14.0 | % | 59,467 | 13.1 | % | 225,017 | 12.2 | % | 213,293 | 12.3 | % | ||||||||||||||||||||
Net underwriting expenses incurred | 157,373 | 36.2 | % | 146,967 | 36.1 | % | 635,760 | 33.7 | % | 602,698 | 33.3 | % | ||||||||||||||||||||
Total deductions | 424,231 | 435,796 | 1,790,991 | 1,724,104 | ||||||||||||||||||||||||||||
Statutory underwriting gain | 45,619 | 16,881 | 61,618 | 13,333 | ||||||||||||||||||||||||||||
Net loss from premium balances charged off | (54 | ) | (676 | ) | (2,822 | ) | (2,697 | ) | ||||||||||||||||||||||||
Finance charges and other income | 1,617 | 2,834 | 17,204 | 13,078 | ||||||||||||||||||||||||||||
Total other income | 1,563 | -0.3 | % | 2,158 | -0.5 | % | 14,382 | -0.7 | % | 10,381 | -0.5 | % | ||||||||||||||||||||
Policyholders' dividends incurred | (2,239 | ) | 0.5 | % | (882 | ) | 0.2 | % | (6,182 | ) | 0.3 | % | (4,275 | ) | 0.2 | % | ||||||||||||||||
Total underwriting gain | 44,943 | 93.2 | % | 18,157 | 99.6 | % | 69,818 | 95.7 | % | 19,439 | 97.5 | % | ||||||||||||||||||||
INVESTMENT | ||||||||||||||||||||||||||||||||
Net investment income earned | 31,745 | 35,246 | 137,670 | 134,866 | ||||||||||||||||||||||||||||
Net realized gain (loss) | (389 | ) | (5,200 | ) | 26,594 | 14,593 | ||||||||||||||||||||||||||
Total income before income tax | 76,299 | 48,203 | 234,082 | 168,898 | ||||||||||||||||||||||||||||
Federal income tax expense | 11,775 | 3,773 | 43,827 | 46,710 | ||||||||||||||||||||||||||||
Net income | $ | 64,524 | 44,430 | 190,255 | 122,188 | |||||||||||||||||||||||||||
Policyholders' Surplus | ||||||||||||||||||||||||||||||||
Surplus, beginning of period | $ | 1,323,097 | 1,194,797 | 1,256,431 | 1,050,107 | |||||||||||||||||||||||||||
Net income | 64,524 | 44,430 | 190,255 | 122,188 | ||||||||||||||||||||||||||||
Change in deferred taxes | 8,146 | (11,861 | ) | (2,016 | ) | (5,657 | ) | |||||||||||||||||||||||||
Change in net unrealized capital (losses) / gains | 693 | 12,759 | (3,721 | ) | 16,434 | |||||||||||||||||||||||||||
Dividends to stockholders | (14,378 | ) | (6,685 | ) | (57,511 | ) | (32,129 | ) | ||||||||||||||||||||||||
Paid in surplus | - | - | - | 57,125 | ||||||||||||||||||||||||||||
Change in reserve for unauthorized | (4,927 | ) | 4,764 | (4,927 | ) | 4,764 | ||||||||||||||||||||||||||
Change in non-admitted assets | (15,801 | ) | 11,399 | (18,004 | ) | 27,099 | ||||||||||||||||||||||||||
Change in Overfunded Contra Asset | (1,285 | ) | (503 | ) | (5,925 | ) | (11,594 | ) | ||||||||||||||||||||||||
Qual Pen Trans Liab | (50,660 | ) | 8,427 | (45,214 | ) | (23,605 | ) | |||||||||||||||||||||||||
Excess Plan Trans Liab | (1,400 | ) | (432 | ) | (1,377 | ) | (994 | ) | ||||||||||||||||||||||||
PRL Plan Trans Liab | (167 | ) | 242 | (149 | ) | (947 | ) | |||||||||||||||||||||||||
Change in minimum pension liability | - | - | - | 54,755 | ||||||||||||||||||||||||||||
Surplus adjustments | - | (906 | ) | - | (1,115 | ) | ||||||||||||||||||||||||||
Net change in surplus for period | (15,255 | ) | 61,634 | 51,411 | 206,324 | |||||||||||||||||||||||||||
Surplus, end of period | $ | 1,307,842 | 1,256,431 | 1,307,842 | 1,256,431 | |||||||||||||||||||||||||||
Statutory underwriting gain | $ | 44,943 | 18,157 | 69,818 | 19,439 | |||||||||||||||||||||||||||
Adjustments under GAAP: | ||||||||||||||||||||||||||||||||
Deferred policy acquisition costs | (4,074 | ) | (4,229 | ) | 12,626 | 17,458 | ||||||||||||||||||||||||||
Pension costs | (136 | ) | (116 | ) | (429 | ) | 5,606 | |||||||||||||||||||||||||
Other, net | (2,096 | ) | (1,841 | ) | (3,872 | ) | (3,737 | ) | ||||||||||||||||||||||||
GAAP underwriting gain | $ | 38,637 | 11,971 | 78,143 | 38,766 | |||||||||||||||||||||||||||
Note: Some amounts or ratios may not foot due to rounding
Selective Insurance Group, Inc. and Consolidated Subsidiaries
Alternative Investments
as of December 31, 2014
(unaudited)
Inception | Original | Remaining | Current | YTD | DPI(1) | TVPI(2) | |||||||||||||||||||
Fund | Year | Commitment | Commitment | Market Value | Income | Ratio | Ratio | ||||||||||||||||||
Real Estate | |||||||||||||||||||||||||
Silverpeak RE II | 2005 | 20,000,000 | 2,142,141 | 8,874,486 | 1,771,424 | 0.67 | 1.09 | ||||||||||||||||||
Silverpeak RE III | 2008 | 15,000,000 | 7,909,214 | 2,577,523 | (31,973 | ) | 0.07 | 0.43 | |||||||||||||||||
Total - Real Estate | 35,000,000 | 10,051,355 | 11,452,009 | 1,739,452 | 0.51 | 0.92 | |||||||||||||||||||
Mezzanine Financing | |||||||||||||||||||||||||
Neovara Euro Mezz | 2004 | 9,000,000 | - | 1 | - | 0.98 | 0.98 | ||||||||||||||||||
GS Mezz V | 2007 | 25,000,000 | 10,223,976 | 5,401,666 | 1,033,604 | 1.03 | 1.32 | ||||||||||||||||||
New Canaan V | 2012 | 7,000,000 | 1,473,310 | 3,466,536 | 516,293 | 0.49 | 1.12 | ||||||||||||||||||
Centerfield Capital | 2012 | 3,000,000 | 1,843,500 | 985,030 | 44,805 | 0.13 | 0.99 | ||||||||||||||||||
Total - Mezz. Financing | 44,000,000 | 13,540,787 | 9,853,233 | 1,594,702 | 0.91 | 1.17 | |||||||||||||||||||
Distressed Debt | |||||||||||||||||||||||||
Varde VIII | 2006 | 10,000,000 | - | 2,331,563 | 506,633 | 1.11 | 1.35 | ||||||||||||||||||
Distressed Managers III | 2007 | 15,000,000 | 2,982,132 | 6,347,694 | 645,767 | 0.75 | 1.23 | ||||||||||||||||||
Total - Distressed Debt | 25,000,000 | 2,982,132 | 8,679,257 | 1,152,400 | 0.91 | 1.28 | |||||||||||||||||||
Private Equity | |||||||||||||||||||||||||
Prospector | 1997 | 5,000,000 | - | 409,742 | 2,973 | 2.79 | 2.88 | ||||||||||||||||||
Trilantic Capital Partners III | 2004 | 10,000,000 | 1,455,947 | 2,495,030 | 261,132 | 1.63 | 1.89 | ||||||||||||||||||
NB Co-Invest | 2006 | 15,000,000 | 1,476,418 | 6,781,167 | 995,206 | 0.96 | 1.42 | ||||||||||||||||||
Trilantic Capital Partners IV | 2007 | 11,098,351 | 1,321,501 | 8,175,671 | 884,137 | 1.02 | 1.76 | ||||||||||||||||||
Trilantic Capital Partners V | 2012 | 7,000,000 | 4,636,211 | 2,263,961 | 137,102 | - | 0.96 | ||||||||||||||||||
Total - Private Equity | 48,098,351 | 8,890,077 | 20,125,571 | 2,280,551 | 1.29 | 1.76 | |||||||||||||||||||
Private Equity, Secondary Market | |||||||||||||||||||||||||
NB SOF | 2005 | 12,000,000 | 899,494 | 3,567,937 | 188,914 | 1.02 | 1.34 | ||||||||||||||||||
Vintage IV | 2007 | 20,000,000 | 4,122,656 | 11,531,938 | 892,851 | 0.77 | 1.36 | ||||||||||||||||||
NB SOF II | 2008 | 12,000,000 | 1,978,288 | 6,707,251 | 1,059,532 | 0.96 | 1.50 | ||||||||||||||||||
Total - Pvt. Eq. Sec. Mkt. | 44,000,000 | 7,000,438 | 21,807,125 | 2,141,297 | 0.89 | 1.40 | |||||||||||||||||||
Energy/Power Generation | |||||||||||||||||||||||||
ArcLight I | 2002 | 15,000,000 | - | 12,455 | (24,079 | ) | 1.81 | 1.81 | |||||||||||||||||
ArcLight II | 2003 | 15,000,000 | 2,295,492 | 553,066 | (455,491 | ) | 1.38 | 1.41 | |||||||||||||||||
ArcLight III | 2006 | 15,000,000 | 2,037,794 | 3,079,880 | 894,818 | 1.23 | 1.42 | ||||||||||||||||||
Quintana Energy | 2006 | 10,000,000 | 284,272 | 8,333,018 | 1,510,737 | 0.60 | 1.45 | ||||||||||||||||||
ArcLight IV | 2007 | 10,000,000 | 2,287,578 | 2,466,956 | 1,771,299 | 1.20 | 1.44 | ||||||||||||||||||
Arclight VI | 2014 | 15,000,000 | 15,000,000 | - | - | ||||||||||||||||||||
Total - Energy/Power Generation | 80,000,000 | 21,905,136 | 14,445,375 | 3,697,284 | 1.31 | 1.51 | |||||||||||||||||||
Venture Capital | |||||||||||||||||||||||||
Venture V | 2001 | 9,600,000 | 350,000 | 6,605,440 | 974,026 | 0.69 | 1.40 | ||||||||||||||||||
Total - Venture Capital | 9,600,000 | 350,000 | 6,605,440 | 974,026 | 0.69 | 1.40 | |||||||||||||||||||
TOTAL - ALTERNATIVE INVESTMENTS | $ | 285,698,351 | 64,719,924 | 92,968,010 | 13,579,712 | 1.03 | 1.39 |
(1) Distributed to paid in ratio
(2) Total value to paid in ratio
Exhibit may not foot due to rounding
Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Available-for-Sale Fixed Income Securities
December 31, 2014
(unaudited)
($ in millions) | Fair Value | Unrealized Gain (Loss) | Weighted Average Credit Quality | |||||||||
AFS Fixed Income Portfolio: | ||||||||||||
U.S. government obligations | $ | 124.1 | 7.4 | AA+ | ||||||||
Foreign government obligations | 27.8 | 0.8 | AA- | |||||||||
State and municipal obligations | 1,246.3 | 37.5 | AA | |||||||||
Corporate securities | 1,799.8 | 36.4 | A- | |||||||||
Asset-backed securities (“ABS”) | 177.2 | 0.4 | AAA | |||||||||
Mortgage-backed securities (“MBS”) | 690.9 | 7.8 | AA+ | |||||||||
Total AFS fixed income portfolio | $ | 4,066.1 | 90.3 | AA- | ||||||||
State and Municipal Obligations: | ||||||||||||
General obligations | $ | 563.4 | 15.9 | AA+ | ||||||||
Special revenue obligations | 682.9 | 21.6 | AA | |||||||||
Total state and municipal obligations | $ | 1,246.3 | 37.5 | AA | ||||||||
Corporate Securities: | ||||||||||||
Financial | $ | 565.5 | 11.3 | A | ||||||||
Industrials | 146.9 | 4.2 | A- | |||||||||
Utilities | 151.0 | 2.0 | BBB+ | |||||||||
Consumer discretionary | 207.9 | 5.1 | A- | |||||||||
Consumer staples | 171.1 | 3.3 | A- | |||||||||
Healthcare | 170.8 | 4.7 | A | |||||||||
Materials | 112.6 | 2.4 | BBB+ | |||||||||
Energy | 103.4 | 0.2 | A- | |||||||||
Information technology | 116.7 | 1.9 | A+ | |||||||||
Telecommunications services | 51.1 | 1.0 | BBB+ | |||||||||
Other | 2.8 | 0.3 | AA | |||||||||
Total corporate securities | $ | 1,799.8 | 36.4 | A- | ||||||||
ABS: | ||||||||||||
ABS | $ | 176.7 | 0.3 | AAA | ||||||||
Sub-prime ABS1 | 0.5 | 0.1 | CCC | |||||||||
Total ABS | $ | 177.2 | 0.4 | AAA | ||||||||
MBS: | ||||||||||||
Government guaranteed agency commercial MBS (“CMBS”) | $ | 14.5 | 0.3 | AA+ | ||||||||
Other agency CMBS | 13.6 | (0.1 | ) | AA+ | ||||||||
Non-agency CMBS | 151.5 | 1.4 | AA+ | |||||||||
Government guaranteed agency residential MBS (“RMBS”) | 32.4 | 0.8 | AA+ | |||||||||
Other agency RMBS | 453.5 | 5.1 | AA+ | |||||||||
Non-agency RMBS | 21.7 | 0.2 | BB+ | |||||||||
Alternative-A (“Alt-A”) RMBS | 3.7 | 0.1 | A | |||||||||
Total MBS | $ | 690.9 | 7.8 | AA+ |
1Subprime ABS includes one security whose issuer is currently expected by rating agencies to default on its obligations. We define sub-prime exposure as exposure to direct and indirect investments in non-agency residential mortgages with average FICO® scores below 650.
Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Held-to-Maturity Fixed Income Securities
December 31, 2014
(unaudited)
($ in millions) | Fair Value | Carry Value | Unrecognized Holding Gain | Unrealized Gain (Loss) in Accumulated Other Comprehensive Income | Total Unrealized/ Unrecognized Gain | Weighted Average Credit Quality | ||||||||||||||||||
HTM Fixed Income Portfolio: | ||||||||||||||||||||||||
Foreign government obligations | $ | 5.4 | 5.3 | 0.1 | — | 0.1 | AA+ | |||||||||||||||||
State and municipal obligations | 299.1 | 287.4 | 11.7 | 2.1 | 13.8 | AA | ||||||||||||||||||
Corporate securities | 21.4 | 18.6 | 2.8 | (0.3 | ) | 2.5 | A+ | |||||||||||||||||
ABS | 2.9 | 2.4 | 0.5 | (0.5 | ) | — | AAA | |||||||||||||||||
MBS | 5.2 | 4.4 | 0.8 | (0.4 | ) | 0.4 | AAA | |||||||||||||||||
Total HTM fixed income portfolio | $ | 334.0 | 318.1 | 15.9 | 0.9 | 16.8 | AA | |||||||||||||||||
State and Municipal Obligations: | ||||||||||||||||||||||||
General obligations | $ | 97.8 | 94.6 | 3.2 | 1.0 | 4.2 | AA | |||||||||||||||||
Special revenue obligations | 201.3 | 192.8 | 8.5 | 1.1 | 9.6 | AA | ||||||||||||||||||
Total state and municipal obligations | $ | 299.1 | 287.4 | 11.7 | 2.1 | 13.8 | AA | |||||||||||||||||
Corporate Securities: | ||||||||||||||||||||||||
Financial | $ | 2.2 | 1.9 | 0.3 | (0.1 | ) | 0.2 | A- | ||||||||||||||||
Industrials | 6.7 | 5.7 | 1.0 | (0.2 | ) | 0.8 | A+ | |||||||||||||||||
Utilities | 12.5 | 11.0 | 1.5 | — | 1.5 | A+ | ||||||||||||||||||
Total corporate securities | $ | 21.4 | 18.6 | 2.8 | (0.3 | ) | 2.5 | A+ | ||||||||||||||||
ABS: | ||||||||||||||||||||||||
ABS | $ | 0.6 | 0.6 | — | — | — | AA | |||||||||||||||||
Alt-A ABS | 2.3 | 1.8 | 0.5 | (0.5 | ) | — | AAA | |||||||||||||||||
Total ABS | $ | 2.9 | 2.4 | 0.5 | (0.5 | ) | — | AAA | ||||||||||||||||
MBS: | ||||||||||||||||||||||||
Non-agency CMBS | $ | 5.2 | 4.4 | 0.8 | (0.4 | ) | 0.4 | AAA | ||||||||||||||||
Total MBS | $ | 5.2 | 4.4 | 0.8 | (0.4 | ) | 0.4 | AAA |