Earnings call transcript Q1 2023

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Operator

Good day, everyone. Welcome to Selective Insurance Group’s First Quarter 2023 Earnings Call. At this time, for opening remarks and introductions, I would like to turn the call over to Investor Relations analyst, Haley Chrobock.

Haley Chrobock

Good morning.

We are simulcasting this call on our website, selective.com. June until available is X. Replay measures We business our and discuss use three operations. results to

use reported First, quarterly financial GAAP we measures reports with and in filed the SEC. current annual, our

believe equity on non-GAAP impact realized measures, on to use or of our Non-GAAP available net net business. investments gains gains income insurance easier losses excluding to we Second, common evaluate which we stockholders, and for make unrealized operating securities. investors is income losses operating or it the after-tax

any return value operating is book operating share Non-GAAP by losses gains are common on non-GAAP on stockholders’ from investor found after-tax our measures investments share package income equity common average and the supplemental reconciliations equity. divided total exclusion in comprehensive value the differs per our by per unrealized website. common to Adjusted of non-GAAP of Investors referenced page book on accumulated financial in common other included loss. GAAP

performance. We about future performance Act Third, of current of are guarantees we subject Reform make risks not statements future XXXX. filed Litigation detail in projections and statements uncertainties and with They our these and the in revise We annual, to quarterly the statements. uncertainties. and our update obligation discuss These risks Securities forward-looking undertake and SEC. Private to under or forward-looking are are no reports any

President and our Officer, Chief call the Wilcox, turn Treasurer. Officer President, Executive over to the John Chief I’ll Financial Board, Chairman will Now by Vice our be Marchioni, who Executive Mark followed and of

John Marchioni

loss is we effectively well three that quarter, remain to insurance excellent our strong faces. earnings strong we the for us. morning continued We’ve had elevated you, headline to industry trends in navigate uncertainty for very an that you deliver segments. quarter growth The year. Good joining and economic all to Haley. Thank the the In the positioned start and thank and had

net over past income was produced operating driven XX% investment the losses. ratio generated quarters, management fixed over we few despite ROE income was past higher-than-expected active XX.X% XX% years. After-tax XX.X%, portfolio QX XXXX, the catastrophe we over non-GAAP up average of core nine outperforming the by all-in Our a and combined our of

Let me growth line in premiums in our core additional quarter. Commercial XX%. color on business, some provide top written the Standard Lines grew our Net

X.X%. continued New this within and our we pricing business X% pricing up risk positive Renewal pure up by as as traditional a profile finding in XX% change premium increased was segment expectations. was and XX% was exposure opportunities

that eight five Lines over has by Our quarter. points the past Standard Commercial years, the two states of expanded growth footprint and expansion overall contributed in

early driven the success of the these we new employ unique the established. in by is and distribution markets strength we model partnerships operating Our

bottom to also greater line diversification. the addition line geographic expansion this benefits bolstering growth, In top through

opening working five are over additional two towards years. We the states next an to three

Net X%, stable E&S our in growth with rate grew segment retention. XX% business premiums X.X% and renewal written pure of new of

over our mix the to hazard transition relatively Standard business mass Net represents premiums The in-force we we expect and our mass the Personal our continued to of half of lines of that has about affluent stable terms in business segment business in affluent of market allocation now book, increase quarters. next market. target several the as and and written limits Our XX% mix. Lines grew remained profile

particularly elevated catastrophe where am our quarter in face long-term averages. the a significantly losses were profitability of in with losses, I pleased industry above

expected. one the point Our catastrophe ratio above combined were about six losses or points on

was combined above of Our long-term target. XX% ratio only our slightly XX.X%

underlying Our ratio combined was XX%.

throughout the combined and last trend and ratio. this a lower budget, XX.X% saw were produced our overall favorable underlying than pricing driven XXXX. strong further Standard year Let a about continues me and first XX.X% make we points X.X% Commercial about auto outcome, profitability. line. Despite ratio some meaningfully to losses of reversing and comments Retentions our Lines Non-cat drive three of our Commercial increases the in in remains stable. from in remained pricing by Lines loss increases and targets. the quarter X% view moved quarter, in property last with QX line trends XXXX combined to

rate XX.X% pure renewal renewal XX.X%. property Commercial exposure in change was producing and the quarter X.X%, of premium a up increased

improved of continue. We pure expect and renewal up X.X%, of total this pricing grew ratio premium earned auto continued and and Like Commercial Commercial in deliver for strong non-cat exposure have ratios. a we’ve favorably past casualty loss by combined underwriting years strong few expected to XX% XX% than the Standard better an Lines, margins underlying quarter. the year-over-year was The impacted change made trend rate improvements XX.X%. combined a XX.X%. was ratio we’ve E&S E&S property resulting with of rate to over and

be increases about effective home the will price affluent cat and XX an changes Profitability to Standard to of the by target. with market. combined points across largely over the filed Excess combined primarily Personal Lines auto improvement continue but became losses lines, X.X%. drove challenged. profitability the underlying XX.X% we In as remains driven quarter’s increase XX ratio, was rate the ratio transition mass quarter, average XXX%

several We over to expect months. this next pace continue the

of is up new and April. a impact X% month was pricing, business X% QX pricing in over the over there lagged While in renewal on

Investments quarter. quarter, produced the the bright spot XX% QX after-tax up million portfolio $XX XXXX. The of was in in over another income

XXX XX% when To has the quarter, target, book the of actively at yields, credit moving currently expect and we that are their up portfolio which to reiterate up our experiencing, team a point by did operating we exceed start this quarter. increase we outperform to last XXXX investment while ROE also long-term is been positioning basis quality. points as investment Our returns in average, made

XXXX, not While does year. recognize fully a we pleased with to one that our start make strong quarter

with operate to our executing growth profitability continue in and discipline We great initiatives.

positioned us and a as of distribution our has and highly choice of technologies partners. leveraging skilled sophisticated employees, team our for Our fully aligned market tools top-notch

align a council feedback teams do agency we understand to regional principles, profitable additional their to opportunities XX uniqueness our talent, great tell market our of model opportunity growth management our for of Our the and meetings performance, that of growth. are six local managing on approach and which executive face primary strength the to us as routinely and March XX year. They of on in choice. take they in solicit make and operating are us the the includes each challenges sessions, each These they agency markets consistent we regional hosted their profitability reasons why the

the headwinds face industry to closing, economic trend and in In from loss continue uncertainty. we

any muscle challenges. navigate have and through built market to successfully potential organizational economic However, I am confident we the

record backs performance track up long-term consistent claim. industry Our with of along strong low that volatility

me Now let turn to call Mark. over the

Mark Wilcox

reported EPS. start to We diluted of with non-GAAP a EPS Thank you, and John, of fully the in the first $X.XX $X.XX good operating strong year quarter morning. and

operating XX% in investment of after-tax driven our ahead came underwriting significant The solid growth by non-GAAP of XX.X% performance income. in nicely strong Our target. was net ROE results and

underwriting Turning results. to our consolidated

offset the we despite net ratio. driver three were large the or profitable growth. quarter losses the were quarter were the XX for or consolidated There losses in totaling manageable losses. healthy of written a rate quarter, These combined points in of first The quarter reported our X.X XX.X% of $XX.X another over to We by impacting $XX the reserve premiums contributing casualty each of footprint $X the million one net of in in $XX.X favorable cat on the events reported U.S. first net of in with individual of losses March billion of cat in storms resulting segments million a For first catastrophe a points development. XXXX, quarter ratio year or catastrophe and million PCS XX% February, active combined growth XX% two our prior X.X our part

and Workers’ reserve favorable claims by of included adverse was $X in personal line development million in our This part casualty. emergence The million offset million in in E&S favorable development Compensation of auto. $X in business $XX

were personal combined quarter lower to the plan also for points benefiting was pick compared in our loss of property The from XXXX XX% elevated compared and total the our property auto than property for auto underlying up improvement to physical business. commercial auto year drove lines our our better have period, than non-cat margin prior losses We in expected, remain X.X damage ratio in above property underlying which property Non-cat Non-cat personal and of expectations. lower original E&S points liability the X.X for and losses year. losses expectations. commercial adjusted for

Moving to expenses.

year the ratio XX.X% was basis up ago. versus XX expense Our points of

upward As initiatives containment cost place. XXXX noted modest expense but have quarter, in ratio we pressure on expect last several in the

principally which totaled appropriately longer-term expense to the in lowering and ratio million remained long-term strategic the stock term, we Over longer include compensation, are and ensuring through holding on we focused our support investing Corporate the objectives. company quarter. costs various expenses, initiatives while $XX.X medium

Moving to investments.

well Our portfolio positioned. remains

in with quarter, of we recession modestly years. from assets and XX.X% last income our portfolio As year. a of with ago of March this XX, later but expectations against short-term have an in rating were credit XX, portfolio X.X year XX% down of portfolio was fixed X.X% line the an duration as approximately investments as AA- a March derisked market Risk of effective of and of average our

year, offset million put fixed in first by work quarter, portfolio income investment on our after-tax translating ago net by after-tax $X.X healthy investment yields. year $X.X income year the The strong total up a of yield gains which the generated growth after-tax last high million period, growth the million, are to in driven a compared significant $XX.X X.X% billion a points management ROE driven to lower the in This XX.X from contribution. was For we for was to contribution was alternatives, million and $XX.X ago. where reported relative The portfolio. lag XX% to fixed one-quarter of was our quarter, core at portfolio on active partially a $XX.X income by from income

fixed lowering short-term potential decline allocation Approximately down XX% our a just year, XX.X% X.X% rate later portfolio short-term investment been floating In remains anticipation and in over and of year-end floating securities. our interest this rate securities, around to at we’ve ago. of year rates in from is income which a

a we while As back rates managing duration instead our floaters, time elected credit we of new the and to money have period targets. our have longer pared in quality current for high lock

management billion theme in with our consistent work put yield of quarter new In continued portfolio active $X.X addition, of we the pre-tax at of a money and to XXXX, X.X%.

now quarter X.XX%, and since XXX points basis the XX yield points up book XXXX. of basis the start current in at Our stands

translates every of reminder, portfolio, about high ROE to a our on As X.X investment total XXX yield basis points. points

the particularly within I’d strength investment of the recent also like portfolio the of our in sector. to highlight turmoil, light banking

the the no that of direct to recently have particular securities exposure We down. wound banks been have

on focus a bonds financial money within to of large diversified more exposure across with is Our center institutions banks sectors banking.

Given our portfolio of I’d the principally our real commercial also commercial briefly of about asset to which thought our I on class. highlight allocation and portfolio. exposure securities, arises estate investment from Commercial recent real our X.X% estate, XX.X% focus agency mortgage-backed totals to and non-agency this represents

over and AAA tranches likelihood of securities AA of attachment tranches. in a subordination XX% in have these part strong invested low of by are rated level loss rated Just the these in and higher driven

X.X% investment feel of the while loans, to remaining real up debt trust liquidity a X.Xx. investment portfolio. have of and are within our service X.X% X.X% coverage estate XX% which estate and of real also loan-to-value about X.X%. our performing represents We an real equity portfolio all trust quality we makes ratio mortgage up with portfolio and alternative commercial investment equity the of Overall, credit and profile debt commercial debt underwritten makes good estate the allocation Investment-grade

in stay at market liquidity However, we and to monitoring the general conditions and risk underweight assets up a bias in of have a time credit strong to are maintain closely to and terms and remain liquidity credit quality position. this

capital. to Turning

adjusted end. per the remains position of was equity for increased book share with X.X% billion the quarter. up or GAAP and quarter Adjusted Our $X.X value X.X% extremely surplus strong value statutory dividends. as of $X.X of during capital and X.X% Book billion capital for quarter share per

and longer-term target. position is $XXX parent our investment which above Our stands cash company million, at

during written flexibility on of of target execute our ratio support quarter. range We premiums not with repurchase significant net of XX.X% low shares These the Our and is to on X.XXx end is provide our initiatives. us and surplus financial our did target first in debt-to-capital to our strategic the middle of metrics our growth range. any ratio the

under $XX.X have our We capacity we remaining use opportunistically million plan share authorization, repurchase of in to which XXXX.

to our turning Finally, outlook.

of a no follows: accident are For last additional reserve XX.X% expectations our X.X unchanged This ratio XXXX, assumes inclusive year of as full points of from GAAP losses. development. quarter year prior remain combined and catastrophe

year for any and are in growth of adjust net make an better items, ratio our from XX% authorization. share approximately income weighted an an other investment may after-tax investment first our in quarter reflect to and off of to average $XXX it’s for includes income alternative $XX of too under basis, million, on Overall, XX early gains a terms rate XX% the start to After-tax all not combined effective million our which in we we does rate of million XX%, full diluted repurchases of which than expected, including tax excellent effective While profitability. came investments, year and overall tax shares expectations.

to up ask the for operator I’ll open the call With questions. that,

Operator

with from Mike comes Thank [Operator you. question Our Instructions] Zaremski first BMO.

now is open. line Your

Mike Zaremski

I view come I don’t have came will missed and our commercial a the light I quarter-over-quarter, expectations a few I has was hear I little trend late. think versus, Any changed year loss Hey, your did meaningfully this. curious in the development, of might good that minuses? in prior at which pluses PYD, minutes the least did color Thanks. but commentary color I morning. on guess, lines? admit I any Maybe on just

Mark Wilcox

me, will Excuse Mike, as well. in start Mark John and jump it’s Wilcox. I might

$XX puts And there in a So was couple there. PYD QX of net. million and for XXXX are takes

with the consistent really ago. off, First year

to of lower claims within years continue emergence the and We line in really workers’ prior. driven favorable by compensation XXXX business, severities see

reserve XXXX E&S and within casualty and lower one liability favorable from other the development. and year, was in was $X there. $X million, the other that saw auto years prior adverse went the severities or quarter in million direction saw an about the of for But also development accident $X personal item XXXX the for that pressure tune then million some to within of We

in $X of included on the X.X% which And also, we It the personal pick of expectations but – did or comments, quarter. may favorable, XXXX net you heard, an liability for versus make trend adjustment jump loss may our increase on I out that’s in increase that’s we year accident per $XX, my unfavorable, million in actually $XX embedded the numbers. seen. the current auto in we and was XXXX combined a year mentioned se, So, the during doesn’t did benefit the that ratio have have not back for the year prepared light there the

Mike Zaremski

the Got to elevated get thinking on property taking back exposure it. That’s noticed was and competitive helpful. I is of guess in X%. close stepping side. prepared in I environment the Selective and up remarks, my words, about the to maybe, front – both action the inflation

of is maybe noteworthy in, just to about is moving environment? is if of I’m feels and higher of the inflationary kind just of trends moving also the industry north pricing direction. way? competitive like more of is that Just of maybe or I’ll element – like curious, add feels the business your something it earlier for or just new actions was is right talking pure kind overall than that think just reprice is an it’s that And environment overall peers the in taking But some kind you Selective of It of property business kind on the side? Selective kind Thanks. curious is the competitive the proactively being

John Marchioni

into And much of With QX was Mike. is X.X% X% portfolio work always the exposure, we’ve and properly and And regard always diligence of we aspects inflation sure of accelerate, make starting Yes. which those properties same. exposure fourth point matters. question, was to Commercial course Lines lot of are overall our really property we about I’ll did were effort and adjustments. happened Sure, with that around of X.X%, in in I make making Commercial tackle to ahead lot And to sure And the in we up over think The quarter Thanks. to your the of we was Property question. stay the in started think try as a exposure a to our what And I in line by the put all pretty to evaluating that. the for insured account quarter in saw increase to what QX. it had X.X%. value. was fourth then Lines quarter. that XXXX account

property And so, think in we pretty materially, I and practice The understand as be almost think target rate also and performance. on need do the exposure basis moving commercial that appropriate to The pricing adequacy that’s our both up they continue want to push continue addition risk-adjusted that’s our was points that. really we’ve continue a for always for sequential of to on is both profitability. got moving been property XX.X% lower will pricing We do because impact because to to those you to ratio commercial the and pieces combined change a and practice. line, us we’ll X more to improve

important and other the how higher at relative And see significant be on the point X was some expected industry, you comments, the a property. impact our throughout to load think and points. quarter, around philosophy in pricing for about the know QX above point to relative it I much relative managed commentary underwriting to saw you us many we’ve miss was in to And a driven prepared that’s just cat expectations year. the in to do think always to quarter been at the can we relative the But And the a commercial others. more testament full by property tends cats. quarter there’s I

is seen will trends severity declare ready of did year-over-year a it down nice I losses there dynamic We follow-up. basis try pieces a And have favorable I to continue non-cat XXXX. in property and of market so the came a basis. to feel Mike, in better think hit in shift but that to in as quarter in suggest ahead to expected a property, free to might or where don’t all have on on it we’re QX. would the than you’ve I question, stay not So, be,

Mike Zaremski

is the losses, did. commentary estate, mention, rates? asset the – on likelihood screen Yes, interest driven Any is AAA, class is Mark lot plenty they disclosure – being AA-rated you loss commercial are attachment. obviously by or Because just at mark-to-market kind high-quality of have? of there of more the did least a it on spreads enhanced This you exposure kind CMBS of very and my are question. lastly from trading long-winded of or Is just a everyone loss real on relative Mark, low color maybe add on Maybe about makes like exposure. you so of at the was getting you’d this substantial That on unrealized a and CMBS you incoming about your there what loss comfortable? commentary to attachment, you fairly to likelihood low any commentary

Mark Wilcox

Yes.

give So XX% non-agency commercial also varies is within feel has exposure, the real various real very by bit well. the valuations, it commercial location. you couple color we portfolio, on real varies it. which estate little commercial CMBS, estate total recognize about as class within particularly well. other of a about but And allocations estate, of CMBS behind the it’s let real moving the sectors type there and a piece it that side exposure, of CMBS, pressure market. on But to our on by we But as more because more a that and particularly me the And the good statistics guarantees estate agency put

But as there estate not pressures throughout some is ahead I be we real look all think So, equal. XXXX. could

and do non-agency by to the within good rates our is we relates about widening the portfolio, that benchmark would commercial say our for But spreads really concerns CMBS unrealized driven higher real losses on As exposure. of the I credit some it of interest back estate. feel

quite across in that And with CMBS, losses level and terms XX% might subordination. our of non-agency prepared comments, XX% AA-rated. Our tranches, we loan-to-value And come subordination, have as portfolio you us portfolio. asset XX%. the my a into I class, mentioned years is about in of bit average CMBS from have non-agency a The protection which is whole those of duration of is it whole the X.X provides that out higher AAA a across

the as XX%, true So, effective when concerns what an of plus investors terms them. a losses, going pretty pretty to credit dollar subordination good terms describe loss as to to far is loan we have losses. in about about loan of removed value, would and consider the in in real so of we commercial There’s value clearly from feel be true aftermarket losses others defaults But estate. you some

then done to management other XX.X% in this of portfolio. property bit we stress peak real value quick Street a perspective. real to calibrated Maybe the you a statistics and to if about you, terms quite which back But crisis estate. is to we’ve go I’ll just on XXXX/XXXX, peak of of a And the trough perspective, give Property of in estate testing index, a couple of a back the go great in have risk been was commercial it work financial terms trough Commercial decrease the index from Green from

decrease think be But for of decrease If basis, the stress estate, XX% value commercial loss $X XX% real have get have a CMBS on going to a we had healthy our the think real $X value estate portfolio, you decrease. how to tested across loss. pretty much of down to do a in in we have So, When estate. non-agency a real a go-forward the the we is about you million when portfolio the we’d by? of

at. look couple are metrics taking those So risk a of kind we’re management a just of

situation and always losses. impact to crisis have asset in to valuation great there’s the financial ‘XX a again, off, sell meaningful could actual But classes mark-to-market ‘XX perspective widen. a the from So, any could and credit spreads you than have worse have and

very feel a perspective within good but cautious non-agency we’re CMBS. from So, CRE-loss

Mike Zaremski

has off-line, your like some can comment and about XX LTV talking follow-up, but I the another a you it feel too. as off-line this saying similar, get take of your how take subordination is confusion, about one it peers can because to something there’s been versus worth and We we

Mark Wilcox

But that conversation a little getting offline, weeds to the here. Yes. let’s after take fact. the happy into follow-up But with we’re bit a

Mike Zaremski

Thank you.

Operator

Thank you.

comes Grace Our from Bank America. next Carter of with question

Your line is now open.

Grace Carter

everyone Hi,

John Marchioni

Good morning, Grace.

Grace Carter

we bit a components combined little ratio of for year. the talk about could hoping the guide this was I

I quarter, had think, mentioned think ratio and, last target I dividend X.X% you target. expense XX.X% ratio a

of mentioned So, that ratio reserve the well I out getting, the XX.X% was all catastrophe XX.X% curious a the as a the just had I’m in core the as that kind year, loss and I higher load using backing expenses and think, which of full XX.X% for year development little you last impact than the quarter. quarter. bit is

I ratio XQ if other loss just moved just around? XXXX? core in square the have curious, reported of versus the was to trying that Or components So, favorable any

Mark Wilcox

Mark. Yes, Grace, it’s

would our year You in change a just early have the it correct. to to And what full year say guidance. too I make is it’s

in volatile activity full the favorable the I an the annualize year, X.X development, the clearly favorable cats, of no combined change. underlying year take a to XX.X% year to of some And then combined to you development QX to gets favorable implies, reserve more it John’s expectations, So, a come guidance X.X sort actually little back ratio you year. points XX.X% of of the you there. expense rest and the of which with of if XX.X% full think, That’s for loss around of variability an the our year, X.X the And there’s rest QX doesn’t that of assuming the XX.X%, kind ratio assuming that. QX of through if later line through above bit about get for to implies to point points, a underlying cat being points point,

The we well. So, the bit loss the in in bit for really year overall, us full little we all right our Cats it’s the initial components about come feel further ratio. a expected. bit came bit QX. other on benefit But report year. better really year. things feel a I behave if ratio again update track good assume saw we’ll the rest didn’t through a full X.X ratio They better of property and about a to heavy. at than were would in little of non-cat the a points say that expense is all just take to normalize good and combined insight when the roll But days’ soon for into time. XX it little too expectations we We and give back the you just But

Grace Carter

past Thank That’s mix last needing maybe up on the the Okay. helpful. mentioned all book of I little the given you Personal had on versus distraction quarter, Lines, catch just a think you. some industry And bit changing over quarters. to rate few the in from

you personal was Some fair for mentioned target as of outlook well? next year if your peers can on your assumption that lines I your XXXX. is profitability of target have when and think targeting for the reaching all a just curious profitability a by reach book the book end

John Marchioni

John. is this Grace, Yes.

a what trend. trend on with I what big think loss it’s loss personal uncertain to an in of in all, because driver margins lines happens to is there, put First target to always especially environment a dangerous happens regard out

have think have trend. I out statements what loss do around us, direction put trend. But to sometimes qualifiers and that our Selective rate far loss next of make around when all the written do I think in understanding we included, you And a have I advance. you project pretty to convicted around in to over some relative And peers some plus. realize that of ratios next plan our clear assumptions several quarters, earned loss of make of terms year rate is of the

on sights our have We achieving profitability.

subsequent realize us. surprise and plan But around back We can have we do where have all quarters assumptions to loss last that industry the trends to five in as quarters. an loss is look in go that trends

is think in hesitant I always put to book get reason we about also lag changes, approved affluent, earned you positive have a our is That and better our of start X.X% positioned have there. mass but transformation. impact context, And this somewhat through will market change much think personal which that think new through profit is we profitability. book, we’re renewal remember, the basis place a be to these in in long-term way. the premium our lines going from So, then was near-term as And of in-force a a to that is putting which targets rate through mass from move come to compete on significant said, a to as out to in subsequent quarter, that rate implemented, the the run we we quarters. bit and indicated an we’ve impacting do a will And rate filings improvement

a putting are on of specific going path to short We I’m quarter out stop a there. but to profitability,

Grace Carter

Thank you.

John Marchioni

Thank you.

Operator

you. Thank

Our comes Newsome Paul from next from Piper Sandler. question

line is now open. Your

Paul Newsome

In may now. past, where passenger morning. in between diverge and auto, books of private as and you here. Thanks be a call. or those Almost contrast seeing two in inflation for a Could perspective? Good they trends may auto – from commercial but converging seen the maybe kind not you’re follow-up what the we’ve it’s different claim maybe just claims

John Marchioni

Yes.

stay by to the the aligned. from damage you ones were trends think aligned. well well auto think impacts. that well fairly driven an those inflationary Those And aligned continue I think I I saw were So, were fairly standpoint, physical and be fairly

impacted auto. it generally seen social movement you’ve with on difference with profile on saw bit from on a might limits it us commercial quickly and think BI little litigation the do impacts, a rates. a a where got in inflationary more little impacted in might than have you industry, I you liability of auto BI personal than commercial you do higher auto an auto of think personal bit perspective, have probably more and the lag I

two So, driving I bit are societal think different a magnitude those will the commercial the ultimately, impact look of personal lines, profiles. in factors a are and because just similarly, probably the limit But but difference might both inflationary differences. ultimately little that social trends

Paul Newsome

I help [indiscernible]. That’s Thank all much. the appreciate I you. had. will very

Operator

you. Thank

next KBW. with comes Derek Han question Our from

open. now is line Your

Derek Han

morning, you. Good thank and

if But elevated commercial? last the given loss and And just for we in just that we’re pricing I talked wondering I there’s the going X.X% about update if just understand trends. an the loss just to the trends So I’m how about And to the number? year? X% you about think back thinking should quarter, think to assumed conservatism guidance, trends. reaccelerating your completely uncertainty just loss

John Marchioni

down very about So, earlier that. enough cited point. an January certainly reported trends, loss his there’s going activity in make don’t certainly and to and downward not we to the question, because property we in separating casualty else – that always into then loss Mark and in in broke to in And be I again, see subsequent And would as going make the in those in to indicated and talk that anybody severity we comments trend adjustment on do full year, for frequency say X.X% embedded that to X% And sure they’re quarter or casualty And picks. and our on year, a X% is at prepared X% that hard-pressed change say from need different. mentioned they’re to a want we not to loss this trend, think we we’re casualty, the the we property.

of is full what in and seeing frequency side, On the largely out, that them in would too it’s the separate trend year what’s the almost will assumed early severities about equate had assumed books, extent the really To side. the change in for drives through property severity think and/or it’s frequency assume beginning change come on property variability But ultimately, the expectation to actual assumed important it. an to does, an is better we it But And we’re it So, in coming months we the different, X% is loss that trend, that them loss and to see think than trend with where expected. in X quickly, or haven’t the severity? and relatively that’s non-cat for the we results you’ll want year how immediately. continue. think you property call reason I that, I – our to

additional the trends in that than reported We’re extent on see exposure. come anticipated, commercial through results. line And property generating severity on significant rate you’ll plus the that come we to better

Derek Han

helpful. of core loss really obviously XXX question, had then nice ratio a my And you second That’s it. improvement bps. Got

quarter. You called three non-cats out that this lower about points were

year, Or function that side? underwriting constantly underwriting kinds kind points making the last XQ making do about those like from claim X.X benefits changes you of to XXXX, the I of for this think quarter normalization you’re that the led improvement? on as just are it was higher. a or of Is you changes – you’re mix where benefiting

John Marchioni

Yes.

did here. question also underlying the we’ve is, ratio and throughout ties selection property is than this on There kind that emerging, We’ve recognizing in. to if those improvement that’s it it. – to all lose primary the the never versus But and always line. better those way That’s I than the variability point, at were that. prior and pricing non-cat to in equate look to these the contributing XXXX, can expected we’ve loss there, of accelerated which about year subsegment property think sight that what year-over-year not underwriting would very we first better to is exposure, pricing, I risk talking year. up disciplined driver you’re you back into so areas, all contributing. and I’m to But also at the but inherent in trends it the earning they’re of attempt different variability, And picked approach underwriting we increases going of a its had factors.

Derek Han

last then quick And lines. personal Okay. on question

New I’m in significantly That’s struggles was lines? personal surprised up comps? the just growing, or that up and given business easy quarter-over-quarter year-over-year. is by Is pressures much $XX.X how million. business new just

John Marchioni

– of quarter the drivers, comparison been is but success to prior to perspective. quite prior also stride XXXX, that we’ve first working of needs a this start way the think The mass repositioning that it year from its low way the But repositioning tougher I to production us and market. in. affluent was think low, the its a starting start to But was into quarter comparison in the was in market two quarter year big But I that earn hit that’s of our Yes. terms again, from will earn realize on. rate starting to

Derek Han

very Okay, thank much. you

Operator

Thank you.

next Our from JMP Matt with Carletti Securities. question comes

open. now is line Your

Matt Carletti

Good Hey, morning. thanks.

I model a is question cat the $XX cleanup break was by all I of I million so if segment got apologize it line? losses hoping Just or Commercial Mark, left. out early in you on. could missed the Standard

Mark Wilcox

Matt. Certainly, Sure.

just so to was commercial on the all million. In And lines, X.X just, all lines. it points $XX.X That by is are guess home BOP then gets and commercial those in $XXX,XXX. in standard it it’s was E&S the was self-evident. So commercial and property, properties, going $XX.X property, you or really $X.X million line I personal within auto, our it

Matt Carletti

Alright. Wonderful, you. very helpful. Thank

Operator

this further you. time, no Instructions] At speakers, Thank show questions. [Operator we

You proceed. may

John Marchioni

all today. follow-up always you Please as Well, with thank for us to additional free feel joining any questions.

Operator

conference. today’s Thank concludes you, for participating. that everyone, And

disconnect. now may You

Selective Insurance (SIGI) 4 May 232023 Q1 Earnings call transcript