SIGI - Earnings call transcript Q1 2024 | Selective Insurance Group, Inc.

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Selective Insurance Group First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Brad Wilson, Senior Vice President, Investor Relations and Treasurer. Please go ahead.

Brad Wilson

you Selective's thank Earnings Quarter and Call. Conference morning, for First joining XXXX Good our release earnings on posted we Yesterday, press section our the and of website, selective.com. Investors supplement financial there this will will of our market next for performance, and financial this XXXX. X replay A quarters discuss be posted of call.Today, shortly webcast we expectations the conditions after make Chief measures, John evaluate remarks today Financial Harnett, our Tony Executive Officer; Marchioni, our and to Chief move Chairman we references investors business. believe Interim of Vice before the it Accounting President, our Board, Officer, commentary to and easier for insurance will President which and Chief session.Our make Officer, Senior our question-and-answer we non-GAAP common operating measures operating income, share. on non-GAAP per include return equity and common These adjusted value book referenced and projections our reconciliations measures on We financial posted supplements any in about statements website.We financial include will make our GAAP non-GAAP future performance. also the to Securities not Act are the Reform of forward-looking performance. Litigation future and Private XXXX, of under statements These guarantees to risks we filed are and disclosed with the They reports quarterly annual, and current subject our SEC. in that uncertainties statements.With no forward-looking or obligation update remarks, the introductory to revise to now any John. undertake call I'll We turn those

John J. Marchioni

and In generated operating net we of everyone. first quarter, an grew good premiums XX.X% Brad, and XX%. morning, ROE written the Thanks,

prior the partially main development. Lines' combined favorable unfavorable combined in $XX Standard due ourselves reserve during workers' and Commercial quarter.We continued When X.X X.X posture $XX of disciplined general of relative development the was net reported Consequently, driven the adverse the elevated million trends target casualty ROE to a points overall of quarter. insurance to how by above see Standard reserving an increases casualty Our liability our compensation a in was points the ratio year, emerge, development X.X growth retention. operating ratio our trend maintaining actions points took consisting in pride strong we produced The approximately exposure to unfavorable combined respond.We well to reserving. consistent The loss $XX adverse stable XX% by million reflected and Commercial discussed recent previously driver our quarter, net below development, ratio overall million and pricing, segments quarter. added we in property our of increased pricing Entering The X% expectations.We we offset of of combined and the expected years. for was at loss planning, guidance on and and XX.X% this trend X%, X% our underwriting, casualty. for our ratio we XXXX expected Lines' year

we loss to XXXX severities. of we've our all higher X general trend through for than response Excluding workers' emergence reserves XXXX point lines.Despite underlying our workers' assumptions, expected number XXXX and compensation, were expected point is X.X casualty for trend context, X% X% loss The to compensation, assumptions, average loss casualty ex-workers' casualty typically discuss liability excluding XXXX, strengthened for the X.X% trend the X% these further paid approximately was XXXX. approximately years closer for to compensation for in in higher for forward XXXX.For

also We about accident for ratio liability point. increased X XXXX picked general loss the our year by

best Our up held undertake review lines we and an trend commercial assumptions quarter, book and in-depth workers' the for well.Every auto our reserve compensation estimate.

book higher, liability damage attorneys Our claimants we segment, for extraordinarily relative stable. industry of inflation, heightened by the to consider elevated longer widespread challenges, portfolio sometimes times higher pricing we propensity indicated a expanded theories which evidenced higher increased relatively retain to and litigate, settlement relate pose higher, profile evidenced settlement has values.Certain and and remained awards. remained and and and has jurisdictions by terms limits in social Therefore, mix, believe levels hazard stable severities to our of

the think the in general and jurisdictions book. increases an seeing We elevated loss rate inflation are of social industry-wide liability. these monitoring closely to will we are acceleration and trends our lead and We are trends broader across

umbrella During for the and quarter, year liability from X.X% price quarter full last renewal general XXXX. pure was up and X.X% X.X%,

our further book, months.To grade, coming accelerate mix in general the industry pricing of classification, business monitor quality risk the and regularly liability pricing attributes. individual we expect and jurisdiction We by of will our profile, limits our hazard understand other

partner allow and Our have in XX% proven to a record actions need insurance a unique ability sophisticated dynamic model primary targeted the ratio in underwriting remains our action.With doing segments environment.Consistently tools strong across our comfortable relationships, of book so employees of this areas achieving identify our X executing our most target with goal. track and of continue combined highly and talented us disciplined and rate in remain to distribution operating our manner. We our we

X.X% price prioritize pure X.X% or trends. quarter continue to the Commercial pure quarter. Lines each price achieving loss renewal that price to the was in accelerating increased our exceeds for We XXXX. year up pure full for and future within renewal matches Renewal X.X%, Overall from X.X% fourth expected XXXX Standard in month quarter,

first this signs granular stability, we performance continue year accelerating renewal net X.X%.Exposure points, total auto, continue liability. Personal transition pure are XXX.X%, written combined and loss severity lines and based quarter rate increases due excellent market pricing E&S XX.X ratio growth the our improved XX% expect impacting with current increased premiums X XX%. and grow X improvement premium was of to book.We continues Lines strong general point mass commercial net contributing level, quarter and written the to total X.X% recent present approximately Despite opportunities Lines' quarter to Surplus lines remains was as in up larger up rate with as in renewal its to property with profit an up increased average regional line and targeted ratio quarter our continued market premium and book XX% pricing and our by underwriting by manage total up XX.X% XX.X% years renewal pick the the underlying XX.X%.Personalized XX.X%, renewal X.X At compensation, increased see our accident growth ratio. from a the Standard we on year increasing point, in combined growth XX.X%.In retention the premiums XX.X%. reserve in the rate affluent profitable pure we with dynamics performance exposure workers' results size. X% XX.X%. pricing, execute in renewal added increasing fashion.Excess change and to pure points renewal to improvement exposure in improved commercial beginning was and prior to The prior the The Even Renewal a Excluding XXXX. was and combined policy stable premium The plans. to of strong teams quarter

to continue XXXX to full personalized We of XX%. pure renewal in expect pricing be year excess

was end As year's actions below of approximately quarter, the at target rate.Retention expected, retention run last the profit strategic first X is decreased and XX% improvement business. from these points for higher

in Personal new premiums to XX% non-target XX% deliberate down business counts declined took steps as with policy curtail we Lines New of business. production

A often just that meetings. distribution or strategic our advantage field near of of a For up competitive $XXX,XXX We of places customers. new the we model speak quarter, agency nearly home business unique council of values our partners and front, greater.On underwriting the wrapped had empowered our XX% staff Coverage annual

differentiator. strong receive continue that market is a our well. having the with us to and Staying serves our meaningful operating model relationships distribution close feedback to We partners

long-term Our distribution opportunity represent customers challenging and to communication our value consistency, and continues the clarity growth and expansion we in attractive an environment.Our partners geographic diversifies navigate transparency portfolio. further our as methodical

Commercial us allowed a footprint, strategic covering important repeatable that XX Standard initiative added accelerate have West We process to successful now states. has Virginia recent April, to Maine our years.In approach in and and we Lines this

launch and Montana Nevada in and XXXX; to XXXX. Washington expect We Oregon, in later Wyoming and Kansas,

XX% guidance, Our revised will the that, an target turn Tony implies ROE detail, in for over full I'll more call Tony. discuss year.With our the which to exceeding

Anthony Harnett

John, return X%. morning, a on operating XX.X% first down fully equity of We've ago. XX% down you, and quarter, was an of of $X.XX and year EPS operating $X.XX, Thank return XX.X%. This from the translated good equity EPS everyone. on Non-GAAP to a in diluted reported

was X.X return will to of ago.Catastrophe and better XX.X% strong. see year quarter GAAP XXXX, a in quarter, to I the a X.X of first from ratio lower were later, the to than continue points points be which Our we X.X losses points performance, combined expense continues up Underlying ratio.

However, added the X.X favorable net was X per adverse liability ROE prior $X.XX compensation. million development million impacted million year of combined $XX a reduced casualty by and operating our general reserve development to This development offset or of workers' $XX partially by of points points in results. adverse our ratio.$XX annualized share

quarter. the continued remain general of liability was liability to with, experienced line accident strengthened preserving, to in emergence As than we severity expectations. We mainly in loss reserves driven million the John general elevated $XX increased as attribute or better attributed described, paid the to we strengthening years. by social In impacts inflation.Frequencies this XXXX XXXX quarter through somewhat XXXX, in continue fourth

prior.In general was increase due $X development. the reserves attributed loss represented and quarter. compensation This severities accident X.X in million accident points ratio offset years spread XXXX, accident development to combined lower year produced and $XX the across years reserve mainly XXXX for points million each prior the of million favorable to million reserve of and favorable in $XX year prior adverse Lines, through net quarter's X% liability adjustment of Personal approximately our $X of XX% forward.The across year on years. Workers' prior years This accident reserve impacted XXXX of primarily XXXX with development was is to auto X homeowners

XX% on treaty, severity, Standard of covers July accident place underlying impact the took of quarters. drove Excess better lines The on renewed our and each catastrophic XXXX Surplus individual to million ratio XXXX, and in we various ratio X.X E&S for point. For impacting and XXX% the first recent by market recent in have $X dynamics losses casualty and loss than in than our In treaties strong $XX context adjustments.As social in approximately accident combined inflation combined net X, prior quarter, was business.The excess General overall of standard million rate events. our retention. Severity covers run the reinsurance X year, points approximately in a XX.X% large our current and excess slightly treaty Liability and which of manage better the quarter impacting to reminder, lines, line's its action a exposure years of we the

management expectation a $X expectation quarter the than in million in and we first fixed-income the money Our from first portfolio's new quarter, interest-rate yield end had losses on book target top The book the down an higher range ratio, of quarter, increases slightly X.X of and our environment commercial of better of internal investing our X.XXx the X.XXx, to and portfolio net This in our yield lag, the were strong of the expense was in attractive is quarter. in surplus attractive growth.Additionally, XX%. from This the points ending securities at if an internal allows our $XXX capital substantial remained a us as X A+ exceeding than invested strategic flexibility expense at to higher billion. XX% and are points quarter adjusted the compared a earned income approximately did the ROE. which operating XX.X of opportunities bar statutory generated XX, operating $XX.X year-end, our ratio execute cash than moving provides the period, threshold modestly overall disciplined benefiting with average position property quality $XX at shares yield us of and represented flows, to and years.Our the positioned. organic credit above increased of report quarter persist.Debt-to-capital X.XXx. elevated and XXXX the forward.The lines.After-tax quarter, authorization. our together provides below rate repurchase growth a X $X.X source and improved growth we comfortable of income per of conservatively at our increased as premium-to-surplus not support contributing we and in equity $X.X billion risk portfolio share portfolio ratio meaningfully non-catastrophe lower auto and at Fixed-income remaining financial well Book of and year the was X.X% better capital of our embedded short-term of any investment-grade of pre-tax year move from under income and with an value initiatives. end that million book in ended share repurchase X.X line XX% X% points top duration at investment value for year raising our the during up levels, assets. ago.We Alternative although first last pre-tax March GAAP deploy to We was durable The remains X.X%. with million property average prior in XX.X% investments, quarter quarter, from million our $X.X investments million The after-tax the at

we drove increase development. elevated rate E&S XX%, the from including and We take an to year reflect million. no to open in additional acknowledge increase. of income expect of share loss assumptions quarter combined be environment from investments.Our expect our unchanged, remain with effective Other for authorization.I'll point year year guidance deploy within million all Current weighted-average session. the under reflects first now respond GAAP with to and operations which now remainder full organic key does estimated the not on we of X repurchases points reserve a investments most XX.X existing point million, of tax be and estimates ratio of attractive XX.X%. $XXX the items. are casualty assume operating. development.While on to XX.X% impact general we up uncertainty to adverse original in approach prior year catastrophes opportunistic bookings investment includes alternative question-and-answer tax are our Fully accident make view repurchases our process trends, to planning an insurance of ask prior quickly and net capital.For guidance overall effective $XX opportunity the in X our growth we and XXXX, any as after-tax The first liability This share may diluted allow XX% monitoring XX the to other the operator to the accident us the our shares We basis of quarter rate trend our XX.X%,

Operator

Zaremski [Operator from Markets. Mike with BMO first come will Instructions] question Our of line Capital the

Michael Zaremski

Thanks for moving a.m. the call up till X:XX

you've and gave the I'm the of years the you all change But whatnot the seen ratio, First color loss question, about. loss this on we But loss isn't look all of -- and Selective thing much commentary of this expecting for guys all higher a what to despite given accident I'm year-over-year with trying is how kind and carriers, reserves changed you asking inter-commercial on if us at other underlying it kind happened a about in and something thanks we've didn't just lot the trend and trend. a reserves.

just transpired ratio. be too over the of I'm that course why much underlying the loss maybe what the kind So year-to-date? would on But stable-ish given of focusing

John J. Marchioni

the we're break for you pieces the I'll year it current Yes, underlying. try Mike, the the down to and you, thank for and question. into current on focused year

casualty. So out the do and separate to first thing want is property we

property came non-cat better QX. and in in So, specifically property than expected

let's I the off that So, side. to put think

particular, make to stability.With about the on general in the and So, regard basis an liability basis casualty annualized raises the by impact he an adjustment by on some in -- comments, on to an -- XX prepared basis, which, Tony's talked and points. for that the of year current We current guidance. drives all-in did year underlying

don't that's we casualty loss think now casualty trend giving further, had the look step what 'XX of me you couple been think tie exclude And so on you or moved look got X year to while the having assumption on of prepared workers' of point back X% roughly we've the current quarterly, and update that, about ratio take we and points. assumptions annual disclosed year-over-year. for in you I and assumptions that trend let it just one to if is an X gave equivalent from at at to you've your our was which X%.Now, we've primary a focus an liability, offsetting the commentary, there, trend. move that it I effective do about more impact of if factors X consistently closer point expected So driver.But our trend And gets basis, year, loss you by loss you as we assumption trend that very the assumptions we comments, you loss trend because comp auto casualty GL if loss it --

you've from So the the an I property ratio going loss adjustment got in you've and underlying think we the direction. the on impact made, that's -- other your from or the minus offsetting increase got casualty non-cat

Anthony Harnett

accident points made clarify to prior basis to impact current XX year year just guidance, points Mike, one change point, the basis the was the we that our the XX was within And development.

Michael Zaremski

Okay.

can and basis. break-out because Umbrella Umbrella, talked lot. is has know portfolio be see construction. don't kind a if this there on on be in also out I Is Umbrella, context. hone is than line, strong in stat that macro very could trends you're able of percentage have certain follow-up, trend upping coming My do and of, and while. that any, for you other just, it classes on types has queue, great think, gone that's Okay, you've, it of people been the now able you just that What think like -- time it's us, of tell loss you guess, you certain we reserves, of lastly, guess mindful little you said I business been a any I'll in to GL, is Selective you've emanating think about just a emanating niche right, of you I Or out of a any to other from? your your guys And business?I think

John J. Marchioni

Okay.

will just the question. with with be shift would the I from, So this continue where and say, back come a market-wide might highest-level, question, this regard kind of regard Umbrella to first severities. in the we average But the as part to to you I'll view then at I handle of emanating to

Now an no always industry more recent least more tough dynamic.There I'll because question, the I go a also little at have are that is think have this and that or in legal case, there's memory, environments. deeper has been certain and always and had I on think jurisdictions have this had

seeing, expanded Carolina, I if that companies' inflationary think you social cases has states inflationary impact case law challenging South more I outsized Illinois. York, theories and just a social have you Georgia we're trends hit.But like of through Pennsylvania, where statute think or And New states you you see as Jersey, either and most you portfolio. like liability, these have So environments legal think when pretty I and in New consistently took the do large more states pretty are factors have

pretty this in I number highlight social trends terms evident certainly of magnitude viewing that's what board.I in are this differences as inflationary that and confidence across of we I to point a There important inflationary other think some So is in think one. point trend. the is, talking the think where But think social gain are about impacts. we're geographic I the the

on our $X has In of has limits been the over the including reinsurance more addition our look limit to recent several the that remained fact time over the you all years, at all mix years the last frame, very years, open of decade profile, that it's and business last hit at pretty the casualty million. our in consistently point over consistent accident underlying across accident to addition years, attachment book if profile

remained industry has consistent. percent mercantile quite got you've wholesaling and perspective, manufacturing stability So, classification there.From versus or also and contractors service percent an

consistent. remained hazard Our hazard medium, low, high has distribution; grade very

And we've one our just we've a So the took that on in little and honestly, the based through around from states expansion would just together, that geographically, second that footprint. there's to shift, a think the tend overall the is, hotter the of I shift vantage a as Tony, no all hasn't in portfolio. seen a pieces gives And environment But statements us expanded geographic from bit it diversifier spots here. play be shifts litigation all that those point.So make dramatic the why at don't dynamics to as that the you been kind underlying I you touch you view geo when perspective, the put you of on question? generally confidence

Anthony Harnett

But the up on Yes, and right versus I represent split as would we We reserves the total, position. have to sit about in call. a us can back liability follow XX% XX% after just our say the of our front don't of Umbrella there general GL. reserve

John J. Marchioni

that layer. exposure mentioned, one our in $X means we Xx I quarterly really our as adjustment, and as that reserve that that review is or retention And million umbrella

Michael Zaremski

color. the Appreciate

Operator

Your Michael will of come the next question with Phillips line from Oppenheimer.

Michael Phillips

John, of the kind question reserve reviews. to of relates timing

don't refresher obviously, up general do you of of every reserve that's we But think data you you all up this right?So, but general maybe segments we of here. granular your reviews liability kind have, pieces. a into individual inside rolls your and that now house kind for that give because number when I that that that then, feed I how what each comes of What see. liability ] the don't the one you general a to it changes, those [ of total many us is, at have whatever liability do know are independent

on And review? you you when Is pieces looked mean yet forward? see would other obviously, impact might accident didn't see you Are individual that part that looked What or you what another? today last mean maybe second was really. what's future favorable you ask you've charge? it at there -- some current -- at So us there pieces done So does a year didn't because the it of did that just accident quarter those X-parts or years a timing that is does or for some some the give haven't charge whatever this didn't like?And there then, be, the John, all see changes that because quarter basis, you is when done quarter, I one quarter, quarterly took you've that that you like each going older that quarters?

John J. Marchioni

No, the appreciate question. Yes.

at a somewhat a within level do we segmented reserve GL. evaluation So

GL exposure, that's then non-product So excess products and consistently every quarter. and done and

you or you somewhere because exact those percent numbers, when in the paid relative the give important think accident point the accident we all is point happens the and that's way years the -- And -- what numbers, XX% to that generally a at the to comments, ultimate this most. We is but percentage an So it's years severities. upper-single-digits XX% and question, paid probably to key for saw is saw speaking, a second to 'XX your fact point regard to relative the is from in percent expected when paid couple paid exercise.So think I that's of in of not QX, that question. that's QX. through the different think And emergence at expected not things we annually the -- I'll in the for with what do. this back the think workers' the the study you the range. saw, QX part in something at low.So approximate first the comp With to regard you in go tail the quarterly But your that regard we 'XX, to there's about XX% with quarter QX. year, prepared these mentioned paid this of probably part There are done this emergence paid your and I this in to the to about quite we is were is immaturity reacting and to the of the comes expected maturity of point percent

and losses, the changes -- based and expect. When know reserve the and or respond paid percentage adjusted incurred accordingly.So paid methods case to data, to want reacting and that's unadjusted it's those ultimate quickly, where small paid looking weights say we different an relative to story an then environment. you you your based the we're an and was a weakening. But It's in on what development us point. what important like at provide reporting methods, those then we're point the and look which then a about. changes at recognizing So adjusted unadjusted you on with in looking that this strengthening also them on level.And the it case of patterns, you just relative case to I level reacting at actuaries reserves methods. portion the you factors [ on strength relatively to talking historical we're reinforce But I the They're paid outcomes various paid of are paid that we to small adjusted activity And on to include rates, immature it appropriate in percentage appropriate, things to what ] change felt respond disposal -- you and they're really paid apply about know respond was point. that's

Anthony Harnett

a this really the current specific nothing It's year at Yes. point. immature we And Mike, that accident year, maybe I add observe. in there's would just

we we years However, our year adjustment years that the adjustments if the informing those made. did to, you position look and at on it's that current the make accident are

Michael Phillips

Yes.

Okay. Good.

much customers that underneath customer by your strong much it X how at new you strong is, that is pure the pretty or much exposure.How how are much lot in parts question getting focus now? customers about in around is assume exposure don't law there's which pricing, more you're is growth. I talked our driven take growth -- a commercial Second that strengthening states, new trying question, count through in different a commercial tone get pause to new let's when really of XX%. business And door this also kind which more is are with it's the of expanding lines, of guess belt? you of always new really you time uncertainty, to pretty get Well, I but let's push and a right it is that maybe obviously, know and couple a of at pushing, are in you lines is do, because kind so really you great. I growth, But time

John J. Marchioni

think new and be, about the expectations ratio I we're way drive business not our those for company. pricing Yes. pricing relative is, No, And and might growth-off appreciate the a question, production. market have we will think where hit expectations listen, The to where business, Mike. new our it drive we growth-on, ultimately are

because If organic opportunities, footprint. XX.X%.Retentions that were new up is but we're pieces think that create We've stable. business I states the count the on so this at agents just not commercial diagnostics, that got remember, underneath of the look relative as your book.Our had but in Generally sitting strong existing prepared put business will because to pedal was disclose our to up policies look I there new to continue saying, down you've basket And low-single-digits. pricing and for renewal And it, these policy new on specific in in when be and comments, don't premium metrics renewal we you total our business. lines add new pricing we continued not to show the growth. growth, some reiterate a at different strong growth they're change has speaking, the continued open pricing to we

really how and growth want new to is, writing marketplace. is overall So point at an by basis. on we're the currently what really that at by be that's it's business perceived the rate exposure it writing tells in driven But and we the retention you price and strong driven

Michael Phillips

makes sense. a lot Okay. Thank of you, That John.

Operator

Criscitiello KBW. Your of next line with comes the from question Dean

Dean Criscitiello

like looking are rate wondering And are oppose if states that liability likely about the there of such rate either talked line. or slow approval within you for increases was maybe increases? any I Hi, guys general to

John J. Marchioni

tools filed other speaking, through multiple flexibility. issue have state No, number evaluate achieve a companies pricing and debits that on that. tools got to with individual us gives the a regard commercial for that are those you basis pricing Generally Personal lines, well risk individual you've you within ability in in of an is lot any of issue more use lines expectations scheduled an and of our commercial credits, that to to of Lines. pricing And you

Dean Criscitiello

bit. growth business Were that improvement next there ticked obviously retention And profit sort fundamental the the plan asking quarter, we within about in in going long of this how forward? to quarter? book? quarter And actions a like, happen And happen Okay. like auto, And within sort Personal growth are changes in Personal question do corrective last the think was should in the how both Lines my going new of context you this personal down of didn't I'm slowing and Lines. persist on these think

John J. Marchioni

Yes.

gave think in I Commercial the story Lines. I to Lines similar asked, Personal answer that question on it's think that similar Mike I a growth the

a premium. don't little XX%, XX.X% on and look It in the you in was business renewal our of It's have continued higher. the date to has If between and the move impact where about pricing over about at QX, X% the QX. filing you new pricing lag effective

full-year build growth. expect pricing XX.X% a we has hit business the in that year, New been continue over think to we've overall quarter.I reiterated excess certain the that's ratios, about, in in pricing have that's driving and retention. that driving It's XX%. about driving, the the And to prepared we as course to think comments of to extent, expected of I we talked

-- with I we a start that our next combined the ratio top I that segment, settle But see regard that into to into expect line. that growth So rate to continue more we for normal as target and think will approach you'll rate earn think to pressure year.

Operator

line JMP. come from of the Citizens will Carletti question Matt with next Your

Matthew Carletti

trying in a for just reserve to the help of last the get as has how view reserves. to us general you management back been put liability, kind maybe you the those of feel more in can much at conservatism Going kind total, into I'm with couple of of look charges quarters --

that it reported? I can metric versus think some where of X to way a much Or how today you ago months guess, bit you actual maybe little kind charges? before help that is versus, one actuals us So, is, versus or say, of took you like of maybe maybe midpoint sat where of these with maybe you sit

John J. Marchioni

And the for I as about assumption have the accident and be approach last would on methods, the methods paid we think and we years. a we're had to is, a that's you. reacting consistent might the to trend much satisfying, could early each emergence Yes. I with few weight to I last reserve years. different make. philosophy guess regard based accident what to I say tell continue you realize but this And as those have not of decisions We in we few that different evaluate I

what's XXXX now ex-comp. was loss ] trend to You bigger severity forward more I a fixed our in embedded of and by move for responding when average start assumptions casualty to, responding raised X%, insight X and happening last trend into with our into [ think years.And to what we're actually get we above each that change. That's increasing been at the that what that's assumption over even it we've

in what last about the we're are of experience just there to driven pandemic driven period, think loss it reserves loss still remained in think very the years your from need in earlier, and 'XX make to limits as how mentioned consistent approach over consistent process, portfolio, very is a 'XX and what about of evaluating more we've been that goes think factors but we the process I particular. a factors by out and all elevated And the to always contemplating. to of that and I and is at uncertain highlighting we about think industry context our trend terms sure that not our booking from reserve in effect very want decisions trends trends, is, and perspective, couple inflation establishing consistent risk updating fairly that's I into classification the social years perspective underwriting and by you reserves approach the assumptions, has relative think booking is of the that risk consistent.And how we to in

Matthew Carletti

quick losses then That's within auto, could. BOP? question, Okay. you commercial and if property Could And break-out that just cat mean, sublines I commercial the just helpful. a I -- the by numbers Commercial Standard

Anthony Harnett

of Sure. had million. Within cat $XX.X $XX.X property was Commercial, Commercial we million losses. the Standard

of was million. was Our $X.X $X.X auto million, commercial and business BOP line

Operator

America. line will come the question from next Our of Grace of Carter with Bank

Grace Carter

dig a guidance I combined bit. to wanted little for the ratio updated into the

like assumptions XX.X% implied this for mentioned favorable a year. kind know XX% book of are year-over-year, the ratio improvement make Just come kind the potential of all I where ratio of to I you sure just of sort loss just get my Personal I considering expense some flat in quarter, year-over-year are I roughly the expenses we on of tailwinds flat loss think cost core that higher thinking correct, that from the versus assume about but losses impacts computing ratio kind loss that if all liability and quarter, that non-cat this the might had just Lines kind from? you about trends wanted property of as core or deterioration

Anthony Harnett

Grace, Yes. is this Tony.

in in to terms assumptions the assumption you that, we remainder mentioned, our of the in of favorable course the the our point the quarter that over out or the -- that non-cat relative the favorable we first expectation, our In wanted ongoing non-cat just in to I variance the neutralized saw year. of

due we natural will of the volatility year to assume over the through benefit that carry don't property. the So of course

John J. Marchioni

primary difference. the And that's

Grace Carter

lines. how getting renewal We've that a light was all about in bit about thinking And like commentary curious are upcoming reinsurers. more the social cautious tightening if that there's you implement? just was just casualty how and in potential your from that tweaks all that suggesting just wondering of on versus a inflation the Okay. thinking any I -- would some you are And you casualty the to environment, also you're the kind renewals. heard of just I mentioned reinsurance. at reinsurers

John J. Marchioni

Yes, think in we're -- and I Grace, obviously, the early process.

of early comes pricing we Our And we've do July with to evaluate actually of clearly, X. all where to reinsurance But ultimately in we're going I on think have program some renews like started it decision conversations. make our programs, or changes. view to $X very program that always on terms whether a has any proposed time. for there not us makes long process, been make our a our been sense retention structural million for around and our That's

I sort when market of we'll the based late started think same to philosophy 'XXs, we into the that property and took move. evaluate the back pricing.It's on

ceded about that, managing the a based decision relative expected losses to You're ultimately then, to ceded profile of and ceded volatility think rates on indicated in premiums we the results. make also evaluating economics losses and combined ratio the the online so relative our -- how

we'll So it's process. go through we and having early ultimately make as those process fluid the conversations early that obviously be We're in decision. and a

Operator

come with will next the from Bob You Instructions] line of [Operator Farnam question Janney.

Robert Farnam

coming you the of you wasn't -- trying reserves. I just do peers. some get of to pile it's your So I'm feel book that claims some your maybe the of sense through funding if general that But not of liabilities, business? to is size litigation a are sure versus backing on for, claims with quite the for the

funding Just kind you'd sense that is of curious if things? get behind litigation a

John J. Marchioni

I not real that exposure I'm the is side. about going I high litigation funding cases is it's the funding the primary Yes, product suggest on impact board. think just but will an to say the litigation across not driver,

active that. than applies actual that increase seen think very auto more at both question And bit think where statutory funding states, allowed, more in litigation in that only a will you broad I think that a litigation in bar plaintiff rates, comment modest damages like liability. a premises and our litigation are where liability you there's nature. I things of little general theories is more question.And you no rates, states to are there's much expanded expansion I we've you no have look phantom and But exposures, especially challenging environment a in and litigation I when say, liability liability certain see see

tend their where to the you focus investments. litigation that's think see financing I

But there's on it's below accounts I it they all our larger -- of average. all sizes all are and focused and all limits that limits, think profile So think books bit little does of no is question I sizes. a impact

Robert Farnam

million going I sense getting to involvement even long was of you're plaintiff to going endeavor? at. as I this the Do keep maturity companies. going with limits limit didn't claims? to Yes. that the be under a that's That's what litigation more in Is is as as your larger that You maybe going-forward of attractive that having $X be get basically think to -- going a get trend you're up more kind be bar like you successful if is probably know facing seems just some forward? as going

John J. Marchioni

the inflationary of going look is industry talk get challenge long-term behind that's trends like. uncertainty our one I an think -- social reasons what and forward about of because we the as to

Now than this data point. more is nothing a

severity it's are in think look you an you liability. the to do indication it's that going I auto, has grounds. these their be to out.But that trends the been commercial in If or from we of I for X that inflation also need going or is And at bar seeing a early pricing little to a settle commercial little bit commercial than auto severity the stronger hit find trial because ultimately, level to been also and leveling say environment things The not happen. look more And might moderation severities out quickly social But more tail. continue shorter but impact general auto, stop. trial bar X fertile in is

I drive up once level. is relative is, near-term But to landscape front until it exists be both important whether and in personal to time law consumers fighting a in I I sold bad the to makes case a law in is the the point case uphill as that conversation, that's battle unwinds connection cost consumer-driven start statutory industry case change, consumers, underwriting and business think that's policy legislative on companies on need public consumers. that made that an law changes And that more near-term, our ultimately precedent-setting the state-by-state reform and its going goods think the results. think borne a to strongly need it this this forward, impacting relatively into going this winds it's bad by way of most becomes issue. such And state.From perspective, think to unwind I You the change, or bad address you or statute that

Robert Farnam

very color. Great, good that's

Operator

And this the we for further I'll John closing have to at over no turn call back remarks. questions time. any

John J. Marchioni

out all your free to always, as feel for follow-ups. please to And Brad any you. Thank Well, you reach thank participation. very for much

Operator

and you now call. that for Ladies conclude all and today's gentlemen, may joining, disconnect. We will you thank

Selective Insurance (SIGI) 2 May 242024 Q1 Earnings call transcript