SIGI - Earnings call transcript Q3 2024 | Selective Insurance Group, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Selective Insurance Group Inc.

Third Quarter 2024 Earnings Call. [Operator Instructions] After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to President, conference Investor now Wilson, to like Vice Senior Relations would turn over the Brad I and Treasurer.

Brad Wilson

you Yesterday, be shortly earnings selective.com. A Thank earnings posted the Investors and there morning. for of our third on Selective's Good website, of quarter investor conference presentation call. call. release, the we after press our replay this section posted financial supplement joining XXXX webcast will

Senior Officer; Chairman address our President the President and Officer, Tony Accounting of join our also your pleased and Executive Marchioni, John to Brennan, and will Harnett, President Vice us. have Financial Board, Executive and Vice We're remarks Officer, Chief and Patrick Chief make new Chief our questions.

use These it insurance our common to Our common evaluate non-GAAP We our measures to non-GAAP equity, to on per share. commentary operating GAAP supplement financial references investment include make adjusted measures today easier return business. non-GAAP posted website. operating we include financial the reconciliations income, and value measures on in referenced book community any the

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

to John. the Now call I'll turn

John J. Marchioni

Thanks, Brad, and morning. good

from the ask suited finance company. operations. our is has Executive Financial We Patrick you Officer, and believe deep discuss a remarks Before quarter's experience with a are corporate I'll background of make we results, Chief his and lead results. He discuss Vice Brennan. President Patrick? to our and prior the insurance to introductory we pleased Patrick ideally new few quarter's to before significant I'm investment he Many introduce familiar in Patrick finance.

Patrick Brennan

led. time and not long here. XXXX I I've dating him, Murphy conference also to with sat when a impressed known advantages, he Greg model John. differentiated reputation why next company Selective and competitive and and left growth. for company's strong industry team. really be only with I a excited investor the joined leader market runway foundation to is back for track The I'm Thanks, are but excellent the to an operating Selective profitable record an at

Selective leadership to with on partner excited thank want his finance the eagerness for our like and to to I future. onboard for especially to acquainted very me executives warm and quickly get new helping Tony help. would and his welcome my CFO I'm their lead management their other for into John, team to thank generosity and Selective. I team steady as the his help with interim colleagues in

in company of those I of Brad's sat when many years forward and know look I I many you at haven't met. from prior my you ago, I role to meeting yet

and John, I'll coming the Over opportunity. creation. It's be to for speaking allocating on months, great focusing this value you long-term about your we're investing capital how Thanks, here. with and be

John J. Marchioni

an to and transition. reporting our like member will to continue running has work Tony executive for and to his Harnett acknowledge would as I interim Tony Accounting He this CFO. team a excellent Patrick. preparing Patrick. Thanks, done for Chief serve finance Officer leadership key team as our job remain

Let me now turn to results.

operating generated we and $X.XX an XX.X%. per quarter, operating ROE For share the of earnings

from losses to and investment added strong ratio, very elevated XX.X contribution underlying our results the that catastrophe combined our income. highlight Given these profitability points

is ROE operating X.X%. Year-to-date,

X the our primarily expectations above catastrophe first second actions losses deliver Our our reserving implies we with full year our guidance in of first below operating in in target, due year. the This the ROE an high range. quarters, is will the and single-digit to along XX% months

where each reinforce with to segment. target want one in I on results, better XX% in is or ratios is our line our value. segment focused insurance delivering than team discussing Priority combined creating Before

tactics always our due our partners long-term Our market to vary in stable and and position we strive business, communities. shareholders while to generate for distribution in market a and be customers, dynamics competitive returns employees our each segment and for invest our

demanding no experienced and liability persist, and social quarter In particular. quarters further reserve casualty both our these total The prudence social its recent on in prior recent are we've and quarters, trends. continued inflationary we've elevated development dynamics Despite and discussed in prudent portfolio strengthened impact and balance discipline, inflation result, underwriting on claims trends remain this accident sheet general execution. our impacting actions this severity pressures and We taken year believe industry. loss we and Selective our the

our us We allowing and premiums reserve future leverage and assumptions prospective establish realistic appropriate to rate our and planning quarterly detailed model and continue underwriting written and on latest actual incorporate process. We monthly to update disciplined loss Based with our changes, pricing ratios. set achievable and to pricing quickly actions. review combined trend

pricing to for risk from staff. business tools our underwriting output and position future of calibrate our used also is The success. that claims planning refine and our book The we pure actions provide increases achieve management selection, taking claims risk us to to price are the process our renewal level guidance

teams and tools that and has have environment. in I'm long these confident capabilities this that the Selective demonstrated execute we

to target we remains emergence our in and Lines, our severity quarters. pushed responding As higher, elevated have achieving top priority. In recent mentioned, the Commercial pricing loss profitability Standard

moderated, has for profitability to business new growth While in trade trend loss are willing current the we environment.

auto pricing levels in the third time, renewal increase the For property same At in in commercial quarter. to the with pure commercial liability renewal in in pricing was XX% was X.X% and from XX.X% delivered we recent second quarter holding steady quarters. meaningful business, a XX.X%, general reported

renewal renewal second we portfolio quarter, Lines points and pure Standard a Commercial this Our in a to as pricing of Lines from while points accelerated our to targets. pricing XXX XXX the price ago. than retention and up maintaining X.X% protect basis achieved high-quality regional basis this higher Standard quarter year teams Commercial look XX% renewal increase X.X%,

renewal X.X contributing in opportunities Adding should to share market market XX.X%. with points, a Commercial existing diversify and provide Lines of states lower growing growth states workers Exposure our pricing, total appetite. premium new further our within excluding and property ample compensation, change added XX.X%. book increased

We closer enter the states. added states the Wyoming Standard moderate grew across the operating After in goal We Standard Washington, in XX.X move next as our Lines Oregon X of offer entered and Lines of our Nevada, driven October, to are number the pace that, our our XX. expansion we years. geographic in states bringing Commercial total the Standard Montana quarter, have to points as Standard net next Across Commercial states Lines written now over expect to renewal X% that country by and early footprint, Commercial flagship XX Kansas, in we of of X premium Commercial since XXXX Line premiums entire will we change. business.

our to Our catastrophe of XX% losses. target due XX.X% combined ratio above elevated was

program. event aggregation our coastal we our represented total guidelines, catastrophe net single Hurricane appropriate pricing, a with Helene property quarter-to-quarter, management exposure, above managed the remain catastrophe was no insurance losses. comfortable reinsurance through which significant we variability net strict retention, our While conservative Despite risk-based and portion of

lower these performance, business ago. based XX.X%, underlying manage catastrophes, X.X While an points a the we note than excellent all-in on which and was combined the price year our excludes we ratio,

ratio scale. representing performance. net expense paid XX% in E&S increased an written our Lines Net ratio. the segment, combined Surplus in quarter written our Excess and the in commissions Despite of with building premiums continued the the now in of reflects XX% premiums investments its quarter strong XX.X% higher XX.X%

in and maintaining Our opportunities. E&S taking of very favorable focus is levels of attractive underwriting on advantage growth profitability

improve actions premiums net reflecting decreased Lines the written quarter, profitability. X% Personal in by our to

rate actions in rate take approvals. adequacy. rate significant in we and continue underperforming Simultaneously, growth limiting needing with nonrenewing new to states business business promote We are and areas additional

third XXXX. our Renewal counts increased of the was policy size XX.X%, those the from shifted quarter towards Retention affluent offset down increases. pure XX XX%, mass strong pricing renewal segment. and and new as we points policy quarter at our XX% Declining target in by was average

growing Across homeowners, are coverage in values subset where of book over $XXX,XXX. the we're our A

profitability points are XX to quarter's highly towards compared handling XXXX. third transitioning of the focused points we and remain rate have claims on NFIP of towards book affluent XX.X achieving do progressing fees ratio by the Lines improved quarter impact as Personal mass the Nonetheless, or the and more adequacy segment. to combined excluding We underlying work our

commitment year. executing to has far, and So our of I our team's been strategy. am XXXX focus a proud challenging

in quarter's position gives us we Despite dynamics. of manage Our delivered ROE operating target. the elevated line catastrophe strong flexibility market with our through these an capital losses, XX.X% to

as confident we ability in our We value move create are forward. to

financial quarterly turn now will Tony, detail. me results more to our the call in discuss who Let

Anthony David Harnett

of net per and third and We per Thank reported in share everyone. operating you, fully $X.XX John, good diluted income share. of $X.XX the morning, quarter income non-GAAP

As year-to-date X% a X.X%. on equity is is our result, operating and return equity return on

the XX.X ratio GAAP XX.X% combined Our including points of catastrophe quarter, was losses. in

$XX the casualty impacting development was of million no an widespread, estimated quarter. There commercial offset $X million both by Helene significant, Hurricane was pretax bonds of were in most XX Catastrophes year million favorable was with auto. compensation loss. million, prior in events causing strengthening reserve $XX in Modest results. reserve net workers and development $XX

year accident years action The and driven was related prior. in The to to accident compensation severity auto XXXX. development favorable related workers bonds was XXXX commercial and

we current As a $X of in an also booked commercial year loss result, auto. million additional costs

costs decision third quarter, current increase for As points This adjustment XXXX reflecting loss accident selection ratio loss over or the guidance the XXXX through by million quarter. current ratio that full of year points year. in emergence drove the we the This X.X ratio approximately our noted observed earned combined to the year course year year liability cost X.X to we quarter. of updated reflected premiums accident $XX as in loss total current a we the $XX recorded informed the loss end, the our we corresponding To severity our last increase the run XXXX years. general million rate

mainly non-catastrophe a a was benefiting to and losses. property combined renewal underlying price Property from reduction our points year improved X.X results pure coverage due conditions. point Nonetheless, X.X in and ratio terms excellent are modifying and from increases ago,

property outcomes positive and are quarter exclusions, We damage assume level are wind cosmetic to embedded non-catastrophe implementing volatile. in depreciation expectation will losses normal with inherently our seeing that and a Even more guidance. roof schedules. these hail changes, have the lower we loss in deductibles they from year higher return full Anecdotally, fourth and

and Program and Insurance the LAE the were the Write the overall $X.X by ratio reducing handling primarily in combined ratio. Flood and million, ratio National Lines Your benefited quarter. loss Personal related Helene underlying points fees, by to X.X Hurricane claims LAE These Own fees points X.X

better points a basis Our was year expense than third in ratio XX the quarter XX.X%, ago.

improvement ratio was expected of reductions expense The from underwriting employee in our updated view compensation XXXX profit-based due to performance.

represented investment and remains quality and positioned, credit AA- an of income years the of investments conservatively a portfolio duration September fixed short-term on X.X Our XX% XX. portfolio with average of

last $XX ROE. of net points XX.X up After-tax $X.X was $X.X the income generated Alternative investments, X-quarter of on up million from third million year a investment a after-tax lag, and contributed quarter, million report income, ago. XX% in from which year

invested $XXX we pretax money quarter quarter, of portfolio's the overall the yield our at book in moving fixed of ending federal third nearly even forward, yield the a the the income approximately an quarter. embedded increased with average rate pretax at in fixed the during X.X%. X.X%. source new should The book durable income million modestly yield income funds This XX point basis portfolio provide reduction In higher

value position of equity increased share increased per X%. our $X.X Book of capital the ratio XX.X%, was At $X.X billion. end year-end share billion our X% surplus book statutory per internal of of XX%. with from adjusted well value below GAAP remains Our threshold quarter, debt-to-capital strong the and

financial capacity, the borrowing initiatives. Given and organic growth to support flexibility operating our and flows execute our cash strategic we have

shares remaining That the our During at million a under quarter million. average repurchased price XXX,XXX left quarter, authorization of stock an we repurchase end. of share common total of $X.X approximately $XX.X for at $XX.XX

opportunistically. this per dividend share quarterly profitable our Board of declared use or outlook a growth, for expect continued of $X.XX X%. Directors With $X.XX, an We to to continue our increase of common

reduce XXX.X%, is assumption, catastrophe be property third X.X The XXXX, previous losses For point quarter year to of guidance our by which ratio in X to this, non-catastrophe increase the from reflects leading XXX.X%. expect we ratio higher our partially to now our combined points. now underlying offset loss full GAAP Better-than-expected the X-point combined XX%. us up

expect we reserve Florida be with provide claims exposure we It in immaterial. assume typical to is specific Hurricane and too additional losses its reporting, no our development. minimal based path, early to event prior Milton, a casualty will our estimate process, early our very Consistent the but on from

estimate million, investments remains including Our investment of alternative from net unchanged. income $XX after-tax $XXX million

rate XX.X% weighted assumptions Our authorization. items. shares be all a $XX.X million, guidance XX% on tax and our on repurchases to with XX% rate of no includes an and overall average effective effective Fully investments are other tax under diluted we share for existing make estimated

telling it know honor serve a answers, Before team been has also many to of the to company's you privilege and as over rest community. to like and of year. service, an to so I Selective interim a the getting years CFO. we and executive questions was of thank pleasure of the the would get investor this John, It leadership past in the story to and unwavering the Directors for their support opportunity the After XX Board take

my being team. operator Accounting to Patrick to question-and-answer the back Chief start to welcome to I please take As the that, opportunity I'll I the Selective Officer, to this our like officially turn ask would With session.

Operator

[Operator And first from Michael Oppenheimer. with question Instructions] Phillips the comes

Michael Phillips

was ask Tony's after going comments this on ask I want I then guess auto commercial definitely question, stuff. to to and some I

want like I added year. current clarification, million just $XX the Tony? to you it guess, confirm So sounds that. I for to

Anthony David Harnett

correct. current the million that's accident $XX auto year. to Yes, commercial

Michael Phillips

Okay.

with I us extent given social would auto. of comments more nature help anybody the I to on my comfortable the guess, but commercial get that maybe quarters, last for of which So not you over could impacts be, from just the question else spread few course, guys, inflation. to the guess of

$XX took million last million quarter. quarter, You $XX this

$XX I million took sure you I'm million then think last pretty $XX quarter, this and quarter.

comfortable been on pretty to inside is commercial and book. us for So GL And million spread $XX took because order for what over you not we commercial saw extensive. the the extent reserves small just of has get may auto pretty help what your still for which GL

get I comfortable So ] just the us is auto crux [ help guess, question. reserves, with of the commercial

John J. Marchioni

can I this the thanks things, start I on guess for Mike, think Yes, question. we've believe I I John. and highlighted of before. is This a couple that.

we've in longer. commercial -- and them have I seen have We persisted for earlier, been saw think the we've trends persist. auto seen start them

the And in in GL when are severities. the 'XX prior actions adjustment to we taken to year some year small we've driven by on focused your saw opted accident much point, the And year, most current relatively quarter, prior we largely movement like recent year. did to and on small small last we make a the

for auto an is with if here and and at difference been a as that trends remained pointed is elevated, the look the commercial commercial extended for as we've lot But in this Selective period pricing is it that's time. auto, comment been much industry comment, pricing stable, commercial has lot you an relatively albeit to these But stronger of longer. regard out have a auto a

couple current line the the on year accident ], quarter, us And basis. an running up XX.X% and and the prior of is out if year-to-date on back at a you've through this and is you in pricing [ got XX.X% that over strong rate year XX% for auto look basis, last even earn commercial strip year right the coming around emergence through there. years year, Our in

been which GL, responded is pricing the basis. you've a than more GL So track perspective more auto do from perspective I recent from longer-term whereas been to I on evidenced very had it recently, in that's more differently a a record in a severity view has and emergence consistent

Anthony David Harnett

it's Mike, Tony. And

of Just one point clarification.

was development. current auto, The was million. actions last million $X and the quarter $XX was actually million, prior it prior On year for $XX development the commercial

Michael Phillips

let's sense. that it while. broadly social helpful. taken That's that about That difference others guess not great. the maybe Yes, you're who unlike John, just makes more significant charges. I take for pretty talked I you've think And on inflation. is some a have

your other I you see track them, Selective from we got know -- of you've companies. early, I to hear take it you what is that Good think about record that

you've we to extent GL. We the early which have seen to taken haven't me,

question more think is, your just then if the -- specific what it's be in else? business of book it it do everything you've the becomes, you are microcosm a of for isn't wide what won't industry? maybe to so and so then how seen and you that confident matter you And happens that else just a spreads everybody time, Or write of

John J. Marchioni

Yes. Yes.

So the again, question. I appreciate

you industry an as from perspective is, limits when we've expanded the profile our even over geographic and is incredibly stable our First as portfolio while book stable. from footprint, from and portfolio stable geo thing at your a a a time, of perspective, classification from period ours I'll say and a long of perspective, remains look it's relatively perspective, is distribution

and diagnostics there, states look of that's you particular lot this jurisdictional attorney a know severities pushing at then new like of Georgia like a jurisdictions the York and have I've Illinois, it's past, New challenges on pointed been higher. footprint of a industry-wide are you renewal the parts are external in number California, and a while there not lot some a in in the that engagement stability and trends. the pointed pricing to I And that of And see active and in Florida and that basis, lot our out verdicts of footprint nuclear certain driving there's Texas those our average something like sort also of I

puts why what bodily confident is, is a inflation, bodily claim in we're manufacturing anytime got high class in environmental class. class, give construction pools claim I class-specific this that's not injury A higher pretty think willing that injury jury is rates a that or you bodily a is this This retail awards. is you out are in that more have shift injury a have to you've claim in an social trend. industry-wide environment fact, litigation And you where whether

neighborhood if look GL in regard actions, industry years, back XXXX or in and the prior. line has to X emerged emergence reserving totaled billion full industry several and -- pretty over And adverse I years the on been has Now you extremely the $XX for over years with that actually consistent. the primarily last the unfavorably, the X somewhere for years, think a the it's basis of the last entire

And judgment more every unfavorably. currently has portfolio, different and mature, earned project at that those I those it's haven't yet trend GL different every that process. Every company company they're is have different. look forward planning you assumption then a prior assume are on But as all the to where in years for years terms their and emerge by loss relatively company think whether has your What and going be companies take is rate and own a and company not think you seen what you recent you hangs by to disclosed a looking forward instructive -- together. company and or basis if exercise what they've 'XX of reserving and

perspective, the continues well loss us, And a actions updated from that taken be I pricing our with to as we've think we're the years as our is trend, for more of our right and go-forward in focus. approach basis how and view on the recent

Michael Phillips

past I in on all year. thanks your Patrick, guess to the Tony and help congrats for to

Operator

Zaremski the And with Michael BMO. from comes question next

Michael Zaremski

congrats or the work back way, writers know but just is going the question you obviously the did one just auto. in on first Maybe has preeminent by curious, U.S. just to a commercial is more to to coming taken Or started of Patrick October I'm Brennan, to is the on auto, X, going to Patrick addition study to auto progressive of? -- Patrick commercial -- sticking was the months that this acclimated part reserves doing gets is the dive company? a as the be due deep charges that reserve in commercial the or quarter he I

John J. Marchioni

Yes.

it's lot I there's and think discussion important speculation appreciate restate and of John, to been a know question. process. around And is this So our this. I I the

we're on looking and that First and are And on and our refine the and a thrilled in Patrick set to certainly board, experiences that. a have Patrick has opportunities Patrick joined strong confident of additive of for to processes, team background all, process. X always we're the October while to we're to

time, think the when process. we've I And when that a role I'm important ago restate is company XX our it's my years decades with time. approach had talking But I predate the reserving for I long to started also a which say long

and First Vince the here lead and the foremost, Actuary, a time prior and Senia current has reserving the Chief Actuary. Actuary for in been long organization Chief was our

Chief our CFO alongside the CEO reports structure decision organizational in CFO relative has management his is Actuary Officer, in the appeared process in and reserves then the the and and to Chief serving heavily Chief Tony long that CEO. been to the involved of in heavily involved Officer the to the role Accounting over Financial as engaged term. prior has and Interim as

multiple And -- -- our There there's included, worked worked speculation I continue continue work. that has in about a the process involved CFO on those that realize process been voice in decisions. will that and are there's have way have the weigh myself But and has it be will to involved change. and to people, been always

as his in our make going in I said process forward, at Patrick's voice and regard commercial very decisions think organization. consistent has earlier, And auto, to but those to be experience beneficial. background been With be going is instrumental his I particular, we will

Michael Zaremski

best Maybe in That's the loss underlying Okay. underlying one Commercial going rate helpful. ratio, to of the Standard years. Lines

out good noncatastrophe called property benefiting. can disclosure You see your losses we on

we run of line of the about to this upward property and spend we like there? rate mean trend think there of kind -- kind the the just is total load, catastrophe to kind to similar thinking make way. not we we're I to quarter. as to should time? losses non-catastrophe us kind longer there about -- periods averaging over of the losses be of non-catastrophe property just So right want feel an underlying losses is cat it you're -- just We I -- sure I want telling

John J. Marchioni

couple and well. a Tony in Yes. certainly of weigh I as can guess things

give trends. trend more been property assumed and we've point, starting that a of our assumption of And between in lot your to X% in years, property a think disclosure closer for I trend we all-in XXXX, down was casualty. And recent assumption you around and X%. breaking trend that

we're XX%. And particular, around at in Line the earning property Commercial rate in

at you of way generally the and whatever year year just rate that XX% positive, number. as you focus XXXX to little plus there's We But a We earn view that last XXXX, current run look its If continues a there this margin exposure pickup portion through. gap positive. don't. of want to over profit positive on the rate

So benefit I we're clear impacts And on corner property turn to on there think a commercial. there's that. that personal the now the starting

from as XXXX side, forward cat cat been higher going higher move built expected have so far. That into pricing loads continue our and the gets our in to last On years assumptions. several for you've assumption seen us, our

the and quarterly at us, for cat commercial. volatility loads we think If seen for for in book lines the we've you I annual look personal have it than

higher range commercial tighter than around as well. gone dynamic has has a there's bit or has little pricing in amount Lines, loads fair for a commercial variability to Personal it tighter that While a the been but in cat

Anthony David Harnett

some add, But non-cat pricing I as impact agree Yes. had would property. the well. variability John, The there's obviously, has was that only there a I just thing positive the normal on

prudent. be the So multiple taking describe look a would you I them way averaging periods think at and

in embedded we've overall which when guidance is of quarter, a fourth you expect the in the more we at put look out normalization In guidance, there. fact, non-cat

sounds reasonable. So I think your approach

Michael Zaremski

That's claim just year? Okay. And quickly on into handling those QX and/or flood Lines, the helpful. next then the lastly, continue fees. very of Personal to Should trickle

John J. Marchioni

estimated of the all I and all, I Yes. think them, current quarter. I in to mean we most contained have think

believe And the regards accurate and any, fourth said, quarter is I Milton, into put like number the we pretty won't real to we out immaterial. with bleed be for it's much, current quarter. the So if there

don't and either. we there be that with much fees So to flood particular regards expect to storm

Anthony David Harnett

results claims is early. you bigger when of volume revenue get claim these a And of But from our impact that you operation. have a portion there's bit flood a normal the that little events, higher in

Operator

next Newsome And with the comes Sandler. Piper Paul question from

Jon Paul Newsome

if other whether about Helene in those load zone? -- from typically cat was Helene the clearly the sort curious if your It's normal perspective, question the the get any in the typical Hurricane -- the pull be those storms you it mix you is, of losses, of for roughly thoughts curious fairly I'm out, just [indiscernible] And category, Hurricane would

John J. Marchioni

Yes.

So just think with load some in this to the comments, points. regard ratio we cat on I prepared impact, the our impact X.X was quarterly and overall combined of the the had

slightly call that or back you above-average if out, So points. it's quarter, a X it X.X

So it's a Helene. relatively ] in-line quarter [ absent

I was in the Big focus region, wind think aged. Bend loss and industry size already, Southeast North Carolina lot estimates the South that in has it and as on field the higher and that the eye while that been the areas think the have landfall of a has Carolina from seen all generated number storm -- it going and And what there you've with I time the think Helene for was losses underappreciated is that a the more perspective, event. the landfall, a made had of wind as Georgia, I to devastation coastal into as by field wasn't far and storm penetrated wind-driven

A were those far inland. lot impacts felt pretty of

expectation, bit terms the overall loss. where of that's the think the of end maybe of of we at loss the have size in I And a the miss quarter. is for a that little

and estimate quarter. around we've a that. got the loss cat getting focus pretty right right in the is on And Our the disciplined process getting

about So good estimate in we million feel Helene the we for $XX have total. of

Jon Paul Newsome

you mix property today the kind do of doing what similar Or change see competitive a the being we of business think prospectively? addition. it do mix you mentioned, in think and think you do that you question we one of about perspective or from a just up within pricing to what maybe day, at a that more fairly then the end to see the If in shift sort you're towards expect going in And of business Selective? will of and end are you the

John J. Marchioni

Yes.

think home, be -- to going shift see all think the likely don't I you're it's to I magnitude that is significant. towards but a

your than is just higher. thing First the because average much to costs higher continues meaningfully replacement home are we've be seen historically premium

And I broader and think space served think when market mass have, we fewer like offering competitors some, we're there certainly the the there, you affluent look there's more set. set are the at be fewer competitive a I the market whereas much by for are and competitors but auto competitor targeting, to product continues with there the competitor

little will shift So I impacts think of towards as overall combined a a towards home lead bit those percentage likely of mix. both of the a

Operator

next Capital Scott the RBC Markets. from And Heleniak comes with question

Scott Heleniak

was that too. just over kind you're differential that performing that of your curious, data best share. just the that, kind to if you give performing guys I'm was that's lowest had I you your available how past wondering between accounts. changed of spread and of out used I rate if able if you have fine to kind not, curious now the that's year accounts

John J. Marchioni

and know presentation. we the posted Yes. And investor -- updated if that I don't

to I pretty -- you with and for updated those least or it's there that decade by We bucket have see by had We've pattern would basis. a average quarter an probably presentation, see a now. a regard rate same at the with tranches. retentions consistent every overall, path you And investor in say, on then in retention there

say more I direction. retention gone forward and investor a see the that path available it's level a for But that you've with loss is higher entire lower the that XX% gone tilt on regard to presentation. little higher, so shows based while seen bit worst And curve a ratios, on as in rate therefore, that you higher rate has you certainly worse has when expected the see -- a cohort

Anthony David Harnett

you're XX package if Page was looking of the That investor for it.

Jon Paul Newsome

curious rate just then rise. And Lines, Okay. on in trajectory on that's been Personal the the

Some of bit others here. talked from decelerating potentially the about a have that little

you're you with So based how you're about what of out filed I'm as increases just thinking that your that book rate you in high on -- the your kind curious worth overall retention? How build I'm XXXX net just for business? and expecting you're balancing

John J. Marchioni

Yes.

very a our we're regular state-by-state filing basis and a updating on -- on we accordingly. indications So basis, pricing

there for I of states blended look think to a that rate level. adequate as some and you significant getting by approvals state regulatory number variance certainly quarter still on state the the obviously, rate had some XX.X% few see you are hurdles and the

But forward that target indications loss ratio and file will as trends combined to rate we and view basis. going we drive our continue that a run rate of achieve our we're those indications update indications until update on our to

expectation to going not getting on this But rate give I'm number. basis a objective. adequacy is to XX% point, at state-by-state So a the rate certainly, you

filed, we states states number we that's what rate and adequate will at a on aren't coming business the business at curtail adequate, have In based in completely this slow or be forward. are expect to those of the from we of going flow we've that actions that the And growth point, new taken where states. new

work more that underlying So ratio. currently combined to I you're strong guess it on of are. that's we be seeing done terms earning where in by lot will in And of And there. the of a that would of the seen obviously, There's basis XXXX. rate done a balance improvement work describe through written how the then you've be the I

Scott Heleniak

helpful it quarter. around still same on that the was That's that one just had then on second Is Was Any X% in last rate? I any running detail. GL. just the change there? that? there I Okay. the was change trend loss And in think

John J. Marchioni

through of trend assumptions, our there's last it quarter, see quarter. Yes, say last for I accident would are change took both in what and years stable trends more and no forward on from based historical we view loss recent and trend our the we

Operator

our question America. comes Bank from Carter And of Grace next with

Grace Carter

everyone. Hi,

overall in with the hung step-up pretty material in very well the rate it quarter, Commercial Standard this there even book retention in at renewal Looking increases.

next and retention continue sounds are rate So of your and stay guess some you to reacting just your I'm kind mean your your through you've go to and peers share levels these rate on few distribution kind be if -- been increases I of on partners views to as us quarters forth, sort but I to at that. updated it of so concerns all reactions social of all just like wanted of these inflation you the wondering over you the expect kind on if could of continue update to taking able actions. I

John J. Marchioni

Thanks, Yes. Grace.

not a to guess pretty think and substantial, recognize commercial up little about over rate getting shift been basis. appropriate, the and we an over basis, is dramatic we're in a a quarter at I from X% to our in XX%. But been year-to-date GL where overall on on we're that movement a the X% for talking So little it's that important here -- has running. we've the Yes,

but impact a a creates should yes, that disruption not And move, that a substantial so it's it's retention. have much on it move

Now at here. new into as a dynamic GL of some is new suggest conservative will evolve the will a this will the market that's for necessarily that environment in perspective, there's rhetoric that that time. I marketplace. pricing over speculation would maybe something And purely that's point business say I from the come as not think play

is elevated think So participants. the a consistent pretty is on pretty loss consistent. inflation of pretty are competition market. of talk But The pockets social by GL market of still of trends the I there number significant view across

I in of one targets us, out a objectives an comment don't coming important point at made our growth how if that a where objective But that. that's the for think are and about plays point. pricing I being bit we're little that probability a quarters. comfortable trade I And with creates and earlier our know

adding deploying growth at come go-forward hit made the think, the of appointments, when said, for if of rest that production additional outlet expansion, path more pressure you resources, might and I production through agency continued we've growth investments addition new pricing be point. ratios market in opportunity gives this a the of on basis. through our even look at outlets geographic under because stance The than for us conservative Now

So a a for complicated but dynamic it's question, I to pretty environment. answer direct that, a apologize

Grace Carter

to above the you kind all range? guess, just range. a particular is of really And the that look still this the X.XXx you. to much kind of all you'll out one, premium X.Xx? see And I that trajectory time of at? a little next that Or particular surplus. how of that matter. of sort is bit is kind that many target long-term getting a there a line you It's to metric returning one Thank priority that It of naturally see to doesn't back target or that

John J. Marchioni

Yes.

-- So a it's about. we certainly it's metric that and we measure talk

point but surplus account is in of to Grace, ratio it obviously, several pre doesn't and spot company fact holding it adequacy the that is capital one the capital. the drawback So it's your on matters, for metrics is biggest relative which

And mix, metrics obviously, the why when are they as the strong think you put that's that into capital I other are.

time, cured that into capital. our So to be range, incorporating that range see but based that getting desired on again, our over immediately and immediately a path back or essentially to in could expectation holding we is be relatively company range,

but So matters, how the is is that of a context metric earnings always forward potential in stand. it metrics and other capital it viewed

Operator

& And the with Meyer from next Shields question comes Woods. Keefe, Bruyette

Meyer Shields

that Two, any fact talk if And little that a of the the I were this a way guess, wondering maybe that's above lot cat losses bit, the there a was of pushing non-cat or of talked determine not about threshold. I function losses there's questions on lower-than-expected about you weather property -- I how you know losses. but

John J. Marchioni

Yes.

-- just That This auto me non-cat is generally property commercial be let in had they should physical other. there designation includes for a are is total. speaking, damage. be And we be losses cats, is and personal this do, non-cat only. shouldn't what each consistent which clear, independent you of property, this it's relatively us, So if weather of -- includes not PCS definition property what's

non-cat be the quarter that and impact higher favorable on frequency a you property talked cat severity non-cat historically. which there's component -- property about shouldn't to a or we've is a losses, year. what it's when a have your loss And creates variability But there

Anthony David Harnett

And to look the the are about types X property. would that make year-to-date, if of fire to, those and John And the loss auto, the just losses. point, be referred you as non-cat up of would biggest I generally XX% that say X other at

Meyer Shields

this compensation, or to either Okay. the catastrophe elevated with quarter got question, That's helpful. any And employees second quantifying when is the very to losses, you've a incentive agents? maybe on there impact like

John J. Marchioni

Yes.

driven the guess first by our combined I So all incentive compensation is ratio in. for thing employees program is

don't we losses. cat exclude So

So a by high comp will downward pool incentive year. financial on the of that's cat in current year, pressure the the XX% driven performance put

strip out. that So we don't

profit compensation, X-year to includes I say regard profit-sharing plan component. the our And same would for thing agency agents multiyear with applies a a and

happens end and going heavy happens quarter given in of in always of lag to quarter. a when when lot it are cat IBNR, the the be event a a especially -- a at there's losses Now the cat

large for payments catastrophe individual But it mitigate that individual ultimately, impact those come is cap events. an event some that, you through does of certainly profit-sharing there but payouts agents when have

Anthony David Harnett

in just for and tie the get John and by year-to-date the driven that, improvement the point to variability and heavily the to the of expense mentioned. XX Yes, in is quarter basis compensation employee as ratio point X the almost the

Operator

[Operator JMP. next Citizens from question with Matt Instructions]. The Carletti comes

Matthew Carletti

you've this quarters, the or of given for cats quarter? past handy have $XXX question, you First cap that million by Commercial. in line within Standard Do so

John J. Marchioni

$XX.X total million Lines The $X.X $XXX.X million commercial was and ]. the is auto $X.X BOP Commercial the property million The million. of Yes. [ was for

Matthew Carletti

you of then -- just can kind And you a get more Great. to right. you Lines. Standard little my Once question, All actions, standard the specific Personal past profit -- next term longer improvement ] of see roughly the do you'd next of small a like where take relatively to that what It's footprint. years several pie today over with terms business? in [ state XX%

that you little more footprint. profitability term? Or the a the hope of basically that's to hope just grow you that kind kind and to Is good something a have? of Maybe of longer penetration that size in maintain expanded more, is includes this extend maybe already you scale just that business states

John J. Marchioni

is I'll a just which question. this Yes. view. of again, the longer-term It's asked question, And characterize a sort great you Thanks, Matt. as

of near So fact, compete to in showing that term, we target successfully in our I can, think the this that. doing is market. prove we're signs And objective

opportunities market as But I addressable want footprint. better business expansion. tapping you're market you is when you our about clearly maximum address there a for addressable state means that think think smaller into that that as that which to way market, smaller I we're possible, us to targets by would sure make which a having And doing, think expanding be what

profile overall we'll because -- cat in good way step expanding always strong to here that's be we But first think is a total. we're footprint the of a path start to And be invest competitor mindful step exposure in our the potentially execution the that in pretty of on disciplined we again, also to the that it's the again, the cat -- can then existing And of a states. are prove entity there. second in business, I profile going

creating well. a So would expand cat while diversified from look we think that a book to exposure more I perspective as

Operator

further I questions over time. back I the to show call to no at for remarks. John turn now this would like closing

John J. Marchioni

free a to We Well, reach have joining us. Brad. your all I thank again your as please appreciate Have and your day. out you any appreciate questions. you interest if for always, feel time. follow-ups, And nice to

Operator

today's Thank conclude This participating. for you call. does conference

now may You disconnect.

Selective Insurance (SIGI) 22 Oct 242024 Q3 Earnings call transcript