BRANCHVILLE, N.J., May 5, 2020 /PRNewswire/ --
In the first quarter of 2020:
- COVID-19-related underwriting items totaled $19.3 million after-tax, which reduced diluted
earnings per share by $0.32,
increased the combined ratio by 3.5 points, decreased net premiums
written ("NPW") by 11%, and reduced annualized return on equity
("ROE") by 3.6 points;
- NPW decreased 4% from the first quarter of 2019;
- GAAP combined ratio was 96.7%;
- Annualized ROE was 2.8% and non-GAAP operating ROE1
was 9.4%;
- Overall renewal pure price increased 4.0%; and
- After-tax net investment income increased 10% to $45 million from the first quarter of 2019.
Selective Insurance Group, Inc. (NASDAQ: SIGI) today reported
financial results for the first quarter ended March 31, 2020,
with net income per diluted share of $0.25 and non-GAAP operating income1
per diluted share of $0.84.
"Selective entered this unprecedented COVID-19 pandemic crisis
in the strongest position in our 94-year history. Over the
last several years, we have strengthened our financial, operating,
and strategic position, and have built a strong balance sheet, a
high level of embedded profitability within our underwriting and
investment portfolios, and have solid financial strength ratings,"
said John Marchioni, President and
CEO. "This position enabled us to proactively respond to the
COVID-19-related public health, economic and financial market
issues. We continue to provide outstanding service to our
customers and distribution partners, and deliver on all of our
commitments while our employees transitioned to a remote work
environment. I want to thank all of our employees for their
diligence and flexibility in adapting seamlessly."
Mr. Marchioni continued, "Non-GAAP operating income per diluted
share was $0.84 compared to
$0.90 a year ago, and the non-GAAP
operating ROE was 9.4% compared to 11.6%. COVID-19-related
underwriting items totaled $19.3
million after-tax, which reduced diluted earnings per share
by $0.32, increased the combined
ratio by 3.5 points, decreased NPW by 11%, and reduced the ROE by
3.6 points. Even after including the COVID-19-related items,
all three of our insurance segments were profitable, and our GAAP
combined ratio was a solid 96.7%."
"Despite strong new business growth, accelerating pure renewal
price increases, and increased retention, our NPW was down due to a
COVID-19-related $75 million return
audit and mid-term endorsement premium accrual for policies in
force as of March 31, 2020.
This accrual reflects the anticipated decline in auditable sales
and payroll exposures for in-force customers with general liability
and workers compensation coverage. Our first quarter results
were also impacted by a $10 million
pre-tax incurred but not reported ("IBNR") reserve estimate for
losses related to a small portion of our policies that have a
sub-limited $25,000 coverage for
specified extra expenses to clean or disinfect a property when
ordered by a Board of Health. Due to the customer billing
accommodations we announced in the quarter that extend through
May 31, we increased our premiums
receivable allowance for doubtful accounts by $10.5 million, which is reflected in other
insurance expenses."
"Results were solid in our investment segment with after-tax net
investment income increasing 10% to $45
million, and contributing 8.5 points of non-GAAP operating
ROE. We continue to maintain a conservatively positioned
high-quality investment portfolio. We recorded $25 million in after-tax net other-than-temporary
impairments in the first quarter. These charges were evenly
split between those securities we intend to sell to optimize our
portfolio, and those we impaired for credit losses under the new
current expected credit loss ("CECL") accounting standard.
The CECL impairments reflect the significant widening of credit
spreads and reduced future economic activity over the near term due
to COVID-19."
Operating Highlights
Consolidated
Financial Results
|
Quarter Ended
March 31,
|
Change
|
$ and shares in
millions, except per share data
|
2020
|
2019
|
Net premiums
written
|
$
|
647.3
|
|
|
672.9
|
|
(4)
|
|
%
|
Net premiums
earned
|
651.7
|
|
|
632.6
|
|
3
|
|
|
Net investment income
earned
|
56.0
|
|
|
50.6
|
|
11
|
|
|
Net realized and
unrealized (losses) gains, pre-tax
|
(44.7)
|
|
|
13.5
|
|
(432)
|
|
|
Total
revenues
|
664.8
|
|
|
699.0
|
|
(5)
|
|
|
Net underwriting
income, after-tax
|
16.9
|
|
|
26.5
|
|
(36)
|
|
|
Net investment
income, after-tax
|
45.5
|
|
|
41.3
|
|
10
|
|
|
Net income
|
15.2
|
|
|
61.3
|
|
(75)
|
|
|
Non-GAAP operating
income1
|
50.5
|
|
|
54.0
|
|
(6)
|
|
|
Combined
ratio
|
96.7
|
|
%
|
94.7
|
|
2.0
|
|
pts
|
Loss and loss expense
ratio
|
61.4
|
|
|
61.1
|
|
0.3
|
|
|
Underwriting expense
ratio
|
35.2
|
|
|
33.3
|
|
1.9
|
|
|
Dividends to
policyholders ratio
|
0.1
|
|
|
0.3
|
|
(0.2)
|
|
|
Catastrophe
losses
|
5.1
|
|
pts
|
3.3
|
|
1.8
|
|
|
Non-catastrophe
property losses and loss expenses
|
16.6
|
|
|
17.1
|
|
(0.5)
|
|
|
(Favorable) prior
year reserve development on casualty
lines
|
(1.5)
|
|
|
(1.6)
|
|
0.1
|
|
|
Net income per
diluted share
|
$
|
0.25
|
|
|
1.02
|
|
(75)
|
|
%
|
Non-GAAP operating
income per diluted share1
|
0.84
|
|
|
0.90
|
|
(7)
|
|
|
Weighted average
diluted shares
|
60.2
|
|
|
59.9
|
|
1
|
|
|
Book value per
share
|
$
|
35.11
|
|
|
32.51
|
|
8
|
|
|
Overall Insurance Operations
For the quarter, despite strong new business growth in
Commercial Lines, accelerating pure renewal price increases and
strong retention, overall NPW decreased 4% compared to the first
quarter of 2019, driven by declines in both Commercial Lines and
Personal Lines. The principal reason for the premium decline
was the $75 million return audit and
mid-term endorsement premium accrual recorded for the workers
compensation and general liability lines of business to reflect
reduced risk exposures in auditable policies based on lower
payrolls and sales for commercial lines policies in force as of
March 31, 2020, due to the slowdown
in economic activity.
The combined ratio of 96.7% includes 3.5 points of
COVID-19-related items. Catastrophe losses added 5.1 points
to the combined ratio and were driven by $23
million of net losses from the early-March tornadoes that
impacted Tennessee. COVID-19-related losses are not included
in our catastrophe losses as it has not been designated a
catastrophe event by the Insurance Services Office's Property
Claims Services unit ("PCS"). These items were partially
offset by favorable prior year casualty reserve development of 1.5
points in our workers compensation line of business.
Standard Commercial Lines Segment
Standard Commercial Lines premiums, which represented 80% of
total NPW, were down 5% in the quarter mainly due to the
$75 million return audit and mid-term
endorsement premium accrual. Renewal pure price increases
remained strong at 4.0%, and retention was solid at 85%. New
business increased 6% to $115
million. The first quarter combined ratio of 96.7%
reflected catastrophe losses of 4.0 points that were partially
offset by 1.9 percentage points of favorable prior year casualty
reserve development in the workers compensation line of business.
COVID-19-related items increased the combined ratio by 3.9
points.
Standard
Commercial Lines Segment
|
Quarter Ended
March 31,
|
Change
|
$ in
millions
|
2020
|
2019
|
Net premiums
written
|
$
|
518.4
|
|
|
546.7
|
|
(5)
|
|
%
|
Net premiums
earned
|
516.6
|
|
|
497.2
|
|
4
|
|
|
Combined
ratio
|
96.7
|
|
%
|
94.8
|
|
1.9
|
|
pts
|
Loss and loss expense
ratio
|
60.4
|
|
|
60.1
|
|
0.3
|
|
|
Underwriting expense
ratio
|
36.1
|
|
|
34.3
|
|
1.8
|
|
|
Dividends to
policyholders ratio
|
0.2
|
|
|
0.4
|
|
(0.2)
|
|
|
Catastrophe
losses
|
4.0
|
|
pts
|
3.2
|
|
0.8
|
|
|
Non-catastrophe
property losses and loss expenses
|
15.4
|
|
|
15.0
|
|
0.4
|
|
|
(Favorable) prior
year reserve development on casualty
lines
|
(1.9)
|
|
|
(2.0)
|
|
0.1
|
|
|
Standard Personal Lines Segment
Standard Personal Lines premiums, which represented 10% of total
NPW, were down 2% in the quarter, driven by a 4% reduction in new
business that reflects an increasingly competitive
marketplace. Renewal pure price increases averaged 3.7%, and
retention was 83%. The first quarter combined ratio was
99.5%, up 3.6 points from a year ago. As the table below
outlines, aside from the increase in catastrophe losses and the
decrease in non-catastrophe property losses, factors driving the
increase include 2.2 percentage points related to the increase in
the allowance for doubtful accounts due to the COVID-19
pandemic.
Standard Personal
Lines Segment
|
Quarter Ended
March 31,
|
Change
|
$ in
millions
|
2020
|
2019
|
Net premiums
written
|
$
|
67.6
|
|
|
69.4
|
|
(2)
|
|
%
|
Net premiums
earned
|
76.1
|
|
|
77.3
|
|
(2)
|
|
|
Combined
ratio
|
99.5
|
|
%
|
95.9
|
|
3.6
|
|
pts
|
Loss and loss expense
ratio
|
71.4
|
|
|
68.6
|
|
2.8
|
|
|
Underwriting expense
ratio
|
28.1
|
|
|
27.3
|
|
0.8
|
|
|
Catastrophe
losses
|
15.7
|
|
pts
|
5.3
|
|
10.4
|
|
|
Non-catastrophe
property losses and loss expenses
|
30.0
|
|
|
37.6
|
|
(7.6)
|
|
|
Excess and Surplus Lines Segment
Excess and Surplus Lines premiums, which represented 10% of
total NPW, increased 8% in the quarter and were driven by a 7%
increase in new business. Overall renewal pure price
increases were 3.9%. The combined ratio was 93.5%, a
1.4-point increase, driven by the factors in the table below,
including 2.0 percentage points related to the increase in the
allowance for doubtful accounts due to the COVID-19 pandemic.
Excess and Surplus
Lines Segment
|
Quarter Ended
March 31,
|
Change
|
$ in
millions
|
2020
|
2019
|
Net premiums
written
|
$
|
61.3
|
|
|
56.9
|
|
8
|
|
%
|
Net premiums
earned
|
59.0
|
|
|
58.1
|
|
2
|
|
|
Combined
ratio
|
93.5
|
|
%
|
92.1
|
|
1.4
|
|
pts
|
Loss and loss expense
ratio
|
57.4
|
|
|
59.7
|
|
(2.3)
|
|
|
Underwriting expense
ratio
|
36.1
|
|
|
32.4
|
|
3.7
|
|
|
Catastrophe
losses
|
0.8
|
|
pts
|
1.4
|
|
(0.6)
|
|
|
Non-catastrophe
property losses and loss expenses
|
9.7
|
|
|
7.8
|
|
1.9
|
|
|
Investments Segment
Net investment income, after-tax, was up 10% in the quarter to
$45 million. The growth was
driven by alternative investment returns that, due to the
one-quarter lag in reporting, benefited from strong returns from
the fourth quarter of 2019. In the second quarter of 2020, we
expect to recognize limited partnership investment losses in our
alternative investments portfolio between $15 million and $20
million, pre-tax, driven by the significant first quarter
decline in equity markets and widening of credit spreads. For
the first quarter, we incurred $25
million of after-tax other-than-temporary impairments, which
were evenly split between those securities for which we intend to
sell to optimize our investment portfolio and those securities
which were deemed to have credit impairments under the CECL
accounting literatures. The after-tax earned income yield on
the portfolio averaged 2.7%, while new purchase yields declined to
2.5%. Invested assets per dollar of stockholders' equity was
$3.26, at March 31, 2020, and the investment portfolio
generated 8.5 points of non-GAAP operating ROE in the quarter.
Investments
Segment
|
Quarter Ended
March 31,
|
Change
|
$ in millions,
except per share data
|
2020
|
2019
|
Net investment income
earned, after-tax
|
$
|
45.5
|
|
|
41.3
|
|
10
|
|
%
|
Net investment income
per share
|
0.76
|
|
|
0.69
|
|
10
|
|
|
Net realized and
unrealized investment (losses) gains
|
(44.7)
|
|
|
13.5
|
|
(432)
|
|
|
Effective tax
rate
|
18.7
|
|
%
|
18.4
|
|
0.3
|
|
pts
|
Average
yields:
|
|
|
|
|
|
Fixed income
securities:
|
|
|
|
|
|
Pre-tax
|
3.3
|
|
%
|
3.6
|
|
(0.3)
|
|
pts
|
After-tax
|
2.7
|
|
|
3.0
|
|
(0.3)
|
|
|
Portfolio:
|
|
|
|
|
|
Pre-tax
|
3.3
|
|
|
3.4
|
|
(0.1)
|
|
|
After-tax
|
2.7
|
|
|
2.8
|
|
(0.1)
|
|
|
Annualized ROE
contribution
|
8.5
|
|
|
8.9
|
|
(0.4)
|
|
|
Balance Sheet
$ in millions,
except per share data
|
March 31,
2020
|
December 31,
2019
|
Change
|
Total
assets
|
$
|
8,975.1
|
|
8,797.2
|
|
2
|
%
|
Total
investments
|
6,842.1
|
|
6,688.7
|
|
2
|
|
Short-term
debt
|
302.0
|
|
—
|
|
NA
|
|
Long-term
debt
|
550.6
|
|
550.6
|
|
—
|
|
Stockholders'
equity
|
2,096.5
|
|
2,194.9
|
|
(4)
|
|
Invested assets per
dollar of stockholders' equity
|
3.26
|
|
3.05
|
|
7
|
|
Net premiums written
to policyholders' surplus
|
1.4x
|
|
1.4x
|
|
-
|
|
Book value per
share
|
35.11
|
|
36.91
|
|
(5)
|
|
Our long-term debt balance did not change from December 31, 2019. However, we increased
our short-term debt by $302 million
during the first quarter out of an abundance of caution in light of
the COVID-19-related volatility and uncertainty in the financial
markets. The proceeds from these short-term borrowings were
invested in high-quality money market funds and were used to
increase liquidity and operating flexibility. We expect to
repay the short term borrowings in the near term.
Book value per share decreased 5% in the quarter, driven by
$1.75 of net unrealized losses and
$0.23 of dividends paid to
shareholders, partially offset by $0.25 of net income per diluted share, which is
inclusive of $0.59 in net realized
and CECL losses. Selective's Board of Directors declared a
$0.23 per share quarterly cash
dividend on common stock that is payable June 1, 2020, to shareholders of record as of
May 18, 2020.
Subsequent Events
The following subsequent events occurred since March 31, 2020:
- Subject to regulatory approval, which we received in April, we
announced a premium-based credit to our customers with in-force
personal and commercial automobile insurance policies equal to 15%
of their April and May premium, that should be reflected on their
May and June bills. The total amount of this credit for the
two month period is estimated at $20
million, and we expect to reflect it as an increase in other
insurance expenses in our second quarter results, offset by a
reduction in insured automobile net losses due to reduced claim
frequencies due to the economic slowdown;
- We expect to record pre-tax net investment losses of between
$15 million and $20 million in the second quarter from our
private equity, private credit and real asset limited partnership
investments in our alternative investments portfolio due to an
expected reduction in the underlying investment valuations.
These alternative investments are recorded on a one quarter lag
under the equity method of accounting; and
- We expect to incur estimated pre-tax net catastrophe losses of
approximately $35 million in April
due to two severe storms in our footprint.
Guidance
For 2020, Selective has revised its full-year guidance to the
following:
- A GAAP combined ratio, excluding catastrophe losses, of between
92% and 93%. This is an increase from our prior guidance of 91.5%
and is primarily due to expense ratio pressure from the estimated
full-year impact of COVID-19. As always, our combined ratio
estimate assumes no additional prior-year development;
- Catastrophe losses of 4.5 points on the combined ratio,
reflecting higher than expected cat losses through April, combined
with lower earned premium. Because COVID-19 has not been designated
a PCS event, related losses are not included as catastrophe
losses;
- After-tax net investment income of approximately $160 million, down from our prior guidance of
$185 million, principally due to an
expected change in our full-year after-tax net investment income
from alternative investments. We now expect a range of between
$10 million and $15 million in after-tax net investment losses
from our alternative investments, compared to our prior estimate of
a $14 million gain;
- An overall effective tax rate of approximately 18.5%, which
includes an effective tax rate of 18.5% for net investment income,
reflecting a tax rate of 5.25% for tax-advantaged municipal bonds
and a tax rate of 21% for all other items; and
- Weighted average shares of 60.5 million on a diluted
basis.
Our 2020 guidance reflects the current estimated full-year
impact of COVID-19 on our industry and our insurance and investment
operations. Given the significant uncertainty surrounding the
ultimate duration and severity of the COVID-19 pandemic, the depth
and duration of the economic recession and market volatility, and
the impact federal, state and local actions, including insurance
regulatory directives, can have on our business, significant
uncertainty around our full-year guidance exists.
Despite all of the COVID-19-related challenges, Selective is
well-positioned to provide outstanding service to its customers and
distribution partners and to continue to create long-term value for
its stakeholders.
The supplemental investor package, including financial
information that is not part of this press release, is available on
the Investors page of Selective's website at
www.Selective.com. Selective's quarterly analyst conference
call will be simulcast at 10:00 a.m.
ET, on Wednesday, May 6, 2020
at www.Selective.com. The webcast will be available for
rebroadcast until the close of business on June 8, 2020.
About Selective Insurance Group, Inc.
Selective Insurance Group, Inc. is a holding company for 10
property and casualty insurance companies rated "A" (Excellent) by
AM Best. Through independent agents, the insurance companies offer
standard and specialty insurance for commercial and personal risks
and flood insurance through the National Flood Insurance Program's
Write Your Own Program. Selective's unique position as both a
leading insurance group and an employer of choice is recognized in
a wide variety of awards and honors, including listing in the
Fortune 1000 and being named one of "America's Best Mid-Size
Employers" by Forbes Magazine. For more information about
Selective, visit www.Selective.com.
1Reconciliation of Net Income to Non-GAAP
Operating Income and Certain Other Non-GAAP Measures
Non-GAAP operating income, non-GAAP operating income per diluted
share, and non-GAAP operating return on equity differ from net
income, net income per diluted share, and return on equity,
respectively, by the exclusion of: (i) after-tax net realized
and unrealized gains and losses on investments; and (ii) after-tax
debt retirement costs. They are used as important financial
measures by management, analysts, and investors, because the
realization of net investment gains and losses on sales of
securities in any given period is largely discretionary as to
timing. In addition, these net realized investment gains and
losses, other-than-temporary investment impairments that are
charged to earnings, unrealized gains and losses on equity
securities, and the debt retirement costs could distort the
analysis of trends. These operating measurements are not
intended as a substitute for net income, income per share, or
return on equity prepared in accordance with U.S. generally
accepted accounting principles (GAAP). Reconciliations of net
income, net income per diluted share, and return on equity to
non-GAAP operating income, non-GAAP operating income per diluted
share, and non-GAAP operating return on equity, respectively, are
provided in the tables below.
Note: All amounts included in this release exclude intercompany
transactions.
Reconciliation of Net Income to Non-GAAP Operating
Income
$ in
millions
|
Quarter Ended
March 31,
|
2020
|
|
2019
|
Net income
|
$
|
15.2
|
|
|
61.3
|
|
Net realized and
unrealized losses (gains), before tax
|
44.7
|
|
|
(13.5)
|
|
Debt retirement
costs, before tax
|
—
|
|
|
4.2
|
|
Tax on reconciling
items
|
(9.4)
|
|
|
1.9
|
|
Non-GAAP operating
income
|
$
|
50.5
|
|
|
54.0
|
|
Reconciliation of Net Income per Diluted Share to Non-GAAP
Operating Income per Diluted Share
|
Quarter Ended
March 31,
|
2020
|
|
2019
|
Net income per
diluted share
|
$
|
0.25
|
|
|
1.02
|
|
Net realized and
unrealized losses (gains), before tax
|
0.74
|
|
|
(0.22)
|
|
Debt retirement
costs, before tax
|
—
|
|
|
0.07
|
|
Tax on reconciling
items
|
(0.15)
|
|
|
0.03
|
|
Non-GAAP operating
income per diluted share
|
$
|
0.84
|
|
|
0.90
|
|
Reconciliation of Return on Equity to Non-GAAP Operating
Return on Equity
|
Quarter Ended
March 31,
|
2020
|
|
2019
|
Annualized Return on
Equity
|
2.8
|
|
%
|
13.2
|
|
Net realized and
unrealized losses (gains), before tax
|
8.3
|
|
|
(2.9)
|
|
Debt retirement
costs, before tax
|
—
|
|
|
0.9
|
|
Tax on reconciling
items
|
(1.7)
|
|
|
0.4
|
|
Annualized Non-GAAP
Operating Return on Equity
|
9.4
|
|
%
|
11.6
|
|
Note: Amounts in the tables above may not foot due to
rounding.
Forward-Looking Statements
In this press release, Selective and its management discuss and
make statements based on currently available information regarding
their intentions, beliefs, current expectations, and projections
regarding Selective's future operations and performance.
Certain statements and information incorporated by reference in
this press release are "forward-looking statements" under the
Private Securities Litigation Reform Act of 1995. These statements
about our intentions, beliefs, projections, estimations, or
forecasts of future events or our future financial performance
involve known and unknown risks, uncertainties, and other factors
that may cause our actual results, levels of activity, or
performance to differ materially from what we indicated or implied.
In many cases, forward-looking statements contain words such as
"may," "will," "could," "would," "should," "expect," "plan,"
"anticipate," "target," "project," "intend," "believe," "estimate,"
"predict," "potential," "pro forma," "seek," "likely," or
"continue" or other like terms. These statements are not guarantees
of future performance. We undertake no obligation, other than as
may be required under the federal securities laws, to publicly
update or revise any forward-looking statements for any reason.
Factors that could cause our actual results to differ materially
from what we project, forecast, or estimate in forward-looking
statements, include without limitation:
- Related to COVID-19:
-
- Governmental directives to contain or delay the spread of the
COVID-19 pandemic have disrupted ordinary business commerce and
impacted financial markets. These governmental actions, the extent,
duration, and possible alteration based on future COVID-19-related
developments that we cannot predict, could materially and adversely
affect our results of operations, net investment income, financial
position, and liquidity.
- The amount of premium we record may be reduced and our
underwriting results may be adversely impacted by (i) voluntary
premium credits on in-force commercial and personal automobile
policies, (ii) state insurance commissioner or other regulatory
directives to implement premium-based credit in lines other than
commercial and personal automobile, and we may be required to
return more premium than warranted by our filed rating plans and
actual loss experience, (iii) the effects of our voluntary efforts
or the directives from various state insurance regulators to extend
individualized payment flexibility and suspend policy
cancellations, late payment notices, and late or reinstatement
fees, (iv) return premiums that could be significant because our
general liability and workers compensation policies provide for
premium audit of revenues and payrolls, and (v) collectability of
premiums, which may be impacted by policyholder financial distress
and insolvency.
- Our loss and loss expenses may increase, our related reserves
may not be adequate, and our financial condition and liquidity may
be materially impacted if litigation or changes in statutory or
common law (i) require payment of COVID-19-related business
interruption losses despite contrary terms, conditions, and
exclusions in our policies or (ii) presume that COVID-19 is a
work-related illness compensable under workers compensation
policies for employees who contract the virus, regardless of
whether they worked in industries defined as essential in various
COVID-19-related governmental directives or interacted with the
public as part of their job duties.
- Our net investment income may be impacted by the significant
equity and debt financial market volatility resulting from the
COVID-19 pandemic and the related governmental orders because (i)
financial market volatility is reflected in our alternative
investments' performance, (ii) increased spreads on fixed income
securities may create mark-to-market investment valuation losses
that reduce unrealized capital gains and impact GAAP equity, and
(iii) OTTI losses may increase if we intend to sell more
securities, particularly in asset classes that are more
significantly impacted by COVID-19-related governmental directives
and to which the Federal Reserve Board is providing liquidity and
structural support.
- Difficult conditions in global capital markets and the
economy;
- Deterioration in the public debt and equity markets and private
investment marketplace that could lead to investment losses and
interest rate fluctuations;
- Ratings downgrades on individual securities we own could affect
investment values and, therefore, statutory surplus;
- The adequacy of our loss reserves and loss expense
reserves;
- Frequency and severity of natural and man-made catastrophic
events, including without limitation hurricanes, tornadoes,
windstorms, earthquakes, hail, terrorism, including cyber-attacks,
explosions, severe winter weather, floods, and fires;
- Adverse market, governmental, regulatory, legal, or judicial
conditions or actions;
- The geographic concentration of our business in the eastern
portion of the United States;
- The cost and availability of reinsurance;
- Our ability to collect on reinsurance and the solvency of our
reinsurers;
- The impact of changes in U.S. trade policies and imposition of
tariffs on imports that may lead to higher than anticipated
inflationary trends for our loss and loss expenses;
- Uncertainties related to insurance premium rate increases and
business retention;
- Changes in insurance regulations that impact our ability to
write and/or cease writing insurance policies in one or more
states;
- The effects of data privacy or cyber security laws and
regulations on our operations;
- Major defect or failure in our internal controls or information
technology and application systems that result in harm to our brand
in the marketplace, increased senior executive focus on crisis and
reputational management issues and/or increased expenses,
particularly if we experience a significant privacy breach;
- Recent federal financial regulatory reform provisions that
could pose certain risks to our operations;
- Our ability to maintain favorable ratings from rating agencies,
including A.M. Best, Standard & Poor's, Moody's, and
Fitch;
- Our entry into new markets and businesses; and
- Other risks and uncertainties we identify in filings with the
United States Securities and Exchange Commission, including, but
not limited to, our Annual Report on Form 10-K and other periodic
reports.
These risk factors may not be exhaustive. We operate in a
continually changing business environment, and new risk factors
that we cannot predict or assess may emerge from time-to-time.
Selective's SEC filings can be accessed through the Investors
page of Selective's website, www.Selective.com, or through the
SEC's EDGAR Database at www.sec.gov (Selective EDGAR CIK No.
0000230557).
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SOURCE Selective Insurance Group, Inc.