Selective Insurance Group, Inc. (NASDAQ:SIGI) Q2 2023 Earnings Conference Call August 3, 2023 11:00 AM ET

Company Participants

Brad Wilson - Senior Vice President, Investor Relations and Treasurer

John Marchioni - Chairman of the Board, President and Chief Executive Officer

Mark Wilcox - Executive Vice President, Chief Financial Officer

Conference Call Participants

Paul Musson - Piper Sander

Jiang Li - KBW

Grace Carter - Bank of America

Operator

Good day, everyone. Welcome to Selective Insurance Group’s Second Quarter 2023 Earnings Call. At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President, Investor Relations and Treasurer, Brad Wilson. You may begin.

Brad Wilson

Thanks and good morning. We are simulcasting this call on our website, selective.com, and a replay will be available until September 1st. We used three measures to discuss our results and business operations. First, we use GAAP financial measures reported in our annual, quarterly and current reports filed with the SEC. Second, we use non-GAAP operating measures, which we believe make it easier for investors to evaluate our insurance business.

Non-GAAP operating income is net income available to common stockholders, excluding the after-tax impact of net realized gains or losses on investments and unrealized gains or losses on equity securities. Non-GAAP operating return on common equity is non-GAAP operating income divided by average common stockholders’ equity.

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

Third, we make statements and projections about our future performance. These are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They are not guarantees of future performance and are subject to risks and uncertainties. We discuss these risks and uncertainties in detail in our annual, quarterly and current reports filed with the SEC. We undertake no obligation to update or revise any forward-looking statement.

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

John Marchioni

Thank you, Brad. Good morning and thank you for joining us. The second quarter property casualty industry results were impacted by elevated catastrophe losses. We were no exception, and these losses affected all three of our underwriting segments driven mainly by storms in our Midwest and East Coast footprint states. However, with our strong balance sheet, sophisticated underwriting capabilities and robust risk management, Selective is well positioned to navigate the industry’s elevated and uncertain loss trends. In the first half of the year, despite catastrophe losses being about three points above expected levels, our operating ROE was 12.2%, slightly above our 12% target.