Selective Insurance Group, Inc. (NASDAQ:SIGI) Q1 2023 Earnings Conference Call May 4, 2023 10:00 AM ET

Company Participants

Haley Chrobock - Investor Relations

John Marchioni - Chairman, President and Chief Executive Officer

Mark Wilcox - Executive Vice President, Chief Financial Officer and Treasurer

Conference Call Participants

Mike Zaremski - BMO

Grace Carter - Bank of America

Paul Newsome - Piper Sandler

Derek Han - KBW

Matt Carletti - JMP Securities

Operator

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

Haley Chrobock

Good morning. We are simulcasting this call on our website, selective.com. Replay is available until June 2. We use 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. 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 statements.

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 and Treasurer.

John Marchioni

Thank you, Haley. Good morning and thank you for joining us. We’ve had an excellent start to the year. The headline for the quarter is that we continued to deliver strong earnings and remain very well positioned to effectively navigate the economic uncertainty and elevated loss trends that our industry faces. In the quarter, we had strong growth in all three insurance segments. Our all-in combined ratio was 95.7% despite higher-than-expected catastrophe losses. After-tax net investment income was up 25% over Q1 2022, driven by active management of our core fixed income portfolio over the past few quarters, and we produced a non-GAAP operating ROE of 14.6%, outperforming the 12% average we generated over the past nine years.