Property and casualty insurance holding company Selective Insurance Group has reported that it recovered roughly two thirds of its $135 million gross loss from Winter Storm Elliott.
Selective’s official Q4 results release largely confirmed the preliminary figures that the company reported last week, but they do offer some more insights into how its reinsurance coverage interacted with losses during the period.
Specifically, when comparing the $46.1 million net loss from Elliott that Selective reported to its $135 million gross loss, it indicates that the insurer made some $88.9 million in reinsurance recoveries, worth around 66% of the total loss.
The company also incurred $11.7 million in ceded earned reinstatement premium related to Winter Storm Elliott for a total negative impact to fourth quarter 2022 underwriting results of $57.8 million, pre-tax.
Selective says that, overall, the storm increased its fourth quarter and full year 2022 combined ratio by 6.5 points and 1.7 points, respectively, and reduced its quarterly and annual ROE by 8.0 points and 1.9 points.
The combined ratio for Q4 was 94.7% and for the year was 95.1%, while ROE for the quarter was 15.6% and 12.4% for the year.
Non-catastrophe property losses also increased due to higher severities from inflationary pressures on items such as new and used car prices, auto repair costs, building materials, and labor costs.
These items were partially offset by prior-year favorable casualty reserve development of $38.0 million, including $30.0 million on Selective’s workers compensation line of business.
Net written premiums for Q4 increased 14% from a year ago and growth was strong across all underwriting segments, driven by renewal pure price increases, solid retention, new business, and exposure growth.
“2022 marks our ninth consecutive year of double-digit non-GAAP operating ROEs. Against a backdrop of elevated catastrophe losses, higher loss cost trends, and capital market volatility, these results reflect the success of our underwriting discipline and profitable growth strategies,” said John J. Marchioni, Chairman, President and CEO of Selective.
“In 2023, we expect to build on our strong market position. Our superior distribution partnerships, sophisticated underwriting tools, and strong capital and liquidity position support our profitable growth opportunities,” Marchioni concluded.