Property and casualty insurance holding company Selective Insurance Group has announced its preliminary results for the fourth quarter of 2022, which include a combined ratio of 94.7% and double-digit premium growth.
This was despite the company booking estimated pre-tax net catastrophe losses of $45.7 million, including $46.1 million of net losses from Winter Storm Elliott, which were offset in part by modest favorable emergence on prior quarters’ catastrophe losses.
Catastrophe losses accounted for 5.2 points on the combined ratio for Q4, while net prior year favorable casualty reserve development came to 4.4 points.
Overall, Elliott impacted 37 states, 26 of which are in Selective’s Standard Lines footprint, and losses from the storm primarily impacted the Standard Commercial Lines segment.
Selective also disclosed that it had recorded an additional $11.7 million in ceded earned reinstatement premium from the winter storm, related to an expected reinsurance recovery under its excess-of-loss reinsurance program, for a total negative impact to fourth quarter 2022 underwriting results of $57.8 million, pre-tax.
These factors resulted in a decrease in quarterly earnings, with net income available to common stockholders per diluted common share coming to $1.38 for Q4 2022, down from $1.59 for the same period in the previous year.
“Winter Storm Elliott impacted the majority of our standard lines footprint in late December with freezing temperatures, strong winds, and blizzard conditions, resulting in widespread and severe water-related property losses,” said Chairperson, President and Chief Executive Officer John J. Marchioni.
“Despite Winter Storm Elliott, we delivered strong financial results for the quarter with a 94.7% combined ratio, highlighting the earnings power of Selective’s business. For the year, we will report another year of double-digit growth in net premiums written, strong underwriting profitability, and a double-digit non-GAAP operating ROE that exceeded our target.”
Commenting on its losses, Selective stipulated that its Winter Storm Elliott loss estimates remain subject to change due to the recent occurrence of the event, as well as the widespread nature of loss activity, and the complexity of claims, including large losses.