Selective Insurance has reported has reported income of $106.8 million for the first quarter of 2021, helped by strong growth in both net written premiums (NPW) and investment income.
For Q1, overall NPW increased 23% from a year ago, reflecting solid retention and strong overall renewal price increases of 5.4%, as well as 12 points of COVID-19-related $75 million return audit and mid-term endorsement premium accrual that reduced premiums last year.
Selective’s combined ratio was 89.3% in the quarter, compared to 96.7% in the prior year period, benefiting from favorable reserve development and strong underlying profitability.
Net investment income, after-tax, of $56 million was up a 24% compared to first quarter 2020, with the increase driven by alternative investment gains of $16 million after-tax.
“Our excellent first-quarter financial performance is a testament to our continued successful execution of our strategy focused on generating disciplined and profitable growth,” said John Marchioni, President and CEO of Selective. “We reported a strong 16.2% non-GAAP operating ROE, non-GAAP operating income per diluted common share of $1.70, and an impressive 89.3% combined ratio.
“Our commercial lines NPW increased 28% from a year ago, of which 16 points were due to the COVID-19-related $75 million return audit and mid-term endorsement premium accrual that reduced NPW in 2020,” Marchioni continued. “Commercial lines growth was driven by renewal pure price increases of 5.7% and continued solid retention of 86%. Each of our segments generated profitable results, with Investments a major contributor this quarter.”
He concluded: “We are extremely proud of our successful track record in recent years of balancing growth with profitability, and consistently generating strong ROEs. Our results, in large part, have been driven by our superior distribution partner relationships, sophisticated underwriting tools and technologies, best-in-class customer experience capabilities, and culture of underwriting discipline. Our capital and liquidity position is the strongest at any time in our history. As we look to the remainder of 2021, we are well positioned to build on that successful record.”