Safety Insurance Q3 net income rises as combined ratio improves

Overview

• US property and casualty insurer's Q3 net earned premiums rose 1% yr/yr

• Q3 net income and non-GAAP operating income per share increased yr/yr

• Combined ratio improved to 96.3% from 98.9% on better underwriting and lower loss frequency

Outlook

• Company did not provide specific guidance or outlook for future periods

Result Drivers

• UNDERWRITING IMPROVEMENT - Co said combined ratio improved due to prior written premium growth earning into revenue and a decrease in losses and loss adjustment expenses, driven by improved loss frequency in private passenger automobile

• INVESTMENT INCOME - Co said net investment income rose 15% yr/yr, citing higher assets under management, reinvestment rates above yields on maturing securities, and strong alternative asset returns

• PREMIUM TRENDS - Co said net written premiums declined due to a more competitive market and cancellation of underperforming agency relationships, while average written premium per policy increased across major lines due to rate increases

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the property & casualty insurance peer group is "buy."

• Wall Street's median 12-month price target for Safety Insurance Group Inc is $49.85, about 52.2% below its November 3 closing price of $104.25

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 17 three months ago

Reuters Recommended Reads

• Nov 3 - United Fire Group Q3 profit falls 10% as combined ratio worsens

• Nov 3 - Insurer American Financial Group's Q3 adj EPS beats on underwriting and premium growth

• Nov 3 - United Fire Group reports 13% Q3 NWP growth as combined ratio worsens to 94.6%

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)