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Safety Insurance Q3 net income rises as combined ratio improves

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

$327.77 mln

Q3 EPS

$2.05

Q3 Net Income

$30.02 mln

Q3 Adjusted Operating Income

$28.55 mln

Q3 Pretax Profit

$38.38 mln


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%


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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