Safety Announces Fourth Quarter and Year End 2020 Results
Safety Insurance Group (NASDAQ: SAFT) reported strong fourth quarter 2020 results with net income of $53 million ($3.55 per share), up from $28.1 million in Q4 2019. For the full year, net income reached $138.2 million ($9.18 per share), compared to $99.6 million in 2019. Non-GAAP operating income also rose, reaching $2.55 per share for Q4 and $8.64 per share for the year. Despite these positives, direct written premiums fell by 3.7% in Q4 and 6.3% for the year, largely due to impacts from COVID-19. The company maintained a dividend of $3.60 per share, up from $3.40 in 2019.
- Net income increased by 88.6% to $53 million for Q4 2020 compared to Q4 2019.
- Full year net income rose to $138.2 million, a 38.8% increase year-over-year.
- Non-GAAP operating income improved to $2.55 per share for Q4 2020.
- Dividends paid per share increased to $3.60 in 2020.
- Direct written premiums fell 3.7% to $182.6 million in Q4 2020 and 6.3% for the year.
- The decrease in direct written premiums was impacted by COVID-19 and changes in eligibility by CAR.
Safety Insurance Group, Inc. (NASDAQ:SAFT) (“the Company”) today reported fourth quarter 2020 results. Net income for the quarter ended December 31, 2020 was
Safety’s book value per share increased to
Beginning in March 2020, the global pandemic associated with the novel coronavirus COVID-19 (“COVID-19”) and related economic conditions caused significant economic effects including temporary closures of many businesses and reduced consumer activity due to shelter-in-place, stay-at-home and other governmental actions. The Company has continued to take many actions that address the health and well-being of our employees while still serving the needs of our agents and insureds.
Direct written premiums for the quarter ended December 31, 2020 decreased by
Net written premiums for the quarter ended December 31, 2020 decreased by
The pandemic has resulted in fewer cars on the road, resulting in a decrease in frequency of claims, primarily in our private passenger automobile line of business. As a result, for the quarter ended December 31, 2020, loss and loss adjustment expenses incurred decreased by
The increase in the expense ratios in the respective periods is driven by an increase in contingent commission expense as well as costs associated with various system modernization in our claims, billing and underwriting areas and a reduction in certain expense allowances provided under the Servicing Carrier program that have decreased with the related written premium as noted above.
Net investment income for the quarter ended December 31, 2020 decreased by
On February 16, 2021, our Board of Directors approved a
Non-GAAP Measures
Management has included certain non-GAAP financial measures in presenting the Company’s results. Management believes that these non-GAAP measures better explain the Company’s results of operations and allow for a more complete understanding of the underlying trends in the Company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (“GAAP”). In addition, our definitions of these items may not be comparable to the definitions used by other companies.
Non-GAAP operating income and non-GAAP operating income per diluted share consist of our GAAP net income adjusted by the net realized gains on investments, net impairment losses on investments, change in net unrealized gains on equity investments, credit loss benefit (expense) and taxes related thereto. For the quarter ended December 31, 2020, an increase of
About Safety: Safety Insurance Group, Inc., based in Boston, MA, is the parent of Safety Insurance Company, Safety Indemnity Insurance Company, Safety Property and Casualty Insurance Company, and Safety Northeast Insurance Company. Operating exclusively in Massachusetts, New Hampshire, and Maine, Safety is a leading writer of property and casualty insurance products, including private passenger automobile, commercial automobile, homeowners, dwelling fire, umbrella and business owner policies.
Additional Information: Press releases, announcements, U. S. Securities and Exchange Commission (“SEC”) Filings and investor information are available under “About Safety,” “Investor Information” on our Company website located at www.SafetyInsurance.com. Safety filed its December 31, 2019 Form 10-K with the SEC on February 28, 2020 and urges shareholders to refer to this document for more complete information concerning Safety’s financial results.
Cautionary Statement under "Safe Harbor" Provision of the Private Securities Litigation Reform Act of 1995:
This press release contains, and Safety may from time to time make, written or oral "forward-looking statements" within the meaning of the U.S. federal securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “aim,” “projects,” or words of similar meaning and expressions that indicate future events and trends, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may”. All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements.
Forward-looking statements are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. There are a number of factors, many of which are beyond our control, that could cause actual future conditions, events, results or trends to differ significantly and/or materially from historical results or those projected in the forward-looking statements. These factors include but are not limited to:
- The competitive nature of our industry and the possible adverse effects of such competition;
- Conditions for business operations and restrictive regulations in Massachusetts;
- The possibility of losses due to claims resulting from severe weather;
- The possibility that the Commissioner of Insurance may approve future rule changes that change the operation of the residual market;
- Our possible need for and availability of additional financing, and our dependence on strategic relationships, among others;
- The effects of emerging claim and coverage issues on the Company’s business are uncertain, and court decisions or legislative or regulatory changes that take place after the Company issues its policies, including those taken in response to COVID-19 (such as requiring insurers to cover business interruption claims irrespective of terms or other conditions included in the policies that would otherwise preclude coverage), can result in an unexpected increase in the number of claims and have a material adverse impact on the Company's results of operations;
- The impact of COVID-19 and related risks, including on the Company's employees, agents or other key partners, could materially affect the Company's results of operations, financial position and/or liquidity; and
- Other risks and factors identified from time to time in our reports filed with the SEC, such as those set forth under the caption “Risk Factors” in our Form 10-K for the year ended December 31, 2019 filed with the SEC on February 28, 2020.
We are not under any obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise. You should carefully consider the possibility that actual results may differ materially from our forward-looking statements.
Safety Insurance Group, Inc. and Subsidiaries Consolidated Balance Sheets (Dollars in thousands, except share data) |
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December 31, |
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December 31, |
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2020 |
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2019 |
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(Unaudited) |
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Assets |
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Investments: |
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Fixed maturities, available for sale, at fair value (amortized cost: |
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$ |
1,256,653 |
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$ |
1,228,040 |
|
Short term investments, at fair value (cost: |
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|
441 |
|
|
|
— |
|
Equity securities, at fair value (cost: |
|
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205,254 |
|
|
|
177,637 |
|
Other invested assets |
|
|
45,239 |
|
|
|
37,278 |
|
Total investments |
|
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1,507,587 |
|
|
|
1,442,955 |
|
Cash and cash equivalents |
|
|
53,769 |
|
|
|
44,407 |
|
Accounts receivable, net of allowance for expected credit losses of |
|
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179,147 |
|
|
|
193,369 |
|
Receivable for securities sold |
|
|
1,311 |
|
|
|
1,784 |
|
Accrued investment income |
|
|
8,045 |
|
|
|
8,404 |
|
Taxes recoverable |
|
|
279 |
|
|
|
1,003 |
|
Receivable from reinsurers related to paid loss and loss adjustment expenses |
|
|
13,432 |
|
|
|
11,319 |
|
Receivable from reinsurers related to unpaid loss and loss adjustment expenses |
|
|
106,311 |
|
|
|
122,372 |
|
Ceded unearned premiums |
|
|
22,406 |
|
|
|
35,182 |
|
Deferred policy acquisition costs |
|
|
74,962 |
|
|
|
74,287 |
|
Equity and deposits in pools |
|
|
30,429 |
|
|
|
29,791 |
|
Operating lease right-of-use-assets |
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31,000 |
|
|
|
33,998 |
|
Other assets |
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25,595 |
|
|
|
23,798 |
|
Total assets |
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$ |
2,054,273 |
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$ |
2,022,669 |
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|
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Liabilities |
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Loss and loss adjustment expense reserves |
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$ |
567,581 |
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$ |
610,566 |
|
Unearned premium reserves |
|
|
421,901 |
|
|
|
442,219 |
|
Accounts payable and accrued liabilities |
|
|
79,486 |
|
|
|
75,016 |
|
Payable for securities purchased |
|
|
7,144 |
|
|
|
6,377 |
|
Payable to reinsurers |
|
|
8,236 |
|
|
|
12,911 |
|
Deferred income taxes |
|
|
17,611 |
|
|
|
5,717 |
|
Debt |
|
|
30,000 |
|
|
|
— |
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Operating lease liabilities |
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31,000 |
|
|
|
33,998 |
|
Other liabilities |
|
|
6,635 |
|
|
|
27,459 |
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Total liabilities |
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1,169,594 |
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1,214,263 |
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Shareholders’ equity |
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Common stock: |
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178 |
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|
177 |
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Additional paid-in capital |
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209,779 |
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|
202,321 |
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Accumulated other comprehensive income, net of taxes |
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|
53,527 |
|
|
|
28,190 |
|
Retained earnings |
|
|
745,029 |
|
|
|
661,553 |
|
Treasury stock, at cost: 2,831,168 and 2,279,570 shares |
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|
(123,834 |
) |
|
|
(83,835 |
) |
Total shareholders’ equity |
|
|
884,679 |
|
|
|
808,406 |
|
Total liabilities and shareholders’ equity |
|
$ |
2,054,273 |
|
|
$ |
2,022,669 |
|
Safety Insurance Group, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share data) |
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Three Months Ended December 31, |
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Year Ended December 31, |
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2020 |
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2019 |
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2020 |
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2019 |
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Net earned premiums |
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$ |
196,438 |
|
|
$ |
199,450 |
|
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$ |
771,078 |
|
|
$ |
788,777 |
|
Net investment income |
|
|
10,701 |
|
|
|
12,393 |
|
|
|
41,045 |
|
|
|
46,665 |
|
Earnings from partnership investments |
|
|
4,312 |
|
|
|
506 |
|
|
|
6,901 |
|
|
|
1,937 |
|
Net realized gains on investments |
|
|
1,640 |
|
|
|
1,463 |
|
|
|
957 |
|
|
|
2,976 |
|
Change in net unrealized gains on equity investments |
|
|
16,088 |
|
|
|
6,286 |
|
|
|
10,449 |
|
|
|
21,454 |
|
Net impairment losses on investments (a) |
|
|
— |
|
|
|
(492 |
) |
|
|
— |
|
|
|
(889 |
) |
Credit loss benefit (expense) |
|
|
1,235 |
|
|
|
— |
|
|
|
(1,054 |
) |
|
|
— |
|
Finance and other service income |
|
|
4,620 |
|
|
|
4,293 |
|
|
|
16,872 |
|
|
|
16,833 |
|
Total revenue |
|
|
235,034 |
|
|
|
223,899 |
|
|
|
846,248 |
|
|
|
877,753 |
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|
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Losses and loss adjustment expenses |
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|
95,782 |
|
|
|
126,460 |
|
|
|
404,556 |
|
|
|
509,846 |
|
Underwriting, operating and related expenses |
|
|
71,290 |
|
|
|
61,949 |
|
|
|
266,482 |
|
|
|
244,136 |
|
Interest expense |
|
|
132 |
|
|
|
23 |
|
|
|
440 |
|
|
|
90 |
|
Total expenses |
|
|
167,204 |
|
|
|
188,432 |
|
|
|
671,478 |
|
|
|
754,072 |
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Income before income taxes |
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|
67,830 |
|
|
|
35,467 |
|
|
|
174,770 |
|
|
|
123,681 |
|
Income tax expense |
|
|
14,865 |
|
|
|
7,365 |
|
|
|
36,559 |
|
|
|
24,080 |
|
Net income |
|
$ |
52,965 |
|
|
$ |
28,102 |
|
|
$ |
138,211 |
|
|
$ |
99,601 |
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Earnings per weighted average common share: |
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Basic |
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$ |
3.57 |
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$ |
1.84 |
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$ |
9.25 |
|
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$ |
6.52 |
|
Diluted |
|
$ |
3.55 |
|
|
$ |
1.82 |
|
|
$ |
9.18 |
|
|
$ |
6.46 |
|
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|
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Cash dividends paid per common share |
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$ |
0.90 |
|
|
$ |
0.90 |
|
|
$ |
3.60 |
|
|
$ |
3.40 |
|
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Number of shares used in computing earnings per share: |
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Basic |
|
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14,755,082 |
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|
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15,220,902 |
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|
|
15,002,755 |
|
|
|
15,201,132 |
|
Diluted |
|
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14,866,704 |
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|
|
15,340,518 |
|
|
|
15,119,027 |
|
|
|
15,337,807 |
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(a) No portion of the other-than-temporary impairments recognized in the period indicated were included in Other Comprehensive Income for the period ended December 31, 2019. |
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Reconciliation of Net Income to Non-GAAP Operating Income |
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Net income |
|
$ |
52,965 |
|
|
$ |
28,102 |
|
|
$ |
138,211 |
|
|
$ |
99,601 |
|
Exclusions from net income: |
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|
|
|
|
|
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Net realized gains on investments |
|
|
(1,640 |
) |
|
|
(1,463 |
) |
|
|
(957 |
) |
|
|
(2,976 |
) |
Change in net unrealized gains on equity investments |
|
|
(16,088 |
) |
|
|
(6,286 |
) |
|
|
(10,449 |
) |
|
|
(21,454 |
) |
Net impairment losses on investments |
|
|
- |
|
|
|
492 |
|
|
|
- |
|
|
|
889 |
|
Credit loss (benefit) expense |
|
|
(1,235 |
) |
|
|
- |
|
|
|
1,054 |
|
|
|
- |
|
Income tax expense on exclusions from net income |
|
|
3,982 |
|
|
|
1,524 |
|
|
|
2,174 |
|
|
|
4,944 |
|
Non-GAAP operating income |
|
$ |
37,984 |
|
|
$ |
22,369 |
|
|
$ |
130,033 |
|
|
$ |
81,004 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Net income per diluted share |
|
$ |
3.55 |
|
|
$ |
1.82 |
|
|
$ |
9.18 |
|
|
$ |
6.46 |
|
Exclusions from net income: |
|
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|
|
|
|
|
|
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|
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|
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Net realized gains on investments |
|
|
(0.11 |
) |
|
|
(0.10 |
) |
|
|
(0.06 |
) |
|
|
(0.19 |
) |
Change in net unrealized gains on equity investments |
|
|
(1.08 |
) |
|
|
(0.41 |
) |
|
|
(0.69 |
) |
|
|
(1.40 |
) |
Net impairment losses on investments |
|
|
- |
|
|
|
0.03 |
|
|
|
- |
|
|
|
0.06 |
|
Credit loss (benefit) expense |
|
|
(0.08 |
) |
|
|
- |
|
|
|
0.07 |
|
|
|
- |
|
Income tax expense on exclusions from net income |
|
|
0.27 |
|
|
|
0.10 |
|
|
|
0.14 |
|
|
|
0.32 |
|
Non-GAAP operating income per diluted share |
|
$ |
2.55 |
|
|
$ |
1.44 |
|
|
$ |
8.64 |
|
|
$ |
5.25 |
|
Safety Insurance Group, Inc. and Subsidiaries Additional Premium Information (Unaudited) (Dollars in thousands) |
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Three Months Ended December 31, |
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Year Ended December 31, |
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|
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2020 |
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2019 |
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2020 |
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2019 |
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Written Premiums |
|
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|
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|
|
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|
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Direct |
|
$ |
182,627 |
|
|
$ |
189,671 |
|
|
$ |
798,712 |
|
|
$ |
852,404 |
|
Assumed |
|
|
5,535 |
|
|
|
8,498 |
|
|
|
26,316 |
|
|
|
32,391 |
|
Ceded |
|
|
(17,077 |
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"@type": "FAQPage",
"name": "Safety Announces Fourth Quarter and Year End 2020 Results FAQs",
"mainEntity": [
{
"@type": "Question",
"name": "What were Safety Insurance Group's Q4 2020 earnings?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Safety Insurance Group reported a net income of $53 million for Q4 2020, equating to $3.55 per diluted share."
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},
{
"@type": "Question",
"name": "How did Safety Insurance's full year 2020 performance compare to 2019?",
"acceptedAnswer": {
"@type": "Answer",
"text": "For the full year 2020, Safety reported net income of $138.2 million, an increase from $99.6 million in 2019."
}
},
{
"@type": "Question",
"name": "What were the trends in direct written premiums for Safety Insurance in 2020?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Direct written premiums decreased 6.3% in 2020, attributed to COVID-19 effects and changes in policy eligibility."
}
},
{
"@type": "Question",
"name": "How much did Safety Insurance pay in dividends in 2020?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Safety Insurance paid $3.60 per share in dividends during 2020, up from $3.40 in 2019."
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},
{
"@type": "Question",
"name": "What was the non-GAAP operating income for Q4 2020 for Safety Insurance?",
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FAQ
What were Safety Insurance Group's Q4 2020 earnings?
Safety Insurance Group reported a net income of $53 million for Q4 2020, equating to $3.55 per diluted share.
How did Safety Insurance's full year 2020 performance compare to 2019?
For the full year 2020, Safety reported net income of $138.2 million, an increase from $99.6 million in 2019.
What were the trends in direct written premiums for Safety Insurance in 2020?
Direct written premiums decreased 6.3% in 2020, attributed to COVID-19 effects and changes in policy eligibility.
How much did Safety Insurance pay in dividends in 2020?
Safety Insurance paid $3.60 per share in dividends during 2020, up from $3.40 in 2019.
What was the non-GAAP operating income for Q4 2020 for Safety Insurance?
The non-GAAP operating income for Q4 2020 was $2.55 per diluted share.
Safety Insurance Group Inc
NASDAQ:SAFTSAFT RankingsSAFT Latest NewsNov 5, 2024
Safety Insurance Group, Inc. Announces Third Quarter 2024 Results and Declares Fourth Quarter 2024 Dividend
Aug 7, 2024
Safety Insurance Group, Inc. Announces Second Quarter 2024 Results and Declares Third Quarter 2024 Dividend
SAFT Stock Data
1.26B
14.52M
1.75%
84.42%
0.8%
Insurance - Property & Casualty
Fire, Marine & Casualty Insurance
United States of America
BOSTON
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