Safety Insurance Group, Inc. Announces Second Quarter 2023 Results and Declares Third Quarter 2023 Dividend
George M. Murphy, President and Chief Executive Officer, commented: “Safety’s combined ratio of
Net income for the quarter ended June 30, 2023 was
Safety’s book value per share decreased to
Today, our Board of Directors approved a
Direct written premiums for the quarter ended June 30, 2023 increased by
Net earned premiums for the quarter ended June 30, 2023 increased by
For the quarter ended June 30, 2023, losses and loss adjustment expenses incurred increased by
Loss, expense, and combined ratios calculated for the quarter ended June 30, 2023 were
Total prior year favorable development included in the pre-tax results for the quarter ended June 30, 2023 was
Net investment income for the quarter ended June 30, 2023 increased by
Non-GAAP Measures
Management has included certain non-GAAP financial measures in presenting the Company’s results. Management believes that these non-GAAP measures are useful to 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, change in net unrealized gains on equity securities, credit loss benefit (expense) and taxes related thereto. For the three months ended June 30, 2023, an increase of
About Safety: Safety Insurance Group, Inc., based in
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, 2022 Form 10-K with the SEC on February 28, 2023 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
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 impact of inflation and supply chain delays on loss severity;
- The possibility that the Commissioner of Insurance may approve future rule changes that change the operation of the residual market;
- The possibility that existing insurance-related laws and regulations will become further restrictive in the future;
- The impact of investment, economic and underwriting market conditions, including interest rates and inflation;
- Our possible need for and availability of additional financing, and our dependence on strategic relationships, among others; 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, 2022 filed with the SEC on February 28, 2023.
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
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June 30, |
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December 31, |
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2023 |
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2022 |
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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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$ |
1,017,467 |
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$ |
1,050,155 |
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Short term investments, at fair value (cost: |
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79 |
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— |
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Equity securities, at fair value (cost: |
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230,056 |
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240,155 |
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Other invested assets |
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125,943 |
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112,850 |
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Total investments |
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1,373,545 |
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1,403,160 |
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Cash and cash equivalents |
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25,388 |
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25,300 |
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Accounts receivable, net of allowance for expected credit losses of |
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238,563 |
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192,542 |
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Receivable for securities sold |
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|
607 |
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|
|
877 |
|
Accrued investment income |
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7,200 |
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8,212 |
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Taxes recoverable |
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3,129 |
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|
|
— |
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Receivable from reinsurers related to paid loss and loss adjustment expenses |
|
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27,494 |
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12,988 |
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Receivable from reinsurers related to unpaid loss and loss adjustment expenses |
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96,780 |
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93,394 |
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Ceded unearned premiums |
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29,973 |
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28,453 |
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Deferred policy acquisition costs |
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84,423 |
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75,582 |
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Deferred income taxes |
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20,515 |
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21,074 |
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Equity and deposits in pools |
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34,249 |
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33,648 |
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Operating lease right-of-use-assets |
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21,734 |
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23,336 |
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Goodwill |
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17,093 |
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17,093 |
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Intangible assets |
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7,439 |
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7,856 |
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Other assets |
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27,973 |
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29,054 |
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Total assets |
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$ |
2,016,105 |
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$ |
1,972,569 |
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Liabilities |
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Loss and loss adjustment expense reserves |
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$ |
565,027 |
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$ |
549,598 |
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Unearned premium reserves |
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488,788 |
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433,375 |
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Accounts payable and accrued liabilities |
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59,557 |
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73,875 |
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Payable for securities purchased |
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— |
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1,359 |
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Payable to reinsurers |
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13,069 |
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11,444 |
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Taxes payable |
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— |
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1,729 |
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Debt |
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35,000 |
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35,000 |
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Operating lease liabilities |
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21,734 |
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23,336 |
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Other liabilities |
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39,180 |
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30,854 |
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Total liabilities |
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1,222,355 |
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1,160,570 |
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Shareholders’ equity |
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Common stock: |
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179 |
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179 |
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Additional paid-in capital |
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224,476 |
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222,049 |
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Accumulated other comprehensive (loss) income, net of taxes |
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(74,055 |
) |
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(80,538 |
) |
Retained earnings |
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793,443 |
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815,309 |
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Treasury stock, at cost: 3,157,577 and 3,083,364 shares |
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(150,293 |
) |
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(145,000 |
) |
Total shareholders’ equity |
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793,750 |
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811,999 |
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Total liabilities and shareholders’ equity |
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$ |
2,016,105 |
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$ |
1,972,569 |
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Safety Insurance Group, Inc. and Subsidiaries
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net earned premiums |
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$ |
202,225 |
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$ |
188,333 |
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$ |
393,960 |
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$ |
375,421 |
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Net investment income |
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13,836 |
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11,635 |
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27,490 |
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22,225 |
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Earnings from partnership investments |
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553 |
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5,967 |
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2,719 |
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8,799 |
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Net realized gains on investments |
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108 |
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3,152 |
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|
841 |
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7,362 |
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Change in net unrealized gains on equity securities |
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6,266 |
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(28,885 |
) |
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7,036 |
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(41,919 |
) |
Credit loss expense |
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(35 |
) |
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— |
|
|
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(957 |
) |
|
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— |
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Commission income |
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1,758 |
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|
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— |
|
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|
3,241 |
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— |
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Finance and other service income |
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4,732 |
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3,403 |
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8,872 |
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6,720 |
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Total revenue |
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229,443 |
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183,605 |
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443,202 |
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378,608 |
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Losses and loss adjustment expenses |
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143,523 |
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112,715 |
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310,676 |
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235,881 |
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Underwriting, operating and related expenses |
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62,582 |
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60,872 |
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122,615 |
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|
122,466 |
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Other expense |
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1,523 |
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— |
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3,193 |
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— |
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Interest expense |
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348 |
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131 |
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|
558 |
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|
260 |
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Total expenses |
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207,976 |
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173,718 |
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437,042 |
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358,607 |
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Income before income taxes |
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21,467 |
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9,887 |
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6,160 |
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20,001 |
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Income tax expense |
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4,466 |
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|
1,986 |
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1,496 |
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|
4,262 |
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Net income |
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$ |
17,001 |
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$ |
7,901 |
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$ |
4,664 |
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$ |
15,739 |
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Earnings per weighted average common share: |
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Basic |
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$ |
1.15 |
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$ |
0.54 |
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$ |
0.32 |
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$ |
1.07 |
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Diluted |
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$ |
1.15 |
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$ |
0.53 |
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$ |
0.31 |
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$ |
1.06 |
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Cash dividends paid per common share |
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$ |
0.90 |
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$ |
0.90 |
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$ |
1.80 |
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$ |
1.80 |
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Number of shares used in computing earnings per share: |
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Basic |
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14,681,034 |
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14,599,057 |
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14,681,766 |
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14,613,399 |
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Diluted |
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14,720,520 |
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14,702,627 |
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14,741,076 |
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14,715,099 |
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Reconciliation of Net Income to Non-GAAP Operating Income |
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Net income |
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$ |
17,001 |
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$ |
7,901 |
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$ |
4,664 |
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$ |
15,739 |
|
Exclusions from net income: |
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Net realized gains on investments |
|
|
(108 |
) |
|
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(3,152 |
) |
|
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(841 |
) |
|
|
(7,362 |
) |
Change in net unrealized (losses) gains on equity securities |
|
|
(6,266 |
) |
|
|
28,885 |
|
|
|
(7,036 |
) |
|
|
41,919 |
|
Credit loss expense |
|
|
35 |
|
|
|
- |
|
|
|
957 |
|
|
|
- |
|
Income tax expense on exclusions from net income |
|
|
1,331 |
|
|
|
(5,404 |
) |
|
|
1,453 |
|
|
|
(7,257 |
) |
Non-GAAP operating income (loss) |
|
$ |
11,993 |
|
|
$ |
28,230 |
|
|
$ |
(803 |
) |
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$ |
43,039 |
|
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Net income per diluted share |
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$ |
1.15 |
|
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$ |
0.53 |
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$ |
0.31 |
|
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$ |
1.06 |
|
Exclusions from net income: |
|
|
|
|
|
|
|
|
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|
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Net realized gains on investments |
|
|
(0.01 |
) |
|
|
(0.21 |
) |
|
|
(0.06 |
) |
|
|
(0.50 |
) |
Change in net unrealized gains on equity securities |
|
|
(0.43 |
) |
|
|
1.96 |
|
|
|
(0.48 |
) |
|
|
2.85 |
|
Credit loss expense |
|
|
- |
|
|
|
- |
|
|
|
0.06 |
|
|
|
- |
|
Income tax expense on exclusions from net income |
|
|
0.09 |
|
|
|
(0.37 |
) |
|
|
0.10 |
|
|
|
(0.49 |
) |
Non-GAAP operating income (loss) per diluted share |
|
$ |
0.80 |
|
|
$ |
1.91 |
|
|
$ |
(0.07 |
) |
|
$ |
2.92 |
|
Safety Insurance Group, Inc. and Subsidiaries
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Written Premiums |
|
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|
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|
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Direct |
|
$ |
260,157 |
|
|
$ |
214,576 |
|
|
$ |
478,009 |
|
|
$ |
404,069 |
|
Assumed |
|
|
8,528 |
|
|
|
7,967 |
|
|
|
15,758 |
|
|
|
14,708 |
|
Ceded |
|
|
(23,716 |
) |
|
|
(19,819 |
) |
|
|
(45,914 |
) |
|
|
(38,001 |
) |
Net written premiums |
|
$ |
244,969 |
|
|
$ |
202,724 |
|
|
$ |
447,853 |
|
|
$ |
380,776 |
|
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|
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|
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Earned Premiums |
|
|
|
|
|
|
|
|
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|
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Direct |
|
$ |
217,281 |
|
|
$ |
198,953 |
|
|
$ |
422,836 |
|
|
$ |
395,472 |
|
Assumed |
|
|
7,605 |
|
|
|
7,584 |
|
|
|
15,518 |
|
|
|
15,338 |
|
Ceded |
|
|
(22,661 |
) |
|
|
(18,204 |
) |
|
|
(44,394 |
) |
|
|
(35,389 |
) |
Net earned premiums |
|
$ |
202,225 |
|
|
$ |
188,333 |
|
|
$ |
393,960 |
|
|
$ |
375,421 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802916551/en/
Safety Insurance Group, Inc.
Office of Investor Relations
877-951-2522
InvestorRelations@SafetyInsurance.com
Source: Safety Insurance Group, Inc.