Security Insurance coverage Group, Inc. (NASDAQ: SAFT) introduced its second quarter 2024 outcomes on August 7. The outcomes showcased important premium development and a steady mixed ratio regardless of ongoing inflationary pressures. The Massachusetts-based insurer additionally declared a quarterly dividend, sustaining its dedication to shareholder returns.
Premium Progress Drives Income Enhance
Security reported a considerable improve in each direct and web written premiums for Q2 2024:
- Direct written premiums rose 21.3% to $315.5 million, up from $260.2 million in Q2 2023
- Web written premiums elevated by 20.4% to $294.9 million, in comparison with $245.0 million in the identical interval final 12 months
- Web earned premiums grew by 22.1% to $246.9 million, versus $202.2 million in Q2 2023
George M. Murphy, Chairman of the Board of Administrators, President, and Chief Government Officer, attributed this development to “ongoing fee will increase and development in coverage counts.” The corporate achieved important publicity depend development throughout all strains of enterprise for the primary half of 2024, with Personal Passenger Vehicle coverage depend seeing an 11.9% improve in comparison with the identical interval in 2023.
Profitability Metrics and Loss Ratios
Regardless of the expansion in premiums, Security’s web earnings for Q2 2024 barely decreased to $16.6 million, or $1.13 per diluted share, in comparison with $17.0 million, or $1.15 per diluted share, in Q2 2023. Nevertheless, the corporate’s mixed ratio improved to 99.9% for the quarter, down from 101.9% in the identical interval final 12 months.
Murphy famous, “The expansion in coverage counts mixed with ongoing inflationary developments within the Personal Passenger Vehicle e book of enterprise has resulted in a rise in present 12 months loss expertise in comparison with the second quarter of 2023.”
FAIR Plan Restructuring Boosts Outcomes
A big growth in Q2 2024 was the restructuring of the Massachusetts Property Insurance coverage Underwriting Affiliation, often known as the FAIR Plan. On April 1, 2024, the Massachusetts Division of Insurance coverage accepted a restructuring of the FAIR Plan, reworking it from a partnership that shares income and losses with member corporations to a stand-alone, risk-bearing entity, distributing to Security and the Affiliation’s different members’ their accrued partnership fairness. This transformation resulted in Security’s financials displaying:
- Recognition of a $9.7 million underwriting achieve by means of the discharge of prior 12 months loss reserves
- Institution of latest property, together with a $14.9 million funding in FAIR Plan Belief and an $8.0 million receivable
Murphy highlighted that this restructuring “favorably impacted” the corporate’s quarterly mixed ratio.
Funding Earnings and Portfolio Efficiency
Security’s web funding earnings for Q2 2024 barely decreased by 2.4% to $13.5 million, primarily as a consequence of timing variations in curiosity and money funds from variable fee investments. The efficient annualized yield on the funding portfolio remained steady at 3.9% for each Q2 2024 and Q2 2023.
Dividend Declaration
The Board of Administrators accepted a quarterly money dividend of $0.90 per share, payable on September 13, 2024, to shareholders of document as of September 3, 2024. This maintains the corporate’s dividend on the similar degree because the earlier quarter.
Wanting Forward
Whereas Security Insurance coverage Group demonstrates robust premium development and steady operations, the corporate faces ongoing challenges from inflationary pressures, notably in its Personal Passenger Vehicle line.
About Security
Security Insurance coverage Group, Inc., based mostly in Boston, MA, is the dad or mum of Security Insurance coverage Firm, Security Indemnity Insurance coverage Firm, Security Property and Casualty Insurance coverage Firm, Security Northeast Insurance coverage Firm, and Security Northeast Insurance coverage Company. Working solely in Massachusetts, New Hampshire, and Maine, Security is a number one author of property and casualty insurance coverage merchandise, together with personal passenger car, industrial car, owners, dwelling hearth, umbrella, and enterprise proprietor insurance policies.
