-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Om4vyk1cmrymwGmkomXsNNVeXIDZ3/wffPgBzg9H5adGJqAl/Db/DtxqKIGLY3A9 lI3nuYh9MQwfYUv63YTa9g== 0000950172-05-002340.txt : 20050726 0000950172-05-002340.hdr.sgml : 20050726 20050726170124 ACCESSION NUMBER: 0000950172-05-002340 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050726 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050726 DATE AS OF CHANGE: 20050726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SELECTIVE INSURANCE GROUP INC CENTRAL INDEX KEY: 0000230557 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 222168890 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-08641 FILM NUMBER: 05974813 BUSINESS ADDRESS: STREET 1: 40 WANTAGE AVENUE CITY: BRANCHVILLE STATE: NJ ZIP: 07890 BUSINESS PHONE: 2019483000 MAIL ADDRESS: STREET 1: 40 WANTAGE AVE STREET 2: 40 WANTAGE AVE CITY: BRANCHVILLE STATE: NJ ZIP: 07890 FORMER COMPANY: FORMER CONFORMED NAME: SRI CORP DATE OF NAME CHANGE: 19860508 8-K 1 select8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) July 26, 2005 Selective Insurance Group, Inc. ------------------------------- (Exact name of registrant as specified in its charter) New Jersey 0-8641 22-2168890 ---------- ------ ---------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 40 Wantage Avenue, Branchville, New Jersey 07890 ------------------------------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (973) 948-3000 n/a --- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On July 26, 2005, Selective Insurance Group, Inc. issued a press release announcing results for the second quarter ended June 30, 2005. The press release is attached hereto as Exhibit 99.1 and is being furnished, not filed, under Item 2.02 to this Report on Form 8-K. Item 9.01. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release of Selective Insurance Group, Inc. dated July 26, 2005. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SELECTIVE INSURANCE GROUP, INC. (Registrant) Date: July 26, 2005 By: /s/ Michael H. Lanza -------------------------------- Name: Michael H. Lanza, Esq. Title: Senior Vice President, General Counsel and and Corporate Secretary EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press Release dated July 26, 2005. EX-99 2 selectivepr.txt EXHIBIT 99.1 SELECTIVE [Logo Graphic Omitted] Selective Insurance Group, Inc. 40 Wantage Avenue Branchville, New Jersey 07890 www.selective.com FOR RELEASE AT 4:15 P.M. (EST) ON JULY 26, 2005 Media Contact: Sharon Cooper 973-948-1324, sharon.cooper@selective.com Investor Contact: Dale Thatcher 973-948-1774, dale.thatcher@selective.com SELECTIVE INSURANCE GROUP REPORTS SECOND QUARTER 2005 EARNINGS GAAP combined ratio 96% Commercial lines net premiums written up 9% Investment income, after-tax, up 17% Branchville, NJ - July 26, 2005 - Selective Insurance Group, Inc. (NASDAQ: SIGI), today reported its financial results for the second quarter ended June 30, 2005. Compared with the second quarter of 2004: - - Net income increased 11%, to $32.1 million, or $1.02 per diluted share; - - Operating income(1) increased 10% to $31.7 million, or $1.01 per diluted share; - - The GAAP combined ratio increased 0.3 points to 96.0%; - - The statutory combined ratio improved 0.1 points to 94.9% - The commercial lines statutory combined ratio improved 3.1 points to 92.4% - The personal lines statutory combined ratio increased 16.8 points, mainly due to a $7.5 million increase in reserves for currently estimated increased claim costs related to the New Jersey Supreme Court's decision to eliminate the serious life impact requirement of the verbal tort threshold. This action accounted for 14.4 points of the overall personal lines statutory combined ratio and reduced diluted earnings per share by $0.15; ________________________ (1) Operating income differs from net income by the exclusion of realized gains or losses on investment sales and the cumulative effect of change in accounting principle. It is used as an important financial measure by management, analysts and investors, because the realization of investment gains and losses in any given period is largely discretionary as to timing and could distort the analysis of trends; however, it is not intended as a substitute for net income prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). A reconciliation of operating income to net income is provided in the attached GAAP Highlights and Reconciliation to Comparable GAAP measures. Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners Accounting Practices and Procedures Manual and, therefore, is not reconciled to GAAP. - - Net premiums written (NPW) increased 6% to $369.6 million - Commercial lines NPW increased 9% to $317.5 million - Personal lines NPW declined 11% to $52.1 million; and - - Total revenue was up 8% to $414.4 million. Weather-related catastrophe losses accounted for only 0.2 points of the GAAP and statutory combined ratios for the second quarter of 2005, or $0.5 million, after-tax, compared to 0.8 points, or $1.7 million, after-tax, for the second quarter of 2004. Gregory E. Murphy, Selective Insurance Group Chairman, President and CEO, stated: "We delivered another solid performance this quarter, led by strong results from our commercial lines operation and a 17% increase in after-tax investment income. We continue to build upon the successful strategies that have made Selective one of the premier super-regional property and casualty companies in the industry. Our 6% premium growth is about three times higher than the A.M. Best estimated industry average and clearly reflects the quality of our field-based underwriting and claims strategies, and our business-driven technology initiatives. The commercial lines operation, which represents 85% of our business, delivered strong net premiums written growth of 9%, including almost $71 million of net new business, and a strong 92.4% statutory combined ratio. These results highlight our ability to compete successfully in changing market conditions. "Of significant note, on June 1, 2005, A.M. Best affirmed Selective's "A+" (Superior) rating for the 44th consecutive year. We remain one of only 7% of commercial lines carriers rated "A+" or higher. A.M. Best made reference, in part, to our solid capitalization, historically favorable operating performance, quality management team, disciplined underwriting culture and strong regional market presence within the small commercial lines business segment. A.M. Best also noted the significant advancements we have made in web-based technology that make it even easier for agents and customers to do business with us. "We continue to execute our geographic diversification strategy and refine our personal lines operation. Personal automobile business in New Jersey now represents only 7% of company-wide premium volume, down from 22% a decade ago. Our New Jersey personal auto business was profitable the past four quarters; this quarter was unprofitable, at a statutory combined ratio of 123.4%, due to estimated higher claim costs that reflect a New Jersey Supreme Court decision eliminating the serious life impact requirement of the verbal tort threshold." The Company's Diversified Insurance Services contributed $0.11 in earnings per diluted share for the quarter. Revenue at these fee-based businesses was up 13%, to $29.7 million, compared to second quarter 2004. Return on revenue was 12%, compared to 8.5% in the second quarter of 2004. For the six months ended June 30, 2005, the Company reported net income of $68.2 million, or $2.17 per diluted share. Operating income(1) was $64.3 million, or $2.05 per diluted share. For the comparable period last year, the Company reported net income of $56.4 million, or $1.80 per diluted share, and operating income of $52.8 million, or $1.69 per diluted share. Selective's GAAP combined ratio improved to 95.6% for the first six months of 2005, compared to 96.7% for the six-month period ended June 30, 2004. For the same period, the statutory combined ratio improved to 94.2% in 2005, compared to 95.3% in 2004. After-tax investment income for the second quarter 2005 increased 17%, to $25.2 million, compared to the same period last year. At June 30, 2005, Selective's consolidated assets reached $4.2 billion, including $3.0 billion in the Company's investment portfolio; stockholders' equity was $942.3 million; and book value per share was up 18% to $33.20, compared to second quarter 2004. During the quarter, the Company repurchased approximately 70,000 shares of its stock at an average price per share of $47.55. There are approximately 4.9 million shares available for repurchase under Selective's stock repurchase plan. The Board of Directors declared a $0.19 per share quarterly cash dividend on Selective's common stock payable Sept. 1, 2005, to stockholders of record on Aug. 15, 2005. The supplemental investor packet, including financial information that is not part of this press release, is available on the Investors page of Selective's public website at www.selective.com. Selective's quarterly analyst conference call will be simulcast at 8:30am EST, on July 27, 2005, at www.selective.com. The webcast will be available for rebroadcast until the close of business on Aug. 26, 2005. Selective Insurance Group, Inc., headquartered in Branchville, New Jersey, is a holding company for six property and casualty insurance companies that offer primary and alternative market insurance for commercial and personal risks. The insurance companies are rated "A+" (Superior) by A.M. Best. Through other subsidiaries, the company offers medical claim management services; human resources benefits and administration services; risk management products and services; and flood insurance policy, administration and claim services. Selective maintains a website at www.selective.com. In this press release, Selective and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections regarding Selective's future operations and performance. Such statements are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995, which provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements. These forward-looking statements are often identified by words such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "target," "project," "intend," "believe," "estimate," "predict," "potential," "pro forma," "seek," "likely," or "continue," or other comparable terminology and their negatives. Selective and its management assume no obligation to update these forward-looking statements due to changes in underlying factors, new information, future developments or otherwise. Selective and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in Selective's future performance. Factors that could cause Selective's actual results to differ materially from those indicated by such forward-looking statements, include, among other things, those discussed or identified from time to time in our public filings with the United States Securities and Exchange Commission ("SEC") and those associated with: o the frequency and severity of catastrophic events, including hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, fires, explosions and terrorism; o adverse economic, market or regulatory conditions; o the concentration of our business in a number of East Coast and Midwestern states; o the adequacy of our loss reserves; o the cost and availability of reinsurance; o our ability to collect on reinsurance and the solvency of our reinsurers; o uncertainties related to insurance rate increases and business retention; o changes in insurance regulations that impact our ability to write and/or cease writing insurance policies in one or more states particularly changes in New Jersey automobile insurance laws and regulations; o our ability to maintain favorable ratings from A.M. Best, S&P, Moody's and Fitch; o fluctuations in interest rates and the performance of the financial markets which may affect our investment income; and o our entry into new markets and businesses. Selective's SEC filings can be accessed through the Investors and Corporate Governance sections of the company's website, www.selective.com, or through the SEC's EDGAR Database at www.sec.gov (Selective EDGAR CIK No. 0000230557). Selective Insurance Group, Inc. (Nasdaq: SIGI) * GAAP Highlights and Reconciliation of Non-GAAP Measures to Comparable GAAP Measures
(in thousands, except per share data) - ------------------------------------------------------------------------------------------------------- 3 months ended June 30: 2005 2004 - ----------------------- ---- ---- Net premiums written $ 369,621 349,250 Net premiums earned 350,452 325,986 Net investment income 32,747 28,662 Diversified insurance services revenue 29,697 26,395 Total revenues 414,359 382,137 Operating income 31,714 28,774 Capital gain, after-tax 364 100 ------------- ----------- Net income $ 32,078 28,874 ============= =========== Statutory combined ratio 94.9% 95.0% GAAP combined ratio 96.0% 95.7% Operating income per diluted share $ 1.01 0.92 Net income per diluted share 1.02 0.92 Weighted average diluted shares 32,172 32,402 Book value per share $ 33.20 28.03 6 months ended June 30: 2005 2004 - ----------------------- ---- ---- Net premiums written $ 766,399 724,512 Net premiums earned 693,192 641,292 Net investment income 65,109 58,122 Diversified insurance services revenue 57,449 50,626 Total revenues 822,665 757,257 Operating income 64,332 52,827 Capital gain, after-tax 3,352 3,575 Cumulative effect of change in accounting principle, net of tax 495 - ------------- ----------- Net income $ 68,179 56,402 ============= =========== Statutory combined ratio 94.2% 95.3% GAAP combined ratio 95.6% 96.7% Operating income per diluted share $ 2.05 1.69 Net income per diluted share 2.17 1.80 Weighted average diluted shares 32,225 32,311 Book value per share $ 33.20 28.03 *All amounts included in this release exclude inter-company transactions.
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