Selective Insurance Group, Inc. · NASDAQ:SIGI
Selective Insurance — Investor Presentation (May 2009)
25 slides from Selective Insurance's investor presentation, May 18, 2009
Slide 1: Selective Insurance Group, Inc. Investor Presentation May 2009
Selective Insurance Group, Inc. Investor Presentation May 2009
Slide 2: Forward Looking Statement
Forward Looking Statement Certain statements in this report, including information incorporated by reference, are “forward- looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The PSLRA provides a safe harbor under the Securities Act of 1933
Slide 3: Financial Strength
Financial Strength
Slide 4: Only 10% of P&C carriers rated A+ or better
Only 10% of P&C carriers rated A+ or better MN IA MO WI MI MI NC NY CT MA TN Selective Profile • 22-state super-regional • $ 1.5B NPW • 86% commercial lines • 14% personal lines • Distribution partner with 950 independent agents • Best in class field model • History of financial strength • A.M. Best
Slide 5: A Foundation of Financial Strength
A Foundation of Financial Strength • Conservative investment portfolio • Disciplined reserving practices • Strong reinsurance program
Slide 6: Conservative Investment Portfolio
Most asset classes became correlated in 2008 Conservative Investment Portfolio $3.6B Invested Assets as of March 31, 2009
Slide 7: Alternative investments and asset allocation to equities
If alternative investments were written down to $0 book value per share would decrease by only $1.80 Asset Allocation to Equities and Other Investments As of December 2008 Source: A.M. Best, Barclays Capital Peers include: Auto-owners Insurance, CINF, CNA, THG, HGIC, Liberty Mutual, Main Street Amer
Slide 8: Investment Strategy for the Current Environment
Investment Strategy for the Current Environment • Recognition of current high risk investment environment • Preservation of capital is paramount • Increased allocation to government and agencies • Investment grade corporate bonds • Actively reducing portfolio risk where appropriate
Slide 9: Disciplined Reserving Practices
Calendar Year Reserve Development (p/t) ($10M) ($5M) $7M $16M $18M Carried $2,415M Disciplined Reserving Practices Actuarial Reserve Ranges 52.6% 54.8% 56.9% 57.5% 53.9%
Slide 10: Strong Natural Catastrophe Program
CAT cover: $310M in excess of $40M Strong Natural Catastrophe Program Percentages are net of tax, reinsurance and reinstatement premium. RMS data as of 6/30/08; Equity data as of 3/31/09. % of Equity at Risk RMS Model
Slide 11: Capital Position
Capital Position • Premium to surplus: 1.8x • Debt to total capitalization: • Total: 23.1% • Adjusted: 16.7% • Weighted average life of debt: 35 years
Slide 12: Sound Strategy
Sound Strategy
Slide 13: Strategies for Long-Term Success
Strategies for Long-Term Success
Slide 14: Strong Agency Relationships
While each of these factors is important, relationships drive the business Strong Agency Relationships
Slide 15: Best in Class Field Model
MN IL TN 1Q2009 Commercial lines new business growth - 12% Best in Class Field Model NJ DE Market Opportunity • Small Business (up to $25K) - $23 billion • Middle Market ($25K to $250K) - $54 billion • Large Accounts ($250K to $1M) - $21 billion Claims Management Specialists
Slide 16: Selective's Current Market Share
MN IA IL IN MI MI PA NY NJ CT TN SIGI’s current average market share = 1.1%. At 5% market share, premiums would be > $6B Selective’s Current Market Share RI DE >4% (NJ) 3% to <4% (MD) 2% to <3% (RI & PA) 1% to <2% (NY) 0% to <1% (GA, KY, NC, SC, TN, VA, IA, IL, IN, MI, MN, MO, WI, OH, MA, CT, DE) No
Slide 17: Automation Drives Growth
Automation Drives Growth One & Done® ® Quote, rate & issue in minutes ®@ Focus on improving amount of straight-through business ®@ More than 500 eligible classes ® Decision support models ° Best pricing provided up front One & Done® Business Written per Day (in 000s) $300 | $250 $200 $150 $100 2004
Slide 18: Knowledge Management Tools Make a Difference
Knowledge Management Tools Make a Difference For lines < $50,000 & 4 Diamond Diamond & 1 Diamond Percent of Total New Premium Diamond Distribution WC, BOP, CPP, CA
Slide 19: Knowledge Management Tools Make a Difference
Knowledge Management Tools Make a Difference Retention & 4 Diamond Diamond & 1 Diamond As of March 31, 2009
Slide 20: Knowledge Management Tools Make a Difference
Knowledge Management Tools Make a Difference Pricing & 4 Diamond Diamond & 1 Diamond As of March 31, 2009
Slide 21: Commercial Lines Pure Price vs. Retention
April 2009 pure price increase of 0.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 April Commercial Lines Pure Price vs. Retention 2006 2007 2008 2009
Slide 22: Broad Underwriting Appetite Enhanced through Knowledge Management
Segment 41 95.6% Segment 60 101.0% Segment 21 86.3% Segment 40 95.3% Segment 1 68.7% Segment 20 85.8% Segment 61 101.2% Segment 80 120.2% Broad Underwriting Appetite Enhanced through Knowledge Management Operational Areas Marketing Safety Management Training Pricing Average Lower Than Average Higher
Slide 23: The Road to Profitability
The Road to Profitability 13-state footprint opportunity - $900 million • $24M in-force price change on $214M book • Underwriting and automation improvements - - reduced operating costs and increased data quality • Profitable by 2010
Slide 24: Key Claims Strategies
Key Claims Strategies • Litigation management • Vendor management • Integrated outcomes • Workers compensation • Other casualty lines
Slide 25: Long-Term Shareholder Value Creation
Long-Term Shareholder Value Creation * *Fiscal-year dividend
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