Selective Insurance Group, Inc. · NASDAQ:SIGI
Selective Insurance — Investor Presentation (February 2008)
26 slides from Selective Insurance's investor presentation, Feb 12, 2008
Slide 1: Selective Insurance Group, Inc. Investor Presentation February 2008
Selective Insurance Group, Inc. Investor Presentation February 2008
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: Selective Profile
MN IA MO IL IN MI MI NC PA NY CT MA “A+” A.M. Best rated for 46 years Selective Profile • Strong market position – 21-state super-regional – $1.6B NPW • 87% commercial lines • 13% personal lines • High-Tech, High-Touch™ Business Model – Industry-leading technology – Distribution partner with 876 ind
Slide 5: Reserving Practices
Reserving Practices • Strong actuarial department – 7 fellows, 4 associates – Responsible for budgeting and planning • Detailed actuarial reviews quarterly • Monthly and quarterly controls and monitoring • Minimal environmental & asbestos exposure • Carried reserves at 57 th percentile of range
Slide 6: Insurance Operations Productivity
Insurance Operations Productivity ($ in 000s) %
Slide 7: Insurance Operations Productivity - Proforma
Insurance Operations Productivity - Proforma ($ in 000s) %
Slide 8: Ongoing Underwriting Improvements
Ongoing Underwriting Improvements • Safety management plan – Increase productivity through new system – Increase % of accounts on service plans • Catastrophe management strategy – Average annual loss - - more granular pricing of property premium to exposure
Slide 9: Natural Catastrophe Management
CAT cover: $310M in excess of $40M Natural Catastrophe Management Percentages are net of tax, reinsurance & reinstatement premium RMS Data as of 6/30/07; Equity data as of 12/31/07 % of Equity at Risk RMS Model
Slide 10: Conservative Investment Portfolio
12.5% ROE generated by investment portfolio Conservative Investment Portfolio $3.7B Invested Assets as of Dec. 31, 2007
Slide 11: No Significant Sub-Prime Exposure
No downgrades on structured securities to date No Significant Sub-Prime Exposure
Slide 12: Proactive Capital Management
Proactive Capital Management 18.9% 26.0% 82.8% Annual Earnings ($ in Millions) Dividends paid Share Repurchase % of Capital Returned to Shareholders 116.0% 25.2%
Slide 13: What Drives Success with Agents?
What Drives Success with Agents?
Slide 14: Agents Want Superior Service
Agents Want Superior Service Selective Delivers : • Field model with front-line decision making authority – 100 Agency Management Specialists (AMS) – 75 Safety Management Specialists (SMS) • Competitive products and programs though Strategic Business Units • Granular pricing capability through predi
Slide 15: Commercial Lines New Business
Commercial Lines New Business ($ in millions)
Slide 16: Agents Want Easy to Use Technology
One third of agent business is generated through xSELerate Agents Want Easy to Use Technology Selective Delivers: 2007 Commercial Lines Interface Carrier of the Year Award from ASCnet 2007 Quantum Award from the AMS Users’ Group 2007 Celent Model Carrier Award for Agency Interface Technology • Abili
Slide 17: Agents Want Easy to Use Technology
Agents Want Easy to Use Technology Selective Delivers : Average premium written per business day ($ in thousands) • Easy to use small business system One & Done with 440+ classes of business
Slide 18: Agents Want Carriers Who Understand Their Needs
Agents Want Carriers Who Understand Their Needs Selective Delivers: • Access to management team • Agent development programs – Hiring producers through CIB program; 65 hired in 2007 – Sales training for producers; 300 trained in 2007 • Customer-focused 24 x 7 capabilities – On-line bill pay services
Slide 19: Agents Want Profitability
Agents Want Profitability Selective Delivers: • Information and analytics delivered through Knowledge Management • Pricing precision through predictive modeling – Commercial lines models: workers compensation, BOP, CPP and commercial auto – MATRIX ® for personal lines: auto and homeowners
Slide 20: The Power of Predictive Modeling
The Power of Predictive Modeling • Commercial lines business performance
Slide 21: Agent's Profitability 2003 vs. 2007
Agent’s Profitability 2003 vs. 2007 Cumulative Direct Premiums ($ millions) 2003 2007 1,000 1,500
Slide 22: Workers Compensation Success
Workers Compensation Success Goal: 7 point combined ratio improvement by year-end 2007 Note: Booked accident year combined ratios 7.8 points
Slide 23: Personal Lines Improvement Plan
Personal Lines Improvement Plan • Competitive pricing through MATRIX ® – Auto rolled out Aug 2006 – Homeowners rollout Jan 2008 • Price increases totaling – Auto +8.7% – Homeowners +5% • Shift in mix of business • Property results – Inspection program in key markets
Slide 24: Agents Get What They Want from Selective
Agents rate us 8.9 for overall service levels for second consecutive year Jerry Niewiek, Principal Berends, Hendricks, Stuit Insurance Grandville, Michigan [Video Available @ www.selective.com] Agents Get What they Want from Selective
Slide 25: The Formula for Profitable Growth
The Formula for Profitable Growth + = Actionable Information High-Tech, High-Touch Profitable Growth
Slide 26: Long-Term Shareholder Value Creation
Long-Term Shareholder Value Creation
Selective Insurance Group — Investor Presentation (February 2008) on 6ix