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Selective Insurance Posts Fourth-Quarter Loss

Source: Selective Insurance


Posted on 29 Jan 2009

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Selective Insurance Group, Inc., based in Branchville, New Jersey, today reported its financial results for the fourth quarter and year ended December 31, 2008. Net income for the year was $0.82 per diluted share; operating income for the year was $1.42 per diluted share. Investment income, after tax, for 2008 decreased 21% to $105.0 million, compared to 2007, primarily due to lower than expected performance from alternative investments.

“While our insurance operations performed well in a competitive market, investment losses led to disappointing results for both the quarter and the year,” said Selective Chairman, President and CEO Gregory E. Murphy. “We believe we controlled expenses well and maintained commercial lines prices better than industry survey averages.We’re most pleased to report that our 2008 statutory combined ratio of 99.2% is ahead of Fitch Ratings’ estimate for property and casualty insurers of 104.8%.”as $1.42 per diluted share. Investment income, after tax, for 2008 decreased 21% to $105.0 million, compared to 2007, primarily due to lower than expected performance from alternative investments.

Investment income for the year was $105.0 million, after tax, compared to $133.7 million in 2007. Alternative investments, after tax, recorded an $11.7 million loss for the fourth quarter compared to income of $4.1 million a year ago. Alternative investments represent approximately 5% of Selective’s total investment portfolio.as $1.42 per diluted share. Investment income, after tax, for 2008 decreased 21% to $105.0 million, compared to 2007, primarily due to lower than expected performance from alternative investments.

“Across our portfolio, we have invested in well-diversified asset classes with low historical correlation,” continued Murphy. “Unfortunately, in a year of unprecedented financial turmoil, all asset classes proved to be correlated. As a result of accounting conventions, our alternative investments reduced income. However, their presence in our portfolio left us with a substantially better total return as they outperformed the S&P 500 by 2700 basis points.”


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