2Q 2023 Financial Supplement
Exhibit 99.2
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
Forward-Looking Statements
Certain statements in this report, including information incorporated by reference, are "forward-looking statements" defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a forward-looking statement safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements discuss our intentions, beliefs, projections, estimations, or forecasts of future events and financial performance. They involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, activity levels, or performance to materially differ from those in or implied by the forward-looking statements. In some cases, forward-looking statements include the words "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "target," "project," "intend," "believe," "estimate," "predict," "potential," "pro forma," "seek," "likely," "continue," or comparable terms. Our forward-looking statements are only predictions, and we cannot guarantee or assure that such expectations will prove correct. We undertake no obligation to publicly update or revise any forward-looking statements for any reason, except as may be required by law.
Factors that could cause our actual results to differ materially from what we project, forecast, or estimate in forward-looking statements include, without limitation:
- Challenging conditions in the economy, global capital markets, the banking sector, and commercial real estate, including prolonged higher inflation, could increase loss costs and negatively impact investment portfolios;
- Deterioration in the public debt and equity markets and private investment marketplace that could lead to investment losses and interest rate fluctuations;
- Ratings downgrades on individual securities we own could affect investment values and, therefore, statutory surplus;
- The adequacy of our loss reserves and loss expense reserves;
- Frequency and severity of catastrophic events, including natural events that may be impacted by climate change, such as hurricanes, severe convective storms, tornadoes, windstorms, earthquakes, hail, severe winter weather, floods, and fires, and man-made events such as criminal and terrorist acts, including cyber-attacks, explosions, and civil unrest;
- Adverse market, governmental, regulatory, legal, or judicial conditions or actions;
- The significant geographic concentration of our business in the easteportion of
the United States ; - The cost, terms and conditions, and availability of reinsurance;
- Our ability to collect on reinsurance and the solvency of our reinsurers;
- The impact of changes in
U.S. trade policies and imposition of tariffs on imports that may lead to higher than anticipated inflationary trends for our loss and loss expenses; - Related to COVID-19:
-
- We have been successful in defending against payment of COVID-19-related business interruption losses based on our policies' terms, conditions, and exclusions. However, should the highest courts determine otherwise, our loss and loss expenses may increase, our related reserves may not be adequate, and our financial condition and liquidity may be materially impacted.
- We cannot predict the amount our premiums may be reduced, or the impact on our underwriting results, from any future (i) voluntary premium credits on in-force commercial and personal automobile policies, (ii) state insurance commissioner or other regulatory directives to implement premium-based credit in lines other than commercial and personal automobile, (iii) voluntary efforts or directives from various state insurance regulators to extend individualized payment flexibility or suspend policy cancellation, late payment notices, and late or reinstatement fees, or (iv) litigation brought by policyholders to recover premiums they allege were excessive during the period of any governmental directive.
- The ongoing Russian war against
Ukraine is impacting global economic, banking, commodity, and financial markets, exacerbating ongoing economic challenges, including inflation and supply chain disruption, which influences insurance loss costs, premiums, and investment valuations; - Uncertainties related to insurance premium rate increases and business retention;
- Changes in insurance regulations that impact our ability to write and/or cease writing insurance policies in one or more states;
- The effects of data privacy or cyber security laws and regulations on our operations;
- Major defect or failure in our internal controls or information technology and application systems that result in harm to our brand in the marketplace, increased senior executive focus on crisis and reputational management issues, and/or increased expenses, particularly if we experience a significant privacy breach;
- Potential tax or federal financial regulatory reform provisions that could pose certain risks to our operations;
- Our ability to maintain favorable financial ratings, which may include sustainability considerations, from rating agencies, including AM Best,
Standard & Poor's ,Moody's , and Fitch; - Our entry into new markets and businesses; and
- Other risks and uncertainties we identify in filings with the
United States Securities and Exchange Commission , including our Annual Report on Form 10-K and other periodic reports.
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TABLE OF CONTENTS |
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Page |
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Consolidated Financial Highlights |
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Consolidated Statements of Operations |
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Consolidated Balance Sheets |
3 |
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Financial Metrics |
4 |
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Consolidated Insurance Operations Statement of Operations |
5 |
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Standard Commercial Lines Statement of Operations and Supplemental Data |
6 |
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Standard Commercial Lines GAAP Line of Business Results |
7 |
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Standard Personal Lines Statement of Operations and Supplemental Data |
8 |
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Standard Personal Lines GAAP Line of Business Results |
9 |
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Excess and Surplus Lines Statement of Operations and Supplemental Data |
10 |
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Excess and Surplus Lines GAAP Line of Business Results |
11 |
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Consolidated Investment Income |
12 |
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Consolidated Composition of Invested Assets |
13 |
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Credit Quality of Invested Assets |
14 |
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Reconciliation of Net Income Available to Common Stockholders to Non-GAAP Operating Income and |
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15 |
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Certain OtherNon-GAAPMeasures |
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Ratings and Contact Information |
16 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
|
Quarter ended |
Year-to-date |
|||||||||||||
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|
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|
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||||||||
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($ and shares in millions, except per share data) |
2023 |
2023 |
2022 |
2022 |
2022 |
2023 |
2022 |
|||||||
|
For Period Ended |
Gross premiums written Net premiums written
Change in net premiums written, from comparable prior year period
Underwriting income (loss), before-tax Net investment income earned, before-tax
Net realized and unrealized investment gains (losses), before-tax
Net income
Net income available to common stockholders(1)
Non-GAAP operating income(2)
At Period End
Total assets
Total invested assets
Stockholders' equity
Common stockholders' equity(3)
Common shares outstanding
Per Share and Share Data
Net income available to common stockholders per common share (diluted) Non-GAAP operating income per common share (diluted)(2)
Weighted average common shares outstanding (diluted) Book value per common share
Adjusted book value per common share(2) Dividends paid per common share
Financial Ratios
Loss and loss expense ratio
Underwriting expense ratio
Dividends to policyholders ratio
GAAP combined ratio
Retuon common stockholders' equity ("ROE")
Non-GAAP operating ROE(2)
Debt to total capitalization
Net premiums written to policyholders' surplus
Invested assets per dollar of common stockholders' equity
- 1,238.1
1,084.9
17 %
- (1.5)
97.7
(5.4)
- 58.6
56.3
60.6
11,217.2
8,133.2
2,671.4
2,471.4
60.6
- 0.92
0.99
60.9
- 40.81
47.34
0.30
68.6 %
31.4
0.2
100.2 %
9.1
9.8
15.9
1.52
- 3.29
|
1,138.2 |
988.3 |
1,047.1 |
1,059.1 |
|||
|
999.8 |
849.7 |
903.4 |
930.7 |
|||
|
12 |
14 |
11 |
12 |
|||
|
39.2 |
46.1 |
27.1 |
37.7 |
|||
|
91.5 |
81.4 |
63.9 |
70.2 |
|||
|
3.3 |
(5.9) |
(25.7) |
(42.9) |
|||
|
92.6 |
86.5 |
42.5 |
39.5 |
|||
|
90.3 |
84.2 |
40.2 |
37.2 |
|||
|
87.6 |
88.9 |
60.5 |
71.1 |
|||
|
11,015.0 |
10,802.3 |
10,520.5 |
10,317.7 |
|||
|
8,029.4 |
7,837.5 |
7,536.1 |
7,585.9 |
|||
|
2,669.4 |
2,527.6 |
2,427.5 |
2,594.1 |
|||
|
2,469.4 |
2,327.6 |
2,227.5 |
2,394.1 |
|||
|
60.5 |
60.3 |
60.3 |
60.3 |
|||
|
1.48 |
1.38 |
0.66 |
0.61 |
|||
|
1.44 |
1.46 |
0.99 |
1.17 |
|||
|
60.9 |
60.9 |
60.8 |
60.8 |
|||
|
40.82 |
38.57 |
36.96 |
39.68 |
|||
|
46.61 |
45.49 |
44.59 |
44.18 |
|||
|
0.30 |
0.30 |
0.28 |
0.28 |
|||
|
62.9 |
62.4 |
64.1 |
62.9 |
|||
|
32.6 |
32.1 |
32.6 |
32.5 |
|||
|
0.2 |
0.2 |
0.1 |
0.1 |
|||
|
95.7 |
94.7 |
96.8 |
95.5 |
|||
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15.1 |
14.8 |
7.0 |
6.0 |
|||
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14.6 |
15.6 |
10.5 |
11.4 |
|||
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15.9 |
16.6 |
17.2 |
16.3 |
|||
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1.46 |
1.44 |
1.45 |
1.41 |
|||
|
3.25 |
3.37 |
3.38 |
3.17 |
2,376.2
2,084.7
15
37.7
189.2
(2.1)
151.2
146.6
148.2
11,217.2
8,133.2
2,671.4
2,471.4
60.6
2.41
2.44
60.9
40.81
47.34
0.60
65.8
32.0
0.2
98.0
12.1
12.2
15.9
1.52
3.29
2,065.4
1,820.5
12
93.5
142.8
(83.2)
95.9
91.3
157.0
10,317.7
7,585.9
2,594.1
2,394.1
60.3
1.50
2.58
60.8
39.68
44.18
0.56
61.8
32.3
0.2
94.3
7.1
12.1
16.3
1.41
3.17
- Net income available to common stockholders is net income reduced by preferred stock dividends.
- Non-GAAPmeasure. Refer to Page 15 for definition.
- Excludes equity related to preferred stock.
Page 1
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
Quarter ended |
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($ and shares in millions, except per share data) |
2023 |
2023 |
2022 |
2022 |
2022 |
|||||
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Revenues |
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Net premiums earned |
$ |
942.2 |
902.3 |
872.8 |
853.9 |
834.4 |
||||
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Net investment income earned |
97.7 |
91.5 |
81.4 |
63.9 |
70.2 |
|||||
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Net realized and unrealized gains (losses) |
(5.4) |
3.3 |
(5.9) |
(25.7) |
(42.9) |
|||||
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Other income |
6.1 |
2.6 |
3.8 |
2.9 |
3.0 |
|||||
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Total revenues |
1,040.5 |
999.8 |
952.2 |
895.0 |
864.8 |
|||||
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Expenses |
||||||||||
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Loss and loss expense incurred |
646.1 |
567.4 |
544.8 |
547.8 |
524.9 |
|||||
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Amortization of deferred policy acquisition costs |
194.8 |
189.8 |
183.6 |
179.0 |
173.4 |
|||||
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Other insurance expenses |
108.9 |
108.6 |
102.0 |
102.8 |
101.5 |
|||||
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Interest expense |
7.3 |
7.2 |
7.2 |
7.2 |
7.3 |
|||||
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Corporate expenses |
9.3 |
12.1 |
6.7 |
5.5 |
7.9 |
|||||
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Total expenses |
966.4 |
885.1 |
844.4 |
842.4 |
814.9 |
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Income before federal income tax |
74.2 |
114.8 |
107.8 |
52.6 |
49.9 |
|||||
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Federal income tax expense |
15.5 |
22.2 |
21.2 |
10.1 |
10.4 |
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Net Income |
58.6 |
92.6 |
86.5 |
42.5 |
39.5 |
|||||
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Preferred stock dividends |
2.3 |
2.3 |
2.3 |
2.3 |
2.3 |
|||||
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Net income available to common stockholders |
56.3 |
90.3 |
84.2 |
40.2 |
37.2 |
|||||
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Net realized and unrealized investment (gains) losses, after tax(1) |
4.3 |
(2.6) |
4.7 |
20.3 |
33.9 |
|||||
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Non-GAAP operating income(2) |
||||||||||
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$ |
60.6 |
87.6 |
88.9 |
60.5 |
71.1 |
|||||
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Weighted average common shares outstanding (diluted) |
60.9 |
60.9 |
60.9 |
60.8 |
60.8 |
|||||
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Net income available to common stockholders per common share (diluted) |
$ |
0.92 |
1.48 |
1.38 |
0.66 |
0.61 |
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Non-GAAP operating income per common share (diluted)(2) |
$ |
0.99 |
1.44 |
1.46 |
0.99 |
1.17 |
- Amounts are provided to reconcile net income available to common stockholders to non-GAAP operating income.
- Non-GAAPmeasure. Refer to Page 15 for definition. Note: Amounts may not foot due to rounding.
Year-to-date
|
|
|
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|
2023 |
2022 |
||
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$ |
1,844.5 |
1,646.7 |
|
|
189.2 |
142.8 |
||
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(2.1) |
(83.2) |
8.74.6
2,040.3 1,710.9
|
1,213.6 |
1,019.1 |
384.6 343.1
217.4 195.5
14.4 14.4
21.4 18.9
1,851.4 1,591.1
188.9 119.8
37.723.9
151.2 95.9
4.64.6
146.6 91.3
|
1.6 |
65.8 |
||
|
$ |
148.2 |
157.0 |
|
|
60.9 |
60.8 |
||
|
$ |
2.41 |
1.50 |
|
|
$ |
2.44 |
2.58 |
Page 2
Attachments
Disclaimer


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