SAFT Shareholder/Stockholder Letter Transcript:
2023
ANNUAL
REPORT
TO
OUR
AUTO
HOME
BUSINESS
SHAREHOLDERS
We help you
manage life s
storms
Safety Insurance was founded in 1979 with a belief that we would
succeed as a company if customers were given the best possible service.
As we ve grown and expanded our product line to include a full portfolio of
property and casualty insurance products, staying committed to that belief
has meant even more. At Safety, we do everything possible to make it easy
for our agents and policyholders to do business with us.
Today, Safety is the third largest private passenger automobile
carrier, the second largest commercial automobile carrier, and the
fourth largest homeowners carrier in Massachusetts. We support
our network of independent agents with state-of-the-art tools
that make the ease and convenience of doing business with Safety
second to none.
The key
to our
success:
Together with our agents, Safety
Insurance remains a premier provider
SERVICE.
of property and casualty insurance
in Massachusetts, New Hampshire,
and Maine. We ll continue this tradition
into the future.
The key to our
customers
success:
SAFETY.
Dear Fellow Stockholders:
In 2023, Safety Insurance Group posted record top-line growth as Direct
Written Premiums increased by 20.4%, as a result of a 10.2% increase in overall policy counts and a 10.9% increase
in average premium per policy, blended across all lines of business. The hardest insurance market in decades,
brought opportunities for us to grow our rounded account strategy with our key independent agency partners.
While in prior years, our moderate growth was mainly driven by rate, these important relationships, and our strong
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up for continued future success.
The increases to direct written premiums and net written premiums were focused in our key areas of business,
including 14.7%, 5.4% and 11.2% in Private Passenger Automobile, Commercial Automobile and Homeowners lines,
respectively, compared to the same period in 2022. Average written premium per exposure increased 10.8%, 3.8%
and 4.5% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively,
compared to the same period in 2022.
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For the year ended December 31, 2023, Safety Insurance posted a 107.7% combined ratio, impacted
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The long-term commitment to strong underwriting results and enhanced investment returns remains
George M. Murphy
President and
&KLHI ([HFXWLYH 2 FHU
unchanged. As always, we focus on pricing our products appropriately for the risks we are insuring
while generating the capital to grow our business. We continue to work with our agency partners toward
our goal of maintaining underwriting discipline, while leveraging investments in our pricing and risk
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lines and is seeing these rate increases begin to impact earned premiums.
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annual yield on our investment portfolio was 4.0% for the year ended December 31, 2023 compared
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our current portfolio position and strong underlying operating cash
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Total Direct Written Premiums
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991,224
852,404
798,712
802,139
and develop strong independent agent relationships. In contrast to
some of our competitors, Safety distributes its products exclusively
823,318
through our extensive network of agents throughout Massachusetts,
New Hampshire, and Maine. We support them with a full suite
of insurance products and information technology services, which
enables them to better serve their customers and more easily
2019
2020
2021
2022
2023
transact business with us.
Safety Insurance 2023 Annual Report
1
Safety is proud of our history as an independent agency company and remains committed to the agency channel. In
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We continue to invest in technology enhancements for our core systems that are aimed at providing our independent
agents and consumers with useful tools to enhance the user experience. During 2023, the Innovation Lab and business
units introduced a no-code, low-code product into our technology toolset which was used to develop an underwriting
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electronic claim payments functionality and additional enhancements to
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The long-term
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commitment to strong
and to capture a larger share of the total business written by each agent.
enabled Safety to establish strong relationships with agency partners
underwriting results
We position ourselves as the preferred insurance carrier for those agents
and enhanced
direct written premium. We have translated our competitive advantage and
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investment returns
extensive knowledge of the market to become the second largest commercial
remains unchanged.
and the fourth largest homeowners carrier in Massachusetts.
automobile carrier, the third largest private passenger automobile carrier
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development, and market position as a leading property and casualty insurance
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important strengths.
We were also named to the 2023 Ward s 50 group of top performing property and casualty insurance companies. Ward
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total revenue, growth in revenue, growth in surplus, and combined ratio.
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Cash Dividends Paid Per Common Share
Total Assets
(Dollars)
$3.40
2019
2
(Dollars in Billions)
$3.60
$3.60
$3.60
$3.60
$2.02
$2.05
$2.12
2020
2021
2022
2023
2019
2020
2021
Safety Insurance 2023 Annual Report
$1.97
2022
$2.09
2023
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Directors and management team.
We believe that Safety Insurance has a responsibility to both its stakeholders and the environment in which it
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To that end, Safety Insurance is committed to developing environmentally and socially-conscious solutions for
our employees, our community, our investors and our independent agency partners and policyholders.
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committed to investigating additional ways to measure and reduce our overall carbon footprint in line with industry
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our senior leadership team oversees the management and risk mitigation
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Our long-standing
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strategy remains
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consistent as we look to
charitable donations and company-sponsored volunteer activities. Safety
maintain and develop
is committed to making a positive impact on the communities where our
employees live and work through our matching gift program, corporate giving
strong independent
and employee volunteerism. The Safety Insurance Charitable Foundation
agent relationships.
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food banks, youth programs, healthcare, medical research and disaster relief.
With the support of an experienced, knowledgeable and dedicated senior
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The ongoing commitment of our employees, allows us to continually provide the best service possible to our
independent agent partners and policyholders. This has resulted in a history of strong returns and enduring value
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Sincerely,
George M. Murphy
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Total Exposures
Total Revenues
(Excluding Changes in Unrealized Gains on Equity Investments)
(Dollars in Millions)
$856.30
$835.70
$868.80
$842.00
2019
2020
2021
2022
$923.40
2023
697,157
675,377
653,584
648,497
2019
2020
2021
2022
728,379
2023
Safety Insurance 2023 Annual Report
3
4/2/2024 Letter Continued (Full PDF)