Achieves Major Milestone in 2024
Premium Growth and Financial Performance
Safety Insurance Company surpassed $1 billion in direct written premiums for the first time in its history last year. The company recorded a 20.4% increase in direct written premiums, driven by an 8.5% rise in policy counts and a 10.9% increase in average premium per policy.
“For the year ended December 31, 2024, Safety Insurance continued to achieve significant direct written premium growth, which increased 20.4% over the prior year, driving our top-line revenue above $1 billion for the first time in the Company’s history,” said George M. Murphy, Chairman, President, and CEO. “Our strong top-line growth was a result of an 8.5% increase in overall policy counts and a 10.9% increase in average premium per policy, blended across all lines of business.”
Net written premiums increased by 18.2% for the year to $1.09 billion. The growth was attributed to strong new business production and premium rate increases across all lines. Policy counts rose in key segments, with Private Passenger Automobile increasing by 10.0%, Commercial Automobile by 4.5%, and Homeowners by 8.7%. Average written premium per policy also grew by 14.1%, 10.7%, and 8.9% in these respective lines.
Profitability and Loss Ratios
The Boston-based insurer reported a combined ratio of 101.1% for 2024, an improvement from 107.7% in 2023. The fourth-quarter combined ratio also improved to 101.9% from 106.5% in the prior-year period.
Losses and loss adjustment expenses increased by 11.6% to $716.6 million due to inflationary pressures in the Private Passenger Automobile book. However, the loss ratio improved to 70.9% for the year, compared to 77.0% in 2023, helped by premium growth and moderation of loss severity.
Net Income and Book Value Growth
Net income for 2024 rose to $70.7 million ($4.78 per diluted share) from $18.9 million ($1.28 per diluted share) in 2023. Non-GAAP operating income also increased significantly to $4.16 per diluted share, up from $0.84 per diluted share the previous year.
Book value per share grew by 8.4% to $55.83, reflecting increased net income offset by dividends paid. The company continued its shareholder returns, maintaining its quarterly dividend of $0.90 per share, payable on March 14, 2025, to shareholders of record as of March 3, 2025.
Investment Performance
Net investment income declined slightly to $55.7 million for the year from $56.4 million in 2023. The investment portfolio’s net effective annualized yield was 3.9%, slightly lower than the prior year’s 4.0%. The portfolio’s duration on fixed maturities remained stable at 3.5 years.
Regulatory Developments and Market Conditions
The insurer also benefited from regulatory changes, including the restructuring of the Massachusetts Property Insurance Underwriting Association (FAIR Plan), which contributed $10.1 million in current and prior-year development.
