Rate Increases and Premium Growth Drive Return to Sub-100 Combined Ratio in 2025
Safety Insurance Group, Inc. reported a return to underwriting profitability in 2025, posting a 99.0% combined ratio for the year ended December 31, 2025, compared to 101.1% in 2024.
Chairman, President and CEO George M. Murphy said the improvement reflects prior growth and rate actions earning into results.
“In 2025, Safety achieved a combined ratio of 99.0% for the year ended December 31, 2025, compared to 101.1% from the prior year. The year-over-year improvement in combined ratio reflects the impact of our prior year growth in policy counts and rate increases earning into top-line results. Our improved underwriting results, coupled with favorable results in other revenue lines, positively impacted earnings per-share, which improved to $6.72 for the year ended December 31, 2025, compared to $4.79 for the same period in the prior year.”
Murphy also noted that book value per share increased 9.2% year over year to $60.98.
Earnings and Capital Position
Fourth Quarter 2025
- Net income: $20.1 million, or $1.36 per diluted share (vs. $8.1 million, or $0.55 per diluted share, in Q4 2024)
- Non-GAAP operating income: $1.51 per diluted share (vs. $0.94 in Q4 2024)
- Combined ratio: 99.4% (vs. 101.9% in Q4 2024)
Full Year 2025
- Net income: $99.3 million, or $6.70 per diluted share (vs. $70.7 million, or $4.78 per diluted share, in 2024)
- Non-GAAP operating income: $5.71 per diluted share (vs. $4.16 in 2024)
- Combined ratio: 99.0% (vs. 101.1% in 2024)
Book value per share rose to $60.98 at year-end 2025 from $55.83 a year earlier, driven by net income and increases in the value of the company’s fixed maturity portfolio, partially offset by dividends.
Safety paid $3.64 per share in dividends during 2025, compared to $3.60 in 2024. The board declared a quarterly cash dividend of $0.92 per share payable March 13, 2026, to shareholders of record as of March 2, 2026.
The company also resumed share repurchases, buying back $20 million of shares during the fourth quarter.
“This action reflects our confidence in the durability of our business and our commitment to delivering shareholder value,” Murphy said.
Premium Growth Driven by Rate Increases
Direct written premiums for the fourth quarter increased 2.6% ($7.6 million) to $299.6 million. For the full year, direct written premiums rose 7.2% to $1.28 billion.
Net written premiums increased 6.5% in the quarter to $272.2 million and 7.5% for the year to $1.18 billion.
The company attributed the increases to rate actions. For the year:
- Average written premium per policy increased 8.1% in Private Passenger Automobile
- 4.6% in Commercial Automobile
- 9.7% in Homeowners
Net earned premiums increased 9.0% in the fourth quarter and 12.7% for the full year, reflecting prior growth in written premiums earning into results.
Loss Trends and Prior-Year Development
Loss and loss adjustment expenses rose 7.6% in the fourth quarter and 11.2% for the full year. Safety cited larger policy counts and inflationary impacts on its Private Passenger Automobile book.
For 2025, the company reported:
- Loss ratio: 70.0% (vs. 70.9% in 2024)
- Expense ratio: 29.0% (vs. 30.2% in 2024)
- Combined ratio: 99.0% (vs. 101.1% in 2024)
Total, prior-year favorable development was $44.6 million in 2025, compared to $51.9 million in 2024. The 2024 figure included $8.6 million related to a restructuring of the Massachusetts Property Insurance Underwriting Association.
Investment Income and Portfolio Positioning
Net investment income increased 14.3% in the fourth quarter to $16.9 million and 12.6% for the year to $62.7 million.
The net effective annualized yield on the investment portfolio was 4.0% for 2025, up from 3.9% in 2024. The fixed maturity portfolio duration increased to 3.9 years at year-end 2025 from 3.5 years a year earlier.
Overall, Safety’s 2025 results reflect improved underwriting performance supported by rate increases, continued favorable reserve development, and higher investment income, positioning the insurer with a sub-100 combined ratio and strengthened book value entering 2026.
