BOSTON — August 6, 2025 — Safety Insurance Group, Inc. (NASDAQ: SAFT) posted robust second quarter 2025 results, marked by double-digit premium growth, an improved combined ratio, and a dividend increase, signaling management’s confidence in the company’s performance and outlook.
“For the quarter ended June 30, 2025, our combined ratio improved to 98.1% compared to 99.9% in the same period in the prior year,” said George M. Murphy, Chairman, President, and CEO. “The 2024 results included the favorable impact of the Massachusetts Property Insurance Underwriting Association restructuring, which reduced loss and loss adjustment expenses by $9.7 million and lowered the combined ratio by 3.9 points. The year-over-year improvement reflects the impact of our prior year growth in policy counts and rate increases, resulting in top-line growth, with net earned premium increasing by 14.2% for the quarter… We also continue to see favorable results in other revenue lines, which positively impacted earnings per share of $1.95 and increased total shareholders’ equity by $44.8 million.”
Q2 2025 Financial Highlights
- Net Income: $28.9 million ($1.95 per diluted share), up from $16.6 million ($1.13) in Q2 2024
- Net Earned Premiums: $282.1 million, up 14.2% from $246.9 million in Q2 2024
- Direct Written Premiums: $345.8 million, up 9.6% from $315.5 million
- Combined Ratio: 98.1%, improved from 99.9% (excluding the prior year’s 3.9-point FAIR Plan benefit, the operational improvement is even greater)
- Book Value per Share: $58.63, up from $55.83 at year-end 2024
- Dividend: Increased to $0.92 per share from $0.90, payable September 15, 2025
The Engine of Growth: Rates and Volume
A combination of rate actions and increased policy counts are driving Safety’s premium growth.
Recent Rate Approvals (earning through 2025):
- Private Passenger Auto: +9.0% average written premium per policy
- Commercial Auto: +7.2%
- Homeowners: +10.6%
Policy Count Growth (six months ended June 30, 2025):
- Private Passenger Auto: +0.4%
- Commercial Auto: +2.8%
- Homeowners: +3.9%
These increases reflect both the Massachusetts Division of Insurance’s approval of substantial rate adjustments and Safety’s ability to write new business through its independent agent network.
Profitability and the FAIR Plan Nuance
While the combined ratio improved to 98.1% from 99.9%, the year-over-year comparison is skewed by a one-time $9.7 million underwriting gain in Q2 2024 from the restructuring of the Massachusetts FAIR Plan. That benefit reduced last year’s combined ratio by 3.9 points. Without that prior-year boost, Q2 2025’s operational improvement is more substantial, underscoring stronger underwriting discipline and earned rate impact.
Challenges and Cost Pressures
Loss and LAE rose 12.4% in the quarter, reflecting higher policy counts and ongoing inflationary pressures, particularly in the private passenger auto book. While net investment income rose 16.5% year-over-year to $15.7 million, claims inflation remains a headwind.
Outlook
The dividend increase — the second consecutive quarterly rise — reinforces management’s confidence in Safety’s capital position and earnings power. With rate increases still earning in, continued policy growth, and an improving underlying combined ratio, Safety appears well-positioned for the remainder of 2025, even as inflation and claims costs remain watch points.
