Safety Insurance Group, Inc. Announces First Quarter 2026 Results and Declares Second Quarter 2026 Dividend

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combined ratio financial

The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.

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BOSTON--(BUSINESS WIRE)-- Safety Insurance Group, Inc. (NASDAQ:SAFT) (“the Company” or “Safety”) today reported first quarter 2026 results.

George M. Murphy, Chairman of the Board of Directors, President and Chief Executive Officer, commented: “The first quarter results were significantly impacted by two winter weather events. Beginning on January 23, 2026, the Northeast region experienced a nor’easter storm, bringing blizzard conditions including excess snowfall, subzero windchill temperatures, and wind gusts reaching seventy-five miles per hour. Then, beginning on February 22, 2026, the Northeast region experienced an additional severe winter weather event which produced record-breaking snowfall and hurricane-force wind gusts. Areas in the region received up to thirty-six inches of snowfall and many households were left without power for multiple days. In total, these events resulted in more than 1,600 property claims reported to the Company, causing damage of $42.7 million, which contributed 14.6 percentage points to our combined ratio of 113.4%.”

Net loss for the quarter ended March 31, 2026 was $14.3 million, or $0.99 per diluted share, compared to net income of $21.9 million, or $1.48 per diluted share, for the comparable 2025 period. Non-generally accepted accounting principles (“non-GAAP”) operating loss, as defined below, for the quarter ended March 31, 2026 was $0.72 per diluted share, compared to non-GAAP operating income of $1.28 per diluted share, for the comparable 2025 period.

Safety’s book value per share decreased to $58.28 at March 31, 2026 from $60.98 at December 31, 2025 resulting from the net loss and decreases in the value of our fixed maturity portfolio. Safety paid $0.92 per share in dividends to investors during the quarter ended March 31, 2026 compared to $0.90 for the comparable 2025 period. Safety paid $3.64 per share in dividends to investors during the year ended December 31, 2025.

Today, our Board of Directors approved and declared a $0.92 per share quarterly cash dividend on its issued and outstanding common stock, payable on June 12, 2026 to shareholders of record at the close of business on June 1, 2026.

Direct written premiums for the quarter ended March 31, 2026 increased by $0.8 million, or 0.3%, to $299.8 million from $299.0 million for the comparable 2025 period. Net written premiums for the quarter ended March 31, 2026 increased by $0.6 million, or 0.2%, to $275.4 million from $274.8 million for the comparable 2025 period. Net earned premiums for the quarter ended March 31, 2026 increased by $18.3 million, or 6.7%, to $291.0 million from $272.7 million for the comparable 2025 period. The year-over-year increase in net earned premiums primarily reflects the impact of rate actions earning into top-line results.

Consistent with the increase in net earned premiums, the increases in direct written premiums and net written premiums reflect the impact of rate actions. For the three months ended March 31, 2026, average written premium per policy increased 4.0%, 6.1%, and 9.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2025.

For the quarter ended March 31, 2026, loss and loss adjustment expenses incurred increased by $57.2 million, or 30.1%, to $247.5 million from $190.3 million for the comparable 2025 period. The increase in losses is due to the severe winter weather events in January and February 2026.

Loss, expense, and combined ratios for the quarter ended March 31, 2026 were 85.1%, 28.3%, and 113.4%, respectively, compared to 69.8%, 29.6%, and 99.4%, respectively, for the comparable 2025 period. The increases in the loss and combined ratios are driven by the increased loss and loss adjustment expenses incurred as a result of the winter weather events this quarter. Total prior year favorable development included in the pre-tax results for the quarter ended March 31, 2026 was $10.5 million compared to $12.2 million for the comparable 2025 period.

Net investment income for the quarter ended March 31, 2026 increased by $2.4 million, or 16.9%, to $17.0 million from $14.6 million for the comparable 2025 period. The increase is primarily driven by higher assets under management and higher reinvestment yields versus maturing assets. Net effective annualized yield on the investment portfolio was 4.1% for the three months ended March 31, 2026 compared to 3.9% for the comparable 2025 period. Our duration on fixed maturities was 3.9 years at March 31, 2026 and December 31, 2025, respectively.

Non-GAAP Measures

Management has included certain non-GAAP financial measures in presenting the Company’s results. Management believes that these non-GAAP measures better explain the Company’s results of operations and allow for a more complete understanding of the underlying trends in the Company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (“GAAP”). In addition, our definitions of these items may not be comparable to the definitions used by other companies.

Non-GAAP operating (loss) income and non-GAAP operating (loss) income per diluted share consist of our GAAP net (loss) income adjusted by the net realized gains on investments, change in net unrealized gains on equity securities, credit loss expense and taxes related thereto. For the quarter ended March 31, 2026, the change in net unrealized gains on equity securities increased non-GAAP operating income by $11.5 million, compared to a $0.3 million increase for the quarter ended March 31, 2025. Net income and earnings per diluted share are the GAAP financial measures that are most directly comparable to non-GAAP operating income and non-GAAP operating income per diluted share, respectively. A reconciliation of the GAAP financial measures to these non-GAAP measures is included in the financial highlights below.

About Safety: Safety Insurance Group, Inc., based in Boston, MA, is the parent of Safety Insurance Company, Safety Indemnity Insurance Company, Safety Property and Casualty Insurance Company, Safety Northeast Insurance Company, and Safety Northeast Insurance Agency, Inc. Operating exclusively in Massachusetts, New Hampshire, and Maine, Safety is a leading writer of property and casualty insurance products, including private passenger automobile, commercial automobile, homeowners, dwelling fire, umbrella and business owner policies.

Additional Information: Press releases, announcements, U. S. Securities and Exchange Commission (“SEC”) Filings and investor information are available under “About Safety,” “Investor Information” on our Company website located at www.SafetyInsurance.com. Safety filed its December 31, 2025 Form 10-K with the SEC on February 27, 2026 and urges shareholders to refer to this document for more complete information concerning Safety’s financial results.

Cautionary Statement under "Safe Harbor" Provision of the Private Securities Litigation Reform Act of 1995:

This press release contains, and Safety may from time to time make, written or oral "forward-looking statements" within the meaning of the U.S. federal securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “aim,” “projects,” or words of similar meaning and expressions that indicate future events and trends, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may”. All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements.

Forward-looking statements are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. There are a number of factors, many of which are beyond our control, that could cause actual future conditions, events, results or trends to differ significantly and/or materially from historical results or those projected in the forward-looking statements. These factors include but are not limited to:

• The competitive nature of our industry and the possible adverse effects of such competition;
• Conditions for business operations and restrictive regulations in Massachusetts;
• The possibility of losses due to claims resulting from severe weather;
• The impact of inflation, changes in tariffs and supply chain delays on loss severity;
• The possibility that the Commissioner of Insurance may approve future rule changes that change the operation of the residual market;
• The possibility that existing insurance-related laws and regulations will become further restrictive in the future;
• The impact of investment, economic and underwriting market conditions, including interest rates and inflation;
• Our possible need for and availability of additional financing, and our dependence on strategic relationships, among others; and
• Other risks and factors identified from time to time in our reports filed with the SEC, such as those set forth under the caption “Risk Factors” in our Form 10-K for the year ended December 31, 2025 filed with the SEC on February 27, 2026.

We are not under any obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise. You should carefully consider the possibility that actual results may differ materially from our forward-looking statements.

Safety Insurance Group, Inc. and Subsidiaries Consolidated Balance Sheets (Dollars in thousands, except share data)
		March 31,				December 31,
		2026				2025
		(Unaudited)
Assets
Investments:
Fixed maturities, available for sale, at fair value (amortized cost: $1,350,252 and $1,337,235, allowance for expected credit losses of $348 and $0)		$	1,315,300			$	1,315,548
Equity securities, at fair value (cost: $186,933 and $201,591)			194,798				220,953
Other invested assets			156,519				151,020
Total investments			1,666,617				1,687,521
Cash and cash equivalents			54,831				73,901
Accounts receivable, net of allowance for expected credit losses of $823 and $802			313,428				320,187
Receivable for securities sold			564				4,269
Accrued investment income			11,396				12,169
Taxes recoverable			7,810				—
Receivable from reinsurers related to paid loss and loss adjustment expenses			12,145				9,433
Receivable from reinsurers related to unpaid loss and loss adjustment expenses			151,810				149,441
Ceded unearned premiums			40,744				39,674
Deferred policy acquisition costs			108,515				111,791
Deferred income taxes			4,629				4,116
Equity and deposits in pools			4,965				4,197
Operating lease right-of-use-assets			11,101				11,861
Goodwill			17,093				17,093
Intangible assets			6,546				6,783
Other assets			22,377				18,672
Total assets		$	2,434,571			$	2,471,108
Liabilities
Losses and loss adjustment expense reserves		$	813,089			$	761,739
Unearned premium reserves			640,319				654,803
Accounts payable and accrued liabilities			59,120				80,461
Payable for securities purchased			3,302				846
Payable to reinsurers			1,890				15,184
Taxes payable			—				3,903
Long-term debt			50,000				50,000
Operating lease liabilities			11,101				11,861
Total liabilities			1,578,821				1,578,797
Shareholders’ equity
Common stock: $0.01 par value; 30,000,000 shares authorized; 18,103,381 and 18,051,631 shares issued			181				181
Additional paid-in capital			237,129				235,693
Accumulated other comprehensive loss, net of taxes			(27,337	)			(17,133	)
Retained earnings			816,270				844,063
Treasury stock, at cost: 3,419,947 shares			(170,493	)			(170,493	)
Total shareholders’ equity			855,750				892,311
Total liabilities and shareholders’ equity		$	2,434,571			$	2,471,108

Safety Insurance Group, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share data)
		Three Months Ended March 31,
		2026				2025
Net earned premiums		$	290,986			$	272,690
Net investment income			17,038				14,574
Earnings from partnership investments			3,905				2,112
Net realized gains on investments			6,631				4,263
Change in net unrealized gains on equity securities			(11,497	)			(271	)
Credit loss (expense) benefit			(348	)			(321	)
Commission income			2,150				2,095
Finance and other service income			5,801				6,287
Total revenue			314,666				301,429
Losses and loss adjustment expenses			247,490				190,290
Underwriting, operating and related expenses			82,281				80,851
Other expense			2,137				1,954
Interest expense			618				104
Total expenses			332,526				273,199
(Loss) income before income taxes			(17,860	)			28,230
Income tax (benefit) expense			(3,537	)			6,334
Net (loss) income		$	(14,323	)		$	21,896
(Loss) earnings per weighted average common share:
Basic		$	(0.99	)		$	1.48
Diluted		$	(0.99	)		$	1.48
Cash dividends paid per common share		$	0.92			$	0.90
Number of shares used in computing earnings per share:
Basic			14,498,177				14,718,572
Diluted			14,498,177				14,745,015
Reconciliation of Net (Loss) Income to Non-GAAP Operating Income
Net (loss) income		$	(14,323	)		$	21,896
Exclusions from net (loss) income:
Net realized gains on investments			(6,631	)			(4,263	)
Change in net unrealized gains on equity securities			11,497				271
Credit loss expense			348				321
Income tax (benefit) expense			(1,095	)			771
Non-GAAP operating (loss) income		$	(10,204	)		$	18,996
Net (loss) income per diluted share		$	(0.99	)		$	1.48
Exclusions from net (loss) income:
Net realized gains on investments			(0.46	)			(0.29	)
Change in net unrealized gains on equity securities			0.79				0.02
Credit loss expense			0.02				0.02
Income tax (benefit) expense			(0.08	)			0.05
Non-GAAP operating (loss) income per diluted share		$	(0.72	)		$	1.28

Safety Insurance Group, Inc. and Subsidiaries Additional Premium Information (Unaudited) (Dollars in thousands)
			Three Months Ended March 31,
		2026				2025
Written Premiums
Direct		$	299,775			$	298,970
Assumed			6,656				6,805
Ceded			(31,000	)			(30,995	)
Net written premiums		$	275,431			$	274,780
Earned Premiums
Direct		$	313,933			$	296,819
Assumed			6,983				6,725
Ceded			(29,930	)			(30,854	)
Net earned premiums		$	290,986			$	272,690

 

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Safety Insurance Group, Inc.
Office of Investor Relations
877-951-2522

InvestorRelations@SafetyInsurance.com

Source: Safety Insurance Group, Inc.