second quarter 2026
Filed Aug 5, 2026SAFETY INSURANCE GROUP, INC. ANNOUNCES SECOND QUARTER 2026 RESULTS AND DECLARES THIRD QUARTER 2026 DIVIDEND
Second-quarter underwriting profitability, net income, non-GAAP operating income per diluted share, net earned premiums, and net investment income improved from the comparable 2025 period, while written premiums declined and the six-month combined ratio was 104.5% following severe winter weather events in the first quarter.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income for the quarter ended June 30, 2026GAAP | $34.5 million | – | – |
| Earnings per diluted share for the quarter ended June 30, 2026GAAP | $2.36 per diluted share | – | – |
| Net income for the six months ended June 30, 2026GAAP | $20.2 million | – | – |
| Earnings per diluted share for the six months ended June 30, 2026GAAP | $1.38 per diluted share | – | – |
| Non-GAAP operating income per diluted share for the quarter ended June 30, 2026non-GAAP | $2.03 per diluted share | – | – |
| Non-GAAP operating income per diluted share for the six months ended June 30, 2026non-GAAP | $1.33 per diluted share | – | – |
| Direct written premiums for the quarter ended June 30, 2026other | $341.8 million | – | decreased by $4.0 million, or 1.2% |
| Direct written premiums for the six months ended June 30, 2026other | $641.6 million | – | decreased by $3.2 million, or 0.5% |
| Net written premiums for the quarter ended June 30, 2026other | $313.5 million | – | decreased by $6.0 million, or 1.9% |
| Net written premiums for the six months ended June 30, 2026other | $588.9 million | – | decreased by $5.4 million, or 0.9% |
| Net earned premiums for the quarter ended June 30, 2026other | $291.7 million | – | increased by $9.6 million, or 3.4% |
| Net earned premiums for the six months ended June 30, 2026other | $582.6 million | – | increased by $27.8 million, or 5.0% |
| Losses and loss adjustment expenses incurred for the quarter ended June 30, 2026other | $195.1 million | – | increased by $0.9 million, or 0.5% |
| Losses and loss adjustment expenses incurred for the six months ended June 30, 2026other | $442.6 million | – | increased by $58.1 million, or 15.1% |
| Loss ratio for the quarter ended June 30, 2026other | 66.9% | – | – |
| Expense ratio for the quarter ended June 30, 2026other | 28.8% | – | – |
| Combined ratio for the quarter ended June 30, 2026other | 95.7% | – | – |
| Loss ratio for the six months ended June 30, 2026other | 76.0% | – | – |
| Expense ratio for the six months ended June 30, 2026other | 28.5% | – | – |
| Combined ratio for the six months ended June 30, 2026other | 104.5% | – | – |
| Total prior year favorable development included in pre-tax results for the quarter ended June 30, 2026other | $10.6 million | – | – |
| Total prior year favorable development included in pre-tax results for the six months ended June 30, 2026other | $21.1 million | – | – |
| Net investment income for the quarter ended June 30, 2026other | $16.6 million | – | increased by $0.9 million, or 5.3% |
| Net investment income for the six months ended June 30, 2026other | $33.6 million | – | increased by $3.3 million, or 10.9% |
| Net effective annualized yield on the investment portfolio for the quarter ended June 30, 2026other | 4.0% | – | – |
| Net effective annualized yield on the investment portfolio for the six months ended June 30, 2026other | 4.1% | – | – |
| Book value per share at June 30, 2026GAAP | $59.70 | – | – |
| Investment portfolio duration on fixed maturities at June 30, 2026other | 3.8 years | – | – |
| Change in unrealized gains on equity securities recognized in income before income taxes for the quarter ended June 30, 2026other | an increase of $4.7 million | – | – |
| Change in unrealized gains on equity securities recognized in income before income taxes for the six months ended June 30, 2026other | a decrease of $6.8 million | – | – |
Capital returns
- Safety paid $0.92 per share in dividends to investors during the quarter ended June 30, 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.
- The Board of Directors approved a $0.92 per share quarterly cash dividend payable on September 15, 2026, to shareholders of record at the close of business on September 1, 2026.
- An affiliate of Mapfre S.A. will acquire Safety in an all-cash transaction valued at approximately $1.54 billion.
- Safety shareholders will receive $105 for each Safety common share in cash.
What drove it
- Net earned premium growth was the result of rate increases earning into top-line results.
- Direct written premiums and net written premiums declined primarily due to the cancellation of certain underperforming agency relationships.
- For the six months ended June 30, 2026, policy count declined 8.8% in Private Passenger Automobile and 4.0% in Homeowners, partially offset by 2.7% growth in Commercial Automobile policies.
- Average written premium per policy increased 2.9% in Private Passenger Automobile, 6.4% in Commercial Automobile and 10.9% in Homeowners, reflecting rate increases.
- The second-quarter decrease in loss and expense ratios was driven by the increase in net earned premiums.
- Net investment income increased primarily due to higher assets under management, reinvestment rates that exceeded the yields on maturing securities, and strong alternative asset returns.
Concerns
- The six-month combined ratio was 104.5%, compared to 98.8% for the comparable 2025 period.
- Losses and loss adjustment expenses incurred for the six months ended June 30, 2026 increased by $58.1 million, or 15.1%, due to two severe winter weather events that occurred during the quarter ended March 31, 2026.
- Direct written premiums and net written premiums declined in both the quarter and the six-month period.
- Book value per share decreased to $59.70 at June 30, 2026 from $60.98 at December 31, 2025, primarily due to first-quarter underwriting losses and decreases in the value of the fixed maturity portfolio.
- Total prior year favorable development was lower in both the quarter and the six-month period than in the comparable 2025 periods.
What to watch
- Whether rate increases continue to earn into net earned premiums while policy count declines persist in Private Passenger Automobile and Homeowners.
- Loss experience following the two severe winter weather events during the quarter ended March 31, 2026.
- The proposed Mapfre transaction, including the planned proxy statement and required stockholder approval.
- The $0.92 per share quarterly cash dividend payable on September 15, 2026.
Balance sheet and cash flow
- Safety’s book value per share decreased to $59.70 at June 30, 2026 from $60.98 at December 31, 2025.
- The investment portfolio’s duration on fixed maturities was 3.8 years at June 30, 2026 compared to 3.9 years at December 31, 2025.
Analysis
Safety reported a substantially improved second quarter following the first-quarter weather losses that weighed on first-half results. Net income for the quarter was $34.5 million, or $2.36 per diluted share, compared with $28.9 million, or $1.95 per diluted share, in the comparable 2025 period. Non-GAAP operating income per diluted share was $2.03, compared with $1.45. The quarterly combined ratio improved to 95.7% from 98.1%, with both the loss ratio and expense ratio lower than the comparable period.
Premium trends show a distinction between written and earned business. Direct written premiums decreased to $341.8 million and net written premiums decreased to $313.5 million, primarily because of the cancellation of certain underperforming agency relationships. In contrast, net earned premiums increased to $291.7 million as rate increases earned into results. Policy counts declined in Private Passenger Automobile and Homeowners for the six-month period, while Commercial Automobile policies grew, and average written premium per policy increased across all three reported lines.
First-half profitability remained pressured by severe winter weather. Losses and loss adjustment expenses incurred for the six months rose to $442.6 million, and the six-month combined ratio increased to 104.5% from 98.8%. The company attributed the increase in losses to two severe winter weather events during the quarter ended March 31, 2026. Prior year favorable development also declined from the comparable periods, while the lower second-quarter loss and expense ratios reflected higher net earned premiums.
Investment income provided additional support, rising to $16.6 million in the quarter and $33.6 million for the six months. Management cited higher assets under management, reinvestment rates exceeding yields on maturing securities, and strong alternative asset returns. Book value per share declined to $59.70 from $60.98 at December 31, 2025, reflecting first-quarter underwriting losses and lower fixed-maturity portfolio values. Capital-return activity included a $0.92 per share dividend paid during the quarter and a new $0.92 per share quarterly cash dividend payable on September 15, 2026.
The filing also centers on the proposed acquisition by a Mapfre affiliate. The all-cash transaction is valued at approximately $1.54 billion, with Safety shareholders set to receive $105 for each Safety common share in cash. No forward operating guidance was provided in the release, so the next disclosures on underwriting trends, policy retention and counts, rate realization, weather losses, and the transaction approval process are the principal items to watch.
Management, verbatim
I’m pleased to announce that for quarter ended June 30, 2026, our combined ratio improved to 95.7% compared to 98.1% in the same period in the prior year.
George M. Murphy, Chairman of the Board of Directors, President and Chief Executive Officer
The increase in net income reflects the impact of strong written premium growth in prior years earning into top-line revenue, as well as the ongoing impact of pricing actions.
George M. Murphy, Chairman of the Board of Directors, President and Chief Executive Officer
Not in the filing
stated, not guessed- Total revenue
- Segment revenue and segment profitability
- Gross margin
- Operating income
- Operating expenses
- Income tax expense and effective tax rate
- Cash balance
- Debt balance
- Operating cash flow
- Free cash flow
- Share repurchases
- Forward financial guidance
- Prior-quarter comparisons for reported quarterly metrics
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.