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1. Company Snapshot

1.a. Company Description

Safety Insurance Group, Inc.provides private passenger and commercial automobile, and homeowner insurance in the United States.The company's private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured's car occupants, and physical damage coverage for an insured's own vehicle for collision or other perils.


It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy.In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers.Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner's insurance policies; and commercial umbrella and business owner policies, as well as underwrites dwelling fire insurance for non-owner-occupied residences.


Additionally, the company offers inland marine coverage for homeowners and business owner policies, and watercraft coverage for small and medium sized pleasure crafts.It distributes its products through independent agents.The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc.


in April 2002.Safety Insurance Group, Inc.was founded in 1979 and is headquartered in Boston, Massachusetts.

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1.b. Last Insights on SAFT

Safety Insurance Group's recent performance was negatively impacted by increased policy counts and premium rate actions, which led to a 21.9% year-over-year increase in top-line revenue for the nine months ended September 30, 2024. This growth in direct written premium is putting pressure on the company's bottom line, as evidenced by the lack of specific mention of earnings growth in the recent earnings release. The company's ability to manage this growth and maintain profitability will be a key focus in the coming quarters.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Ensign Peak Advisors Inc Decreases Stock Position in Safety Insurance Group, Inc. $SAFT

Dec -01

Source: defenseworld.net

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Safety Insurance Group, Inc. $SAFT Shares Acquired by Creative Planning

Nov -29

Source: defenseworld.net

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Connor Clark & Lunn Investment Management Ltd. Boosts Stock Position in Safety Insurance Group, Inc. $SAFT

Nov -17

Source: defenseworld.net

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Safety Insurance: A Juicy Dividend Hiding A Mediocre Business

Nov -11

Source: seekingalpha.com

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High Potential In Low Vol? These Dividends Up To 8.6% Payers Think So

Nov -10

Source: forbes.com

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Safety Insurance Group, Inc. Announces Third Quarter 2025 Results and Declares Fourth Quarter 2025 Dividend

Nov -03

Source: businesswire.com

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Safety Insurance Group: Profitability Increases Fast

Aug -13

Source: seekingalpha.com

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Safety Insurance Group, Inc. Announces First Quarter 2025 Results and Declares Second Quarter 2025 Dividend

May -07

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.81%)

6. Segments

Private Passenger Automobile

Expected Growth: 1.8%

The 1.8% growth in Private Passenger Automobile from Safety Insurance Group, Inc. is driven by increasing vehicle sales, rising average premiums, and a low loss ratio. Additionally, the company's strong brand reputation, expanded distribution channels, and favorable regulatory environment contribute to this growth.

Homeowners

Expected Growth: 1.9%

Safety Insurance Group, Inc.'s 1.9% growth among homeowners is driven by increasing demand for property insurance, favorable premium rates, and a strong brand reputation. Additionally, the company's expanded product offerings, effective underwriting, and efficient claims processing have contributed to its growth. Furthermore, a low combined ratio and solid investment returns have also supported the company's profitability.

Commercial Automobile

Expected Growth: 1.7%

The 1.7% growth in Commercial Automobile from Safety Insurance Group, Inc. is driven by increasing demand for commercial auto insurance, expansion into new markets, and a focus on digitalization to improve customer experience. Additionally, a favorable regulatory environment and a strong brand reputation contribute to the growth.

Business Owners

Expected Growth: 1.9%

Safety Insurance Group's 1.9% growth is driven by increasing demand for personal and commercial insurance products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation, improved customer experience, and effective risk management practices have contributed to its growth.

Dwelling Fire

Expected Growth: 1.6%

The 1.6% growth in Dwelling Fire from Safety Insurance Group, Inc. is driven by increasing demand for homeowners' insurance, rising construction costs, and favorable regulatory environments. Additionally, the company's expanded agent network, improved underwriting processes, and targeted marketing efforts have contributed to the growth.

Personal Umbrella

Expected Growth: 1.8%

The 1.8% growth of Personal Umbrella from Safety Insurance Group, Inc. is driven by increasing consumer awareness of liability protection, rising litigation costs, and growing demand for high-net-worth individual coverage. Additionally, the company's expanded distribution channels, enhanced policy features, and competitive pricing strategies contribute to the segment's growth.

Commercial Umbrella

Expected Growth: 1.7%

The 1.7% growth of Commercial Umbrella from Safety Insurance Group, Inc. is driven by increasing demand for risk management solutions, expansion into new markets, and a rise in small to medium-sized businesses seeking comprehensive coverage. Additionally, the insurer's strong brand reputation, competitive pricing, and enhanced policy features contribute to its growth momentum.

7. Detailed Products

Private Passenger Automobile Insurance

Provides financial protection against physical damage to vehicles and liability for bodily injury or property damage to others.

Commercial Automobile Insurance

Covers business-owned vehicles and drivers, protecting against liability, physical damage, and other risks associated with commercial vehicle operation.

Homeowners Insurance

Provides financial protection against damage to homes and personal property, as well as liability for accidents that occur on the property.

Dwelling Fire Insurance

Covers rental properties and vacant dwellings against damage from fire, lightning, and other perils.

Umbrella Insurance

Provides additional liability coverage beyond the limits of standard insurance policies, protecting personal assets in the event of a catastrophic loss.

Business Owners Policy (BOP) Insurance

Combines liability, property, and business interruption insurance to protect small to medium-sized businesses from various risks.

8. Safety Insurance Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Safety Insurance Group, Inc. operates in a highly regulated industry, which limits the threat of substitutes. However, the rise of fintech companies and digital platforms may pose a moderate threat to the company's business model.

Bargaining Power Of Customers

Safety Insurance Group, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand reputation and customer loyalty programs further reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Safety Insurance Group, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position and long-term contracts with suppliers also limit the bargaining power of suppliers.

Threat Of New Entrants

The insurance industry is highly regulated, and new entrants face significant barriers to entry, including high capital requirements and complex regulatory hurdles. This limits the threat of new entrants to Safety Insurance Group, Inc.'s business.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share. Safety Insurance Group, Inc. faces intense competition from other insurance companies, which may lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.12%
Debt Cost 3.95%
Equity Weight 95.88%
Equity Cost 4.86%
WACC 4.82%
Leverage 4.30%

11. Quality Control: Safety Insurance Group, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Horace Mann Educators

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Value: 7.3

Growth: 5.0

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Yield: 7.0

Momentum: 9.0

Volatility: 9.7

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United Fire Group

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Safety Insurance

A-Score: 6.3/10

Value: 7.4

Growth: 3.9

Quality: 7.1

Yield: 8.0

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Volatility: 9.7

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Quality: 8.2

Yield: 1.0

Momentum: 10.0

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Growth: 4.2

Quality: 5.9

Yield: 8.0

Momentum: 2.0

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A-Score: 4.9/10

Value: 6.1

Growth: 8.3

Quality: 6.7

Yield: 0.0

Momentum: 4.5

Volatility: 4.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.6$

Current Price

74.6$

Potential

-0.00%

Expected Cash-Flows