SELECTIVE INSURANCE GROUP INC
For the period ended Dec 31, 2023. Filed Feb 9, 2024.
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FY2023 · Filed Feb 9, 2024
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Federal Income Taxes
The following table provides information regarding federal income taxes.
| ($ in millions) | 2023 | 2022 | 2021 |
|---|---|---|---|
| Federal income tax expense | $93.2 | 55.3 | 101.5 |
| Effective tax rate1 | 20.7% | 20.4 | 20.5 |
1 The effective tax rate is calculated by taking "Total federal income tax expense" divided by "Income before federal income tax" less "Preferred stock dividends" on our Consolidated Statements of Income.
Federal income tax expense increased $37.9 million in 2023, compared to 2022, primarily due to an increase in pre-tax income that is taxed at the statutory rate. The increase in pre-tax income was primarily driven by (i) higher net investment income earned in 2023, compared to 2022, resulting from an increase in income earned on our fixed income securities portfolio, and (ii) a decrease in net realized and unrealized investment losses in 2023, compared to 2022, partially offset by (iii) a decrease in underwriting income.
See Note 14. "Federal Income Taxes" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K for (i) a reconciliation of our effective tax rate to the statutory rate of 21% and (ii) details regarding our net deferred tax asset and liability.
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