SAFETY INSURANCE GROUP INC
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 7, 2026
SAFT$104.27-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001172052-26-000015
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001172052-26-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 136 current paragraphs.
73 unchanged; 45 reworded; 15 added; 6 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 39 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended June 30, 2026 increased by $887, or 0.5%, to $195,119 from $194,232 for the comparable 2025 period. Losses and loss adjustment expenses incurred for the six months ended June 30, 2026 increased by $58,087, or 15.1%, to $442,609 from $384,522 for the comparable 2025 period. Our losses and loss adjustment expenses ratio for the three months ended June 30, 2026 decreased to 66.9% from 68.8% for the comparable 2025 period. The decrease in our losses and loss adjustment expense ratio for the three months ended June 30, 2026 is primarily driven by improved reported accident frequency in our Private Passenger Automobile line of business. Our losses and loss adjustment expense ratio for the six months ended June 30, 2026 increased to 76.0% from 69.3% for the comparable 2025 period. The increase in losses and loss adjustment expense ratio for the six months ended June 30, 2026 is due to the impact of Winter Storms.
Current report
Proposed Merger
Current report
On July 23, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MAPFRE U.S.A. Corp., a Massachusetts corporation (“Parent”), and Splash Merger Sub, Inc., a Delaware corporation and wholly owned direct subsidiary of Parent (“Merger Subsidiary”), pursuant to which the Company is to be acquired by Parent. Upon the terms and conditions set forth in the Merger Agreement, Merger Subsidiary will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). At the effective time of the Merger, each issued and outstanding share of the Company’s common stock (other than certain excluded shares and shares held by stockholders who properly exercise appraisal rights) will be cancelled and converted into the right to receive $105.00 per share in cash, without interest thereon. In addition, at or immediately prior to the effective time, our outstanding equity awards, including stock options and restricted stock units, will be cancelled and converted into the right to receive cash payments based on the Merger consideration, subject to the terms of the Merger Agreement.
Current report
The respective obligations of the Company, Parent and Merger Subsidiary to consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of customary closing conditions, including, among others, approval by the holders of a majority of the voting powers of the outstanding shares of Company common stock entitled to vote on the Merger and the receipt of certain regulatory approvals, including from insurance regulators in Massachusetts. In addition, Parent’s and Merger Subsidiary’s obligation to consummate the
Current report
transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of a condition that there has not occurred a material adverse effect on the Company since the date of the Merger Agreement that is continuing.
Current report
The Company expects to incur significant costs, expenses, and fees for professional services and other transaction costs in connection with the Merger. Additionally, if the Merger Agreement is terminated under specified circumstances, the Company may be required to pay Parent a termination fee of $46.2 million and Parent may in certain circumstances be required to pay the Company a termination fee of $111.8 million.
Current report
June 30, 2026 decreased by $5,314, or 0.9%, to $588,941 from $594,255 for the comparable 2025 period. The decreases were primarily due to the factors that decreased direct written premiums.
Current report
Earnings from Partnership Investments. Earnings from partnership investments were $3,329 for the three months ended June 30, 2026 compared to $346 for the comparable 2025 period. Earnings from partnership investments were $7,234 for the six months ended June 30, 2026 compared to $2,458 for the comparable 2025 period. The year-over-year increase reflects higher investment appreciation and the impact of timing differences between valuation changes and the recognition of realized gains. Cash distributions received from partnerships may not correspond to earnings recognized in the same period, as gains are typically recognized over time based on changes in fair value. The timing and magnitude of these returns can vary depending on the performance and transactional activity of the underlying partnerships.
Current report
Net Realized Gains on Investments. Net realized gains on investments were $1,418 for the three months ended June 30, 2026 compared to $2,131 for the comparable 2025 period. Net realized gains on investments was $8,049 for the six months ended June 30, 2026 compared to $6,394 for the comparable 2025 period. The increase in net realized gains during the six-month period reflects the sale of equity securities in a gain position during the first quarter of 2026.
Current report
deferred compensation plan.
Current report
Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended June 30, 2026 increased by $887, or 0.5%, to $195,119 from $194,232 for the comparable 2025 period. Losses and loss adjustment expenses incurred for the six months ended June 30, 2026 increased by $58,087, or 15.1%, to $442,609 from $384,522 for the comparable 2025 period.
Current report
Underwriting, Operating and Related Expenses. Underwriting, operating and related expenses for the three months ended June 30, 2026 increased by $1,087, or 1.3%, to $83,883 from $82,796 for the comparable 2025 period. Underwriting, operating and related expenses for the six months ended June 30, 2026 increased by $2,517, or 1.5%, to $166,164 from $163,647 for the comparable 2025 period. Our GAAP expense ratio for the three months ended June 30, 2026 decreased to 28.8% from 29.3% for the comparable 2025 period. Our GAAP expense ratio for the six months ended June 30, 2026 decreased to 28.5% from 29.5% for the comparable 2025 period. The decrease in the GAAP expense ratio during the three and six months ended June 30, 2026 was due to higher earned premium.
Current report
Investment Impairments
Current report
We use a systematic methodology to evaluate declines in fair values below cost or amortized cost of our investments. Some of the factors considered in assessing impairment of fixed maturities due to credit losses include the extent to which the fair value is less than amortized cost, the financial condition of and the near and long-term prospects of the issuer, whether the debtor is current on its contractually obligated interest and principal payments, changes to the rating of the security by a rating agency, the historical volatility of the fair value of the security and whether it is more likely than not that we will be required to sell the investment prior to an anticipated recovery in value. This methodology ensures that we evaluate available evidence concerning any declines in a disciplined manner.
Current report
For fixed maturities that we do not intend to sell or for which it is more likely than not that we would not be required to sell before an anticipated recovery in value, we separate the expected credit loss component of the impairment from the amount related to all other factors. The expected credit loss component is recognized as an allowance for expected credit losses. The allowance is adjusted for any additional credit losses and subsequent recoveries, which are booked in income as either credit loss expense or credit loss benefit, respectively. Upon recognizing a credit loss, the cost basis is not adjusted. The impairment related to all other factors (non-credit factors) is reported in other comprehensive income.
Removed paragraphs (6)
Previous report
MANAGEMENT’S DISCUSSION AND ANALYSIS
Previous report
Losses and Loss Adjustment Expenses. Losses and loss adjustment expenses incurred for the three months ended March 31, 2026 increased by $57,200 or 30.1%, to $247,490 from $190,290 for the comparable period. Our losses and loss adjustment expenses ratio for the three months ended March 31, 2026 increased to 85.1% from 69.8% for the comparable 2025 period. The increase in losses is primarily due to the impact of the Winter Storms.
Previous report
Earnings from Partnership Investments. Earnings from partnership investments was $3,905 for the three months ended March 31, 2026 compared to $2,112 for the comparable 2025 period. The three-month earnings reflect an increase in investment appreciation and distribution of investment returns compared to the prior year. Timing and generation of these returns on capital can vary based on the results and transactions of the underlying partnerships.
Previous report
Net Realized Gains on Investments. Net realized gains on investments was $6,631 for the three months ended March 31, 2026 compared to $4,263 for the comparable 2025 period. The increase is driven by higher realized gains from the sale of equity securities compared to prior years.
Previous report
Losses and Loss Adjustment Expenses. Loss and loss adjustment expenses incurred for the three months ended March 31, 2026 increased by $57,200, or 30.1%, to $247,490 from $190,290 for the comparable 2025 period. The increase is primarily driven by the impact of the Winter Storms.
Previous report
Underwriting, Operating and Related Expenses. Underwriting, operating and related expenses for the three months ended March 31, 2026 increased by $1,430, or 1.8%, to $82,281 from $80,851 for the comparable 2025 period. The increase reflects higher base commissions driven by growth in written premiums. Our GAAP expense ratio for the three months ended March 31, 2026 decreased to 28.3% from 29.6% for the comparable 2025 period.
Reworded paragraphs (45)
Previous wording
We are a leading provider of private passenger automobile, commercial automobile, homeowners and commercial other-than-auto insurance in Massachusetts. In addition to private passenger automobile insurance (which represented 54.9% of our direct written premiums in 2025), we offer a portfolio of other insurance products, including commercial automobile (15.2% of 2025 direct written premiums), homeowners (25.2% of 2025 direct written premiums) and dwelling fire, umbrella and business owner policies (totaling 4.7% of 2025 direct written premiums). Operating exclusively in Massachusetts, New Hampshire, and Maine through our insurance company subsidiaries, Safety Insurance, Safety Indemnity, Safety P&C, and Safety Northeast (together referred to as the “Insurance Subsidiaries”), we have established strong relationships with independent insurance agents, who numbered 797 in 1,063 locations throughout these three states at December 31, 2025. We have used these relationships and our extensive knowledge of the Massachusetts market to become the third largest private passenger automobile carrier and the second largest commercial automobile insurance carrier in Massachusetts, capturing an approximate 9.4% and 13.0% share, respectively, of the Massachusetts private passenger and commercial automobile markets in 2025, according to statistics compiled by the Commonwealth Automobile Reinsurers (“CAR”) based on automobile exposures. We are also the third largest homeowners insurance carrier in Massachusetts with a 7.0% share of the Massachusetts homeowners insurance market in 2024.
Current wording
We are a leading provider of private passenger automobile, commercial automobile, homeowners and commercial other-than-auto insurance in Massachusetts. In addition to private passenger automobile insurance (which represented 54.9% of our direct written premiums in 2025), we offer a portfolio of other insurance products, including commercial automobile (15.2% of 2025 direct written premiums), homeowners (25.2% of 2025 direct written premiums) and dwelling fire, umbrella and business owner policies (totaling 4.7% of 2025 direct written premiums). Operating exclusively in Massachusetts, New Hampshire, and Maine through our insurance company subsidiaries, Safety Insurance, Safety Indemnity, Safety P&C and Safety Northeast (together referred to as the “Insurance Subsidiaries”), we have established strong relationships with independent insurance agents, who numbered 797 in 1,063 locations throughout these three states at December 31, 2025. We have used these relationships and our extensive knowledge of the Massachusetts market to become the third largest private passenger automobile carrier and the second largest commercial automobile insurance carrier in Massachusetts, capturing an approximate 9.4% and 13.0% share, respectively, of the Massachusetts private passenger and commercial automobile markets in 2025 according to statistics compiled by the Commonwealth Automobile Reinsurers (“CAR”) based on automobile exposures. We are also the third largest homeowners insurance carrier in Massachusetts with a 7.0% share of the Massachusetts homeowners insurance market.
Previous wording
Our Insurance Subsidiaries began writing insurance in New Hampshire during 2008 and in Maine in 2016. In November 2020, we formed a fourth insurance subsidiary, Safety Northeast, which became licensed to write insurance products in Massachusetts. The table below shows the amount of direct written premiums written in each state during the three months ended March 31, 2026 and 2025.
Current wording
Our Insurance Subsidiaries began writing insurance in New Hampshire during 2008 and in Maine in 2016. In November 2020, we formed a fourth insurance subsidiary, Safety Northeast, which became licensed to write insurance products in Massachusetts.
Previous wording
During the quarter ended March 31, 2026, the Northeast region was impacted by two severe winter weather events (“Winter Storms”). Beginning on January 23, 2026 and through January 26, 2026, the Northeast region experienced a severe winter weather event (“January Winter Storm”), which developed into a nor’easter, bringing blizzard conditions including excess snowfall, subzero windchill temperatures and wind gusts reaching 75 miles per hour. As a result of the January Winter Storm, the Company received approximately 1,200 reported claims totaling $32,573 of losses and loss adjustment expenses for the three months ended March, 31, 2026.
Current wording
During the quarter ended March 31, 2026, the Northeast region was impacted by two severe winter weather events (“Winter Storms”). Beginning on January 23, 2026 through January 26, 2026, the Northeast region experienced a severe winter weather event, which developed into a nor’easter, bringing blizzard conditions including excess snowfall, subzero temperatures and wind gusts reaching 75 miles per hour. Beginning on February 22, 2026, the Northeast region experienced a severe winter weather event, which produced record-breaking snowfall and hurricane-force wind gusts. Areas in the region received up to 36 inches of snowfall and wind gusts exceeding 80 miles per hour. As a result of the Winter Storms, the Company received approximately 1,800 reported claims totaling $42,736 of losses and loss adjustment expenses for the six months ended June 30, 2026.
Previous wording
Direct and Net Written Premiums. For the three months ended March 31, 2026, direct written premium growth and net written premium growth were 0.3% and 0.2%, respectively. The increase in premium is driven by rate increases. 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.
Current wording
*Direct and Net Written Premiums.*For the three months ended June 30, 2026, direct written premium and net written premium decreased 1.2% and 1.9%, respectively, compared to the prior period. The decrease was primarily due to the cancellation of certain underperforming agency relationships. For the six months ended June 30, 2026, the Company experienced policy count declines of 8.8% in Private Passenger Automobile and 4.0% in Homeowners lines, partially offset by 2.7% growth in Commercial Automobile policies, compared to the same period in 2025. Average written premium per policy increased 2.9%, 6.4% and 10.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, primarily reflecting rate increases.
Previous wording
A summary of share based awards granted under the Incentive Plan during the three months ended March 31, 2026 is as follows:
Current wording
A summary of share based awards granted under the Incentive Plan during the six months ended June 30, 2026 is as follows:
Previous wording
We reinsure with other insurance companies a portion of our potential liability under the policies we have underwritten, thereby protecting us against an unexpectedly large loss or a catastrophic occurrence that could produce large losses, primarily in our homeowners line of business. We are selective in choosing our reinsurers, seeking only those companies that we consider to be financially stable and adequately capitalized. In an effort to minimize exposure to the insolvency of a reinsurer, we continually evaluate and review the financial condition of our reinsurers. Most of our other reinsurers have an A.M. Best rating of “A+” (Superior) or “A” (Excellent).
Current wording
We reinsure with other insurance companies a portion of our potential liability under the policies we have underwritten, thereby protecting us against an unexpectedly large loss or a catastrophic occurrence that could produce large losses, primarily in our homeowners line of business. We are selective in choosing our reinsurers, seeking only those companies that we consider to be financially stable and adequately capitalized. In an effort to minimize exposure to the insolvency of a reinsurer, we continually evaluate and review the financial condition of our reinsurers. Most of our reinsurers have an A.M. Best rating of “A+” (Superior) or “A” (Excellent).
Previous wording
For 2026, we have purchased three layers of excess catastrophe reinsurance providing $770,000 of coverage for property losses in excess of $80,000 up to a maximum of $850,000. Our reinsurers’ co-participation is 85.0% of $120,000 for the 1st layer, 85.0% of 250,000 for the 2nd layer and 90.0% of $400,000 for the 3rd layer.
Current wording
For 2026, we have purchased three layers of excess catastrophe reinsurance providing $770,000 of coverage for property losses in excess of $80,000 up to a maximum of $850,000. Our reinsurers’ co-participation is 85.0% of $120,000 for the 1st layer, 85.0% of $250,000 for the 2nd layer and 90.0% of $400,000 for the 3rd layer.
Previous wording
We also have casualty excess of loss reinsurance for large casualty losses occurring in our automobile, homeowners, dwelling fire, and business owner lines of business in excess of $2,000 up to a maximum of $10,000. We have property excess of loss reinsurance coverage for large property losses, with coverage in excess of $3,000 up to a maximum of $20,000, for our homeowners, and business owners. In addition, we have liability excess of loss reinsurance for umbrella large losses in excess of $1,000 up to a maximum of $10,000. We also have various reinsurance agreements with Hartford Steam Boiler Inspection and Insurance Company, of which the primary contract is a quota share agreement under which we cede 100% of the premiums and losses for the equipment breakdown coverage under our business owner policies.
Current wording
We also have casualty excess of loss reinsurance for large casualty losses occurring in our automobile, homeowners, dwelling fire, and business owner lines of business in excess of $2,000 up to a maximum of $10,000. We have property excess of loss reinsurance coverage for large property losses, with coverage in excess of $3,000 up to a maximum of $25,000, for our homeowners, and business owners. In addition, we have liability excess of loss reinsurance for umbrella large losses in excess of $1,000 up to a maximum of $10,000. We also have various reinsurance agreements with Hartford Steam Boiler Inspection and Insurance Company, of which the primary contract is a quota share agreement under which we cede 100% of the premiums and losses for the equipment breakdown coverage under our business owner policies.
Previous wording
At March 31, 2026, we had $179,203 recoverable from CAR comprised of loss adjustment expense reserves, unearned premiums and reinsurance recoverable.
Current wording
At June 30, 2026, we had $181,032 recoverable from CAR, which consisted of loss adjustment expense reserves, unearned premiums and reinsurance recoverable.
Previous wording
Non-GAAP operating income and non-GAAP operating income per diluted share consist of our GAAP net income adjusted by the net realized gains (losses) on investments, changes in net unrealized gains on equity securities, credit loss benefit (expense) and taxes related thereto. Net income (loss) and earnings (loss) per diluted share are the GAAP financial measures that are most directly comparable to non-GAAP operating income (loss) and non-GAAP operating income (loss) per diluted share, respectively. A reconciliation of the GAAP financial measures to these non-GAAP measures is included in the financial highlights below.
Current wording
Non-GAAP operating income and non-GAAP operating income per diluted share consist of our GAAP net income adjusted by the net realized gains (losses) on investments, changes in net unrealized gains on equity securities, credit loss benefit (expense) and taxes related thereto. 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.
Previous wording
Three Months Ended March 31, 2026 compared to Three Months Ended March 31, 2025
Current wording
Three and Six Months Ended June 30, 2026 Compared to Three and Six Months Ended June 30, 2025
Previous wording
Direct Written Premiums. Direct written premiums for the three months ended March 31, 2026 increased by $805, or 0.3%, to $299,775 from $298,970 for the comparable 2025 period. The increase in direct written premiums is the result of rate increases. 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.
Current wording
Direct Written Premiums. Direct written premiums for the three months ended June 30, 2026 decreased by $3,994, or 1.2%, to $341,835 from $345,829 for the comparable 2025 period. Direct written premiums for the six months ended June 30, 2026 decreased by $3,189, or 0.5%, to $641,610 from $644,799 for the comparable 2025 period. The decreases in direct written premiums and net written premiums reflect lower policy counts resulting from the cancellation of certain underperforming agency relationships. For the six months ended June 30, 2026, average written premium per policy increased 2.9%, 6.4% and 10.9% in Private Passenger Automobile, Commercial Automobile and Homeowners lines, respectively, compared to the same period in 2025.
Previous wording
Net Written Premiums. Net written premiums for the three months ended March 31, 2026 increased by $651, or 0.2%, to $275,431 from $274,780 for the comparable 2025 period. The increase was primarily due to the factors that increased direct written premiums.
Current wording
Net Written Premiums. Net written premiums for the three months ended June 30, 2026 decreased by $5,965, or 1.9%, to $313,510 from $319,475 for the comparable 2025 period. Net written premiums for the six months ended
Previous wording
Net Earned Premiums. Net earned premiums for the three months ended March 31, 2026 increased by $18,296, or 6.7%, to $290,986 from $272,690 for the comparable 2025 period. The increase was primarily due to rate increases earning into top-line results.
Current wording
Net Earned Premiums. Net earned premiums for the three months ended June 30, 2026 increased by $9,540, or 3.4%, to $291,653 from $282,113 for the comparable 2025 period. Net earned premiums for the six months ended June 30, 2026 increased by $27,836, or 5.0%, to $582,639 from $554,803 for the comparable 2025 period. The increases were primarily due to rate increases earning into top-line results.
Previous wording
Net Investment Income. Net investment income for the three months ended March 31, 2026 increased by $2,464, or 16.9%, to $17,038 from $14,574 for the comparable 2025 period. The increase is primarily driven by higher assets under management, reinvestment rates that exceeded the yields on maturing securities, and strong alternative asset returns. 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 three months ended March 31, 2025. The investment portfolio’s duration was 3.9 years at March 31, 2026 and December 31, 2025.
Current wording
Net Investment Income. Net investment income for the three months ended June 30, 2026 increased $835, or 5.3%, to $16,559 from $15,724 for the comparable 2025 period. Net investment income for the six months ended June 30, 2026 increased by $3,299, or 10.9%, to $33,597 from $30,298 for the comparable 2025 period. The increase for the three and six months ended June 30, 2026, compared to the same periods in 2025, is primarily driven by higher assets under management, reinvestment rates that exceeded the yields on maturing securities, and strong alternative asset returns. Net effective annualized yield on the investment portfolio was 4.0% for the three months June 30, 2026 compared to 4.2% for the comparable 2025 period. Net effective annualized yield on the investment portfolio was 4.1% for the six months ended June 30, 2026 compared to 4.0% for the comparable 2025 period. 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.
Previous wording
The gross unrealized gains and losses on investments in fixed maturity securities, equity securities, including interests in mutual funds, and other invested assets were as follows for the periods indicated:
Current wording
The gross unrealized gains and losses on investments in fixed maturity securities, including redeemable preferred stocks that have characteristics of fixed maturities, short term investments, equity securities, including interests in mutual funds, and other invested assets were as follows for the periods indicated:
Previous wording
(2)Equity securities include common stock, mutual funds and interests in mutual funds held to fund the Company’s executive deferred compensation plan.
Current wording
(2)Equity securities include common stock, preferred stock, mutual funds and interests in mutual funds held to fund the Company’s executive
Previous wording
(3)Our investment portfolio included 936 securities in an unrealized loss position at March 31, 2026.
Current wording
(3)Our investment portfolio includes 833 securities in an unrealized loss position at June 30, 2026.
Previous wording
The composition of our fixed income security portfolio by Moody’s rating was as follows:
Current wording
The composition of our fixed income security portfolio as defined by nationally recognized rating agencies was as follows:
Previous wording
As of March 31, 2026, our portfolio of fixed maturity investments was comprised principally of investment-grade corporate securities, U.S. government and agency securities, asset-backed securities, and investment-grade collateralized loan obligations. The portion of our non-investment grade portfolio of fixed maturity investments is primarily comprised of variable rate secured and senior bank loans and high yield bonds.
Current wording
As of June 30, 2026, our portfolio of fixed maturity investments was comprised principally of investment grade corporate fixed maturity securities, U.S. government and agency securities, and asset-backed securities. The portion of our non-investment grade portfolio of fixed maturity investments is primarily comprised of high yield bonds.
Previous wording
As of March 31, 2026, the Company concluded that $348 of unrealized losses were due to credit factors and were recorded as an allowance for expected credit losses. As of December 31, 2025, the Company concluded that none of the unrealized losses in the fixed maturity portfolio were due to credit factors; therefore, no allowance for credit losses was reported. The Company concluded that outside of the securities that were recognized as credit impaired, the unrealized losses recorded on the fixed maturity portfolio at March 31, 2026 and December 31, 2025 resulted from fluctuations in market interest rates and other temporary market conditions as opposed to fundamental changes in the credit quality of the issuers of such securities. Based upon the analysis performed, the Company’s decision to hold these securities, the Company’s current level of liquidity and our history of positive operating cash flows, management believes it is more likely than not that it will not be required to sell any of its securities before the anticipated recovery in the fair value to its amortized cost basis.
Current wording
As of June 30, 2026 the Company concluded that $355 of unrealized losses were due to credit factors and were recorded as an allowance for expected credit losses. As of December 31, 2025, the Company concluded that none of the unrealized losses in the fixed maturity portfolio were due to credit factors; therefore, no allowance for credit losses was reported. The Company concluded that outside of the securities that were recognized as credit impaired, the unrealized losses recorded on the fixed maturity portfolio at June 30, 2026 and December 31, 2025 resulted from fluctuations in market interest rates and other temporary market conditions as opposed to fundamental changes in the credit quality of the issuers of such securities. Based upon the analysis performed, the Company’s decision to hold these securities, the Company’s current level of liquidity and our history of positive cash flows, management believes it is more likely than not that it will not be required to sell any of its securities before the anticipated recovery in the fair value to its amortized cost basis.
Previous wording
*Commission Income:*Commission income includes revenues from new and renewal commissions paid by insurance carriers, which we recognize when earned. Commission income was $2,150 and $2,095 for the three months ended March 31, 2026 and 2025, respectively.
Current wording
*Commission Income:*Commission income includes revenues from new and renewal commissions paid by insurance carriers, which we recognize when earned. Commission income was $2,252 and $2,285 for the three months ended June 30, 2026 and 2025, respectively. Commission income was $4,402 and $4,380 for the six months ended June 30, 2026 and 2025, respectively. The year-over-year change is driven by increased premium rates across the property and casualty insurance market.
Previous wording
Finance and Other Service Income. Finance and other service income includes revenues from premium installment charges, which we recognize when earned, and other miscellaneous income and fees. Finance and other service income for the three months ended March 31, 2026 decreased by $486, or 7.7%, to $5,801 from $6,287 for the comparable 2025 period. The decrease is primarily driven by a decrease in policy counts and changes to our fee assessment policies.
Current wording
Finance and Other Service Income. Finance and other service income includes revenues from premium installment charges, which we recognize when earned, and other miscellaneous income and fees. Finance and other service income for the three months ended June 30, 2026 decreased by $727, or 11.2%, to $5,758 from $6,485 for the comparable 2025 period. Finance and other service income for the six months ended June 30, 2026, decreased by $1,213, or 9.5%, to $11,559 from $12,772 for the comparable 2025 period. The decrease is primarily driven by the decline in policy counts.
Previous wording
Our GAAP loss ratio for the three months ended March 31, 2026 increased to 85.1% from 69.8% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended March 31, 2026 was 75.7% compared to 61.4% for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the three months ended March 31, 2026 was $10,549 compared to $12,238 for the comparable 2025 period.
Current wording
Our GAAP loss ratio for the three months ended June 30, 2026 decreased to 66.9% from 68.8% for the comparable 2025 period. Our GAAP loss ratio for the six months ended June 30, 2026 increased to 76.0% from 69.3% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended June 30, 2026 was 59.5% compared to 60.9% for the comparable 2025 period. Our GAAP loss ratio excluding loss adjustment expenses for the six months ended June 30, 2026 was 67.6% compared to 61.1% for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the three months ended June 30, 2026 was $10,569 compared to $11,235 for the comparable 2025 period. Total prior year favorable development included in the pre-tax results for the six months ended June 30, 2026 was $21,118 compared to $23,473 for the comparable 2025 period.
Previous wording
Interest Expense. Interest expense was $618 and $104 for the three months ended March 31, 2026 and 2025. The increase in interest expense is due to borrowings under the Company’s existing Credit Agreement with Citizens Bank on March 27, 2025, which carries an interest rate of SOFR rate plus 1.25%, compared to the repaid FHLB of Boston loan that had a fixed rate of 1.42%.
Current wording
Interest Expense. Interest expense was $814 and $442 for the three months ended June 30, 2026 and 2025, respectively. Interest expense was $1,432 for the six months ended June 30, 2026 compared to $546 for the comparable 2025 period. The increase in interest expense is due to borrowings under the Company’s existing Credit Agreement with Citizens Bank on March 27, 2025, which carries an interest rate of SOFR rate plus 1.25%, compared to the repaid FHLB of Boston loan that had a fixed rate of 1.42%.
Previous wording
Income Tax Expense. Our effective tax rate was 19.8% and 22.4% for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2026 was lower than the statutory rate primarily due to the effects of the change in unrealized gains on equity securities. The effective tax rate for the three months ended March 31, 2025 was higher than the statutory rate primarily due to the effects of executive compensation expense.
Current wording
Income Tax Expense. Our effective tax rate was 21.1% and 21.4% for the three months ended June 30, 2026 and 2025, respectively. The effective tax rate was 22.0% and 21.9% for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate in 2026 was higher than the statutory rate primarily due to the effects of stock-based compensation and permanent differences regarding executive compensation.
Previous wording
Net (Loss) Income. Net loss for the three months ended March 31, 2026 was $14,323 compared to net income of $21,896 for the comparable 2025 period.
Current wording
*Net Income.*Net income for the three months ended June 30, 2026 was $34,517 compared to net income of $28,937 for the comparable 2025 period. Net income for the six months ended June 30, 2026 was $20,194 compared to $50,833 for the comparable 2025 period.
Previous wording
Non-GAAP Operating (Loss) Income. Non-GAAP operating loss as defined above was $10,204 for the three months ended March 31, 2026 compared to non-GAAP operating income of $18,996 for the comparable 2025 period. The decrease in Non-GAAP operating income was primarily the result of an increase in losses and loss adjustment expenses compared to the prior period. Non-GAAP operating loss 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.
Current wording
Non-GAAP Operating Income. Non-GAAP operating income, as defined above, was $29,674 for the three months ended June 30, 2026 compared to $21,519 for the comparable 2025 period. Non-GAAP operating income was $19,470 for the six months ended June 30, 2026 compared to $40,515 for the comparable 2025 period.
Previous wording
Net cash used for operating activities was $17,034 during the three months ended March 31, 2026 compared to net cash provided by operating activities of $3,173 during the three months ended March 31, 2025. Our operations typically generate positive cash flows from operations as most premiums are received in advance of the time when claim and benefit payments are required. Net cash used for operating activities during the three months ended March 31, 2026 was the result of the timing of expense payments and Winter Storm payments. Positive operating cash flows are expected in the future to meet our liquidity requirements.
Current wording
Net cash provided by operating activities was $21,294 and $35,496 during the six months ended 2026 and 2025, respectively. Our operations typically generate positive cash flows from operations as most premiums are received in advance of the time when claim and benefit payments are required. Positive operating cash flows are expected in the future to meet our liquidity requirements.
Previous wording
Net cash provided by investing activities was $11,556 and $16,129 during the three months ended March 31, 2026 and 2025, respectively. Fixed maturities, equity securities, and other invested assets purchased were $101,182 for the three months ended March 31, 2026 compared to $59,383 for the comparable prior year period. Proceeds from maturities, redemptions, calls and sales, of securities were $114,580 during the three months ended March 31, 2026 compared to $75,844 for the comparable prior year period.
Current wording
Net cash used for investing activities was $323 and $18,217 during the six months ended June 30, 2026 and 2025, respectively. Fixed maturities, equity securities, and other invested assets purchased were $216,213 for the six months ended June 30, 2026 compared to $159,014 for the comparable prior year period. Proceeds from maturities, redemptions, calls and sales, of securities were $218,359 during the six months ended June 30, 2026 compared to $141,197 for the comparable prior year period.
Previous wording
Net cash used for financing activities was $13,592 and $13,568 during the three months ended March 31, 2026 and 2025, respectively. Net cash used for financing activities during the three months ended March 31, 2026 consisted of dividend payments to shareholders.
Current wording
Net cash used for financing activities was $26,954 and $26,844 during the six months ended June 30, 2026 and 2025, respectively. Net cash used for financing activities during the six months ended June 30, 2026 consisted of dividend payments to shareholders.
Previous wording
Our Insurance Subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to their parent without prior approval of the Commissioner of the Division of Insurance of Massachusetts (the “Commissioner”). The Massachusetts statute limits the dividends an insurer may pay in any twelve-month period, without the prior permission of the Commissioner, to the greater of (i) 10% of the insurer’s surplus as of the preceding December 31 or (ii) the insurer’s net income for the twelve-month period ending the preceding December 31, in each case determined in accordance with statutory accounting practices. Our insurance company subsidiaries may not declare an “extraordinary dividend” (defined as any dividend or distribution that, together with other distributions made within the preceding twelve months, exceeds the limits established by Massachusetts statute) until thirty days after the Commissioner has received notice of the intended dividend and has not objected. As historically administered by the Commissioner, this provision requires the Commissioner’s prior approval of an extraordinary dividend. Under Massachusetts law, an insurer may pay cash dividends only from its unassigned funds, also known as earned surplus, and the insurer’s remaining surplus must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs. At December 31, 2025, the statutory surplus of Safety Insurance was $833,432, and its statutory net income for 2025 was $83,092. As a result, a maximum of $83,343 is available in 2026 for such dividends without prior approval of the Commissioner. As a result of this Massachusetts statute, the Insurance Subsidiaries had restricted net assets in the amount of $750,089 at December 31, 2025. During the three months ended March 31, 2026, Safety Insurance paid dividends to Safety of $13,098.
Current wording
Our Insurance Subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to their parent without prior approval of the Commissioner of the Division of Insurance of Massachusetts (the “Commissioner”). The Massachusetts statute limits the dividends an insurer may pay in any twelve-month period, without the prior permission of the Commissioner, to the greater of (i) 10% of the insurer’s surplus as of the preceding December 31 or (ii) the insurer’s net income for the twelve-month period ending the preceding December 31, in each case determined in accordance with statutory accounting practices. Our insurance company subsidiaries may not declare an “extraordinary dividend” (defined as any dividend or distribution that, together with other distributions made within the preceding twelve months, exceeds the limits established by Massachusetts statute) until thirty days after the Commissioner has received notice of the intended dividend and has not objected. As historically administered by the Commissioner, this provision requires the Commissioner’s prior approval of an extraordinary dividend. Under Massachusetts law, an insurer may pay cash dividends only from its unassigned funds, also known as earned surplus, and the insurer’s remaining surplus must be both reasonable in relation to its outstanding liabilities and adequate to its financial needs. At December 31, 2025, the statutory surplus of Safety Insurance was $833,432, and its statutory net income for 2025 was $83,092. As a result, a maximum of $83,343 is available in 2026 for such dividends without prior approval of the Commissioner. As a result of this Massachusetts statute, the Insurance Subsidiaries had restricted net assets in the amount of $750,089 at December 31, 2025. During the six months ended June 30, 2026, Safety Insurance paid dividends to Safety of $26,897.
Previous wording
On February 23, 2022, the Board of Directors approved a share repurchase program of up to $50,000 of the Company’s outstanding common shares. As of March 31, 2026, the Board of Directors has cumulatively authorized increases to the existing share repurchase program of up to $200,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require us to repurchase any specific number of shares and may be modified, suspended or terminated at any time without prior notice. No share repurchases were made by the Company under the program during the three months ended March 31, 2026. As of March 31, 2026 and December 31, 2025, the Company had purchased 3,478,060 shares of common stock at a cost of $175,240.
Current wording
On February 23, 2022, the Board of Directors approved a share repurchase program of up to$50,000 of the Company’s outstanding common shares. As of June 30, 2026, the Board of Directors has cumulatively authorized increases to the existing share repurchase program of up to $200,000 of its outstanding common shares. Under the program, the Company may repurchase shares of its common stock for cash in public or private transactions, in the open market or otherwise. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The program does not require us to repurchase any specific number of shares and may be modified, suspended or terminated at any time without prior notice. No share repurchases were made by the Company under the program during the three and six months ended June 30, 2026. As of June 30, 2026 and December 31, 2025, the Company had purchased 3,478,060 shares of common stock at a cost of $175,240.
Previous wording
Management determines our loss and LAE reserves estimate based upon the analysis of our actuaries. A reasonable estimate is derived by selecting a point estimate within a range of indications as calculated by our actuaries using generally accepted actuarial techniques. The key assumption in most actuarial analysis is that past patterns of frequency and severity will repeat in the future unless a significant change in the factors described above takes place.
Current wording
Management determines our loss and loss adjustment expense (“LAE”) reserves estimate based upon the analysis of our actuaries. A reasonable estimate is derived by selecting a point estimate within a range of indications as calculated by our actuaries using generally accepted actuarial techniques. The key assumption in most actuarial analysis is that past patterns of frequency and severity will repeat in the future, unless a significant change in the factors described above takes place.
Previous wording
Such techniques assume that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting our ultimate losses, total reserves, and resulting IBNR reserves. It is possible that the final outcome may fall above or below these amounts as a result of a number of factors, including immature data, sparse data, or significant growth in a line of business. Using these methodologies our actuaries established a range of reasonably possible estimations for net reserves of approximately $622,192 to $688,388 as of March 31, 2026. In general, the low and high values of the ranges represent reasonable minimum and maximum values of the indications based on the techniques described above. Our selected point estimate of net loss and LAE reserves based upon the analysis of our actuaries was $661,279 as of March 31, 2026.
Current wording
Such techniques assume that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting our ultimate losses, total reserves, and resulting IBNR reserves. It is possible that the final outcome may fall above or below these amounts as a result of a number of factors, including immature data, sparse data, or significant growth in a line of business. Using these methodologies our actuaries established a range of reasonably possible estimations for net reserves of approximately $616,475 to $685,439 as of June 30, 2026. In general, the low and high values of the ranges represent reasonable minimum and maximum values of the indications based on the techniques described above. Our selected point estimate of net loss and LAE reserves based upon the analysis of our actuaries was $657,605 as of June 30, 2026.
Previous wording
At March 31, 2026, our total IBNR reserves for our private passenger automobile line of business was comprised of ($90,778) related to estimated ultimate decreases in the case reserves, including anticipated recoveries (i.e. salvage and subrogation), and $43,260 related to our estimation for not yet reported losses.
Current wording
At June 30, 2026, our total IBNR reserves for our private passenger automobile line of business was comprised of ($85,210) related to estimated ultimate decreases in the case reserves, including anticipated recoveries (i.e. salvage and subrogation), and $41,546 related to our estimation for not yet reported losses.
Previous wording
Our IBNR reserves consist of our estimate of the total loss reserves required less our case reserves. The IBNR reserves for CAR assumed commercial automobile business are 41.2% of our total reserves for CAR assumed commercial automobile business as of March 31, 2026, due to the reporting delays in the information we receive from CAR, as described further in the section onResidual Market Loss and Loss Adjustment Expense Reserves.
Current wording
Our IBNR reserves consist of our estimate of the total loss reserves required less our case reserves. The IBNR reserves for CAR assumed commercial automobile business are 38.8% of our total reserves for CAR assumed commercial automobile business as of June 30, 2026, due to the reporting delays in the information we receive from CAR, as described further in the section onResidual Market Loss and Loss Adjustment Expense Reserves.
Previous wording
Residual market deficits, consists of premium ceded to the various residual markets less losses and LAE, and is allocated among insurance companies based on a various formulas (the “Participation Ratio”) that takes into consideration a company’s voluntary market share.
Current wording
Residual market deficits and gains, consists of premium ceded to the various residual markets less losses and LAE, and is allocated among insurance companies based on a various formulas (the “Participation Ratio”) that takes into consideration a company’s voluntary market share.
Previous wording
Establishment of appropriate reserves is an inherently uncertain process. There can be no certainty that currently established reserves based on our key assumptions regarding frequency and severity in our lines of business, or our assumptions regarding our share of the CAR loss will prove adequate in light of subsequent actual experience. To the extent that reserves are inadequate and are strengthened, the amount of such increase is treated as a charge to earnings in the period that the deficiency is recognized. To the extent that reserves are redundant and are released, the amount of the release is a credit to earnings in the period the redundancy is recognized. For the three months ended March 31, 2026, a 1 percentage-point change in the loss and LAE ratio would result in a change in reserves of $2,909. Each 1 percentage-point change in the loss and loss expense ratio would have had a $2,298 effect on net income, or $0.16 per diluted share.
Current wording
Establishment of appropriate reserves is an inherently uncertain process. There can be no certainty that currently established reserves based on our key assumptions regarding frequency and severity in our lines of business, or our assumptions regarding our share of the CAR loss will prove adequate in light of subsequent actual experience. To the extent that reserves are inadequate and are strengthened, the amount of such increase is treated as a charge to earnings in the period that the deficiency is recognized. To the extent that reserves are redundant and are released, the amount of the release is a credit to earnings in the period the redundancy is recognized. For the six months ended June 30, 2026, a 1 percentage-point change in the loss and LAE ratio would result in a change in reserves of $5,825. Each 1 percentage-point change in the loss and LAE ratio would have had a $4,602 effect on net income, or $0.32 per diluted share.
Previous wording
Our assumptions consider that past experience, adjusted for the effects of current developments and anticipated trends, are an appropriate basis for establishing our reserves. Our individual key assumptions could each have a reasonable possible range of plus or minus 5 percentage-points for each estimation, although there is no guarantee that our assumptions will not have more than a 5 percentage point variation. The following sensitivity tables present information for each of our primary lines of business on the effect each 1 percentage-point change in each of our key assumptions on unpaid frequency and severity could have on our retained (i.e., direct minus ceded) loss and LAE reserves and net income for the three months ended March 31, 2026. In evaluating the information in the table, it should be noted that a 1 percentage-point change in a single assumption would change estimated reserves by 1 percentage-point.
Current wording
Our assumptions consider that past experience, adjusted for the effects of current developments and anticipated trends, are an appropriate basis for establishing our reserves. Our individual key assumptions could each have a reasonable possible range of plus or minus 5 percentage-points for each estimation, although there is no guarantee that our assumptions will not have more than a 5 percentage point variation. The following sensitivity tables present information for each of our primary lines of business on the effect each 1 percentage-point change in each of our key assumptions on unpaid frequency and severity could have on our retained (i.e., direct minus ceded) loss and LAE reserves and net income for the six months ended June 30, 2026. In evaluating the information in the table, it should be noted that a 1 percentage-point change in a single assumption would change estimated reserves by 1 percentage-point. A 1 percentage-point change in both our key assumptions would change estimated reserves within a range of plus or minus 2 percentage-points.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The table below shows the amount of direct written premiums written in each state during the three and six months ended June 30, 2026 and 2025.
Current report — wording carried from elsewhere
case reserves. Our retained other than auto and homeowners lines of business prior year reserves decreased, due primarily to fewer claims than previously estimated.
Current report — wording carried from elsewhere
For further information, see “Results of Operations*.”*
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Beginning on February 22, 2026, the Northeast region experienced a severe winter weather event (“February Winter Storm”), which produced record-breaking snowfall and hurricane-force wind gusts. Areas in the region received up to 36 inches of snowfall and wind gusts exceeding 80 miles per hour. As a result of the February Winter Storm, the Company received approximately 450 reported claims totaling $10,163 of losses and loss adjustment expenses for the three months ended March 31, 2026.
Previous report — wording carried elsewhere
A 1 percentage-point change in both our key assumptions would change estimated reserves within a range of plus or minus 2 percentage points.