Safety Insurance Group, Inc. (SAFT) Earnings Call Transcript & Summary

Good morning, everyone. This is Chris Whitford, Safety's CFO. It's 10 o'clock. So we were going to start the Annual Meeting of Safety Insurance Group. I just want to confirm that Peter Brennan from PricewaterhouseCoopers is on the line.

Correct.

Great. George, I'll turn it over to you.

Great. Thank you, Chris. Good morning, ladies and gentlemen. It's now 10 a.m. on Wednesday, May 19, 2021. The meeting will please come to order. I'm George M. Murphy, President and CEO of Safety Insurance Group, Inc. On behalf of Safety Insurance Group, I welcome all of you to the 2021 Annual Meeting of Shareholders. Virtually, I might add. Before we go further, I'd like to introduce you to our officers who are present in today's meeting. They are Christopher T. Whitford, Vice President, CFO and Secretary; and James D. Berry, Vice President Underwriting. Peter Brennan, a representative of PricewaterhouseCoopers LLP, our independent auditor, is on the conference call and is available to respond to appropriate questions. As is stated in the handout that all of you should have received, we will conduct the formal portion of this meeting first. Following adjournment of the annual meeting, you will have an opportunity to raise any questions that you may have. Furthermore, questions sent in advance via e-mail will also be addressed. Now back to the official part of this meeting. As President and CEO of Safety Insurance Group, I will act as Chairperson of the 2021 Annual Meeting. I hereby appoint Christopher Whitford, Safety's CFO, Vice President and Secretary, as the Secretary of this meeting. Now I will ask Chris to take care of certain preliminary formalities. Chris?

Thanks, George. Each of you should have received a copy of our 1-page handout, showing the agenda and meeting procedures. Please conduct yourself in accordance with those rules of conduct. The handout also contains information regarding certain forward-looking statements, which may be expressed today regarding Safety's future operations or performance. I would like to introduce you to Jennifer Borden of Borden Consulting Group LLC. Ms. Borden has been appointed as Inspector of Election for this meeting. If you have already voted by proxy, your vote will be counted automatically without any further action on your part. As a matter of convenience for the Inspector of Election, it will be preferable for a shareholder who is present and who has previously given a proxy and does not wish to change his or her vote to allow his or her shares to be voted by proxy rather than voting in person. Is there any shareholder present who wishes to give their proxy to the Inspector of Elections, but has not done so? If still, please raise your hand and the Inspector of Elections will collect them at this time. If there is anyone present who wishes to vote his or her shares in person, please raise your hand at this time. Before acting on the matters stated in the notice of the meeting and proxy statement, I will establish for the record that this meeting is properly convened and that there is a quorum present for the transaction of business. According to the affidavit of distribution dated April 16, 2021, a notice of this Annual Meeting of Shareholders and instructions as to how to access the proxy statement, the proxy card and the annual report to shareholders were sent to each shareholder of record as of the close of business on March 22, 2021. Notice of this meeting has been duly given in accordance with Safety's bylaws, and the proxy statement has been filed with the Securities and Exchange Commission. Extra copies of the annual report and proxy statement are available at the end of the table. Prior to the commencement of this meeting, Ms. Borden took an oath of office to faithfully and honestly execute the duties of inspector with strict impartiality and to the best of her ability. The affidavit of distribution and the oath of the Inspector of Elections are in my possession and will be filed within the minutes of this meeting. On the record date, there were 14,982,998 shares of Safety's common stock outstanding and entitled to vote at this meeting. The list of shareholders of record entitled to vote was taken from Safety's stock ledgers and has been prepared and certified by Broadridge Financial Solutions. I have been informed by the Inspector of Elections that there are holders of a total of no fewer than 13,715,176 shares of stock present or represented by proxy at this meeting. And as a result, I hereby declare a quorum is present, and I hereby declare this meeting is duly convened. Mr. Chairman, I believe that all preliminary matters have been concluded.

Thank you, Chris. If there is no objection to the report of the Secretary, it will be accepted. There being no objection, it stands so accepted. We shall now move on to the transaction of business. In addition to certain procedural matters, there are 3 proposals before the shareholders: The first is the election of 2 of Safety's Directors to Class I with a term ending in 2024; the second is the ratification of the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2021; and the third is an advisory vote on compensation of the named executive officers as disclosed in the company's proxy statement for the 2021 annual meeting. In order to make this process as orderly as possible, after a motion has been moved and seconded, I will open the floor to any questions or discussion related only to that motion. Please hold all other questions not directly related to the motion until after the formal portion of the meeting. The first order of business is the election of 2 Class I Directors to serve a 3-year term expiring in 2024. May I have a motion?

I move that we elect 2 Class I Directors, and on behalf of the Board of Directors, I nominate Peter J. Manning and Mary C. Moran to each serve a 3-year term ending at the 2024 Annual Meeting of Shareholders.

Is there a second?

I second the motion.

Is there any discussion on the motion? The second order of business is the ratification of the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2021. May I have a motion?

I move that we ratify the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2021.

Is there a second?

I second the motion.

Is there any discussion on this motion? The third order of business is an advisory vote on the compensation of the named executive officers as disclosed in the company's proxy statement for the 2021 Annual Meeting. May I have a motion?

I move that we approve the compensation of the named executive officers as disclosed in the company's proxy statement for the 2021 Annual Meeting.

Is there a second?

I second the motion.

Is there any discussion on the motion? Is the Inspector of Election ready to report on the results of the votes?

Yes, Mr. Chairman. I have received and tabulated the proxies and ballots on the first item identified in the company's notice of Annual Meeting of Shareholders and proxy statement dated April 9, 2021. As of May 19, 2021, at least 11,099,057 shares of Safety's common stock or 74.7% of shares outstanding and 91.22% of shares voted, representing a majority of the votes cast by the shareholders entitled to vote on this matter at this meeting in accordance with the bylaws, have been voted in favor of Peter J. Manning. Mr. Chairman, I have received and tabulated the proxies and ballots on the first item identified in the company's notice of Annual Meeting of Shareholders and proxy statement dated April 9, 2021. As of May 19, 2021, at least 11,657,434 shares of Safety's common stock or 77.8% of shares outstanding and 95.81% of shares voted, representing a majority of the votes cast by the shareholders entitled to vote on this matter at this meeting in accordance with the bylaws, have been voted in favor of Mary C. Moran.

Thank you. I hereby declare that Mr. Manning and Ms. Moran have been elected as Directors of Safety Insurance.

Mr. Chairman, I have also received and tabulated the proxies and ballots on the second item identified in the company's notice of Annual Meeting of Shareholders and proxy statement dated April 9, 2021. As of May 19, 2021, at least 13,212,400 shares of Safety's common stock or 88.18% of shares outstanding and 96.33% of shares voted, representing a majority of the votes present or represented and entitled to vote on this matter at this meeting in accordance with the bylaws, have been voted in favor of ratifying the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2021.

Thank you. I hereby declare that the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2021 has been ratified.

Mr. Chairman, I have also received and tabulated the proxies and ballots on the third item identified in the company's notice of Annual Meeting of Shareholders and proxy statement. As of May 19, 2021, at least 11,989,209 shares of Safety's common stock or 80.1% of shares outstanding and 98.54% of shares voted, representing a majority of the shares -- excuse me, of the votes present or represented and entitled to vote on this matter at this meeting, have been voted in favor of approving on an advisory basis the compensation of the named executive officers as disclosed in the company's proxy statement for the 2021 Annual Meeting.

Thank you. I hereby declare that the compensation of the named executive Officers as disclosed in the company's proxy statement for the 2021 Annual Meeting has been approved on an advisory basis. Is there any further business to come before the meeting? If there is no other business, I will entertain a motion to adjourn.

So moved.

Is there a second?

I second the motion.

Unless there is an objection, I intend to handle the motion to adjourn by voice vote. All those in favor, please say yes. [Voting]

Those opposed, please say no. [Voting]

The motion is carried. I declare the formal part of the meeting adjourned. Thank you all for attending, and those on the phone who have dialed in. We did not receive any questions prior to the meeting, but are happy to answer any questions that those in-person may have at this time.

No questions.

Thank you, all.

Thank you, everyone.