Selective Insurance Group, Inc. (SIGI) Earnings Call Transcript & Summary

Good day and welcome to the Selective Insurance Group, Inc. Annual Meeting of Stockholders. I would now like to turn the conference over to Gregory Murphy. Please go ahead.

Thank you, Howard. Good morning. I'm Gregory Murphy, Executive Chairman of Selective Insurance Group, Inc. On behalf of the Board, our management team and employees, I would like to thank you for attending our 2020 Annual Meeting of Stockholders. For the first time, due to COVID-19 related directives and best practices to protect the health and well-being of our stockholders and employees, our annual meeting is being held as a virtual meeting. I will call the 2020 Annual Meeting of Stockholders of Selective Insurance Group Inc. to order. We will conduct this meeting according to the agenda and rules of conduct provided on the web portal. With us today are the 13 directors nominated for election: John C. Burville, Terrence W. Cavanaugh; Robert Kelly Doherty; John J. Marchioni, Thomas A. McCarthy, H. Elizabeth Mitchell; Michael J. Morrissey; myself, Gregory E. Murphy; Cynthia S. Nicholson, William M. Rue, John S. Scheid, J. Brian Thebault and Philip H. Urban. I would also like to recognize Ron O'Kelley, who is retiring from the Board today. Ron joined the Board on January 17, 2005, and over the last 15-year period, Ron has demonstrated excellent financial acumen, strong leadership, remarkable loyalty and unwavering commitment to Selective. Ron's significant contributions, particularly as chairperson of the Audit Committee and the Corporate Governance and Nominating Committee, as the designated Audit Committee financial expert, have added to the company's long-term financial results. On behalf of the Board, management, employees, we wish Ron all the best and thank him for his many years of dedicated service to Selective. We will miss Ron's leadership, forethought and good humor in the boardroom. We are also joined here today by Michael Lanza, Executive Vice President, General Counsel and Chief Compliance Officer; Mark Wilcox, Executive Vice President, Chief Financial Officer; Suzanne Sus, Kevin Siemen and Kevin Brown of KPMG LLP, the company's independent registered public accounting firm; and Luis Larson and Janice Castillo of Broadridge Financial Services, who are serving as Inspectors of Election and took their oath, which will be reflected in the meeting's records. Robyn Turner, the company's Corporate Secretary, will act as the Secretary of the Meeting and report on the mailing of the notice of this meeting, the presence of a quorum and the procedures will follow.

Thank you, Mr. Chairman. This meeting is being held pursuant to the notice of meeting and proxy statement mailed on March 25, 2020, to each stockholder of record as of the close of business on March 6, 2020, in accordance with the company's bylaws. The count of shares currently indicates that not less than 52,375,439 shares of the company's common stock are present in person or by proxy at this meeting. This is approximately 88% of the company's outstanding shares of common stock. A quorum is present and the meeting may proceed. A list of stockholders entitled to vote is available during the meeting by clicking Registered Shareholder List in the footer of the web portal. All documents concerning this meeting's call and notice will be filed with the records of the meeting. . The agenda and rules of conduct are provided on the virtual meeting platform. Only stockholders of record as of March 6, 2020, or their valid proxy holders, may ask questions in the designated field on the web portal. Questions on the specific proposals will be taken through the question-and-answer section of the web portal when each proposal is introduced. When all proposals have been presented, if you wish to vote or change your previously submitted vote, please click on the voting button on the web portal and follow the instructions there. After the close of voting and the conclusion of the formal meeting, we will have a general question-and-answer session. Please save your general questions for the question-and-answer session.

Proposal #1.

The first proposal to be voted on is the election of the 13 directors nominated for a 1 year term expiring at the 2021 Annual Meeting of Stockholders and until their successors are duly elected and qualified. John C. Burville, Terrence W. Cavanaugh, Robert Kelly Doherty, John J. Marchioni, Thomas A. McCarthy, H. Elizabeth Mitchell; Michael J. Morrissey, Gregory E. Murphy, Cynthia S. Nicholson, William M. Rue, John S. Scheid, J. Brian Thebault, and Philip H. Urban.

The company's bylaws permit the nomination of directors by stockholders only by prior and proper written notice to the company. There were no such nominations. Therefore, the nominations are now closed. Board of Directors has recommended a vote in favor of proposal 1. If any stockholder would like to ask a question regarding proposal 1, please submit your question through the web portal.

The second proposal to be voted on is the approval on an advisory basis of the 2019 compensation of the company's named executive officers.

Board of Directors has recommended a vote in favor of proposal 2. If any stockholder would like to ask a question regarding proposal 2, please submit your question through the web portal.

The third proposal to be voted on is the ratification of the appointment by the Audit Committee of the Board of Directors of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. The representatives of KPMG LLP are available to respond to appropriate questions from stockholders.

Board of Directors has recommended a vote in favor of proposal 3. If any stockholder would like to ask a question regarding proposal 3, please submit your question through the web portal.

We do have a question. I will read it aloud for your response. Mr. Chairman, the Carpenters Union Pension Fund with combined assets of $70 billion have a collective ownership position of 242,500 shares of company common stock. As long-term shareholders, we appreciate the efforts of the company to address the difficulties faced by employees, customers and other important stakeholders during the COVID-19 pandemic. Protecting audit firm independence is critically important to ensuring the integrity of our financial reporting system. Would you or the chair of the Audit Committee describe the lead partner rotation process and whom the decision-making authority rests in selecting a new lead partner every 5 years. Thank you, Mr. Chairman.

Thank you for that question. So under the Audit Committee's Charter, the Audit Committee has sole authority and responsibility for the appointment, compensation, retention, evaluation and oversight of the company's independent auditors. The Audit Committee reviews the performance of the independent auditors, including the lead partner rotation on the account and that occurs, at a minimum, every 5 years. So thank you for that question. Are there any other questions on that item?

No additional shareholder proposals were received, and there are no additional matters to be voted upon at this meeting.

Will the secretary -- there being no further questions on the proposals, we'll now proceed to the vote on the agenda items. The polls are now open. If a stockholder on the web has not yet cast their vote, you may do so by clicking on the voting button on the web portal and following the instructions there. If you've previously voted by proxy, it's not necessarily to vote again unless you wish to change your vote. The change in vote will revoke any prior proxy that you may have previously submitted. [Voting]

There being no further votes, I now declare the polls closed for voting. Will the Secretary please report on the results of the voting on the 3 agenda items?

The Inspectors of Election have reported that the votes on proposal 1 have been counted, and a majority of votes cast were voted in favor of each nominee to the Board. The votes on proposal 2 have been counted, and a majority of votes cast were voted in favor of the approval on an advisory basis of the 2019 compensation of the company's named executive officers. The votes on proposal 3 have been counted, and a majority of votes cast were voted in favor of the ratification of the appointment by the Audit Committee of the Board of Directors of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020.

So based on the report of the Inspectors of Election, I hereby declare, one, that the stockholders have duly elected the nominees for directors; two, that the stockholders have approved on an advisory basis the 2019 compensation of the company's named executive officers; and three, that the stockholders have duly ratified the appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ended December 31, 2020.

Mr. Chairman, the Inspectors of Election will execute a final report as to the voting results, which will be filed in the records of the company together with the minutes of this meeting. The final tabulation of these votes will appear in our required Form 8-K to be filed with the Securities and Exchange Commission.

If there's no other business, this concludes the formal portion of the annual meeting. 2020 Annual Meeting of Stockholders is hereby adjourned. We will now respond to general questions. Anyone wishing to address the meeting should ask questions in the designated field on the web portal. Give it a second to see if any questions queue up. All right. There are no questions. Therefore, we thank you for attending the meeting. On behalf of the Board, our management team and employees, please stay safe and well. Thank you very much for attending the Annual Meeting of Selective Insurance Group Inc. Thank you.

Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.