Safety Insurance Group, Inc. (SAFT): A Bull Case Theory 

We came across a bullish thesis on Safety Insurance Group, Inc. on Valueinvestorsclub.com by natty813. In this article, we will summarize the bulls’ thesis on SAFT. Safety Insurance Group, Inc.’s share was trading at $75.28 as of December 1st. SAFT’s trailing P/E was 12.82 according to Yahoo Finance.

Safety Insurance Group (SAFT) represents a compelling absolute value opportunity for long-term investors, trading at just 125% of tangible book value—a ten-year low—while offering a generous 5% dividend yield. The $1.1 billion market-cap company is a high-quality, defensive property and casualty insurer with no net debt and significant overcapitalization. Safety has a remarkable track record, generating positive reserve development year after year and achieving profitability in 44 of its 45 years since 1979.

While recent years were impacted by poor weather, extreme claims inflation, and increased exposures, the company is raising prices, with average written premiums per policy up 9–14% across private auto, commercial auto, and homeowners’ lines in 2024, and further gains in the first half of 2025, setting the stage for improved profitability. A modest 5-point improvement in the combined ratio could add over $3 per share in earnings power.

Safety operates primarily in Massachusetts, New Hampshire, and Maine, where it is a market leader in private passenger auto, commercial auto, and homeowners’ insurance. The company distributes its policies through 828 carefully selected independent agents, emphasizing long-term relationships with high-quality producers. Its diverse product mix includes private and commercial auto, homeowners, business owner policies, and smaller coverages such as umbrella and dwelling fire policies.

Financially, Safety is robust, with $873 million in shareholders’ equity, minimal goodwill, a $1.58 billion investment portfolio yielding 4%, and a low premiums-to-surplus ratio of 1.6x. After two challenging years, operating EPS is recovering, combined ratios are improving, and policy counts and premiums are rising, driving strong direct written premium growth. Led by a conservative and experienced management team, Safety Insurance is positioned for continued earnings growth and value realization, making it an attractive risk-adjusted investment with upside from pricing power and operational leverage.

Previously we covered a bullish thesis on The Progressive Corporation (PGR) by Charly AI in April 2025, which highlighted strong financial performance, improved profit margins, operational efficiency, and technological innovation. The company’s stock price has depreciated approximately by 12.50% since our coverage. The thesis still stands as Progressive remains well-positioned for long-term growth. Natty813 shares a similar perspective but emphasizes Safety Insurance Group’s (SAFT) defensive characteristics and market leadership.

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Disclosure: None.