Selective Insurance (NASDAQ:SIGI) said Monday it expects higher net catastrophe losses in Q4, hurt by Winter Storm Elliott, which primarily impacted its standard commercial lines division.

Selective (SIGI) expects pre-tax net catastrophe losses of ~$45.7M, which includes $46.1M of net losses from Winter Storm Elliott. Q4 EPS is expected to be $1.38 and adj. operating EPS of $1.461, compared with $1.38 consensus.

Selective (SIGI) projected combined ratio of 94.7%, inclusive of catastrophe losses of 5.2 points. Net investment income, after tax, is expected to be $65.5M, up 0.8% Y/Y.

Selective (SIGI) recorded additional $11.7M in ceded earned reinstatement premium from the storm, for a total negative impact to Q4 underwriting results of $57.8M, pre-tax, or $0.75/share.

“Winter Storm Elliott impacted majority of our standard lines footprint in late December, resulting in severe water-related property losses,” said CEO John Marchioni. “We will report another year of double-digit growth in net premiums written, strong underwriting profitability, and double-digit non-GAAP operating ROE that exceeded our target.”

Selective (SIGI) plans to release Q4 results after market close on February 2.

SA Quant cautioned investors that Selective (SIGI) is at high risk of performing badly.