DEF 14A of Safety Insurance Group Inc, Apr 2, 2024

DEF 14A of Safety Insurance Group Inc

Filed Apr 2, 2024 · FY20230001172052-24-000014

Open on EDGAR

  1. Nominees for Director

    Nominees for Director Charles J. Brophy III was appointed Director of the Company on April 5, 2023. Mr. Brophy has over 30 years of experience in the insurance industry. He has spent the last 22 years with HUB International, where he currently serves as the Regional President (U.S. East) and has extensive commercial and personal sales development and management experience. Prior to joining HUB International, Mr. Brophy was a Director at Bain Hogg Robinson, LLC, and began his career in commercial lines underwriting with the Travelers Insurance Company. Mr. Brophy was the 2016 Massachusetts Insurance Professional of the Year and has served on various advisory councils for The Hartford Insurance Group, Arbella Mutual Insurance, the Hanover Insurance Group, and the Travelers Insurance Company. He is also a member at the Insurance Library Association of Boston. We believe that Mr. Brophy’s many years of experience in the property and casualty insurance business, including the independent agency channel, provide him with the necessary qualifications which we believe well qualify him to serve on our Board. Dennis J. Langwell was appointed Director of the Company on April 5, 2023. Mr. Langwell is a retired senior executive of Liberty Mutual Insurance, a Fortune 100 company, where he worked more than 25 years in various executive, strategic and financial positions, until his retirement in 2021. His most recent position was Vice Chairman of Insurance Operations, and prior to that he was President of Global Risk Solutions, where he led Liberty’s $20 billion global commercial (re) insurance business. Prior to his role as President of Global Risk Solutions, Mr. Langwell served as Executive Vice President and Chief Financial Officer from 2003 to 2018. Mr. Langwell began his career at KPMG and has over 40 years of insurance and finance experience. Mr. Langwell also serves on the boards of James River Group and Companion Protect and on the Advisory Board of Owl.co. He is also a trustee of Providence College, where he received his Bachelor of Science in Accounting, and is Chairman of the Board of Trustees of the U.S.S. Constitution Museum. Mr. Langwell has been appointed to serve as a member of the Audit and Compensation Committees. Mr. Langwell qualifies as an “Audit Committee Financial Expert” as defined by the U.S. Securities and Exchange Committee rules. We believe that Mr. Langwell’s many years of experience in finance, leadership and risk management skills in the insurance industry provide him with the necessary qualifications which we believe well qualify him to serve on our Board. Mary C. Moran was appointed Director of the Company on March 27, 2020. Ms. Moran has over 40 years of financial experience in both private industry as well as consulting. Ms. Moran began her career at KPMG, previously Peat Marwick, where she became a Senior Manager before serving as Senior Vice President of Finance and Administration for Boston Sand and Gravel Company from 1990 to 2001. Since 2002 she has served as CEO of MCM Financial Consulting, focusing on projects within in the banking, construction, higher education, manufacturing, not-for-profit and professional services industries. Ms. Moran previously served as a director of Care Dimensions where she served on the finance and audit committee and is a former director and audit committee member of Danvers Bankcorp, the College of the Holy Cross and Catholic Memorial School. Ms. Moran graduated from Northeastern University with a M.B.A. and MS in Accounting and from the College of the Holy Cross with a degree in Economics. Ms. Moran qualifies as an “Audit Committee Financial Expert” as defined by the U.S. Securities and Exchange Committee rules. We believe that Ms. Moran’s many years of experience in finance, along with her leadership skills and vast consulting experience in the financial sector provide her with the necessary qualifications which we believe well qualify her to serve on our Board and as Chairperson of the Nominating and Governance Committee.

  2. Directors Continuing in Office

    Directors Continuing in Office Deborah E. Gray was appointed Director of the Company on March 24, 2022 and currently serves on the Compensation and Nominating and Governance Committees. Ms. Gray has served in various General Counsel roles over her 30-year career, including most recently providing her expertise as outside General Counsel to a number of companies. She is also currently the Vice President and General Counsel of the Achievement Network, a private, non-profit national education and technology organization where she leads all day-to-day legal, data privacy and security, and compliance initiatives. Prior to this role, Ms. Gray served as Vice President, General Counsel and Secretary at Acquia, Inc., a Software-as-a-Service (SaaS) company, from October 2011 to December 2013, where she led the creation and build out of its global legal, data security and corporate compliance functions including M&A, commercial contracts, licensing, real estate, employment, corporate and Board governance. From 2002 to 2011, Ms. Gray was with Charles River Laboratories International, Inc., a U.S. life sciences company providing pre-clinical/clinical lab services for pharma, medical devices and biotech companies. At Charles River Laboratories, she was responsible for corporate, licensing, employment law, SEC and NYSE reporting and compliance, corporate governance, M&A, and general commercial contracts. In 2006, she took on the role of chief employment counsel for offices in 19 states and various locations in Canada, Japan, China, India and Europe. Previous to this, Ms. Gray was a member of the Executive Team at Sapient Corporation, a publicly traded professional services tech company, as Vice President, General Counsel, and Assistant Secretary and with Harcourt General, a publicly traded holding company, as Senior Corporate & SEC Counsel. Ms. Gray began her legal career at WilmerHale in Boston where she was a Junior Partner specializing in mergers and acquisitions, initial public offerings, and SEC compliance matters. Ms. Gray has served on a number of non-profit boards including, The Home for Little Wanderers, the largest child welfare organization in the country, where she co-chaired the Nominating & Governance Committee and chaired the Risk Management Committee for many years. Previously, she was a Trustee of Colby College and an Overseer of the Boston Symphony Orchestra. Ms. Gray graduated with a B.A. from Colby College and a J.D. from Boston College Law School. Her legal and business expertise with high-growth companies, ranging from start-ups to publicly traded multibillion-dollar corporations, are beneficial to Safety, particularly in relation to risk management, compliance, data privacy and security, and corporate governance matters. We believe that Ms. Gray’s corporate governance and legal expertise enable her to provide valuable insight and advice regarding decisions and other matters of importance to the Company, which we believe well qualify her to serve as a Director. John D. Farina was appointed Director of the Company on March 24, 2022 and is a member of the Company’s Audit and Investment Committees. Mr. Farina is a retired partner of PricewaterhouseCoopers (“PwC”), where he spent 35 years advising both domestic and multinational Fortune 500 companies on financial accounting, regulatory, and tax matters. Mr. Farina also led PwC’s US Insurance Tax practice and has deep insurance industry expertise. During his time at PwC, Mr. Farina held a variety of senior leadership roles including Managing Partner of the Northeast Region, where he was responsible for over 3,800 partners and staff in five offices. In this role, he oversaw strategic planning, operations, finance, risk management, human capital, and marketing functions. Mr. Farina was elected by his fellow partners for two terms on both PwC’s US and Global Boards, providing 10 years of governance oversight to the firm. After retiring from PwC in 2021, Mr. Farina was elected to join the National Committee of St. Jude Children's Research Hospital in Memphis, Tennessee, where he serves as the Vice Chair of the Audit & Compliance Committee. Mr. Farina has also served on several non-profit boards, including the Greater Boston Chamber of Commerce. Mr. Farina received his BBA in Accounting from Evangel University and was licensed as a CPA in Massachusetts and Texas. Mr. Farina qualifies as an “Audit Committee Financial Expert”' as defined by the U.S. Securities and Exchange Committee rules. We believe that Mr. Farina’s many years of experience in tax, regulatory and accounting matters, along with his leadership skills and strategic risk management experience provide him with the necessary qualifications which we believe well qualify him to serve on Safety’s Board as well as the Chairperson of the Audit Committee.. Thalia M. Meehan was appointed Director of the Company on July 3, 2017 and has served as the Independent Lead Director since 2022. Ms. Meehan has also been appointed to serve as a member of the Investment Committee and the Nominating and Governance Committee, as well as Chairperson of the Compensation Committee of the Board effective February 24, 2021. Ms. Meehan, a Charter ed Financial Analyst, has over 30 years of experience in the investment sector. Ms. Meehan retired from Putnam Investments in 2016 with 27 years of experience and most recently served as a Team Leader and Portfolio Manager at Putnam Investments. Ms. Meehan currently serves on the Board of Cambridge Bancorp where she is a member of the Trust and Risk Committees. Ms. Meehan also serves as a member of the Nominating and of the Governance Committee of the Municipal Securities Rulemaking Board and the Advisory Committee of the Board of Boston Women in Public Finance. Ms. Meehan’s leadership skills and vast experience in the investment sector enable her to provide valuable insight and advice regarding investment decisions and other matter of import to the Company, which we believe well qualify her to serve on our Board as well as Chairperson of the Compensation Committee. George M. Murphy, CPCU, was appointed President and Chief Executive Officer of the Company effective April 1, 2016. He previously was the Vice President of Marketing since October 1, 2005. Mr. Murphy was appointed to the Board of Directors and to the Investment Committee in February 2016. Mr. Murphy has been employed by the Insurance Subsidiaries for over 32 years. On March 3, 2023, Mr. Murphy was appointed as Chairperson of the Board. Mr. Murphy is also on the Board of Trustees of the Insurance Library Association of Boston. Mr. Murphy’s leadership roles in the Company and our insurance subsidiaries which includes developing a deep understanding of our business as well strong personal relationships with Safety’s network of independent agents along with his knowledge of finance, regulation, corporate governance and other matters affecting public companies, make him well-qualified to serve on our Board of Directors.

  3. Certain Information Regarding the Board of Directors

    Certain Information Regarding the Board of Directors Board Refreshment Since 2017, our Board has undergone significant change as part of a conscious effort, led by the Nominating and Governance Committee, to refresh the Board and augment its composition with fresh, diverse perspectives and complementary skills and experiences that are aligned with the Company’s long-term strategy. As of December 31, 2023, our Board has added six new directors – comprising a majority of the independent directors of the Board. Board Retirement On February 27, 2024, the Board, on recommendation from the Nominating and Governance Committee, adopted a policy whereas no Director can be nominated to the Board, or to an additional term, after they turn 75 years of age. Board Diversity and Inclusion The Company is committed to creating and fostering an environment of diversity and inclusion, and that commitment extends to our Board of Directors. In considering our director nominees, the Nominating and Governance Committee considers candidates who represent a mix of skills and experiences and represent diversity of gender, age, race, ethnicity, background and perspective that enhance the quality of Board deliberations and align with the perceived needs of the Board and the Company’s strategy. As part of our Board refreshment since 2017, we have added three women, one minority and one LBGTQ member. We believe that our Board, as currently comprised, consists of a highly qualified and diverse group of leaders in their respective fields, bringing together a fresh mix of perspectives and deep institutional knowledge of the Company and its business. The following table sets forth the diversity characteristics of the Board of Directors:

  4. Certain Information Regarding the Board of Directors

    | Board Diversity Matrix | | | | | | Total Number of Directors | 8 | | | | | | | | | Did Not | | | | | | Disclosure | | | Female | Male | Non-Binary | Gender | | Part I: Gender Identify | | | | | | Directors | 3 | 5 | - | - | | Part II: Demographic Background | | | | | | African American or Black | 1 | - | - | - | | Alaskan Native or Native American | 0 | - | - | - | | Asian | 0 | - | - | - | | Hispanic or Latino | 0 | - | - | - | | Native Hawaiian or Pacific Islander | 0 | - | - | - | | White | 2 | 5 | - | - | | Two or More Races or Ethnicities | 0 | - | - | - | | LGBTQ+ | 1 | - | - | - |

  5. Certain Information Regarding the Board of Directors

    Meetings of the Board of Directors During 2023, the following meetings of the Board were held: five meetings of the Board, four meetings of the Audit Committee, four meetings of the Compensation Committee, four meetings of the Nominating and Governance Committee and four meetings of the Investment Committee. All of the incumbent Directors attended 100% of the Board and committee meetings held while they were members during 2023. The directors also gathered throughout the year for less formal business updates and provided input to management. At each quarterly meeting of the Board, the non-executive directors held an executive session without management present. Board Leadership Structure The positions of Chairman of the Board and Chief Executive Officer are held by Mr. George M. Murphy. As the Chairman of the Board, Mr. Murphy provides leadership to the Board and works with the Board to define its structure and activities in the fulfillment of its responsibilities. In his role as Chief Executive Officer, Mr. Murphy has general charge, supervision, and control of the business and affairs of the Company and is responsible generally for assuring that policy decisions of the Board are implemented as adopted. Ms. Meehan is the Board’s Lead Independent Director. In this role, Ms. Meehan has the following responsibilities:

  6. Certain Information Regarding the Board of Directors

    | ● | presiding at all meetings of the Board at which the chair is not present, including executive sessions of the independent directors; |

  7. Certain Information Regarding the Board of Directors

    | ● | serving as liaison between the chair and the independent directors; |

  8. Certain Information Regarding the Board of Directors

    | ● | approving information sent to the Board; |

  9. Certain Information Regarding the Board of Directors

    | ● | approving meeting agendas for the Board; |

  10. Certain Information Regarding the Board of Directors

    | ● | approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; |

  11. Certain Information Regarding the Board of Directors

    | ● | having the authority to call meetings of the independent directors; and |

  12. Certain Information Regarding the Board of Directors

    | ● | if requested by major stockholders, being available for consultation and direct communication. |

  13. Certain Information Regarding the Board of Directors

    We believe this leadership structure is appropriate for the Company, in that the Chairman of the Board / Chief Executive Officer, and Lead Independent Director provide strong leadership and direction for management to execute the Company’s strategy and business plan while contributing to a more efficient and effective Board. Risk Oversight The Board has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board regularly reviews information regarding the Company’s strategic, financial and operational risks. The Company’s Compensation Committee oversees the management of risks relating to the Company’s compensation policies and practices. The Audit Committee oversees the management of risks associated with accounting, auditing, cybersecurity, financial reporting and internal controls over financial reporting. The Audit Committee is responsible for reviewing and discussing the guidelines and policies governing the process by which senior management and the internal auditing department assess and manage the Company’s exposure to risk, as well as the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. The Nominating and Governance Committee oversees risks associated with the independence of the Board of Directors. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about such risks. Independent Directors The Board has determined that Charles J. Brophy III, Deborah E. Gray, John D. Farina, Dennis J. Langwell, Peter J. Manning, Thalia M. Meehan and Mary C. Moran are “independent directors” as determined pursuant to the Marketplace Rules promulgated by NASDAQ and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Board Committees The Audit Committee is comprised of John D. Farina (Chairperson), Dennis J. Langwell, Peter J. Manning, and Mary C. Moran (the “Audit Committee”). The Board has determined that John D. Farina, Dennis J. Langwell, Peter J. Manning, and Mary C. Moran are “Audit Committee Financial Experts” as established by the rules and regulations of the SEC. The Audit Committee meets at least quarterly and at each quarterly meeting meets with the independent auditors in an executive session without management present. For information regarding the functions performed by the Audit Committee, please refer to the Report of the Audit Committee included in this Proxy Statement, as well as the Charter of the Audit Committee, which is posted on our website, www.SafetyInsurance.com. The Compensation Committee is comprised of Thalia M. Meehan (Chairperson), Deborah E. Gray, Dennis J. Langwell, and Peter J. Manning (the “Compensation Committee”). For information regarding the functions performed by the Compensation Committee, please refer to the Compensation Discussion and Analysis and the Compensation Committee Report included in this Proxy Statement, as well as the Charter of the Compensation Committee, which is posted on our website, www.SafetyInsurance.com. The Nominating and Governance Committee is comprised of Mary C. Moran (Chairperson), Deborah E. Gray, and Thalia M. Meehan (the “Nominating and Governance Committee”). For information regarding the functions performed by the Nominating and Governance Committee, please refer to the Charter of the Nominating and Governance Committee, which is posted on our website, www.SafetyInsurance.com. The Investment Committee is comprised of George M. Murphy (Chairperson), Charles J. Brophy III, John D. Farina, and Thalia M. Meehan (the “Investment Committee”). Christopher T. Whitford, the Company’s Chief Financial Officer is a participant on the Committee as a management designee. The Investment Committee reviews and evaluates, as may be appropriate, information relating to the Company’s invested assets and its investment policies, strategies, objectives and activities. All committee chairperson roles are subject to a three-year term limit, and the Lead Independent Director role is subject to a five-year term limit. Board Evaluations The Board annually conducts a formal self-evaluation. Led by the Nominating and Governance Committee, feedback from individual directors is reviewed and discussed first by the Nominating and Governance Committee and then with the entire Board. These discussions include specific governance topics such as director tenure, board refreshment and composition as well as the diversity of experience, skills, competencies and other qualities of current directors and future director candidates. The Board intends for this annual process to help inform its decisions about how to best structure and govern itself in the short- and long-term, enabling it to provide effective oversight of the company for the benefit of stockholders.

  14. Executive Summary

    | combination with our existing performance-based annual cash bonus will help ensure strong pay and performance alignment. |

  15. Executive Summary

    | ● | A “double trigger” rather than “single trigger” vesting acceleration in a potential change of control. For the vesting of shares to accelerate, the executive would need to be terminated and a change of control would have to occur. |

  16. Executive Summary

    | ● | No tax gross-ups for potential excise tax that might be incurred if a change of control were to occur. |

  17. Executive Summary

    | ● | Our equity plan prohibits share recycling and repricing of stock options without advance approval of stockholders. |

  18. Executive Summary

    2023 Results and Impact on Actual Pay In 2023, Safety Insurance Group posted record top-line growth as Direct Written Premiums increased by 20.4%, as a result of a 10.2% increase in overall policy counts and a 10.9% increase in average premium per policy, blended across all lines of business. The hardest insurance market in decades, brought opportunities for us to grow our rounded account strategy with our key independent agency partners. While in prior years, our moderate growth was mainly driven by rate, these important relationships, and our strong financial position, allowed us to be a carrier of choice, and grow all major lines of business, setting Safety Insurance up for continued future success. While Safety achieved positive trends in all major revenue streams, ongoing inflationary impacts contributed to an elevated loss ratio specific to our Private Passenger Automobile book of business. For the year ended December 31, 2023, Safety Insurance posted a 107.7% combined ratio, impacted by these inflationary trends and several weather events, including a $30.0 million winter freeze and a $12.0 million wind event. Our non-GAAP operating earnings per diluted share, which exclude the impact of changes in unrealized gains / losses on equity investments, realized gains / losses on investments, and other-than-temporary impairments, was $0.84. The long-term commitment to strong underwriting results and enhanced investment returns, remains unchanged. As always, we focus on pricing our products appropriately for the risks we are insuring while generating the capital to grow our business. We continue to work with our agency partners toward our goal of maintaining underwriting discipline, while leveraging investments in our pricing and risk management areas to ensure rate adequacy. While historically our combined ratio compares favorably to the average of our Performance Peer Group, our 2023 combined ratio is in-line with the group which also experienced elevated combined ratios due to industry wide trends. In 2023, earnings before income taxes was $24.4 million. Earnings before interest, taxes, changes in unrealized gains on equity securities and credit loss expense was $18.2 million, which is calculated in the table below. The Compensation Committee believes that this is an effective measure for assessing annual profitability and company performance. Beginning in 2020, the Company was required to adopt a new accounting pronouncement from the Financial Accounting Standards Board (“FASB”) which changed the impairment model used on financial instruments to the Current Expected Credit Loss model. This pronouncement requires the Company to estimate the amount of expected credit losses on an impaired financial instrument and record the loss or subsequent recovery through net income rather than through other comprehensive income. Furthermore, in 2018, the Company was required to adopt a new accounting pronouncement from the Financial Accounting Standards Board (“FASB”) which requires changes in unrealized gains (losses) on equity securities to be recorded through net income rather than through other comprehensive income. Eliminating the benefit or penalty of these adoptions gives a representation of true business performance. It is the core metric used in the annual incentive plan under which cash bonus payouts are determined.

  19. Executive Summary

    Due to the above results and in line with financial performance, there was no annual incentive bonus paid with respect to 2023 performance and the 2021 – 2023 performance awards granted on February 24, 2021 had an actual payout of 50.0%. Please refer to the annual cash incentive and long–term incentive section below for further information. The Committee is confident that the 2021-2023 performance share payouts are a fair reflection of Safety’s results during the relevant time periods. Say on Pay Results Safety’s Board of Directors takes its duty to the Company and its stockholders seriously. We strive to follow good process, apply our best judgment, and make the best decisions we can to make Safety an even stronger and more valuable company. Our ability to perform that role is greatly enhanced when we receive thoughtful and constructive feedback from our stockholders. Our stockholders responded very favorably to our executive compensation program with 97.7% voting in support of our 2023 Say on Pay vote. We continue to welcome your input and feedback on our approach to executive compensation and these disclosure materials. We look forward to receiving your continued support on our upcoming say-on-pay vote.

  20. Objectives of the Company’s Compensation Program

    | ● | Compensation should be driven by our long-term financial performance and in doing so work to align the interests of management and stockholders. |

  21. Policies and Practices Related to the Company’s Compensation Program

    Policies and Practices Related to the Company’s Compensation Program We strive to create an overall compensation package for each NEO that satisfies these objectives, recognizing that certain elements of compensation are better suited to reflect different compensation objectives. Our primary goal is to provide strong performance-based total compensation plans that enable us to provide highly competitive compensation when our performance leads the peer group and industry. Compensation Consultant and Compensation Study The Committee selected and directly engaged Pay Governance as its compensation consultant. Pay Governance receives compensation only for services related to executive compensation issues, and neither it nor any affiliate company provides any other services to the Company. Pay Governance reports directly to the Committee and is responsible for reviewing Committee materials, attending Committee meetings, assisting the Committee with program design and generally providing advice and counsel to the Committee as compensation issues arise. Based on the consideration of the various factors as set forth in the rules of the SEC, the Compensation Committee has determined that its relationship with Pay Governance and the work of Pay Governance on behalf of the Committee has not raised any conflict of interest. As part of its review of the compensation of the NEOs at the Company, Pay Governance recommended and the Committee approved the following sixteen companies which comprise the Company’s peer group for 2023. Companies are selected based on industry, size appropriate for both assets, revenue, and market capitalization and business operations as follows: Argo Group International Holdings, Ltd. (new in 2023), Donegal Group, Inc., Employers Holdings, Inc., Hallmark Financial Services, Inc., Hanover Insurance Group, Inc., Heritage Insurance Holdings Inc., HCI Group, Inc. (new in 2023), Horace Mann Educators Corporation, Mercury General Corporation, NI Holdings, Inc. (new in 2023), Palomar Holdings, Inc. (new in 2023), RLI Corporation (new in 2023), Selective Insurance Group, Inc., United Fire Group, Inc., United Insurance Holdings Corporation, and Universal Insurance Holdings, Inc. Additionally, removed from the peer group were Protective Insurance Corporation and State Auto Financial Corporation which were acquired during 2023.

  22. Elements of Executive Compensation

    Elements of Executive Compensation The Committee, after reviewing information provided by Pay Governance, determines what it believes to be the appropriate level for cash and non-cash compensation components for each NEO. After receiving the results of the Pay Governance study and considering our compensation philosophy and the actual practices of the selected peer group, the Committee determined that the elements of targeted overall compensation for all NEOs should include the following: Pay at Risk A significant percentage of each NEO’s target total direct compensation is “pay at risk” through long-term equity awards and annual incentive awards that are linked to actual performance. The Committee believes that the executive pay at Safety should contain a high percentage of pay at risk consistent with our pay for performance philosophy. For example, in 2023, Safety’s CEO had 67% of his target pay (target annual incentive and long-term incentives) at risk, which was above that of peer CEOs according to the Pay Governance executive benchmarking report. The mix of target compensation (base salary, actual annual incentive and long-term incentives) for 2023 for our CEO is shown in the chart below. Base Salaries Base salaries are generally targeted at the median (50th percentile) of peer group companies and reflect the roles, responsibilities and individual performance of the executives. In 2023, in accordance with the executive officers’ employment contracts, salary increases were based on the change in cost of living for the Boston metropolitan market as reported by the U.S. Department of Labor statistics. This resulted in an increase of 4.25% to each NEO, except Mr. Murphy whose salary was unchanged at $800,000, and Mr. Whitford whose salary was increased to reflect market median levels. Annual Cash Incentives The purpose of the Annual Performance Incentive Plan is to provide designated key executive employees with meaningful financial rewards for the accomplishment of our annual financial and strategic objectives. This annual cash incentive compensation award directly reflects the actual performance of the Company. This direct reflection of Company performance is illustrated by the 2023 annual incentive payouts, under which, as discussed below, performance results were below the threshold payout and resulted in no payout to our Named Executive Officers Under the Annual Performance Incentive Plan, once the threshold performance level (as defined by the Committee annually) has been achieved, the payouts may range from 50% to 150% of the target payout. The 2023 payout opportunity for our executive officers ranged as follows:

  23. Elements of Executive Compensation

    | Name | 2023 Non-Equity Incentive Plan Compensation | 2022 Non-Equity Incentive Plan Compensation | | George M. Murphy | - | 473,600 | | Christopher T. Whitford | - | 153,180 | | James D. Berry | - | 174,400 | | Paul J. Narciso | - | 135,950 | | Stephen A. Varga | - | 142,080 |

  24. Elements of Executive Compensation

    Long-Term Incentives (“LTI”) On March 24, 2022, the Company’s Board of Directors adopted the Amended and Restated Safety Insurance Group, Inc. 2018 Long-Term Incentive Plan (“the Amended 2018 Plan”), which was subsequently approved by our stockholders at the 2022 Annual Meeting of Stockholders. The Amended and Restated 2018 Plan enables the grant of stock awards, performance shares, cash-based performance units, other stock-based awards, stock options, stock appreciation rights, and stock unit awards, each of which may be granted separately or in tandem with other awards. Eligibility to participate includes officers, directors, employees and other individuals who provide bona fide services to the Company. We use our incentive plans to grant long-term equity-based incentive awards. A description of the Amended and Restated 2018 Plan can be found in the narrative following the Grants of Plan-Based Awards table. Long-term incentive compensation is intended to reinforce the long-term growth in stockholder value of the Company by linking pay to the value of our shares. The amounts awarded annually are based on the performance of the Company. The actual amount awarded and accumulated reflects our historical performance. On February 22, 2023, the Committee, after reviewing information provided by Pay Governance, determined what it believed to be the appropriate level of each of the various compensation components. The Committee awarded restricted stock awards under the Amended and Restated 2018 Plan with an aggregate total market value of $3,350,000 as of the date of the grant to the executive team. The executives were granted 55% of their overall LTI mix in the form of performance-based restricted shares, while the remaining 45% were in the form of time-based restricted shares. Shares will not be earned or vested until performance criteria and / or time-based service requirements are met. Of the total dollar amount granted to the executive team during 2023, the following grants were made in 2023 to the NEOs:

  25. Elements of Executive Compensation

    The performance share design has the following features: three-year performance measurement period tied to the Company’s relative TSR versus its property-casualty insurance company performance peers (weighting of 40%) and Safety’s three-year average combined ratio (weighting of 60%), which is a standard insurance industry profitability metric. The Committee believes that a three-year average combined ratio is a strong long-term proxy for performance, and when used with relative TSR will ensure both strong pay and performance alignment with shareholders and sufficient line of sight for executives. Actual payouts can range from 0% to 200%, depending on actual performance. The TSR portion of the performance share design employs a stockholder friendly feature that caps payout to 100% of target if absolute TSR is negative (even though the Company might have exceeded target in the relative TSR metric). The earned performance shares will cliff vest after the three-year performance period based on the performance measures attained. Both time vested awards and performance awards granted include a retirement provision. For time vested awards, if termination of service occurs on or after the first anniversary of the date of grant and because of retirement after attaining age 62 with at least 10 years of service with the Company, the periods of restriction shall expire on the date of termination of service with respect to 100% of the shares subject to remaining periods of restriction. For performance vested awards, if during the performance period, the grantee’s termination of service occurs because of the grantee’s retirement after attaining age 62 with at least 10 years of service with the Company, the award shall not be forfeited on the retirement date, but the number of shares earned shall be prorated and equal to the number of shares earned determined based on actual attainment of the performance measures as of the end of the performance period multiplied by a fraction, the numerator of which is the number of months (rounded up to the next integer) from the beginning of the performance period until the date of termination of service, and the denominator of which is 36. The 2021 – 2023 performance awards granted on February 24, 2021 had an actual payout of 50.0%, below the targeted granted amount compared to 121.5% payout in the prior year. The actual payout of 50.0% is based on Safety’s combined ratio for the three year period ending December 31, 2023 of 99.3% (a 84% payout), and TSR performance of 13%, equal to relative performance at the 20th percentile. As this is below our threshold of the 30th percentile, no payout was received for the TSR portion of the award. The actual number of shares awarded compared to the target number of shares granted is shown in the table below.

  26. Elements of Executive Compensation

    | Performance Level | 2021 - 2023 SAFT Combined Ratio | Payout as % of Target | | Relative 2021 - 2023 3-Year TSR | Payout as % of Target | | | | | Below Threshold | >103.1% | 0% | | > 90th Percentile | 200% | | | | | Threshold | 103.1% | 50%x | 60% | 90th Percentile | 200%x | 40% | = | Ultimate | | Intermediate < Target | 100.3% | 75% | Weighting | 70th Percentile | 150% | Weighting | | Payout | | Target | 97.4% | 100% | | 50th Percentile | 100% | | | | | Intermediate > Target | 96.2% | 150% | | 40th Percentile | 75% | | | | | Maximum | 95.1% | 200% | | 30th Percentile | 50% | | | | | Above Maximum | <95.1% | 200% | | < 30th Percentile | 0% | | | |

  27. Elements of Executive Compensation

    The twenty-two competitors used in the establishment of these goals for the 2021 performance shares were The Allstate Corporation, The Chubb Corporation, Cincinnati Financial Corporation, CNA Financial Corporation, Donegal Group Inc., Erie Indemnity Company, Hallmark Financial Services Inc., Hanover Insurance Group Inc., Hartford Financial Services Group, Inc., Horace Mann Educators Corporation, Loews Corporation, Mercury General Corporation, Old Republic International Corp., Progressive Insurance Corporation, Protective Insurance Corporation, Selective Insurance Group Inc., State Auto Financial Corp., The Travelers Companies, Inc., United Insurance Holdings, Inc., United Fire Group, Inc., W.R .Berkley Corporation and White Mountains Insurance Group, Inc. In addition to these competitors five private companies are also used in the establishment of the Combined Ratio target only. These companies were The Andover Companies, Arbella Insurance, Mapfre Insurance, Plymouth Rock Assurance and Quincy Mutual Insurance. At December 31, 2023, the performance awards granted on February 22, 2023, and February 23, 2022 would be projected to payout at 0% and 53%, respectively. These amounts are calculated based on the Company’s actual combined ratio to date, as well as relative TSR performance (compared to its performance peer group) to date. Final actual results may differ and will continue to be calculated until the end of each award’s applicable performance period. Equity Grant Practices The grant date of our equity awards is scheduled in advance and is based on the timing of the completion of our annual performance and compensation review process. We have not granted stock options to our Named Executive Officers since 2003 and none of our Named Executive Officers hold any Company stock options. Clawback Policy In August 2023, the board of directors adopted a “clawback” policy. This policy was adopted to comply with Section 10D of the Exchange Act and the Nasdaq listing standards adopted in 2023 as mandated by the Dodd-Frank Act. Under the policy, which applies to the Company’s current and former Section 16 officers, the Company must promptly recover erroneously awarded incentive-based compensation, subject to limited exceptions. Recovery is triggered by accounting restatements that correct errors that are material to previously issued financial statements (“Big R” restatements), as well as restatements that correct errors that are not material to previously issued financial statements but would result in a material misstatement if (1) the errors were left uncorrected in the current report or (2) the error correction was recognized in the current period (“little r” restatements). The policy does not provide for enforcement discretion by the compensation committee or the board of directors and requires recovery regardless of whether a covered person engaged in any misconduct or is at fault. Stock Ownership Guidelines and Hedging / Pledging Policy We have stock ownership guidelines for our Named Executive Officers to help ensure alignment of our Named Executive Officers’ interests with those of our stockholders. Stock ownership guidelines are set as a multiple of annual base salary divided by the current share price on the date of the annual evaluation. The multiple of annual base salary for the CEO is set at five, and for the remaining executive officers is set at three. All of our Named Executive Officers currently meet these guidelines. Our Directors are also subject to stock ownership guidelines, which require them to have a value four times their annual cash retainer. A director must meet this requirement within five years of becoming a director. All Directors, outside of the recently appointed Mr. Farina, Ms. Gray, and Mr. Langwell, currently meet the guideline. As part of our insider trading policy, our executives and Directors are already subject to an anti-hedging policy that prohibits them from purchasing financial instruments that are designed to hedge or offset any fluctuations in the market value of the Company’s equity securities they hold. The insider trading policy also prohibits the pledging of the Company’s equity securities. Performance-Based Nonqualified Deferred Compensation We maintain a nonqualified deferred compensation plan, the Executive Incentive Compensation Plan (the “EICP”) to further our objective of providing our executive officers with compensation that is competitive with that provided by comparable companies. The EICP is a performance-based program that allocates 1.75% of our insurance subsidiaries annual consolidated statutory net income to a pool that is then distributed as deferred compensation to the eligible executives. The amount allocated is based on the total annual cash compensation (salary plus annual incentive received, or deferred, in the year) of the eligible executives. Our insurance subsidiaries experienced a combined pre-tax net loss of $7.1 million in 2023, therefore no performance-based deferred compensation was allocated under the EICP for 2023. Historically, the allocations are retained by the Company, invested in mutual funds, and only paid to the executives upon employment termination as defined in the EICP. The EICP also provides a deferred compensation benefit with a supplemental matching provision similar to our 401(k) plan. Our intention is to provide additional retirement benefits to eligible executives in the absence of a traditional defined benefit pension arrangement. The provision enables the executive officer to elect to defer amounts from current compensation above the federally limited amount that can be deferred under our tax-qualified 401(k) plan and receive an employer matching contribution on such supplemental deferrals. In accordance with the EICP, we make a matching contribution annually at the close of each plan year in an amount equal to 75% of the participant’s elective deferrals under the plan up to a maximum amount of 8% of the participant’s compensation. The participant’s compensation for this purpose means the participant’s base salary and annual incentive received (or deferred) in the plan year. Amounts deferred under the EICP do not include amounts deferred under the 401(k) plan, thus our matching contributions under the EICP do not include amounts we have matched under the 401(k) plan. We made the following employer matching contributions for 2023 to the EICP on behalf of the Named Executive Officers: Mr. Murphy - $29,051; Mr. Whitford - $10,560; Mr. Berry - $11,110; Mr. Narciso - $10,196: and Mr. Varga - $9,281. A description of our Named Executive Officers’ benefits under the EICP and other material terms of the EICP can be found in the narrative following the Nonqualified Deferred Compensation Plan table. Other Employee Benefits In addition to the main elements of compensation previously discussed in this section, our Named Executive Officers are eligible for the same welfare and other benefits as are available to all of our employees. These benefits include medical and dental insurance, short-term and long-term disability insurance, life and accidental death insurance, and a 401(k) plan. The 401(k) plan allows employees to contribute on a pre-tax basis up to the maximum allowed under federal law. At the close of each plan year, the Company makes a matching contribution equal to 100% of the amount each participant contributed during the plan year from their total pay, up to a maximum amount of 8% of the participant’s base salary, provided the participant is employed on the last day of the plan year. We have no defined benefit pension plan for employees at this time. We provide our Named Executive Officers with limited perquisites that the Committee believes are reasonable and competitive. In 2023 these perquisites included use of an automobile parking space at the Company.

  28. Compensation Policies and Practices as They Relate to the Company’s Risk Management

    Compensation Policies and Practices as They Relate to the Company’s Risk Management The Compensation Committee considers, among other things, in establishing and reviewing our executive compensation program, whether the program pays the executives for performance and whether the program encourages unnecessary or excessive risk taking. The Compensation Committee reviews annually the principal components of executive compensation and believes that our allocation of compensation among base salary and annual and long-term incentives encourages our executives to deliver strong results for our stockholders without taking excessive risk. We set base salaries at levels that provide our executives with assured cash compensation that, when combined with annual and long-term incentive awards, motivates them to perform at a high level without encouraging inappropriate risk taking to achieve a reasonable level of compensation. With respect to incentive opportunities under our annual incentive plan, we believe that our use of measurable corporate financial performance goals and multiple performance levels associated with minimum, target and maximum achievable payouts, together with the Compensation Committee’s discretion to reduce awards, serve to mitigate against excessive risk-taking. We also believe that our strategic balancing of annual incentives and long-term incentives in the form of restricted stock and performance shares, with multi-year vesting schedules, encourages our executives to deliver incremental value to our stockholders while discouraging short-term risk taking that could negatively affect the value of their long-term awards. The Company’s robust stock ownership guidelines combined with high level executive stock ownership additionally help mitigate short-term risk-taking. The Compensation Committee believes that these incentive plans appropriately balance risk, payment for performance and the desire to focus executives on specific financial and leadership measures and that they do not encourage unnecessary or excessive risk taking. We believe that the Company’s compensation policies and practices for all employees, including non-executive officers, are reasonable and do not create any material risk or adverse effect on the Company.

  29. Summary Compensation Table

    Summary Compensation Table The following table shows the cash and non-cash compensation for the 2023, 2022 and 2021 fiscal years awarded to or earned by the five individuals who served as our CEO, CFO, and the three other most highly compensated executive officers (the “Named Executive Officers” or “NEOs”). In accordance with the rules promulgated by the SEC, certain columns relating to information that is not applicable have been omitted from this table.

  30. Summary Compensation Table

    | | | | | Performance | Non-Equity | | | | | | | Time Vested | Based | Incentive Plan | All Other | | | | | | Stock Awards | Stock Awards | Compensation | Compensation | | | Name | Year | Salary | (1) | (2) | (3) | (4) | Total | | George M. Murphy | 2023 | 800,000 | 450,000 | 550,000 | - | 162,783 | 1,962,783 | | | 2022 | 800,000 | 405,000 | 495,000 | 473,600 | 579,590 | 2,753,190 | | | 2021 | 793,500 | 360,000 | 440,000 | 812,540 | 830,516 | 3,236,556 | | Christopher T. Whitford | 2023 | 400,000 | 168,750 | 206,250 | - | 72,991 | 847,991 | | | 2022 | 345,000 | 180,000 | 220,000 | 153,180 | 201,574 | 1,099,754 | | | 2021 | 295,000 | 168,750 | 206,250 | 226,560 | 252,741 | 1,149,301 | | James D. Berry | 2023 | 409,500 | 157,500 | 192,500 | - | 93,080 | 852,580 | | | 2022 | 392,800 | 157,500 | 192,500 | 174,400 | 272,806 | 1,190,006 | | | 2021 | 381,000 | 157,500 | 192,500 | 292,610 | 375,530 | 1,399,140 | | Paul J. Narciso | 2023 | 319,200 | 180,000 | 220,000 | - | 81,981 | 801,181 | | | 2022 | 306,200 | 168,750 | 206,250 | 135,950 | 228,864 | 1,046,014 | | | 2021 | 297,000 | 180,000 | 220,000 | 228,100 | 300,793 | 1,225,893 | | Stephen A. Varga | 2023 | 333,600 | 180,000 | 220,000 | - | 89,480 | 823,080 | | | 2022 | 320,000 | 168,750 | 206,250 | 142,080 | 228,538 | 1,065,618 | | | 2021 | 288,400 | 180,000 | 220,000 | 221,490 | 296,441 | 1,206,331 |

  31. Summary Compensation Table

    | (1) This column shows the grant date fair value of stock awards computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). The fair value per share of the stock awards is equal to the closing price of the Company’s common stock on the grant date. Information concerning the stock awards is shown in the table below. |

  32. Summary Compensation Table

    | Grant Date | Grant Price | | February 22, 2023 | $87.06 | | February 23, 2022 | $84.98 | | February 24, 2021 | $79.27 |

  33. Summary Compensation Table

    | (2) This column shows the grant date fair value of stock awards computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). The fair value per share of the stock awards under the combined ratio performance award calculation is equal to the closing price of the Company’s common stock on the grant date referenced in footnote (1). The fair value per share of the stock awards under the TSR performance award calculation is equal to a fair value determined using a Monte-Carlo scenario based fair value calculation. Actual award payout is calculated at the end of the performance period in 2025 for awards granted in 2023. |

  34. Summary Compensation Table

    | (3) The amounts under this column consist of annual cash incentive awards earned in 2023, 2022 and 2021 under the Annual Performance Incentive Plan. |

  35. Summary Compensation Table

    | (4) The amounts under this column include the following items for 2023: |

  36. Summary Compensation Table

    | | EICP | | | | | | | | Deferred | EICP | 401(k) Plan | Dividends on | Other | | | | Compensation | Company | Company | Restricted | Compensation | | | Name | Bonus | Match | Match | Shares | (A) | Total | | George M. Murphy | - | 29,051 | 26,400 | 95,152 | 12,180 | 162,783 | | Christopher T. Whitford | - | 10,560 | 22,500 | 36,958 | 2,973 | 72,991 | | James D. Berry | - | 11,110 | 26,400 | 46,404 | 9,166 | 93,080 | | Paul J. Narciso | - | 10,196 | 25,536 | 39,629 | 6,620 | 81,981 | | Stephen A. Varga | - | 9,281 | 26,400 | 47,167 | 6,632 | 89,480 |

  37. Summary Compensation Table

    | (A) Other Compensation includes Company paid term life insurance premium for coverage exceeding $50,000 (Mr. Murphy - $4,773, Mr. Whitford - $1,113, Mr. Berry - $7,306, Mr. Narciso - $4,760, and Mr. Varga - $4,772, use of Company automobile (Mr. Murphy-$5,547), and Company paid parking ($1,860 each to Mr. Murphy, Mr. Whitford, Mr. Berry, Mr. Narciso. and Mr. Varga). |

  38. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table summarizes the 2023 grants of non-equity and equity plan-based awards to the NEOs. The non-equity plan-based awards were granted under the Annual Performance Incentive Plan and the equity plan-based awards were granted under the Amended and Restated 2018 Plan.

  39. Grants of Plan-Based Awards

    | | | | | | All Other | Grant Date | | | | Estimated Future Payouts | | | Stock Awards | Fair Value | | | | Under Non-Equity Incentive | | | - Number of | of Stock | | | | Plan Awards (1) | | | Shares of | and Option | | | | Threshold | Target | Maximum | Stock or Units | Awards | | Name | Grant Date | ($) | ($) | ($) | (#) (2) | ($) (3) | | George M. Murphy | 2/22/2023 | - | - | - | 11,220 | 1,000,000 | | | - | 320,000 | 640,000 | 960,000 | - | - | | Christopher T. Whitford | 2/22/2023 | - | - | - | 4,207 | 375,000 | | | - | 120,000 | 240,000 | 360,000 | - | - | | James D. Berry | 2/22/2023 | - | - | - | 3,927 | 350,000 | | | - | 122,850 | 245,700 | 368,550 | - | - | | Paul J. Narciso | 2/22/2023 | - | - | - | 4,488 | 400,000 | | | - | 95,760 | 191,520 | 287,280 | - | - | | Stephen A. Varga | 2/22/2023 | - | - | - | 4,488 | 400,000 | | | | 100,080 | 200,160 | 300,240 | - | - |

  40. Grants of Plan-Based Awards

    | (1) These columns represent the range of cash bonus incentive payouts that were targeted for fiscal 2023 performance under the Annual Performance Incentive Plan as described above in Compensation Discussion and Analysis. Although the table refers to these payouts in future terms, they have already been earned and paid to the NEOs. The actual cash bonus incentive amounts paid are reported in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table |

  41. Grants of Plan-Based Awards

    | (2) This column represents restricted stock awarded in fiscal 2023 under the Amended 2018 Plan. The stock awarded is a combination of performance-based restricted shares representing 55% of the total and time-based restricted shares, representing 45% of the total. The awards were both granted February 22, 2023. The performance-based awards vest depending upon the attainment of pre-established performance objectives at the conclusion of the performance period in 2026. See Restricted Stock Awards below for a description of the performance objectives. The time-based restricted stock vests over three years with installments of 30% on February 22, 2024, 30% on February 22, 2025, and the remaining 40% on February 22, 2026, provided the grantee is still an employee of the Company on such dates. |

  42. Grants of Plan-Based Awards

    | (3) This column shows the grant date fair value of stock awards computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). The fair value per share of the time-based stock awards is equal to the closing price of the Company’s common stock on the grant date. The fair value per share of the stock awards under the combined ratio performance award calculation is equal to the closing price of the Company’s common stock on the grant date. The fair value per share of the stock awards under the TSR performance award calculation is equal to a fair value determined using a Monte-Carlo scenario based fair value calculation. Actual award payout is calculated at the end of the performance period in 2025. |

  43. Grants of Plan-Based Awards

    Restricted Stock Awards In February 2023, the Committee granted time-based restricted stock awards for our Named Executive Officers under our Incentive Plans. Provided there is no termination in service, the shares vest on February 22, 2024, 2025 and 2026 with respect to 30%, 30%, and 40% of the shares, respectively. The shares have voting and dividend rights and are held in custody by the Company during the period of restriction. In addition to time-based awards, the Committee approved performance-based restricted stock awards for our Named Executive Officers. These performance shares will cliff vest after a three-year performance period provided certain performance measures are attained. A portion of these awards, which contain a market condition, vest according to the level of total stockholder return achieved by the Company compared to its property-casualty insurance peers over a three-year period. The remainder, which contain a performance condition, vest according to the level of Company’s combined ratio results compared to its property-casualty insurance peers over the same three-year performance period. Actual payouts can range from 0% to 200% of target shares awarded depending upon the level of achievement of the respective market and performance conditions during a three fiscal-year performance period ending at the end of 2026. Compensation expense for performance-based share awards is based on the probable number of awards expected to vest using the performance level most likely to be achieved at the end of the performance period. Performance-based awards with market conditions are accounted for and measured differently from an award that has a performance or service condition. The effect of a market condition is reflected in the award’s fair value on the grant date. That fair value is recognized as compensation cost over the requisite service period regardless of whether the market-based performance objective has been satisfied. Equity Compensation Plan Information The following table sets forth information regarding all of our equity compensation plans as of December 31, 2023.

  44. Grants of Plan-Based Awards

    | | Number of | | Number of securities | | | securities to be | | remaining available | | | issued upon | Weighted-average | for future issuance | | | exercise of | exercise price of | under equity | | | outstanding | outstanding | compensation plans | | | options, warrants | options, warrants | (excluding securities | | | and rights | and rights | reflected in column (a)) | | Plan Category | (a) | (b) | (c) | | Equity compensation plans | | | | | approved by stockholders (1) | - | $- | 373,422 | | Equity compensation plans | | | | | not approved by stockholders | - | - | - | | Total | - | $- | 373,422 |

  45. Grants of Plan-Based Awards

    | (1) The equity compensation plan approved by stockholders is the Amended and Restated 2018 Long-Term Incentive Plan, which we refer to in this Proxy Statement as the Amended and Restated 2018 Plan. |

  46. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table shows the unvested restricted stock held at fiscal year-end December 31, 2023 by the NEOs.

  47. Outstanding Equity Awards at Fiscal Year-End

    | | | Market | | | Number of | Value of | | | Shares or | Shares or | | | Units of | Units of | | | Stock That | Stock That | | | Have Not | Have Not | | Name | Vested (#) | Vested (7) | | George M. Murphy | | | | Restricted Stock (1) | 1,816 | 138,028 | | Restricted Stock (2) | 5,610 | 426,304 | | Restricted Stock (3) | 3,336 | 253,518 | | Restricted Stock (4) | 5,456 | 414,601 | | Restricted Stock (5) | 5,169 | 392,792 | | Restricted Stock (6) | 6,051 | 459,815 | | Christopher T. Whitford | | | | Restricted Stock (1) | 852 | 64,713 | | Restricted Stock (2) | 2,630 | 199,854 | | Restricted Stock (3) | 1,483 | 112,663 | | Restricted Stock (4) | 2,424 | 184,200 | | Restricted Stock (5) | 1,938 | 147,269 | | Restricted Stock (6) | 2,269 | 172,421 | | James D. Berry | | | | Restricted Stock (1) | 795 | 60,397 | | Restricted Stock (2) | 2,455 | 186,555 | | Restricted Stock (3) | 1,297 | 98,567 | | Restricted Stock (4) | 2,121 | 161,175 | | Restricted Stock (5) | 1,809 | 137,466 | | Restricted Stock (6) | 2,118 | 160,947 | | Paul J. Narciso | | | | Restricted Stock (1) | 908 | 69,029 | | Restricted Stock (2) | 2,805 | 213,152 | | Restricted Stock (3) | 1,390 | 105,641 | | Restricted Stock (4) | 2,273 | 172,725 | | Restricted Stock (5) | 2,068 | 157,147 | | Restricted Stock (6) | 2,420 | 183,896 | | Stephen A. Varga | | | | Restricted Stock (1) | 908 | 69,029 | | Restricted Stock (2) | 2,805 | 213,152 | | Restricted Stock (3) | 1,390 | 105,641 | | Restricted Stock (4) | 2,273 | 172,725 | | Restricted Stock (5) | 2,068 | 157,147 | | Restricted Stock (6) | 2,420 | 183,896 |

  48. Outstanding Equity Awards at Fiscal Year-End

    | (1) Represents time-based restricted stock awards effective February 24, 2021, which vest over three years with installments of 30% on February 24, 2022, 30% on February 24, 2023, and the remaining 40% on February 24, 2024, provided the grantee is still our employee on such dates. |

  49. Outstanding Equity Awards at Fiscal Year-End

    | (2) Represents performance-based restricted stock awards effective February 24, 2021 Vesting of these shares is dependent upon the attainment of pre-established performance objectives, and any difference between shares granted and shares earned will be calculated at the end of the performance period. |

  50. Outstanding Equity Awards at Fiscal Year-End

    | (3) Represents time-based restricted stock awards effective February 23, 2022, which vest over three years with installments of 30% on February 23, 2023, 30% on February 23, 2024 and the remaining 40% on February 23, 2025, provided the grantee is still our employee on such dates. |

  51. Outstanding Equity Awards at Fiscal Year-End

    | (4) Represents performance-based restricted stock awards effective February 23, 2022 Vesting of these shares is dependent upon the attainment of pre-established performance objectives, and any difference between shares granted and shares earned will be calculated at the end of the performance period. |

  52. Outstanding Equity Awards at Fiscal Year-End

    | (5) Represents time-based restricted stock awards effective February 22, 2023, which vest over three years with installments of 30% on February 22, 2024, 30% on February 22, 2025 and the remaining 40% on February 22, 2026, provided the grantee is still our employee on such dates. |

  53. Outstanding Equity Awards at Fiscal Year-End

    | (6) Represents performance-based restricted stock awards effective February 22, 2023 Vesting of these shares is dependent upon the attainment of pre-established performance objectives, and any difference between shares granted and shares earned will be calculated at the end of the performance period. |

  54. Outstanding Equity Awards at Fiscal Year-End

    | (7) The amounts in this column were calculated using a per share value of $75.99 the closing market price of a share of our common stock on December 31, 2023. |

  55. Outstanding Equity Awards at Fiscal Year-End

    There were no unexercised stock options or other equity incentive plan awards held at December 31, 2023 by the NEOs

  56. Restricted Stock Vested

    Restricted Stock Vested The following table summarizes information with respect to restricted stock awards vested during the fiscal year ended December 31, 2023 for each of the NEOs.

  57. Restricted Stock Vested

    | | Stock Awards | | | | Number of | | | | Shares Acquired | Value Realized | | Name | on Vesting (#) | on Vesting (1) | | George M. Murphy | 10,218 | 862,959 | | Christopher T. Whitford | 4,058 | 341,907 | | James D. Berry | 4,866 | 411,894 | | Paul J. Narciso | 4,294 | 362,188 | | Stephen A. Varga | 4,992 | 422,099 |

  58. Restricted Stock Vested

    | (2) Value determined by multiplying the number of vested shares by the closing market price of a share of our common stock on the vesting date or on the previous business day in the event the vesting date is not a business day. |

  59. Restricted Stock Vested

    There were no stock option awards held or exercised by the NEO’s during the year ended December 31, 2023.

  60. Pension Benefits Table

    Pension Benefits Table The table disclosing pension benefits is omitted because we do not have any such pension benefit plans.

  61. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The following table summarizes information with respect to the participation of each of the NEOs in the EICP, a non-qualified deferred compensation plan, as of December 31, 2023.

  62. Nonqualified Deferred Compensation

    | | Executive | Registrant | Aggregate | | Aggregate | | | Contributions | Contributions | Earnings | Aggregate | Balance at | | | in Last | in Last | in Last | Withdrawals/ | Last Fiscal | | Name | Fiscal Year | Fiscal Year (1) | Fiscal Year | Distributions | Year End | | George M. Murphy | 38,735 | 452,351 | 1,063,516 | - | 7,048,150 | | Christopher T. Whitford | 14,080 | 158,799 | 101,192 | - | 592,933 | | James D. Berry | 14,813 | 194,402 | 591,494 | - | 4,007,965 | | Paul J. Narciso | 13,595 | 155,792 | 226,438 | - | 1,748,037 | | Stephen A. Varga | 12,374 | 154,634 | 215,460 | - | 1,563,572 |

  63. Nonqualified Deferred Compensation

    | (3) Represents employer matching contributions credited to the NEOs’ EICP accounts in January 2023 for the plan year ended December 31, 2022 on behalf of each NEO who contributed during the plan year (Mr. Murphy - $33,843, Mr. Whitford - $10,423, Mr. Berry - $16,542, Mr. Narciso - $17,108, and Mr. Varga - $14,039); and annual deferred compensation bonuses credited to the NEOs’ EICP accounts in February 2023 and earned for the year ended 2022 under the EICP (Mr. Murphy - $418,508, Mr. Whitford - $148,376, Mr. Berry - $177,860, Mr. Narciso - $138,684, Mr. Varga - $140,595). |

  64. Nonqualified Deferred Compensation

    The EICP is a non-qualified deferred compensation plan designed to provide a means for retirement savings. With proper notice and approval by the Company, eligible employees may make elective deferral contributions of up to 75% of salary and 100% of annual cash incentives. We make a matching contribution annually in the amount of 75% of the participant’s elective deferral up to a maximum amount of 8% of the participant’s base salary plus annual cash incentive received during the plan year. We also make a fixed contribution annually in the amount of 1.75% of the combined statutory net income of our insurance subsidiaries. Elective deferrals, Company matching contributions, and the portion of the Company fixed contribution allocated to an eligible individual are credited to an account established for the individual. To measure gains and losses, the accounts are treated as though invested in mutual funds selected by the participants. Participants may change the mutual funds in which their accounts are notionally invested on a daily basis. The balance of an individual’s account is distributed in a lump sum upon an employee’s termination of employment, or six months thereafter if required to comply with applicable tax law, or upon change in control. Under the EICP, change in control is defined to mean a change in control event, as that term is used in Section 409A of the Internal Revenue Code. Section 409A defines a change in control event to include a change in ownership, a change in effective control, or a change in the ownership of a substantial portion of assets. A change in ownership of the corporation occurs when one person or a group acquires stock that combined with stock previously owned, controls more than 50% of the value or voting power of the stock of the corporation. A change in effective control occurs on the date that, during any 12-month period, either (i) any person or group acquires stock possessing 30% of the voting power of the corporation, or (ii) the majority of the board is replaced by persons whose appointment or election is not endorsed by a majority of the board. A change in ownership of a substantial portion of assets occurs on the date that a person or a group acquires, during any 12-month period, assets of the corporation having a total gross fair market value equal to 40% or more of the total gross fair market value of all of the corporation’s assets. The definition also contains exceptions that may cause a transaction or event meeting one of the foregoing definitions not to constitute a change in control event if the acquired or selling entity, or its stockholders, retains, directly or indirectly, a sufficient interest in the surviving or acquiring entity.

  65. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control As previously discussed, we have entered into employment agreements with each of the Named Executive Officers. Certain provisions relating to termination of employment and change in control are common to each of the employment agreements. These common provisions include, among other things, the following:

  66. Potential Payments Upon Termination or Change in Control

    | ● | if the executive’s employment is terminated by us for a reason other than Cause, Material Breach, death, disability or continuous poor performance, or is terminated by the executive for Good Reason or as a result of our willful and material violation of the executive’s employment agreement or certain other agreements between the executive and us, then we must provide (i) any earned but unpaid base salary and bonus, (ii) a lump sum payment equal to the annual salary he would have received during the remaining term of his employment agreement; and (iii) life and health insurance benefits (but not disability insurance benefits) substantially similar to those the executive and any covered dependents were receiving immediately prior to the date of termination through the remaining portion of the term of his employment agreement (collectively, the “Severance Payment”); |

  67. Potential Payments Upon Termination or Change in Control

    | ● | if the executive’s employment is terminated by us for a reason other than Cause, Material Breach, death, disability or continuous poor performance, or is terminated by the executive for Good Reason or as a result of our willful and material violation of the executive’s employment agreement or certain other agreements between the executive and us, in each case, within three years after a change in control, then we must provide the greater of the Severance Payment or the following: (i) any earned but unpaid base salary and bonus, (ii) a lump sum payment equal to, for the CEO and CFO, three times, and for the remaining Named Executive Officers, two times, the sum of (1) the executive’s base salary in effect immediately prior to the date of termination and (2) the most recent annual bonus paid to the executive, and (iii) life and health insurance benefits for a three-year period after the date of termination (for the CEO and CFO) and for the two-year period after the date of termination (for the remaining Named Executive Officers); |

  68. Potential Payments Upon Termination or Change in Control

    | ● | The agreements contain non-competition and non-solicitation provisions; and |

  69. Potential Payments Upon Termination or Change in Control

    | ● | Each executive has agreed not to disclose confidential information. |

  70. Potential Payments Upon Termination or Change in Control

    For purposes of these employment agreements,

  71. Potential Payments Upon Termination or Change in Control

    | ● | Change in control is defined, in general terms, to mean the closing of (i) a merger, combination, consolidation or similar business transaction involving the Company after which our stockholders cease to own a majority of the surviving entity, directly or indirectly, (ii) a sale or transfer of all or substantially all of our assets, other than to an entity the majority of which is owned by our stockholders or (iii) a sale of a majority of the Company’s common shares, other than to an entity the majority of which is owned by our stockholders; |

  72. Potential Payments Upon Termination or Change in Control

    | ● | Cause means the executive’s (i) commission or conviction of any crime or criminal offense involving monies or other property or any felony; (ii) commission or conviction of fraud or embezzlement; (iii) uncured material and knowing violation of any obligations imposed upon him personally; or (iv) egregious misconduct involving serious moral turpitude; |

  73. Potential Payments Upon Termination or Change in Control

    | ● | Good Reason means (i) a material reduction in the executive’s authority, perquisites, position, or responsibilities; (ii) relocation of our primary place of business or the executive to another office more |

  74. Potential Payments Upon Termination or Change in Control

    | than 75 miles from Boston, Massachusetts; or (iii) our willful and material violation of the employment agreement or any agreement between the executive and us; in each case that is uncured; |

  75. Potential Payments Upon Termination or Change in Control

    | ● | Material Breach means the executive’s uncured (i) breach of any of his fiduciary duties to us or our stockholders or making of a willful misrepresentation or omission, in each case which would reasonably be expected to materially adversely affect our business, properties, assets, condition (financial or other) or prospects; (ii) willful, continual and material neglect or failure to discharge his duties, responsibilities or obligations; (iii) habitual drunkenness or substance abuse which materially interferes with the executive’s ability to discharge his duties, responsibilities or obligations; or (iv) willful and material violation of any non-competition, non-disparagement, or confidentiality agreement. |

  76. Potential Payments Upon Termination or Change in Control

    Employment Agreements George M. Murphy. We renew our employment agreement on an annual basis with Mr. Murphy effective on January 1st of the respective year. Under this agreement, Mr. Murphy agreed to serve as CEO and President of the Company for a term ending December 31, 2023. The employment agreement requires formal action to renew for an additional one-year term by the Compensation Committee at least 90 days in advance of the scheduled expiration date, unless Mr. Murphy notifies the Company of his decision to decline any additional term before at least 120 days prior to this scheduled expiration date. The Compensation Committee approved the renewal of Mr. Murphy’s contract for an additional one-year term ending December 31, 2024. Under the terms of the employment agreement, Mr. Murphy is entitled to receive an annual base salary increase on an annual basis to reflect increases in the cost of living index specified therein or as otherwise determined by the Board or the Committee. As determined in the sole discretion of the Board, Mr. Murphy is also eligible to receive an annual bonus based on performance. Mr. Murphy is also entitled to other benefits, including severance, reimbursement of expenses, paid vacations, health, life and other similar insurance benefits and use of a Company car, all as determined by the Board. Other Named Executive Officers. We renew our employment agreements with our other Named Executive Officers on an annual basis effective January 1st of the respective year. The employment agreements require formal action to renew for an additional one-year terms by the Compensation Committee at least 90 days in advance of the scheduled expiration date, unless the executive notifies the Company of his decision to decline any additional term before at least 120 days prior to this scheduled expiration date. The Compensation Committee approved the renewal of these contracts for an additional one-year term ending December 31, 2024. Under their respective employment agreements, Messrs. Whitford, Berry, Narciso, and Varga are entitled to receive annual increases to reflect increases in the cost-of-living index specified therein or as otherwise determined by the Board or the Committee. As determined in the sole discretion of the Board or the Committee, Messrs. Whitford, Berry, Narciso and Varga are each eligible to receive an annual bonus based on performance. In addition, Messrs. Whitford, Berry, Narciso and Varga are also entitled to other benefits, including severance, reimbursement of expenses, paid vacations, health, life and other similar insurance benefits. 2018 Amended and Restated Long-Term Incentive Plan (the “Amended and Restated 2018 Plan”) Under the Amended and Restated 2018 Plan, upon a termination by the Company for a reason other than for Cause or disability, all unvested shares of restricted stock which were not granted during the year of termination will vest. Under the Amended and Restated 2018 Plan, "Cause" means (i) the participant’s plea of guilty or nolo contendere to, or conviction of, a felony (or its equivalent in a non-United States jurisdiction) or other conduct of a criminal nature that has or is likely to have a material adverse effect on the reputation or standing in the community of the Company, as determined by the Board in its sole discretion, or that legally prohibits the participant from working for the Company; or (ii) a breach by the participant of a regulatory rule that adversely affects the participant’s ability to perform the participant’s employment duties to the Company, in any material respect; (iii) the participant’s failure, in any material respect, to (A) perform the Participant’s employment duties, (B) comply with the applicable policies of the Company, or (C) comply with covenants contained in any contract or Award Agreement to which the participant is a party. Awards granted under the Amended and Restated 2018 Plan vest upon an award recipient’s termination of employment upon or following a change in control (i.e., “double trigger” vesting). The following table sets forth the estimated incremental payments and benefits, beyond existing compensation and benefit entitlements described in this Proxy Statement that are not contingent upon a termination or change in control, payable to each NEO upon termination of his employment or a change in control of the Company, assuming that the triggering event occurred on December 31, 2023. We have not included amounts that would be provided upon a termination of employment under contracts, agreements, plans or arrangements, such as our 401(k) plan or our vacation policy, to the extent they are available generally to all of our salaried employees and do not discriminate in scope, terms, or operation in favor of our executive officers. Amounts shown below do not include amounts in the NEOs’ EICP deferred compensation accounts as of December 31, 2023.

  77. Potential Payments Upon Termination or Change in Control

    | | Change in Control | | Involuntary Termination | | | | | | | Termination | | | | | | | | Without Cause | | | Resignation | | | | Without | or For Good | With | Without | For Good | Death or | | Name | Termination (1) | Reason (2) | Cause (3) | Cause (4) | Reason (5) | Disability (6) | | George M. Murphy | - | $6,641,258 | $207,950 | $2,064,251 | $831,800 | $2,916,858 | | Christopher T. Whitford | - | 2,876,633 | 107,998 | 993,421 | 431,991 | 1,313,111 | | James D. Berry | - | 2,282,811 | 110,401 | 948,296 | 441,602 | 1,246,709 | | Paul J. Narciso | - | 2,066,688 | 87,710 | 911,386 | 350,839 | 1,252,429 | | Stephen A. Varga | - | 2,116,534 | 91,328 | 925,859 | 365,312 | 1,266,902 |

  78. Potential Payments Upon Termination or Change in Control

    | (1) If there is a change in control but there is no termination of employment, the NEO would not be entitled to receive any incremental benefit under his respective employment agreement with the Company. |

  79. Potential Payments Upon Termination or Change in Control

    | (2) If there is a change in control followed by termination by the Company for a reason other than Cause, Material Breach, poor performance, death or disability or by the executive for Good Reason, the NEO would be entitled to incremental payments and benefits under his respective employment agreement with the Company. Amounts in the “Termination Without Cause or For Good Reason” column include the following: |

  80. Potential Payments Upon Termination or Change in Control

    Equity Awards. Under the Amended and Restated 2018 Plan, upon a change in control and subsequent termination, any restrictions imposed upon restricted stock awards will lapse. The estimated value as of December 31, 2023 of the previously granted restricted stock awards that would have been accelerated for each NEO is as follows: Mr. Murphy - $2,085,058; Mr. Whitford - $881,120; Mr. Berry - $805,107; Mr. Narciso - $901,590; and Mr. Varga - $901,590. The estimated value of restricted stock awards was calculated based upon the closing price of our common stock on December 31, 2023. Annual Incentive. Under the Annual Performance Incentive Plan, upon a change in control and subsequent termination, all performance objectives for the current Performance Period would be deemed to have been achieved at target levels of performance. The amount payable to each NEO based upon such assumed performance as of December 31, 2023 would have been as follows: Mr. Murphy - $640,000; Mr. Whitford - $240,000; Mr. Berry - $245,700; Mr. Narciso - $191,520; and Mr. Varga - $200,160. Lump Sum Payments. The amount payable at three times annual base plus bonus for Mr. Murphy and Mr. Whitford and at two times annual base plus bonus for the remaining NEOs would have been as follows: Mr. Murphy - $3,820,800; Mr. Whitford - $1,659,540; Mr. Berry - $1,167,800; Mr. Narciso - $910,300 and Mr. Varga - $951,360. Life and Health Insurance Benefits. The NEOs are entitled to Company provided life and health benefits for three years after the termination date for Mr. Murphy and Mr. Whitford and two years after the termination date for the remaining NEOs. The amounts are estimated as follows: Mr. Murphy - $95,400; Mr. Whitford - $95,973; Mr. Berry - $64,204; Mr. Narciso - $63,278; and Mr. Varga - $63,424.

  81. Potential Payments Upon Termination or Change in Control

    | (3) Amounts in this column reflect incremental amounts payable upon a termination of the NEO’s employment by the Company for Cause or due to the NEO’s poor performance or Material Breach. The estimated incremental payments shown in this column include three months of base salary and life and health benefits. The three months’ of base salary and life and health benefits would be payable upon the Company’s termination of the NEO’s employment due to the NEO’s poor performance, but would not be payable upon the Company’s termination of the NEO’s employment with Cause or due to his Material Breach. |

  82. Potential Payments Upon Termination or Change in Control

    | (4) The estimated incremental payments shown in this column include the following incremental payments and benefits: |

  83. Potential Payments Upon Termination or Change in Control

    Lump Sum Payments. The amount payable equal to the annual base salary which would have been due under the remaining term of the NEOs employment contracts are as follows: Mr. Murphy - $800,000; Mr. Whitford - $400,000; Mr. Berry - $409,500; Mr. Narciso - $319,200; and Mr. Varga - $333,600. Equity Awards. Under the Amended and Restated 2018 Plan, if the termination by the Company is for a reason other than cause, all unvested shares of restricted stock which were not granted during the year in which the termination occurs will vest. The estimated value as of December 31, 2023 of the previously granted awards that would have been accelerated for each NEO is as follows: Mr. Murphy - $1,232,451; Mr. Whitford - $561,430; Mr. Berry - $506,694; Mr. Narciso - $560,547; and Mr. Varga - $560,547. The estimated value of restricted stock awards was calculated based upon the closing price of our common stock on December 31, 2023. Life and Health Insurance Benefits. The NEOs are entitled to Company provided life and health benefits equal to the benefits which would have been provided under the remaining term of their respective employment contracts. The amounts are estimated as of December 31, 2023 as follows: Mr. Murphy - $31,800; Mr. Whitford - $31,991; Mr. Berry - $32,102; Mr. Narciso - $31,639; and Mr. Varga - $31,712.

  84. Potential Payments Upon Termination or Change in Control

    | (5) The estimated payments shown in this column include the lump sum payments and life and health insurance benefits as shown in note (4). Under the Amended and Restated 2018 Plan, if the termination by the NEO is for Good Reason, all unvested shares of restricted stock will be forfeited. Hence, the amounts shown in this column do not include an incremental benefit related to equity awards. |

  85. Potential Payments Upon Termination or Change in Control

    | (6) The estimated incremental payments shown in this column include a lump sum payment equal to 100% of the NEO’s base salary, Company provided life and health insurance benefits for one year (in the case of disability), and the estimated value of all unvested restricted stock awards as of December 31, 2022 as shown in note (2). |

  86. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Our bylaws provide that at the discretion of the Board, the directors may be paid their expenses, if any, at each meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board or a stated salary as a director. Since we completed our initial public offering of common stock on November 27, 2002, directors who are employees have not received any compensation for serving as directors and directors who were not our employees have received an annual cash retainer paid in quarterly installments. The annual Director fees are $95,000 for each non-management director. Director fees also include an additional $25,000 to the Lead Independent Director, an additional $17,500 annually to the Chairperson of the Audit Committee, an additional $12,500 annually to the Chairperson of our Compensation Committee and the Chairperson of our Nominating and Governance Committee. On February 22, 2023, the Compensation Committee approved grants of 1,000 shares of stock to each of our non-employee directors effective on such date. Board of Director members must maintain stock ownership equal to at least four times their annual cash retainer. This requirement must be met within five years of becoming a director. The following table sets forth the fees paid to the non-employee members of the Board for services provided in 2023.

  87. DIRECTOR COMPENSATION

    | | Fees Earned | | | | | | or Paid in | Stock | All Other | | | Name | Cash | Awards (1) | Compensation | Total | | Charles J, Brophy III | $ - | - | $ - | $ - | | John D. Farina | 103,750 | 87,060 | - | 190,810 | | Deborah E. Gray | 95,000 | 87,060 | - | 182,060 | | Dennis J. Langwell | 71,250 | 71,780 | - | 143,030 | | Peter J. Manning | 103,750 | 87,060 | - | 190,810 | | Thalia M. Meehan | 132,500 | 87,060 | - | 219,560 | | Mary C. Moran | 107,500 | 87,060 | - | 194,560 |

  88. DIRECTOR COMPENSATION

    | (1) The amounts in this column represent 1,000 shares granted to each Director multiplied by the closing price of the stock on February 22, 2023, the date of the grant. For Mr. Langwell, this column represents 1,000 shares multiplied by the closing price of the stock on May 17, 2023, the date of the grant. As of December 31, 2023, no directors who are not our employees held unvested stock awards or unexercised stock options. |

  89. PAY RATIO

    PAY RATIO We are providing the following information to comply with Item 402(u) of Regulation S-K. We have determined that our pay ratio for 2023 is 21 to 1, calculated pursuant to SEC rules by dividing our CEO’s annual total compensation set forth in the Summary Compensation Table for 2023 ($1,962,783) by $91,996, which represents the median of the annual total compensation of our employees (other than our CEO) for 2023. We identified our median employee as of December 31, 2023, using our entire workforce of approximately 580 employees. Total compensation including cash bonuses and stock related awards were used to determine the median employee for 2023. We then calculated the median employee’s annual total compensation based on the proxy rules for determining the annual total compensation of our NEOs in order to determine the pay ratio. SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and make various assumptions that may differ from other companies’ methodologies and/or assumptions. As a result, the pay ratio reported by the Company may not be comparable to the pay ratio reported by other companies.

  90. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    Other Information – Dodd-Frank Pay Versus Performance Disclosure As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and Item 402(v) of Regulation S-K, we are providing the following information about executive compensation for our principal executive officer (CEO) and Non-CEO NEOs (Other NEOs) and Company performance for the fiscal years listed below. This disclosure is not incorporated by reference into our 2023 Annual Report on Form 10-K. The Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. For information about the company's pay-for-performance philosophy and how the Committee aligns executive compensation with the company's performance, refer to Executive Compensation, Compensation Discussion and Analysis beginning on page 19. Pay Versus Performance Table

  91. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | | | | Average | | | | | | | | Summary | | Summary | Average | | | | | | | Compensation | Compensation | Compensation | Compensation | | | | | | | Total | Actually Paid | Total for | Actually paid to | Value of Initial Fixed $100 | | | GAAP | | | for CEO (1) | To CEO | Other NEOs (1) | Other NEOs | Investment Based On: | | Net Income | Combined | | Year | ($) | (1), (2), (3) ($) | ($) | (1), (2), (3) ($) | TSR | Peer Group (4) | ($) (in millions) | Ratio (5) | | 2023 | 1,962,783 | 664,623 | 831,208 | 277,912 | 94.7 | 112.2 | 18.9 | 107.7% | | 2022 | 2,753,190 | 2,521,325 | 1,100,348 | 997,797 | 103.9 | 92.1 | 46.6 | 97.2% | | 2021 | 3,236,556 | 3,644,065 | 1,245,166 | 1,436,698 | 100.8 | 88.5 | 130.7 | 93.0% | | 2020 | 3,450,570 | 3,483,962 | 1,228,044 | 1,245,348 | 88.3 | 98.5 | 138.2 | 87.1% |

  92. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | 1. | George M. Murphy was our CEO for each year presented. The individuals comprising the Other NEOs for each year presented were James D. Berry, Paul J. Narciso, Stephen A. Varga, and Christopher T. Whitford. |

  93. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | 2. | The amounts shown for Compensation Actually Paid (CAP) have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the company’s CEO or Other NEOs. These amounts reflect the Summary Compensation Table Total (SCT) with certain adjustments as described in footnote 3 below. |

  94. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | 3. | CAP reflects the exclusions and inclusions of certain amounts for the CEO and the Other NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards columns set forth in the Summary Compensation Table for the listed year. |

  95. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | | Summary | Exclusion of | Inclusion of | Compensation | | | Compensation | Stock Awards for | Equity Values | Actually Paid To | | | Total for CEO | CEO | for CEO | CEO | | Year | ($) | ($) | ($) | ($) | | 2023 | 1,962,783 | (1,000,000) | (298,160) | 664,623 | | 2022 | 2,753,190 | (900,000) | 668,135 | 2,521,325 | | 2021 | 3,236,556 | (800,000) | 1,207,509 | 3,644,065 | | 2020 | 3,450,570 | (800,000) | 833,392 | 3,483,962 |

  96. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | | | Average | Average | | | | Summary | Exclusion of | Inclusion of | Average | | | Compensation | Stock Awards | Equity Values | Compensation | | | Total for | for | for | Actually Paid | | | Other NEOs | Other NEOs | Other NEOs | to Other NEOs | | Year | ($) | ($) | ($) | ($) | | 2023 | 831,208 | (381,250) | (172,046) | 277,912 | | 2022 | 1,100,348 | (375,000) | 272,449 | 997,797 | | 2021 | 1,245,166 | (381,250) | 572,782 | 1,436,698 | | 2020 | 1,228,044 | (356,250) | 373,554 | 1,245,348 |

  97. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | | Year-End | | | Change In | | | | | Fair Value | | | Fair Value | | | | | Of Equity | Change In | | From Last Day | | | | | Awards | Fair Value | Vesting Date | Of Prior Year | | | | | Granted | From Last Day | Fair Value Of | To Vesting | Fair Value At | | | | During Year | Of Prior Year | Equity Awards | Date Of | Last Day Of | | | | That Remained | To Last Day Of | Granted | Unvested | Prior Year Of | | | | Unvested | Year Of | During Year | Equity Awards | Equity Awards | Total | | | As Of Last Day | Unvested | That Vested | That Vested | Forfeited | Inclusion of | | | Of Year For | Equity Awards | During Year | During Year | During Year | Equity Values | | | CEO | For CEO | For CEO | For CEO | For CEO | for CEO | | Year | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 | 513,326 | (716,501) | - | (94,985) | - | (298,160) | | 2022 | 868,509 | (116,686) | - | (83,688) | - | 668,135 | | 2021 | 1,142,299 | 88,148 | - | (22,938) | - | 1,207,509 | | 2020 | 886,473 | (49,946) | - | (3,135) | - | 833,392 |

  98. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | | Average | | | | | | | | Year-End | | | Average Change | | | | | Fair Value Of | Average Change | Average | In Fair Value | | | | | Equity Awards | In Fair Value | Vesting Date | From Last Day | Average | | | | Granted During | From Last Day | Fair Value | Of Prior Year | Fair Value | | | | Year That | Of Prior Year | Of Equity Awards | To Vesting Date | At Last Day Of | Total - | | | Remained | To Last Day | Granted During | Of Unvested | Prior Year Of | Average | | | Unvested As Of | Of Year Of | Year That Vested | Equity Awards | Equity Awards | Inclusion Of | | | Last Day | Unvested Equity | During Year | That Vested | Forfeited | Equity Values | | | Of Year For | Awards For | For | During Year For | During Year For | For | | | Other NEOs | Other NEOs | Other NEOs | Other NEOs | Other NEOs | Other NEOs | | Year | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 | 195,697 | (325,494) | - | (42,249) | - | (172,046) | | 2022 | 361,820 | (55,434) | - | (33,937) | - | 272,449 | | 2021 | 544,437 | 37,131 | - | (8,786) | - | 572,782 | | 2020 | 394,797 | (19,870) | - | (1,373) | - | 373,554 |

  99. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | 4. | The Insurance Peer Group TSR set forth in this table utilizes a peer group comprised of seven selected property & casualty insurance companies as used in our stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report on Form 10-K for the year ended December 31, 2023. The peer group consists of Donegal Group, Inc., Erie Indemnity Company, Horace Mann Educators Corporation, The Hanover Insurance Group, Inc., Mercury General Corp., Selective Insurance Group, Inc., and United Fire Group. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the company and in the peer group, respectively. All dollar values assume reinvestment of the pre-tax value of dividends paid by companies, where applicable, included in the peer group. Historical stock performance is not necessarily indicative of future stock performance. This peer group is not the Performance Peer Group used by the Committee to determine performance-based compensation awards or the Compensation Peer Group used by the Committee as a reference for compensation program design. See Compensation of Named Executive Officers, Compensation Discussion and Analysis, Benchmarking and Peer Group beginning on Page 31 for more information about the Committee's selection and use of these Peer Groups in making compensation decisions. |

  100. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | 5. | For 2023, we determined Combined Ratio to be the most important financial performance measure used to link company performance to CAP for our CEO and Other NEOs in 2023 and 2022. This performance measure may not have been the most important financial performance measure for years 2021 and 2020, and we may determine a different financial performance measure to be the most important financial performance measure in future years. |

  101. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    Financial Performance Measures As described in greater detail in “Compensation of Named Executive Officers – Compensation Discussion and Analysis,” the company’s executive compensation program is based on a pay-for-performance philosophy. The metrics that the company uses for both our short-term and long-term performance-based awards are selected to incentivize achievement of both short-term and long-term performance objectives that create value for our enterprise and our shareholders. The principal financial metrics that we use to link compensation actually paid to our performance for 2023, are as follows:

  102. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    | Financial Performance Measures | | Earnings Before Interest, Taxes, Changes in Unrealized Gains and Losses on Equity Securities and Credit Loss Expense | | Combined Ratio | | Relative Total Shareholder Return |

  103. Other Information – Dodd-Frank Pay Versus Performance Disclosure

    Analysis of the Information Presented in the Pay Versus Performance Table While the Committee uses several performance measures to align executive compensation with company performance, including Combined Ratio and 3-year TSR achievement relative to the companies in the Peer Group, not all of those performance measures are presented in the Pay Versus Performance Table and therefore the company’s performance measures do not necessarily align with compensation actually paid (CAP) as calculated in accordance with Item 402(v) of Regulation S-K for a particular year. In accordance with Item 402(v) of Regulation S-K, the company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance Table. CAP and Cumulative TSR As shown in the charts below, the CEO and Other NEOs’ CAP amounts are aligned with the company’s TSR. This is due primarily to the company's use of equity incentives, which are tied directly to stock price in addition to the company’s financial performance. As described in more detail in Compensation of Named Executive Officers, Compensation Discussion and Analysis, Long-Term Incentive beginning on Page 44, the Committee selected 3-year TSR relative to the Performance Peer Group as the performance objective for performance-based restricted stock awards that were granted in the listed years. The same measure also applied to performance-based restricted stock awards that vested during the listed years. CAP and Net Income As shown in the charts below, the company’s net income has varied significantly in the years presented. This is due in large part to the inclusion of the change in fair value in our equity portfolio in the net income calculation in accordance with Financial Accounting Standards Board (FASB), ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. Stock market volatility throughout the period also affected the valuations of outstanding equity incentives. CAP and Combined Ratio The charts below show the CEO and Other NEOs’ CAP amounts compared to the company's Combined Ratio. As described in more detail in Compensation of Named Executive Officers, Compensation Discussion and Analysis, beginning on Page 32, the committee selected Combined Ratio relative to the Performance Peer Group targets as the performance objective for long-term incentive compensation awards that were granted in the listed years.