Selective Insurance Group Stock Earnings Reports

Selective reported solid quarterly earnings driven by strong investment income and delivered operating ROE of 13.2% (on track for ~14% for the full year). Key underwriting headwinds centered on casualty lines, especially commercial auto (largely driven by severity re‑acceleration in New Jersey), producing unfavorable prior‑year casualty reserve development of $40 million and a GAAP combined ratio of 98.6%. Management reiterated a focus on profit over growth—moderating premium growth and sharpening risk selection, granular pricing, claims adjudication, expanded use of data/AI, telematics and tighter fleet underwriting. Independent third‑party reserve reviews found Selective’s reserves to be in a reasonable range and somewhat conservative versus central estimates, supporting management’s booked estimates. Segment highlights: Standard Commercial combined ratio 101.1% with slower premium growth (renewal pure price +8.9%); E&S grew 14% with a 76.2% combined ratio; Personal Lines combined ratio 110.1% with strong renewal pricing (+16.9%) but NJ personal auto reserve pressure. Capital management: increased quarterly dividend by 13%, repurchased $36M in the quarter, and authorized a new $200M repurchase program. Updated 2025 guidance: GAAP combined ratio 97%–98% (including 4 pts of catastrophe), after‑tax net investment income ~$420M, effective tax rate ~21.5%, and ~61.1M fully diluted shares (reflecting repurchases). Management emphasized taking targeted underwriting actions (state/segment tactics) and trading some near‑term growth/retention for longer‑term underwriting profitability.