Selective Insurance Group (SIGI) 2024 KBW Insurance Conference summary

Reserve management and loss trends

• Quarterly reserve reviews use consistent processes, with adjustments based on actuarial indications and risk factors by line.

• Recent reserve strengthening focused on older accident years in Q4 and more recent years in Q1/Q2, mainly 2022–2023, due to early paid and incurred emergence.

• Severity, not frequency, drove recent reserve actions, attributed to social inflation despite a stable portfolio mix.

• Average assumed loss trend for GL was 5% (2019–2023), but actual trends moved to 6.5%, with severity up 9–10% and frequency down 4%.

• GL expected loss ratios for recent years were raised by about five points, reflecting ongoing uncertainty in severity trends.

Workers' compensation and commercial auto

• Workers' comp growth has been flat or slightly negative due to competitive pricing and commission environment.

• Medical inflation for workers' comp is rising (4–4.5%), and frequency trends have flattened, suggesting future margin pressure.

• Favorable reserve emergence in workers' comp is declining and now represents a smaller share of reserves (down to 17% in 2023 from 28% in 2018).

• Commercial auto loss trends have stabilized, with combined ratios near 98–100, supported by firm pricing (10.5% rate increases).

• Telematics and analytics are increasingly used to improve underwriting and driver behavior, with growing customer interest in cost reduction through safety.

Property and pricing strategies

• Economic inflation and severe convective storms have driven property pricing actions, with CAT loads rising from 3.5% to 5.5% over five years.

• Target combined ratio for property is upper 80s to 90, reflecting volatility and lack of float benefit.

• Rate increases in commercial property are around 12–12.5%, with additional terms like higher deductibles and cosmetic damage exclusions.

• Conservative pricing and underwriting have led to more submission rejections, but strong agency relationships support continued growth.

• Geographic expansion is ongoing, with new states added and a focus on local underwriting talent and agency partnerships.