Selective Insurance Group (SIGI) Q4 2024 earnings summary

Executive summary

• Net premiums written reached $4.6 billion in 2024, with a 12% year-over-year growth and a 7.1% operating ROE, below the 12% target, but capital position remains strong.

• Standard Commercial Lines represented 79% of net premiums written, with expansion into five new states and a near-national footprint.

• Strategic initiatives included repositioning personal lines, enhancing technology for E&S lines, and sustainability efforts such as an AA MSCI rating and solar energy at headquarters.

• Unique operating model, empowered decision-makers, and strong distribution partnerships drive competitive advantage.

• 2024 financial performance was impacted by significant prior year casualty reserve strengthening and social inflation.

Financial highlights

• Full-year combined ratio was 103.0%, up 6.5 points from 2023, mainly due to $411 million in casualty reserving actions, with $311 million related to prior accident years.

• Net premiums written grew at a 9.4% CAGR since 2015, reaching $4.6 billion in 2024.

• Fully diluted EPS for 2024 was $3.23, and non-GAAP operating EPS was $3.27, both down 44% year-over-year.

• After-tax net investment income rose 17% to $363 million, with a portfolio yield of 4.9% at year-end.

• Book value per share at year-end was $47.99, up 6% year-over-year; adjusted book value per share was $52.10, up 4%.

Outlook and guidance

• 2025 GAAP combined ratio guidance is 96%-97%, including six points of catastrophe losses.

• After-tax net investment income expected to increase 12% to $405 million in 2025; effective tax rate guidance is 21.5%.

• Underlying combined ratio for 2025 expected in the 90%-91% range, with an expense ratio rising to about 31.5%.

• Operating ROE guidance for 2025 is approximately 15%.

• Weighted average diluted shares expected at 61.5 million.