Selective Insurance Q2 Earnings Miss Estimates, Revenues Top

Selective Insurance Group, Inc. SIGI reported second-quarter 2025 operating income of $1.31 per share, which missed the Zacks Consensus Estimate by 15.5%. The bottom line rebounded from the year-ago loss of $1.10 per share.

The company’s performance in the quarter reflects solid underwriting income, lower catastrophe losses, average renewal pure price increase and lower loss and loss expenses.

Behind the Headlines

Total revenues of $1.3 billion increased 10.9% from the year-ago quarter’s figure, primarily due to higher net premiums written, net premiums earned and net investment income earned. The top line beat the Zacks Consensus Estimate by 0.9%.

On a year-over-year basis, net premiums written (NPW) increased 5% to $1.3 billion. Average renewal pure price expanded 80 basis points year over year to 9.9%. The figure matched our estimate.

Net investment income increased 18% year over year to $101 million. 

Net catastrophe losses of $79.9 million were narrower than the year-ago loss of $90.5 million. Non-catastrophe property loss and loss expenses were $173.2 million, narrower than the year-ago loss of $185.5 million.

The combined ratio of 96.1 improved 1590 basis points year over year, driven by lower unfavorable prior year casualty reserve development, net catastrophe losses, and non-catastrophe property losses. The Zacks Consensus Estimate was 98.  Our estimate was 99.1.

Total expenses declined 4.6% year over year to $1.2 billion, primarily due to lower loss and loss expense incurred. The figure matched our estimate.

Segmental Results

Standard Commercial Lines’ NPW was up 6% year over year to $1 billion. The premium growth reflected average renewal pure price increases of 8.9% and lower retention of 83%. Our estimate was $997.4 million. 

The combined ratio improved 1600 basis points (bps) to 102.8. The Zacks Consensus Estimate was 99 and our estimate was 100.8.

Standard Personal Lines’ NPW decreased 5% year over year to $110.5 million due to deliberate profit improvement actions. New business decreased 41%, while renewal pure price was 19% and retention was 79%. The figure was lower than our estimate of $136.2 million. 

The combined ratio improved 2650 bps on a year-over-year basis to 91.6. The Zacks Consensus Estimate was pegged at 110, while our estimate was 117.3.

Excess & Surplus Lines’ NPW was up 9% year over year to $160.2 million, driven by average renewal pure price increases of 9.3%. Our estimate was $190.2 million. 

The combined ratio improved 480 bps to 89.8. The Zacks Consensus Estimate was pegged at 86, while our estimate was 77.7.

Financial Update

Selective Insurance exited the second quarter of 2025 with total assets of $14.5 billion, 7% above the level at December 2024 end. 

Long-term debt of $902.7 million surged 78% from the 2024 end level. Debt-to-total capitalization deteriorated 710 bps to 21.1% from the 2024 end level. 

As of June 30, 2025, adjusted book value per share was $54.48, up 5% year over year. 

Operating return on common equity was 10.3% versus negative 9.6% in the year-ago quarter.

Share Repurchase and Dividend Update

Selective Insurance did not repurchase any shares but had $56.1 million remaining under authorization as of June 30, 2025. 

The board of directors authorized a quarterly cash dividend of 38 cents per share. The dividend will be paid out on Sept. 2 to shareholders of record at the close of business on Aug. 15, 2025.

2025 Guidance

SIGI estimates a GAAP combined ratio of 97% to 98%, a 100-basis point deterioration from the level guided earlier. It also includes net catastrophe losses of 6 points. 

Selective Insurance estimates an after-tax net investment income of $415 million, up from the prior guidance of $405 million.

The overall effective tax rate is expected to be around 21.5%. Weighted average shares were 61.5 million on a fully diluted basis.

Zacks Rank

SIGI currently has a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

The Travelers Companies TRV reported second-quarter 2025 core income of $6.51 per share, which beat the Zacks Consensus Estimate by 83.8%. Total revenues increased 6.7% from the year-ago quarter to $12.1 billion, primarily driven by higher premiums, improved net investment income, higher fee income and other revenues. The top-line figure, however, missed the Zacks Consensus Estimate by 0.7%.

Net written premiums increased 4% year over year to a record $11.5 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.9 billion. 

Travelers witnessed an underwriting profit of $1 billion against a loss of $65 million incurred in the year-ago quarter. The consolidated underlying combined ratio of 84.7 improved 300 bps year over year. The combined ratio improved 990 bps year over year to 90.3 due to lower catastrophe losses, an improvement in the underlying combined ratio and higher net favorable prior year reserve development. The Zacks Consensus Estimate was pegged at 99.

The Progressive Corporation’s PGR second-quarter 2025 earnings per share of $4.88 beat the Zacks Consensus Estimate by 10.1%. The bottom line increased 84.1% year over year. Net premiums written were $20 billion in the quarter, up 12% from $17.9 billion a year ago. 

Net premiums earned grew 18% to $20.3 billion. The reported figure surpassed the Zacks Consensus Estimate of $20.1 billion.  Operating revenues increased 19.5% year over year to $42.2 billion, driven by 19% higher net premiums earned, a 29.3% increase in net investment income, an 18.9% rise in fees and a 28% increase in service revenues.

RLI Corp. RLI reported second-quarter 2025 operating earnings of 84 cents per share, beating the Zacks Consensus Estimate by 12%.  The bottom line, however, decreased 2.3% from the prior-year quarter. Operating revenues for the reported quarter were $441 million, up 6.9% year over year, driven by 6% higher net premiums earned and 16% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.5%.

Underwriting income of $62.2 million decreased 11.14% year over year. The combined ratio deteriorated 300 bps year over year to 84.5. The Zacks Consensus Estimate for the metric was pegged at 88, while our estimate was 42.9.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research