Selective Insurance (SIGI) Up 0.5% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Selective Insurance (SIGI). Shares have added about 0.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Selective Insurance due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

SIGI Misses Q3 Earnings Estimates, Ups Dividend, Okays Share Buyback

Selective Insurance reported third-quarter 2025 operating income of $1.75 per share, which missed the Zacks Consensus Estimate by 4.9%. The bottom line, however, increased 25% year over year.

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 $1.4 billion increased 8.9% 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 0.4%.

On a year-over-year basis, net premiums written (NPW) increased 4% to $1.2 billion, driven by renewal pure price increases. Average renewal pure price contracted 90 basis points year over year to 9.6%. Our estimate for NPW was $1.3 billion.
Net investment income increased 18% year over year to $110 million. 

Net catastrophe losses of $24.9 million were narrower than the year-ago loss of $148.8 million. Non-catastrophe property loss and loss expenses were $169.6 million, wider than the year-ago loss of $146.7 million.

Underwriting income of $16.7 million increased more than threefold year over year. The combined ratio of 98.6 improved 90 basis points year over year. The Zacks Consensus Estimate was 97.6.  Our estimate was also 97.6.

Total expenses increased 7.7% year over year to $1.2 billion, primarily due to higher loss and loss expense incurred. Our estimate was $1.9 billion.

Segmental Results

Standard Commercial Lines’ NPW was up 4% year over year to $940.8 million. The premium growth reflected average renewal pure price increases of 8.9% and retention of 82%. Our estimate was $962.8 million. 
The combined ratio deteriorated 190 basis points (bps) to 101.1. The Zacks Consensus Estimate was 98.9 and our estimate was 97.

Standard Personal Lines’ NPW decreased 6% year over year to $104.2 million due to deliberate profit improvement actions. New business decreased 20%, while renewal pure price was 16% and retention was 79%. The figure was lower than our estimate of $120.1 million. 

The combined ratio improved 1200 bps on a year-over-year basis to 110.1. The Zacks Consensus Estimate was pegged at 99.3, while our estimate was 124.8.

Excess & Surplus Lines’ NPW was up 14% year over year to $162.9 million, driven by average renewal pure price increases of 8.3%. Our estimate was $180.6 million. 

The combined ratio improved 700 bps to 76.2. The Zacks Consensus Estimate was pegged at 88.7, while our estimate was 83.5.

Financial Update

Selective Insurance exited the third quarter of 2025 with total assets of $15 billion, 11% above the level at the end of December 2024. 

Long-term debt of $902.3 million surged 78% from the 2024 end level. Debt-to-total capitalization deteriorated 650 bps to 20.5% from the 2024 end level. 

As of Sept. 30, 2025, adjusted book value per share was $54.46, up 12% year over year. 

Operating return on common equity was 13.2%, up 110 bps year over year.

Share Repurchase and Dividend Update

Selective Insurance repurchased $36 million worth of shares in the third quarter. 

The board of directors authorized a quarterly cash dividend of 43 cents per share, marking a 13% increase in its quarterly dividend and the 12th consecutive annual increase.  The dividend will be paid out on Dec. 1 to shareholders of record at the close of business on Nov. 14, 2025.

The board of directors authorized a new share repurchase program under which it may repurchase shares worth up to $200 million. The program will be effective from Oct. 27, 2025. The company’s existing share repurchase program, which had $19.9 million of shares remaining as of Sept. 30, 2025, will remain effective through Oct. 24, 2025.

2025 Guidance

SIGI estimates a GAAP combined ratio of 97% to 98%. 

Selective Insurance estimates an after-tax net investment income of $420 million, up from the prior guidance of $415 million.

The overall effective tax rate is expected to be around 21.5%. Weighted average shares were 61.1 million on a fully diluted basis.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Selective Insurance has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Selective Insurance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Selective Insurance belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Travelers (TRV), has gained 7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.

Travelers reported revenues of $12.44 billion in the last reported quarter, representing a year-over-year change of +5%. EPS of $8.14 for the same period compares with $5.24 a year ago.

For the current quarter, Travelers is expected to post earnings of $8.34 per share, indicating a change of -8.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Travelers. Also, the stock has a VGM Score of B.

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

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