Selective Insurance 4Q Earnings Beat Estimates on Solid Underwriting

Selective Insurance Group SIGI reported fourth-quarter 2025 operating income of $2.57 per share, which marginally beat the Zacks Consensus Estimate by 0.3%. The bottom line increased 59% year over year.

The company’s quarterly performance reflects a huge underwriting income, average renewal pure price increase, and lower loss and loss expenses.

Selective Insurance Group, Inc. Price, Consensus and EPS Surprise

Selective Insurance Group, Inc. price-consensus-eps-surprise-chart | Selective Insurance Group, Inc. Quote

Behind the Headlines

Total revenues of $1.4 billion increased 8.3% from the year-ago quarter’s level, driven primarily by higher net premiums earned and net investment income. The top line marginally exceeded the Zacks Consensus Estimate by 0.1%.

On a year-over-year basis, net premiums written (NPW) increased 4% to $1.1 billion, driven by renewal pure price increases of 8.3%. Our estimate for NPW was $1.2 billion.

Net investment income increased 17% year over year to $114 million.

Net catastrophe losses amounted to $21 million compared to a gain of $10.1 million a year ago. Non-catastrophe property losses declined to $159.6 million from $178.2 million.

Underwriting income of $76 million more than quadrupled year over year. The combined ratio improved 470 basis points year over year to 93.8 from 98.5. The Zacks Consensus Estimate was 96.7. Our estimate was 95.3.

Total expenses rose 2.8% year over year to $1.2 billion, mainly due to higher amortization of deferred policy acquisition costs & other expenses. The figure was on par with our estimate.

Segmental Results

Standard Commercial Lines’ NPW was up 5% year over year to $875.6 million. The premium growth reflected average renewal pure price increases of 7.5% and retention of 82%. This was below our estimate of $908.4 million.

The combined ratio improved significantly to 92.9 from 100.2 a year ago, reflecting a 730-basis-point improvement. The Zacks Consensus Estimate was 97.8 and our estimate was 96.

Standard Personal Lines’ NPW declined 8% year over year to $95.5 million, reflecting deliberate actions to improve profitability. Policy count fell due to rate and underwriting measures, while average renewal pure price rose 15.1% and retention was 80%. The figure was below our estimate of $100.1 million.

The combined ratio was 103.0, worsening 1,130 basis points from 91.7 a year ago. The Zacks Consensus Estimate was pegged at 99, while our estimate was 104.3.

Excess & Surplus Lines’ NPW increased 4% year over year to $158.4 million, caused by average renewal pure price increases of 7.8%. Our estimate was $170 million.

The combined ratio was 93.1, flat year over year. The Zacks Consensus Estimate was pegged at 87.2, while our estimate was 84.7.

Full-Year Highlights

Operating earnings of $7.38 increased 126% year over year and beat the consensus estimate of $7.04.

NPW was a record $4.9 billion and marked a 5% year-over-year increase.

Net investment income increased 16% year over year to $421.2 million.

Underwriting income rose to $135.9 million, reversing a loss of $132.6 million a year ago. The combined ratio improved 580 basis points to 97.2 from 103.0, reflecting stronger underwriting performance.

Financial Update

Selective Insurance exited the fourth quarter of 2025 with total assets of $15.2 billion, 12.1% above the December-end 2024 level.

Long-term debt surged 77.6% to $901.9 million, while adjusted book value per share rose 11.2% to $57.91 as of Dec. 31, 2025.

Operating return on common equity in 2025 was 14.2%, up from 7.1% a year ago.

Share Repurchase and Dividend Update

During the fourth quarter of 2025, the company repurchased $30 million worth shares. It had $170 million of authorization remaining as of 2025-end.

A quarterly cash dividend of 43 cents per common share is payable on March 2, 2026, to shareholders of record as of Feb. 13, 2026.

2026 Guidance

SIGI estimates a GAAP combined ratio of 96.5-97.5.

Selective Insurance estimates an after-tax net investment income of $465 million.

The overall effective tax rate is expected to be around 21.5%.

Weighted average shares are estimated to be 61 million on a fully diluted basis.

Zacks Rank

SIGI currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

The Travelers Companies, Inc. TRV reported fourth-quarter 2025 core income of $11.13 per share, which beat the Zacks Consensus Estimate by 32% and improved 22% year over year. Travelers’ total revenues increased 3.2% from the year-ago quarter to $12.4 billion, primarily driven by higher premiums, net investment income and other revenues. The top line beat the Zacks Consensus Estimate by 0.08%.

Net written premiums increased 1% year over year to a record $10.8 billion. Net investment income increased 10.3% year over year to $1 billion. The figure matched the Zacks Consensus Estimate. Travelers witnessed an underwriting gain of $1.7 billion, up 21.7% year over year. The consolidated underlying combined ratio of 82.2 improved 180 bps year over year.

The Progressive Corporation’s PGR fourth-quarter 2025 earnings per share of $4.67 beat the Zacks Consensus Estimate by 5.2%. The bottom line increased 14.4% year over year.

Operating revenues increased 10.6% year over year to $22.49 billion and beat the consensus estimate by 2.5%. Net premiums earned grew 10% to $21 billion. The reported figure surpassed the Zacks Consensus Estimate of $20.9 billion.

AXIS Capital Holdings Limited AXS reported fourth-quarter 2025 operating income of $3.25 per share, which outpaced the Zacks Consensus Estimate by 9.4% and rose 9.4% year over year.

Total operating revenues of $1.7 billion beat the Zacks Consensus Estimate by 5.2%. The top line rose nearly 9% year over year on higher premiums earned. Net premiums written rose 13% to $1.4 billion, with an increase of 14% in the Insurance segment, and growth of 5% in the Reinsurance segment.

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