Core Viewpoint - Selective Insurance Group Inc. (SIGI) is expected to grow due to rising premiums driven by solid renewal pure pricing, high retention, and new business growth in Commercial Lines and Excess and Supply Lines [1] Earnings History - SIGI has consistently underperformed, lagging earnings estimates in the last four quarters with an average negative earnings surprise of 58.78% [2] - Over the past five years, earnings have declined by 4.3%, while the industry average growth was 19.3% [2] Factors Favoring SIGI - The company is focused on improving organic growth, with its Commercial Lines business increasing its share of distribution partners' overall premium to 12% and aiming for a 25% agent market share [3] - SIGI's overall premium is expected to benefit from improved pricing, new business growth, and a high retention ratio [3] Geographic Expansion - SIGI relies on geographic expansion for growth and diversification, successfully expanding in New Hampshire and the Southwest region, including Arizona, Colorado, Utah, and Mexico [4] - The company now has a commercial lines presence in 27 states and plans to expand further [4] Investment Performance - Despite a low interest rate environment, SIGI has delivered impressive investment results, with net investment income expected to grow due to an increased invested asset base and higher book yields [5] - The company regularly raises dividends and buys back shares, offering a higher dividend yield compared to its industry, making it attractive for yield-seeking investors [5] Concerns for SIGI - As a property and casualty insurer, SIGI is exposed to catastrophe losses from natural disasters, which can induce underwriting volatility and affect the combined ratio [6] - The company estimates a GAAP combined ratio of 96% to 97% in 2025, including net catastrophe losses of 6 points, with an underlying combined ratio expected in the 90-91% range [6] Financial Metrics - SIGI's debt levels have remained stable, with leverage comparing favorably to the industry average, but its times interest earned is unfavorable compared to the industry [7] - The company expects the expense ratio to increase to approximately 31.5% in 2025, driven by rising expenses primarily due to increasing loss and loss expense [7] Return on Capital - SIGI's trailing 12-month return on equity was 7.3%, below the industry average of 8.3%, indicating inefficiency in utilizing shareholders' funds [8] - The return on invested capital in the trailing 12 months was 3.7%, lagging the industry average of 6.3% [8] Key Industry Players - Other notable players in the insurance industry include The Progressive Corporation (PGR), Kingstone Companies (KINS), and Palomar Holdings (PLMR) [9]

Core Viewpoint - Selective Insurance reported a mixed performance in its fourth-quarter earnings, with operating income missing estimates and a decline in underwriting income, while total revenues increased year-over-year [2][3][4]. Financial Performance - The fourth-quarter operating income was $1.62 per share, missing the Zacks Consensus Estimate by 18.1% and down 16% from the previous year [2]. - Total revenues reached $1.3 billion, a 14.4% increase from the prior year, but fell short of the Zacks Consensus Estimate by 1% [3]. - Net premiums written (NPW) rose 10% year-over-year to $1.1 billion, driven by a 10.7% increase in average renewal pure price [3]. - After-tax net investment income grew 24% year-over-year to $97 million [3]. Underwriting and Losses - After-tax net underwriting income was $13.3 million, a significant decrease of 73.5% year-over-year [4]. - The combined ratio deteriorated by 480 basis points to 98.5%, while the loss and loss expense ratio worsened by 540 basis points to 67.8% [4]. - Total expenses increased by 19.2% year-over-year to $1.1 billion, primarily due to higher loss and loss expenses [4]. Segment Performance - Standard Commercial Lines NPW increased by 9% year-over-year to $833.4 million, with a combined ratio of 100.2% [5]. - Standard Personal Lines NPW decreased by 3% year-over-year to $103.6 million, with a combined ratio improving to 91.7% [6]. - Excess & Surplus Lines NPW rose by 27% year-over-year to $152.6 million, with a combined ratio of 93.1% [7]. Full-Year Highlights - Full-year operating earnings were $3.27 per share, down 44% year-over-year, with NPW reaching a record $4.6 billion, up 12% [8]. - The combined ratio for the year deteriorated by 650 basis points to 103% [8]. Financial Position - As of December 31, 2024, total assets were $13.5 billion, a 15% increase from the end of 2023 [9]. - Book value per share increased by 6% year-over-year to $47.99 [9]. Shareholder Returns - In 2024, the company repurchased shares worth $8.7 million and declared a quarterly cash dividend of 38 cents per share [10]. Guidance - For 2025, the company estimates a GAAP combined ratio of 96% to 97% and after-tax net investment income of $405 million [11]. Market Position - Selective Insurance has seen downward revisions in estimates, leading to a Zacks Rank of 4 (Sell) [14].

Core Insights - Selective Insurance (NASDAQ: SIGI) ranks as the 34th largest insurance carrier in the United States, with net premiums written amounting to $4.6 billion in 2024 [1] Company Overview - The company offers both commercial and personal insurance policies and is involved in the excess and surplus lines market [1] Investment Community - The CrickAnt serves as an actuary for an insurance company and contributes to the Cash Flow Club, which focuses on analyzing company cash flows and capital access [1] - The Cash Flow Club provides features such as access to a leader's personal income portfolio targeting yields of over 6%, community chat, a "Best Opportunities" List, performance transparency, and coverage of various sectors including energy midstream, commercial mREITs, BDCs, and shipping [1]

Investment Income and Financial Performance - The company generated net investment income primarily from fixed income investments, commercial mortgage loans, equity securities, and alternative investments, partially offset by investment expenses[25]. - The company aims to maximize the economic value of its investment portfolio by achieving stable, risk-adjusted after-tax net investment income[73]. Insurance Operations and Market Strategy - The company’s insurance operations primarily sell one-year term policies, with loss and loss expense reserves being a critical accounting estimate for future claims[27][28]. - In 2024, the company expanded its Standard Commercial Lines business into Maine, Nevada, Oregon, Washington, and West Virginia, with plans to enter Kansas, Montana, and Wyoming in the next two years[35]. - The company categorizes its Standard Commercial Lines customers into five strategic business units, with contractors representing 44% of the total direct premium written (DPW)[34]. - The company faces substantial competition in the insurance marketplace, particularly in Standard Commercial Lines and E&S Lines, with market share fragmented among many companies[72]. Technology and Innovation - The company leverages technology, including machine learning and generative AI, to enhance operational efficiency and decision-making processes[46]. - The company has a dedicated innovation team to monitor industry trends and advance strategic ideas, fostering a culture of innovation[51]. - The company is modernizing its Standard Commercial Lines agency interface platform to streamline quoting and issuance for small businesses, focusing on risks with policy premiums under $25,000[58]. - In 2024, the company integrated its claims system with third-party vendors to enhance efficiency and customer experience, including introducing digital payment solutions[67]. Risk Management and Claims Operations - The company has 100 Risk Management Specialists in the field, enhancing risk management and reducing exposure to property, liability, and workers' compensation risks[54]. - In 2024, the company launched a Risk Management Center (RMC) to provide Standard Commercial Lines customers with on-demand access to self-service risk management resources[57]. - The company is executing a multi-year claims system modernization strategy to improve efficiency and customer experience, aiming to reduce cycle times and claims adjudication costs[66]. - The risk governance structure includes an Executive Risk Committee (ERC) that meets quarterly to review significant risks and capital adequacy[91]. - The Reserve Committee meets quarterly to monitor loss and loss expense reserve levels and reports to the Board's Audit Committee[93]. Employee Engagement and Diversity - The company has approximately 2,800 employees and was recognized as a Great Place to Work Certified organization for the fifth consecutive year[99]. - The company was also recognized by Forbes as one of "America's Best Mid-Size Employers" for the fourth time[99]. - Women represented 57% of the non-officer workforce and 36% of the officer workforce as of December 31, 2024, showing a slight increase in officer diversity[105]. - The company has implemented a Flexible Work Location Policy requiring most office-based non-management employees to be in their assigned office 40% of the time[103]. - The company has a robust employee training and development program, including initiatives like the Next Generation of Leaders program and the RISE program[102]. Sustainability and Environmental Impact - The company integrates sustainability principles into its business, focusing on human capital development and environmental impact mitigation[98]. - The company is committed to reducing its carbon emissions relative to revenues over the long term through various initiatives[119]. - The company has prohibited new direct equity or debt investments in thermal coal enterprises, reflecting its commitment to sustainability[117]. - The established catastrophic risk tolerance requires that no more than 10% of stockholders' equity is exposed to a loss from a hurricane event at a 99.6% confidence level[116]. - The company actively monitors its investment exposure to carbon-intensive industries to manage climate-related risks[110]. - The company aims to mitigate climate change impact through proactive risk management and responsive claims handling services[106].

INVESTOR PRESENTATION Fourth Quarter 2024 Copyright © 2025 by Selective Insurance Group, Inc. All rights reserved. Exhibit 99.3 SAFE HARBOR STATEMENT We make certain statements and reference other information in this presentation that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a forward-looking statement safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements discuss our inte ...

Core Insights - Selective Insurance Group, Inc. (SIGI) reported fourth-quarter 2024 operating income of $1.62 per share, missing the Zacks Consensus Estimate by 18.1% and reflecting a 16% decrease from the previous year [1] - Total revenues reached $1.3 billion, a 14.4% increase year-over-year, primarily driven by higher premiums earned and net investment income, although it missed the Zacks Consensus Estimate by 1% [3] - The company experienced a 10% rise in net premiums written (NPW) to $1.1 billion, supported by renewal pure price increases of 10.7% [4] Financial Performance - After-tax net underwriting income fell to $13.3 million, a 73.5% decrease year-over-year, with catastrophe events favorably impacting results [5] - The combined ratio deteriorated to 98.5%, worsening by 480 basis points year-over-year, while the loss and loss expense ratio increased to 67.8% [6] - Total expenses rose by 19.2% year-over-year to $1.1 billion, attributed to higher loss expenses and other insurance costs [6] Segmental Results - Standard Commercial Lines' NPW increased by 9% year-over-year to $833.4 million, with average renewal pure price increases of 8.8% [7] - Standard Personal Lines' NPW decreased by 3% year-over-year to $103.6 million, with retention dropping to 75% [9] - Excess & Surplus Lines' NPW surged by 27% year-over-year to $152.6 million, driven by new business growth of 29% [10] Full-Year Highlights - For the full year, operating earnings were $3.27 per share, down 44% year-over-year, with NPW reaching a record $4.6 billion, up 12% [11] - The combined ratio for the year deteriorated to 103%, with an underwriting loss of $104.7 million [11] Financial Update - As of the end of 2024, total assets stood at $13.5 billion, a 15% increase from the previous year, while long-term debt rose by 1% to $507.9 million [12] - Book value per share increased by 6% year-over-year to $47.99 [12] Shareholder Returns - In 2024, SIGI repurchased shares worth $8.7 million and had $75.5 million remaining under authorization [13] - A quarterly cash dividend of 38 cents per share was authorized, payable on March 3, 2025 [13] 2025 Guidance - SIGI anticipates a GAAP combined ratio of 96% to 97% for 2025, including net catastrophe losses of 6 points [14] - The company projects after-tax net investment income of $405 million and an effective tax rate of 21.5% [14]

Core Insights - Selective Insurance reported revenue of $1.26 billion for the quarter ended December 2024, reflecting a year-over-year increase of 14.4% [1] - The company's EPS was $1.62, down from $1.94 in the same quarter last year, indicating a decline in profitability [1] - The reported revenue fell short of the Zacks Consensus Estimate of $1.28 billion, resulting in a surprise of -0.99% [1] - EPS also missed the consensus estimate of $1.98, leading to an EPS surprise of -18.18% [1] Financial Performance Metrics - Underwriting expense ratio was reported at 30.6%, matching the five-analyst average estimate [4] - Combined ratio stood at 98.5%, higher than the five-analyst average estimate of 96.1% [4] - Loss and loss expense ratio was 67.8%, compared to the five-analyst average estimate of 65.3% [4] - Standard Commercial Lines combined ratio was 100.2%, exceeding the three-analyst average estimate of 96.2% [4] - Standard Personal Lines combined ratio was 91.7%, better than the three-analyst average estimate of 102% [4] - Excess and Surplus Lines combined ratio was 93.1%, above the three-analyst average estimate of 85.2% [4] Revenue Breakdown - Net premiums earned totaled $1.13 billion, slightly below the $1.15 billion average estimate from five analysts, with a year-over-year increase of 13.2% [4] - Net investment income earned was $122.80 million, surpassing the five-analyst average estimate of $119.38 million, reflecting a year-over-year change of 24.5% [4] - Excess and Surplus Lines net premiums earned reached $141.30 million, exceeding the four-analyst average estimate of $134.43 million, with a year-over-year increase of 30.7% [4] - Standard Commercial Lines net premiums earned were $884.60 million, below the four-analyst average estimate of $904.13 million, with a year-over-year increase of 11.7% [4] - Other income was reported at $8.50 million, significantly higher than the $5.53 million estimated by four analysts, representing a year-over-year change of 54.6% [4] - Standard Personal Lines net premiums earned were $107.10 million, lower than the $113.58 million average estimate from four analysts, with a year-over-year increase of 6% [4] Stock Performance - Shares of Selective Insurance returned +1.8% over the past month, slightly outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Selective Insurance reported quarterly earnings of $1.62 per share, missing the Zacks Consensus Estimate of $1.98 per share, representing an earnings surprise of -18.18% [1][2] Financial Performance - The company posted revenues of $1.26 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.99%, compared to year-ago revenues of $1.11 billion [2] - Over the last four quarters, Selective Insurance has not surpassed consensus EPS or revenue estimates [2] Stock Performance - Selective Insurance shares have increased by approximately 1.8% since the beginning of the year, while the S&P 500 has gained 3.2% [3] - The current Zacks Rank for Selective Insurance is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $1.97 on revenues of $1.3 billion, and for the current fiscal year, it is $7.84 on revenues of $5.36 billion [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable [6] Industry Context - The Insurance - Property and Casualty industry is currently in the bottom 44% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions [5]

Premiums and Revenues - Gross premiums written for Q4 2024 were $1,275.9 million, an increase of 11% compared to $1,149.7 million in Q4 2023[8] - Net premiums written for Q4 2024 reached $1,089.6 million, reflecting a 10% increase from $991.5 million in the same quarter last year[8] - Net premiums earned for Q4 2024 increased to $1,133.0 million, up from $1,001.2 million in Q4 2023, representing a growth of 13.1% year-over-year[11] - Total revenues for Q4 2024 reached $1,256.4 million, a 13.1% increase compared to $1,110.7 million in Q4 2023[11] - Year-to-date net premiums written for 2024 reached $3,632.1 million, a 10.7% increase from $3,281.3 million in 2023[22] Underwriting Performance - Underwriting income before tax for Q4 2024 was $16.8 million, a significant recovery from a loss of $173.7 million in Q2 2024[8] - The GAAP combined ratio improved to 98.5% in Q4 2024 from 116.1% in Q2 2024, reflecting better underwriting performance[8] - The combined ratio for Q4 2024 improved to 98.5%, down from 116.1% in Q2 2024, indicating better underwriting performance[19] - The combined ratio for Q4 2024 was 100.2%, slightly up from 93.1% in Q4 2023, primarily due to increased loss expenses[22] - The underwriting income for Q4 2024 was a loss of $1.8 million, a decline from a profit of $54.9 million in Q4 2023[22] Investment Income - Net investment income earned before tax was $122.8 million in Q4 2024, up from $98.6 million in Q4 2023, marking a 24% increase[8] - The net investment income earned in Q4 2024 was $122.8 million, up from $98.6 million in Q4 2023, indicating a growth of 24.5%[11] - Total net investment income after-tax for Q4 2024 was $97.3 million, up from $78.4 million in Q4 2023, representing a 24.1% increase[40] - Investment income for the year-to-date 2024 reached $478.1 million, compared to $406.9 million for the same period in 2023, reflecting a 17.5% growth[40] Net Income and Stockholder Equity - Net income available to common stockholders for Q4 2024 was $93.2 million, compared to $122.5 million in Q4 2023, indicating a decrease of 24%[8] - Net income available to common stockholders for Q4 2024 was $93.2 million, compared to $122.5 million in Q4 2023, reflecting a decrease of 23.9%[11] - Stockholders' equity increased to $3,120.1 million in Q4 2024, compared to $2,954.4 million in Q4 2023, representing a growth of 5.6%[8] - The company’s total stockholders' equity as of Dec. 31, 2024, was $3,120.1 million, an increase from $2,954.4 million year-over-year, representing a growth of 5.6%[13] Loss Ratios and Expenses - The loss and loss expense ratio for Q4 2024 was 67.8%, an improvement from 85.7% in Q2 2024[8] - Total expenses for Q4 2024 were $1,137.3 million, up from $953.7 million in Q4 2023, marking an increase of 19.3%[11] - Losses and loss expenses incurred in Q4 2024 totaled $606.3 million, compared to $482.6 million in Q4 2023, indicating a significant increase of 25.6%[22] - The loss and loss expense ratio for Q4 2024 was 68.5%, compared to 61.0% in Q4 2023, reflecting higher claims costs[22] Assets and Book Value - Total assets at the end of Q4 2024 were $13,514.2 million, up from $11,802.5 million at the end of Q4 2023[8] - Total assets as of Dec. 31, 2024, amounted to $13,514.2 million, up from $11,802.5 million in the previous year, reflecting a growth of 14.5%[13] - The book value per common share increased to $47.99 as of December 31, 2024, compared to $45.42 a year earlier, marking a growth of 5.5%[50] Direct Business and Pricing - Direct new business written in Q4 2024 amounted to $232.0 million, consistent with $232.7 million in Q4 2023[19] - Renewal pure price increases for Q4 2024 were 8.8%, up from 7.3% in Q4 2023, indicating improved pricing power[22] - Direct new business for the quarter was $13.3 million, down from $26.0 million in the same quarter of 2023[31] - The company achieved a renewal pure price increase of 27.3% for the quarter, compared to 8.9% in the same quarter of 2023[31] Other Financial Metrics - The effective tax rate on net investment income was 20.7% for Q4 2024, unchanged from the previous quarter[40] - Non-GAAP operating income for Q4 2024 was $99.6 million, up from $81.5 million in Q4 2023, representing an increase of 22.2%[50] - Non-GAAP operating return on equity (ROE) for Q4 2024 was 13.5%, compared to 11.7% in Q4 2023[50]

Core Viewpoint - Selective Insurance Group, Inc. (SIGI) is currently trading at a premium compared to the Zacks Property and Casualty Insurance industry, with a price-to-book value of 1.90X versus the industry average of 1.49X [1] Company Performance - Selective Insurance has a market capitalization of $5.64 billion, with an average trading volume of 0.3 million shares over the last three months [2] - Over the past six months, SIGI shares have declined by 7.3%, underperforming the industry, sector, and the Zacks S&P 500 composite, which grew by 1.7%, 4.2%, and 3.4% respectively [3] - The stock closed at $92.89, which is 15.2% below its 52-week high of $109.58, and is trading below both the 50-day and 200-day simple moving averages of $95.97 and $94.67, indicating downward momentum [5] Growth Projections - The Zacks Consensus Estimate for SIGI's 2025 earnings per share indicates a significant increase of 117%, while revenues are projected to grow by 9.8% from 2024 estimates [6] - One of the five analysts covering SIGI has raised estimates for 2025 in the past 60 days, resulting in a 1% upward adjustment in the Zacks Consensus Estimate for 2025 [9] Factors Supporting Growth - Factors such as exposure growth, solid retention rates, and higher new business gains in standard commercial and excess and surplus (E&S) lines are expected to drive premium growth [10] - The E&S Lines segment is anticipated to improve due to renewal pure price increases and favorable marketplace conditions [11] - Selective Insurance estimates an after-tax net investment income of $360 million for 2024, benefiting from higher income on fixed-income securities due to improved book yields in a higher interest rate environment [12] Dividend and Return Metrics - Selective Insurance has a strong dividend history, with a nine-year CAGR of nearly 8.8% from 2015 to 2023, and a recent 9% hike in the quarterly cash dividend approved in Q3 2024 [13] - The company's return on equity in the trailing 12 months was 8.1%, surpassing the industry average of 7.5%, indicating efficient use of shareholders' funds [14] Conclusion - Despite facing challenges such as exposure to catastrophe loss and rising expenses, SIGI is well-positioned for growth due to strong renewal rates and favorable market conditions [15] - The company is considered a hold at present, benefiting from favorable growth estimates and prudent capital deployment, despite its expensive valuation [16]