Core Viewpoint - Selective Insurance Group, Inc. (SIGI) has underperformed compared to the industry and major indices, despite a recent stock price increase and positive growth factors [1][4]. Financial Performance - The market capitalization of Selective Insurance is $5.88 billion, with an average trading volume of 0.3 million shares over the last three months [2]. - Total revenues have shown a compound annual growth rate (CAGR) of 8% from 2017 to 2023, indicating steady topline improvement [7]. - The company 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 [8][9]. Operational Challenges - Selective Insurance faces higher expenses due to increasing loss and loss expenses and amortization of deferred policy acquisition costs [2]. - The company is exposed to catastrophe losses from natural disasters, with a GAAP combined ratio projected at 101.5%, up from a previous estimate of 96.5% [3]. Analyst Sentiment - Mixed analyst sentiment exists, with two out of five analysts lowering estimates for 2024 by 0.5%, while one analyst raised estimates for 2025 by 1% [6]. Growth Factors - Factors favoring SIGI include growth in exposure, solid retention rates, and higher new business gains in standard commercial and excess and surplus (E&S) lines [7]. - The E&S lines segment is expected to improve due to renewal pure price increases and favorable market conditions [8]. Dividend and Return Metrics - Selective Insurance has a strong dividend history, with a nine-year CAGR of nearly 8.8% and a recent 9% hike in quarterly cash dividends [10]. - The return on equity over the trailing 12 months is 8.1%, surpassing the industry average of 7.5% [11]. Valuation Concerns - The stock is considered overvalued with a trailing 12-month price-to-book (P/B) ratio of 1.98, compared to the industry average of 1.55 [12]. Conclusion - Despite challenges such as exposure to catastrophe losses and rising expenses, Selective Insurance is positioned to benefit from favorable growth estimates and prudent capital deployment, suggesting a hold strategy for investors [13][14].

Core Viewpoint - Selective Insurance Group, Inc. reported a decline in Q3 earnings, missing estimates, while increasing its dividend and showing revenue growth driven by higher premiums and investment income [2][3][11]. Financial Performance - Q3 2024 operating income was $1.40 per share, missing the Zacks Consensus Estimate by 17.1% and down 7% year-over-year [2]. - Total revenues reached $1.2 billion, a 13.9% increase from the previous year, but missed estimates by 0.4% [3]. - Net premiums written (NPW) increased 9% year-over-year to $1.15 billion, driven by renewal price increases and stable retention [3]. - Net investment income rose 17% year-over-year to $117.8 million, exceeding estimates [3]. Underwriting and Losses - After-tax net underwriting income fell 83% year-over-year to $4.1 million, with pre-tax catastrophe losses more than doubling to $148.8 million [4]. - The combined ratio deteriorated to 99.5, an increase of 270 basis points year-over-year, primarily due to elevated catastrophe losses [4]. Segment Performance - Standard Commercial Lines NPW increased 8% year-over-year to $903.9 million, with a combined ratio of 99.2 [6]. - Standard Personal Lines NPW decreased 2% year-over-year to $111 million, with retention dropping to 75% [7]. - Excess & Surplus Lines NPW rose 28% year-over-year to $142.7 million, with a combined ratio improving to 83.2 [8]. Financial Position - Total assets were $13.4 billion, down 14% from December 2023, while long-term debt increased 1% to $508.2 million [9]. - Book value per share was $48.82, up 9% year-over-year, with an annualized non-GAAP operating return on equity of 12.1% [10]. Shareholder Returns - The company repurchased shares worth $8.7 million and announced a 9% increase in the quarterly cash dividend to 38 cents per share [11]. Guidance - The company estimates a GAAP combined ratio of 102.5% for 2024, reflecting an increase in expected net catastrophe losses [12]. Market Position - Selective Insurance is part of the Zacks Insurance - Property and Casualty industry, with a Zacks Rank 3 (Hold) indicating an expected in-line return in the coming months [15].

Financial Performance - Revenues for Q3 2024 reached $1,244,306, a 15% increase from $1,081,081 in Q3 2023[85] - After-tax net investment income for Q3 2024 was $93,379, up 16% from $80,227 in Q3 2023[85] - Net income available to common stockholders for Q3 2024 was $89,978, a 4% increase from $86,908 in Q3 2023[85] - Diluted net income per share for Q3 2024 was $1.47, a 4% increase from $1.42 in Q3 2023[87] - Non-GAAP operating income for Q3 2024 was $85,720, a decrease of 7% from $92,343 in Q3 2023[86] - The combined ratio for Q3 2024 was 99.5%, an increase of 2.7 points from 96.8% in Q3 2023[85] - The combined ratio for the first nine months of 2024 was 105.6%, an increase of 10.1 points compared to 95.5% in the same period of 2023[106] - The combined ratio increased by 8.4 points in Q3 2024 and 34.1 points in the first nine months of 2024, primarily due to unfavorable prior year casualty reserve development of $216.0 million[114] Investment Performance - The annualized after-tax yield on the investment portfolio for Q3 2024 was 4.0%, up 0.1 points from 3.9% in Q3 2023[85] - Total invested assets increased by 11% to $9,635,288 thousand as of September 30, 2024, compared to $8,693,729 thousand as of December 31, 2023[147] - Net investment income earned after tax increased by 16% to $93,379 thousand in Q3 2024 compared to $80,227 thousand in Q3 2023[148] - Net realized gains on disposals were $2,147 thousand in Q3 2024, a significant recovery from $(4,897) thousand in Q3 2023[149] - Total net realized and unrealized investment gains for Q3 2024 amounted to $5,389 thousand, compared to a loss of $6,880 thousand in Q3 2023, reflecting a change of 178%[149] Underwriting and Loss Ratios - The loss and loss expense ratio increased by 4.8 points in Q3 2024 and 11.0 points in the first nine months of 2024 compared to the same prior-year periods, primarily driven by net catastrophe losses and non-catastrophe property losses[109] - Net catastrophe losses in Q3 2024 were $100.4 million, impacting the loss and loss expense ratio by 11.5 points, compared to $36.7 million in Q3 2023, which impacted the ratio by 4.7 points[109] - The loss and loss expense ratio decreased by 5.8 points in Q3 2024 and 6.9 points in the first nine months of 2024 compared to the same prior-year periods[131] - The underwriting expense ratio decreased by 0.3 points in Q3 2024 and 0.9 points in the first nine months of 2024, attributed to a decrease in expected profit-based employee compensation and premium growth outpacing underwriting expenses[112] Premium Growth and Pricing - NPW grew by 9% in Q3 2024 and 13% in the first nine months, driven by overall renewal pure price increases and higher direct new business[97] - Standard Commercial Lines renewal pure price increase was 9.1% in Q3 2024, up from 7.9% in the previous quarter[93] - Standard Personal Lines renewal pure price increase reached 22.8% in Q3 2024, up from 17.7% in the previous six months[94] - Renewal pure price increases accelerated to 10.2% in Q3 2024, up from 7.6% in the previous quarter[116] Capital Management and Shareholder Returns - The company declared a 9% increase in the quarterly cash dividend on common stock to $0.38 per share, payable on December 2, 2024[170] - The Parent's total investments and cash decreased to $433,876 thousand as of September 30, 2024, from $507,994 thousand as of December 31, 2023[153] - The company repurchased 103,000 shares of common stock for $8.7 million, with $75.5 million of remaining capacity under the share repurchase program as of September 30, 2024[164] - The effective tax rate for Nine Months 2024 was 20.8%, compared to 20.7% for the same period in 2023[150] Operational Efficiency - Operating cash flows during Nine Months 2024 were 22% of net premium written (NPW)[147] - Net cash provided by operating activities increased to $767.7 million in Nine Months 2024, compared to $522.3 million in Nine Months 2023[174] - The underwriting expense ratio decreased by 1.3 points in Q3 2024 and 1.4 points in the first nine months of 2024, primarily due to premium growth outpacing underwriting expense growth[140] Catastrophe Impact - The company experienced higher net catastrophe losses due to Hurricane Helene, which resulted in estimated losses of $85.0 million in Q3 2024 and impacted the ratio by 7.6 points[101] - Net catastrophe losses totaled $189.8 million for the first nine months of 2024, impacting the ratio by 7.4 points, compared to $134.4 million in the same period of 2023, which impacted the ratio by 5.9 points[109] Future Outlook and Expansion - The company plans to expand its geographic footprint, entering new states including West Virginia, Maine, Washington, Nevada, and Oregon in 2024[93] - The expected GAAP combined ratio for 2024 was increased to 102.5%, reflecting elevated catastrophe losses[96]

Financial Data and Key Metrics Changes - The company reported fully diluted net income of $1.47 per share and non-GAAP operating income of $1.40 per share for Q3 2024, with a year-to-date return on equity (ROE) of 5% and operating ROE of 4.8% [18][22] - The GAAP combined ratio for the quarter was 99.5%, including 13.4 points of catastrophe losses, with an underlying combined ratio of 87.7%, which is 2.7 points lower than the previous year [18][14] - The company expects a GAAP combined ratio of 102.5% for 2024, up from previous guidance of 101.5%, reflecting higher catastrophe loss assumptions [23] Business Line Data and Key Metrics Changes - In standard commercial lines, net premiums written grew 8% in the quarter, driven by a 13.4% renewal premium change, with a combined ratio of 99.2% [14][12] - Excess and surplus lines represented 12% of net premiums written, with a 28% increase in net premiums written and an 83.2% combined ratio [15] - Personal lines net premiums written decreased by 2%, with renewal pure pricing at 22.8% and an average policy size increase of 19% [16] Market Data and Key Metrics Changes - The company added Washington, Oregon, and Nevada as standard commercial line states, bringing the total to 35 states since 2017 [13] - The company achieved a meaningful increase in general liability pricing from 7.6% in Q2 to 10.2% in Q3, while commercial property renewal pure pricing was 12% [12] - Commercial lines pricing, excluding workers' compensation, increased by 10.2%, with exposure growth contributing 3.9 points to total renewal premium change [13] Company Strategy and Development Direction - The company aims to deliver combined ratios in line with or better than the 95% target in each insurance segment, focusing on stability for distribution partners and long-term returns for shareholders [9] - The company is willing to trade growth for profitability in the current loss trend environment, emphasizing disciplined underwriting and claims management [11] - The strategic focus includes expanding into new states while managing catastrophe exposure through strict guidelines and conservative reinsurance programs [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges of social inflation impacting severity trends and emphasized the importance of continued underwriting discipline [10] - The company remains confident in its ability to create value despite elevated catastrophe losses, with a strong capital position providing flexibility [17] - Management highlighted the stability of their portfolio and the proactive measures taken to address loss trends, particularly in commercial auto [34] Other Important Information - The company repurchased approximately 103,000 shares of common stock at an average price of $84.34, with $75.5 million remaining under the share repurchase authorization [23] - A quarterly dividend of $0.38 per common share was declared, an increase of 9% [23] - The investment portfolio remains conservatively positioned, with 92% in fixed income and short-term investments, and after-tax net investment income of $93 million for the quarter [22] Q&A Session Summary Question: Clarification on commercial auto reserves - The company confirmed a $10 million addition to the current year for commercial auto reserves [26][30] Question: Impact of social inflation on commercial auto - Management noted that commercial auto pricing has been stable and strong, with a long-term track record of consistent pricing responses [28][29] Question: Future of personal lines and growth strategy - Management indicated a focus on executing successfully in the current target market before considering expansion, with potential for state expansion in the future [76] Question: Rate trajectory in personal lines - The company expects to continue filing for rate increases until achieving target combined ratios, with a blended rate of 22.8% in the quarter [55][56] Question: Impact of elevated catastrophe losses on incentive compensation - The incentive compensation program includes catastrophe losses, which can put downward pressure on financial performance-related compensation [71]

Selective Insurance Group, Inc. (SIGI) reported third-quarter 2024 operating income of $1.40 per share, which missed the Zacks Consensus Estimate by 17.1%. The bottom line decreased 7% from the year-ago quarter.The quarterly results reflected average renewal pure price increases and stable retention across Standard Commercial Lines and Excess & Surplus Lines. Soft performance at Standard Personal Lines, higher catastrophe losses and poor underwriting income were offsets.Behind the Headlines  Total revenues ...

For the quarter ended September 2024, Selective Insurance (SIGI) reported revenue of $1.24 billion, up 13.9% over the same period last year. EPS came in at $1.40, compared to $1.51 in the year-ago quarter.The reported revenue represents a surprise of -0.42% over the Zacks Consensus Estimate of $1.24 billion. With the consensus EPS estimate being $1.69, the EPS surprise was -17.16%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to det ...

Selective Insurance (SIGI) came out with quarterly earnings of $1.40 per share, missing the Zacks Consensus Estimate of $1.69 per share. This compares to earnings of $1.51 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -17.16%. A quarter ago, it was expected that this insurance holding company would post earnings of $1.56 per share when it actually produced a loss of $1.10, delivering a surprise of -170.51%. Over the last fo ...

Exhibit 99.2 FINANCIAL SUPPLEMENT THIRD QUARTER 2024 Forward-Looking Statements Certain statements in this report, including information incorporated by reference, are "forward-looking statements" 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 intentions, beliefs, projections, estimations, or forecasts of future events a ...

In its upcoming report, Selective Insurance (SIGI) is predicted by Wall Street analysts to post quarterly earnings of $1.68 per share, reflecting an increase of 11.3% compared to the same period last year. Revenues are forecasted to be $1.24 billion, representing a year-over-year increase of 14.3%. The consensus EPS estimate for the quarter has undergone an upward revision of 0.4% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed th ...

Wall Street expects a year-over-year increase in earnings on higher revenues when Selective Insurance (SIGI) reports results for the quarter ended September 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on October 21, 2024, might help the stock move higher if these key numbers are be ...