Selective Insurance to Benefit From Growing Premium Amid Cost Woes

Company Overview - Selective Insurance Group, Inc. (SIGI) is positioned to benefit from strong renewal rates, fuel price increases, favorable excess and surplus (E&S) lines marketplace conditions, and higher income from its fixed-income securities portfolio [1] Premium Growth - The company is expected to experience premium growth driven by exposure growth, solid retention rates, and higher new business gains in standard commercial and E&S lines, achieving an 8.7% CAGR in net premiums written from 2017 to 2024 [2] - The Commercial Lines segment is increasing its share of distribution partners' total premiums to 12%, with initiatives aimed at targeting a 25% agent market share and expanding into additional states [2] Financial Performance - Improved net investment income and higher other income have contributed to top-line growth, with the E&S Lines segment likely to improve due to renewal pure price increases and favorable marketplace conditions [3] - Selective Insurance anticipates after-tax net investment income of $415 million in 2025, an increase from the previously guided $405 million, driven by higher income from fixed-income securities [4] Dividend Policy - The company has been increasing dividends, with a 10-year CAGR of about 10% from 2015 to 2024, and had $56.1 million remaining under authorization as of June 30, 2025, enhancing its attractiveness to yield-seeking investors [5] Industry Challenges - Selective Insurance faces challenges from increasing competition in the E&S market, which is leading to pricing pressure and making it difficult for established players to maintain competitive positioning [7]