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]

Financial Data and Key Metrics Changes - The second quarter adjusted after-tax operating income per share was $2.07, down from $2.16 in the same period last year, reflecting earnings pressure [21] - Core operations premium growth was 4.6% in the quarter, keeping the company on track to achieve its full-year premium growth outlook of 3% to 6% [21][36] - The company now expects full-year EPS to be approximately $8.5, a notable shift compared to earlier expectations [17][36] Business Line Data and Key Metrics Changes - Unum U.S. segment produced adjusted operating income of $318.2 million in 2025 compared to $357.5 million in 2024 [22] - Group Disability adjusted operating earnings were $124.8 million in 2025, reflecting a benefit ratio of 62.2%, up from 59.1% in the previous year [23] - Colonial Life segment adjusted operating income increased to $117.4 million, driven by premium growth of 3.6% [30] Market Data and Key Metrics Changes - International premiums showed strong growth, with Unum UK generating premium growth of 10% year-over-year in the second quarter [29] - The benefit ratio for Unum UK was 75%, up from 69.5% a year ago, primarily due to inflation differences [29] - Group persistency was reported at 89.7%, increasing sequentially from the first quarter but decreasing from 94% in the same period last year [28] Company Strategy and Development Direction - The company is focused on reducing its long-term care (LTC) exposure while enhancing its core business operations [15][17] - Recent acquisitions include a small block of group business in the UK and a technology solution to enhance the digital platform [19][20] - The company aims to maintain a robust capital position, ending the quarter with $2 billion in holding company cash and a 485% risk-based capital ratio [18][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that results fell short of expectations, particularly in GAAP earnings, but core fundamentals remain solid [8][10] - The company expects sales growth to improve in the second half of the year, despite a slower start [10][36] - Management remains cautiously optimistic about the rest of 2025, citing strong capital generation and premium growth [40] Other Important Information - The company announced a 10% increase in its annual common stock dividend and repurchased $300 million in shares during the second quarter [20] - The LTC net premium ratio was 94.9%, higher than the reported 93.7% in the same year-ago period [31] - The company is actively looking for further opportunities to reduce the size of its LTC footprint [82] Q&A Session Summary Question: Can you unpack the underlying drivers of the elevated claims in group disability? - Management noted that recoveries have been below expectations, with a stable experience in the first two quarters, and higher than expected claim sizes in the second quarter [45][46] Question: Is the lower claimant mortality in LTC a one-off or a normal volatility? - Management views the current quarter's results as an anomaly, with expectations that the volatility will not persist into the back half of the year [55][56] Question: How should we think about the upcoming annual actuarial assumption review? - Management indicated that the GAAP assumption review will be completed in the third quarter, taking into account recent experience [61] Question: Given the excess capital position, why not more buybacks? - Management emphasized a sustainable approach to capital deployment, with plans to return capital to shareholders through dividends and share repurchases [66][68] Question: What are the dynamics behind plans staying with existing carriers? - Management noted that the competitive environment favors incumbent carriers, with companies wanting to protect their blocks due to favorable conditions [87][90]

Financial Data and Key Metrics Changes - The second quarter adjusted after-tax operating income per share was $2.07, down from $2.16 in the same period last year, reflecting earnings pressure [20] - Full year EPS is now expected to be approximately $8.5, a notable shift compared to earlier expectations [14][39] - Core operations premium growth was 4.6% in the quarter, keeping the company on track to achieve a full year premium growth outlook of 3% to 6% [20] Business Line Data and Key Metrics Changes - Unum U.S. segment produced adjusted operating income of $318.2 million in 2025 compared to $357.5 million in 2024 [20] - Group Disability adjusted operating earnings were $124.8 million in 2025, reflecting a benefit ratio of 62.2%, up from 59.1% in the previous year [21] - Colonial Life segment adjusted operating income increased to $117.4 million, driven by premium growth of 3.6% [28] Market Data and Key Metrics Changes - International premiums showed strong growth, with Unum UK generating a 10% premium growth year-over-year in the second quarter [27] - Persistency in Unum UK was 91.6%, higher than both the first quarter and the same period last year [27] - The overall persistency for Unum U.S. was 89.7%, which increased sequentially from the first quarter but decreased from 94% in the same period last year [26] Company Strategy and Development Direction - The company is focused on reducing its exposure to legacy long-term care (LTC) while positioning itself as a leading employee benefits provider [13][14] - Recent acquisitions in the UK and the U.S. are aimed at enhancing digital capabilities and scaling the business [15][16] - The company plans to continue investing in areas that support growth and improve capital efficiency [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that results fell short of expectations, particularly in GAAP earnings, but core fundamentals remain solid [5] - The company expects sales growth to improve in the second half of the year, despite a slower start in 2025 [7] - Management remains cautiously optimistic about the rest of 2025, citing strong capital generation and a robust capital position [39] Other Important Information - The company announced a 10% increase in its annual common stock dividend and repurchased $300 million in shares during the second quarter [18] - The alternative investment portfolio yielded 7% this quarter, slightly below the long-term target of 8% to 10% [12][30] - The company is actively looking for further opportunities to reduce the size of its LTC footprint [80] Q&A Session Summary Question: What are the underlying drivers of elevated claims in group disability? - Management noted that recoveries have been slightly below expectations, with a stable experience in the first two quarters, and they expect a benefit ratio of around 62% for the year [46][48] Question: Is the lower claimant mortality a one-off or a normal volatility? - Management views the current quarter's results as an anomaly and does not expect continued pressure in the back half of the year [54] Question: How should we think about sustainable free cash flow conversion? - Management emphasized strong capital generation and plans to return capital to shareholders through dividends and share repurchases, maintaining a focus on sustainable capital deployment [62][66]

Financial Data and Key Metrics Changes - The company achieved net income of $58 million and a return on equity of 12.9% for Q1 2025, marking a year-over-year increase in core gross and net premiums written [19][20] - The combined ratio for the core business was 95.4%, impacted by $59 million in losses from California wildfires, which was below the previous estimate of $60 million to $70 million [8][20] - The attritional combined ratio improved by three points to 90%, driven by a 1.2 point improvement in the expense ratio and a 1.4 point improvement in the acquisition cost ratio [24][20] Business Line Data and Key Metrics Changes - Gross written premiums grew 12% year-over-year for the core business, with double-digit growth in accident and health, property, and other specialty lines, while casualty premiums decreased slightly [10][27] - The Insurance and Services segment saw gross written premiums increase by $111 million or 21%, with accident and health premiums up 19% [27][28] - The Reinsurance segment experienced a slight decrease in gross premiums written by $2 million, with casualty premiums decreasing in double digits [35] Market Data and Key Metrics Changes - The company reported strong premium growth from partnerships established in 2023 and 2024, with a focus on retaining profitable underwriting portfolios [12][10] - The pricing environment within accident and health continues to meet the company's risk and return profile, with double-digit rate hardening observed in U.S. Medical [30] - Casualty rates remain elevated due to current loss trends, with positive rate changes exceeding loss costs, particularly in excess casualty [31] Company Strategy and Development Direction - The company aims to become a high-performing specialty underwriter, focusing on stable and consistent returns for shareholders [17][51] - A deliberate strategy to retain a greater proportion of profitable books is in place, with an emphasis on underwriting margin as the top priority [11][10] - Investment in data capabilities within the MGA space is planned for 2025 to enhance competitive advantages [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased global uncertainty due to tariff changes but emphasized proactive monitoring and readiness to adjust pricing and risk appetite [15][16] - Inflation remains a primary focus, with a commitment to react quickly if necessary [15] - The company is optimistic about maintaining double-digit net premium growth for fiscal year 2025 [21] Other Important Information - The company completed a $753 million shareholder repurchase agreement and participated in a secondary offering, both of which were accretive for shareholders [6][7] - The company received positive outlook revisions from Fitch and AM Best, affirming its ratings and reflecting significant underwriting improvements [14][49] - The total investment result for the quarter stood at $71 million, with no significant losses noted in the investment portfolio [43] Q&A Session Summary Question: What are the expectations for premium growth in 2025? - The company expects to maintain double-digit net premium growth for fiscal year 2025, driven by strong performance across various lines of business [21] Question: How is the company addressing the impact of inflation and tariffs? - Management is closely monitoring the impact of tariffs and inflation, with a focus on adjusting pricing and risk appetite as needed [15][16] Question: What is the outlook for the underwriting margins? - The company remains committed to underwriting excellence, with a focus on maintaining attractive margins while growing premiums across a diversified book of business [11][20]

Financial Data and Key Metrics Changes - The company achieved a net income of $58 million and a return on equity of 12.9% for Q1 2025, marking a year-over-year increase in core gross and net premiums written [19][20] - The combined ratio for the core business was reported at 95.4%, impacted by $59 million in losses from California wildfires, which was below the previous estimate of $60 million to $70 million [8][20] - The company reported a 12% year-over-year growth in gross written premiums and a 20% increase in net written premiums [9][10] Business Line Data and Key Metrics Changes - The accident and health segment saw a 19% increase in premiums, contributing significantly to overall growth, while casualty premiums decreased slightly as the company prioritized underwriting discipline [26][29] - The insurance and services segment achieved a combined ratio of 94%, reflecting a 4.4 point improvement from the prior year [27] - The reinsurance segment experienced a decrease in gross premiums written by $2 million, with casualty premiums decreasing in double digits [34] Market Data and Key Metrics Changes - The company noted double-digit rate hardening in U.S. Medical, while U.S. Non-medical pricing remained largely flat [28] - The pricing environment within accident and health continues to meet the company's risk and return profile, with growth opportunities identified [29] - The reinsurance segment's combined ratio was 97.1%, remaining profitable despite catastrophe losses [35] Company Strategy and Development Direction - The company aims to become a high-performing specialty underwriter, focusing on stable and consistent returns for shareholders [17] - A deliberate strategy to retain a greater proportion of profitable underwriting books is in place, with an emphasis on underwriting margin [11] - The company is investing in data capabilities within the MGA space to enhance its competitive edge [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased global uncertainty due to tariff changes but emphasized proactive monitoring and readiness to adjust pricing and risk appetite [15][16] - Inflation remains a primary focus, with the company prepared to react quickly if necessary [15] - The company expressed confidence in maintaining double-digit net premium growth for fiscal year 2025 [21] Other Important Information - The company completed a $753 million shareholder repurchase agreement and participated in a secondary offering, both of which were accretive for shareholders [6][7] - The company received positive outlook revisions from Fitch and AM Best, affirming its ratings [14][46] - The investment portfolio remains strong, with net investment income of $71 million for the quarter [42] Q&A Session Summary Question: What is the outlook for premium growth in 2025? - The company expects to maintain double-digit net premium growth for fiscal year 2025, driven by strong performance across various lines of business [21] Question: How is the company addressing the impact of inflation? - Management stated that inflation is a primary focus and the company is prepared to react quickly to any changes in the environment [15] Question: What are the expectations for the underwriting margin? - The company emphasized that underwriting margin remains the number one priority, with a disciplined approach yielding positive results [11]