Summary of Selective Insurance Group (SGZ.CL) 2025 Conference Call Company Overview - **Company**: Selective Insurance Group - **Date of Conference**: September 03, 2025 Key Points Industry Insights - The insurance industry is experiencing higher paid emergence in recent accident years, particularly in commercial auto and general liability lines [2][3] - Selective Insurance has adopted a conservative approach to reserving, especially in workers' compensation, due to observed flattening frequency trends [14][15] - The company is addressing social inflationary trends impacting claims severity across its portfolio [8][30] Financial Performance - The underlying combined ratio in personal lines is reported at 82%, indicating improved profitability [50] - Year-to-date return on equity (ROE) stands at 12.3%, with a target combined ratio of 89% [35] - The company has seen a significant shift in its personal lines portfolio towards the mass affluent market, with average home values for new business around $1,000,000 [48] Reserving Philosophy - Selective Insurance emphasizes a proactive reserving philosophy, reacting quickly to adverse developments in recent accident years [20][34] - The company has increased its expected loss ratios for general liability, positioning itself better for future years [7][11] - The management believes that the current reserving practices are sound, despite market concerns [29][37] Capital Management - The company plans to return 20-25% of its earnings over time through dividends and stock buybacks, having repurchased $19.4 million in stock in the first quarter of 2025 [26][28] - Selective Insurance is cautious about making economically inefficient decisions to appease market concerns regarding reserves [29] E&S Segment Growth - The Excess and Surplus (E&S) segment has been successful, with a shift towards more property opportunities [39] - The company is expanding its non-admitted E&S products to retail distribution partners, aiming for profitable growth [40][41] Technology and AI Implementation - Selective Insurance is investing in technology to enhance agent and customer experiences, improve operational efficiency, and leverage AI for better decision-making [77][78] - The company has numerous active AI use cases and is focused on continuous improvement in data utilization [80][81] Market Positioning - The company is strategically positioned to capitalize on the mass affluent market, with plans to expand its footprint in jurisdictions not currently served [52] - Selective Insurance is focused on maintaining strong margins while navigating the challenges posed by inflation and market dynamics [54][55] Conclusion - Selective Insurance Group is navigating a complex insurance landscape with a focus on proactive reserving, capital management, and technology investments to drive future growth and profitability [85]

Financial Data and Key Metrics Changes - Net written premium grew 4% to $335.4 million, although growth was impacted by unusual ceded reinsurance premium adjustments [7] - The first quarter combined ratio was 99.4%, a 0.5 point increase from Q1 2024, while the underlying loss ratio improved by 2.9 points to 56.5% [7][18] - Net investment income increased to $23.5 million, primarily due to a rise in fixed maturity income [10][21] - Reported book value per share improved to $32.13, with adjusted book value per share growing to $34.16 [11][24] Business Line Data and Key Metrics Changes - Core Commercial businesses saw net written premium growth of 6%, with renewal premium change remaining strong at 11.7% [14] - Rate changes for general liability exceeded 9%, while automobile and umbrella lines produced double-digit rate changes [14][15] - Specialty and surety businesses performed in line with expectations, contributing to overall growth [16] Market Data and Key Metrics Changes - Catastrophe losses contributed five points to the combined ratio, with $8.2 million attributed to California wildfires [10][19] - The company experienced a strong underwriting profit despite elevated industry catastrophe losses [20] Company Strategy and Development Direction - The company is in the final stages of developing a new policy administration system, which is expected to improve process efficiency and product management [12] - Focus remains on disciplined pricing, stable retention, and increased new business production across the portfolio [7][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage potential impacts from material and labor cost inflation through disciplined pricing and regular trend evaluations [26][27] - The company anticipates that the elevated underwriting expense ratio will normalize over time as new systems and personnel are fully integrated [30][33] Other Important Information - The company declared and paid a cash dividend of $0.16 per share to shareholders [24] - The investment portfolio is well-positioned against market uncertainties, with a focus on improving credit quality and diversification [21][22] Q&A Session Summary Question: Current pricing power and impact of material and labor cost inflation - Management is closely monitoring the situation and believes that current rates exceed net loss trends, allowing for a cushion in estimates [26][27] Question: Underwriting expense ratio and potential levers to reduce it - The elevated expense ratio is partly due to one-time costs associated with the new policy administration system, which is expected to decrease over time [29][30] Question: Expectations for expense ratio normalization as the company grows - Management indicated that fixed costs provide leverage with premium growth, and the expense ratio is expected to normalize as new agents reach historical production averages [33]

Core Viewpoint - NI Holdings, Inc. reported mixed financial results for the year ended December 31, 2024, with a strong fourth quarter net income but challenges in certain segments leading to increased combined ratios and a decline in earnings per share [1][5][6]. Financial Performance - Direct written premiums for Q4 2024 were $73.1 million, down 7.9% from Q4 2023, while full-year direct written premiums increased slightly by 0.3% to $342.3 million [3][5]. - Net earned premiums for Q4 2024 were $71.8 million, a decrease of 3.0% compared to the prior year quarter, but full-year net earned premiums rose by 6.2% to $310.1 million [3][5]. - The loss and LAE (Loss Adjustment Expense) ratio for Q4 2024 was 45.8%, up 2.3 percentage points from the prior year quarter, and the full-year ratio was 66.9%, an increase of 3.1 percentage points [3][5]. - The combined ratio for Q4 2024 was 80.0%, up 1.3 percentage points year-over-year, while the full-year combined ratio was 100.7%, compared to 97.0% in 2023 [3][5]. - Net income attributable to NI Holdings for Q4 2024 was $9.8 million, a 48.6% increase from $6.6 million in Q4 2023, but the full-year net income showed a loss of $6.1 million compared to a loss of $5.5 million in 2023 [3][5][6]. Management Commentary - The newly appointed President and CEO expressed optimism about the company's future and emphasized the importance of collaboration with the board, employees, and agents to drive success [4][6]. - The company highlighted strong performance in the Private Passenger Auto and Home and Farm segments, aided by improved weather conditions and strategic underwriting actions [6][8]. Strategic Focus - NI Holdings plans to implement a comprehensive long-term strategic plan focusing on enhancing investments in people and technology, improving distribution management, and managing expenses to create lasting shareholder value [8]. - The company is taking aggressive actions to address challenges in the Non-Standard Auto segment, which has faced unfavorable reserve developments [6][7].