Selective (SIGI) Q2 2025 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Wed, April 22, 2026 astatine 11:11 AM CDT 40 min read

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July 24, 2025, 8 a.m. ET

• Chairman, President & Chief Executive Officer — John Joseph Marchioni

• Executive Vice President & Chief Financial Officer — Patrick Sean Brennan

John Joseph Marchioni: Thanks, Brad, and bully morning. We delivered an operating instrumentality connected equity of 10.3% this 4th with fantabulous concern income, which accrued 18% from the anterior twelvemonth period. Excess and surplus and Personal lines produced beardown results successful the quarter, with some segments reporting quarterly and year-to-date combined ratios astatine oregon beneath our 95% semipermanent target. Overall, our security segments grew 5%, reflecting our disciplined underwriting and pricing strategy successful an progressively competitory market. In Standard Commercial Lines, renewal axenic terms accrued 8.9%, and we proceed to execute targeted underwriting and claims actions that I volition picture aboriginal successful much detail.

We recorded $45 cardinal oregon 3.8 points of unfavorable anterior twelvemonth casualty reserve improvement related to wide liability and commercialized auto. This pushed our wide combined ratio for the 4th to 100.2%, including an assumed 6 points of catastrophe losses. Given this reserving enactment and those successful 2024, I privation to supply discourse astir our process, existent risks and however we respond erstwhile caller nonaccomplishment information emerges. In summation to broad quarterly reserve reviews, we behaviour semiannual autarkic reserve assessments and periodically prosecute 3rd parties for benchmarking and methodology reviews. Ultimately, reserve improvement reflects the prime of our archetypal nonaccomplishment picks. Historically, those person held up rather well.

Focusing connected the much mature 2015 to 2019 mishap [Audio Gap] 2024, we accrued our different liability occurrence eventual losses by 5.5% from our archetypal picks compared to an mean 14% summation for the industry. In the 2021 to 2023 mishap years, we accrued our eventual losses by 13% compared to the industry's 5%. While manufacture trends successful caller years person not matched pre-pandemic levels, determination person been important reserving actions, which we judge constituent to industry-wide unit connected this enactment of business. Schedule P information confirms that we thin to respond aboriginal to nonaccomplishment emergence adjacent for comparatively immature mishap years for longer process lines. We added caller slides successful our capitalist presumption to item this point.

For much mature mishap years and different liability occurrence and commercialized car liability, our booked nonaccomplishment ratio astatine the 3rd year-end valuation for a fixed mishap twelvemonth is akin to the nonaccomplishment ratio astatine year-end 2024. For the industry, determination has been a much meaningful magnitude of unfavorable improvement aft the 3rd year-end evaluation. This responsiveness informs our presumption erstwhile mounting prospective nonaccomplishment trends and pricing strategy. Our casualty premix of concern is higher than our peers. This has been a payment erstwhile spot lines person been challenged and our humanities catastrophe losses and volatility are little than the manufacture average.