Selective Insurance Group: Financial Growth & Market Adaptation in 2025
Selective Insurance Group has reported significant improvements in its financial outcomes for 2025, showcasing robust underwriting performance in an evolving U.S. property and casualty (P&C) market affected by inflationary trends and volatility. The company's strategic focus on risk management and regulatory compliance requirements underscores its adaptability to shifting industry conditions.
Selective achieved a net income of $7.49 per share and a non-GAAP operating income of $7.38 per share for the year. The combined ratio saw a notable decline to 97.2%, compared to 103% in 2024, reflecting effective underwriting and claims management. Net premiums written (NPW) grew by 5%, reaching $4.87 billion, supported by average renewal price increases of 9.5%.
Q4 Financial Highlights
In Q4, Selective reported a net income of $2.52 per share. NPW increased year-over-year by 4%, reaching $1.13 billion, while net premiums earned rose 7% to $1.22 billion. The Q4 combined ratio improved to 93.8% from 98.5% the previous year. Catastrophe losses added 1.7 points to the combined ratio, with no prior-year casualty reserve development in 2025, unlike the adverse development seen in 2024.
Market Adaptation and Strategic Initiatives
The U.S. P&C sector, particularly auto insurance, is grappling with economic inflation and rising claim severities. Carriers are responding with rate adjustments and stricter underwriting practices. Selective's 2025 performance indicates successful alignment with market conditions, with strategies effectively addressing loss-cost trends and ensuring regulatory compliance.
John Marchioni, Selective's CEO, highlighted investments in areas like risk selection, policy pricing, claims management, and the enhancement of data analytics and artificial intelligence capabilities to improve operational efficiency and outcomes. For brokers, these investments suggest stable capacity offerings with competitive terms and conditions.
Investment Performance and Future Outlook
Selective capitalized on the favorable interest rate environment, with Q4 after-tax net investment income surging by 17% to $114.2 million. By December 31, 2025, total assets increased by 12% to $15.16 billion, while investments rose by 17% to $11.30 billion. Looking ahead to 2026, the company projects a GAAP combined ratio of 96.5% to 97.5%, expecting stable commercial lines and moderating property pricing pressures.