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Selective Insurance's Q3 operating income rose 25% year over year but missed estimates.
Revenues grew 8.9% on higher premiums and investment income, while catastrophe losses narrowed
The board raised the dividend by 13% and approved a new $200M share repurchase program
Selective Insurance Group (SIGI - Free Report) reported third-quarter 2025 operating income of $1.75 per share, which missed the Zacks Consensus Estimate by 4.9%. The bottom line, however, increased 25% year over year.
The company’s performance in the quarter reflects solid underwriting income, lower catastrophe losses, average renewal pure price increase and lower loss and loss expenses.
Behind the Headlines
Total revenues of $1.4 billion increased 8.9% from the year-ago quarter’s figure, primarily due to higher net premiums written, net premiums earned and net investment income earned. The top line beat the Zacks Consensus Estimate by 0.4%.
Selective Insurance Group, Inc. Price, Consensus and EPS Surprise
On a year-over-year basis, net premiums written (NPW) increased 4% to $1.2 billion, driven by renewal pure price increases. Average renewal pure price contracted 90 basis points year over year to 9.6%. Our estimate for NPW was $1.3 billion.
Net investment income increased 18% year over year to $110 million.
Net catastrophe losses of $24.9 million were narrower than the year-ago loss of $148.8 million. Non-catastrophe property loss and loss expenses were $169.6 million, wider than the year-ago loss of $146.7 million.
Underwriting income of $16.7 million increased more than threefold year over year. The combined ratio of 98.6 improved 90 basis points year over year. The Zacks Consensus Estimate was 97.6. Our estimate was also 97.6.
Total expenses increased 7.7% year over year to $1.2 billion, primarily due to higher loss and loss expense incurred. Our estimate was $1.9 billion.
Segmental Results
Standard Commercial Lines’ NPW was up 4% year over year to $940.8 million. The premium growth reflected average renewal pure price increases of 8.9% and retention of 82%. Our estimate was $962.8 million.
The combined ratio deteriorated 190 basis points (bps) to 101.1. The Zacks Consensus Estimate was 98.9 and our estimate was 97.
Standard Personal Lines’ NPW decreased 6% year over year to $104.2 million due to deliberate profit improvement actions. New business decreased 20%, while renewal pure price was 16% and retention was 79%. The figure was lower than our estimate of $120.1 million.
The combined ratio improved 1200 bps on a year-over-year basis to 110.1. The Zacks Consensus Estimate was pegged at 99.3, while our estimate was 124.8.
Excess & Surplus Lines’ NPW was up 14% year over year to $162.9 million, driven by average renewal pure price increases of 8.3%. Our estimate was $180.6 million.
The combined ratio improved 700 bps to 76.2. The Zacks Consensus Estimate was pegged at 88.7, while our estimate was 83.5.
Financial Update
Selective Insurance exited the third quarter of 2025 with total assets of $15 billion, 11% above the level at the end of December 2024.
Long-term debt of $902.3 million surged 78% from the 2024 end level. Debt-to-total capitalization deteriorated 650 bps to 20.5% from the 2024 end level.
As of Sept. 30, 2025, adjusted book value per share was $54.46, up 12% year over year.
Operating return on common equity was 13.2%, up 110 bps year over year.
Share Repurchase and Dividend Update
Selective Insurance repurchased $36 million worth of shares in the third quarter.
The board of directors authorized a quarterly cash dividend of 43 cents per share, marking a 13% increase in its quarterly dividend and the 12th consecutive annual increase. The dividend will be paid out on Dec. 1 to shareholders of record at the close of business on Nov. 14, 2025.
The board of directors authorized a new share repurchase program under which it may repurchase shares worth up to $200 million. The program will be effective from Oct. 27, 2025. The company’s existing share repurchase program, which had $19.9 million of shares remaining as of Sept. 30, 2025, will remain effective through Oct. 24, 2025.
2025 Guidance
SIGI estimates a GAAP combined ratio of 97% to 98%.
Selective Insurance estimates an after-tax net investment income of $420 million, up from the prior guidance of $415 million.
The overall effective tax rate is expected to be around 21.5%. Weighted average shares were 61.1 million on a fully diluted basis.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2025 earnings per share of $4.05 missed the Zacks Consensus Estimate by 20.3%. Operating revenues of $22.2 billion missed the Zacks Consensus Estimate by 0.6%. However, the bottom line increased 13.1% year over year while the top line increased 12.7%.
Net premiums written were $21.3 billion in the quarter, up 10% from $19.5 billion a year ago. Net premiums earned grew 14% to $20.8 billion. The reported figure missed the Zacks Consensus Estimate of $21.1 billion.
The Travelers Companies (TRV - Free Report) reported third-quarter 2025 core income of $8.14 per share, which beat the Zacks Consensus Estimate by 35.4%. The bottom line increased 55% year over year. Travelers’ total revenues increased 5% from the year-ago quarter to $12.44 billion, primarily driven by higher premiums, net investment income, fee income, and other revenues. The top-line figure beat the Zacks Consensus Estimate by 0.7%.
Net written premiums increased 1% year over year to a record $11.47 billion. The underwriting gain doubled year over year to $1.4 billion. The consolidated underlying combined ratio of 83.9 improved 170 bps year over year. The combined ratio improved 590 bps year over year to 87.3 due to lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development.
RLI Corp. (RLI - Free Report) reported third-quarter 2025 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 33.9%. The bottom line increased 27.7% from the prior-year quarter. Operating revenues in the reported quarter were $449 million, up 5.3% year over year, driven by 4.7% higher net premiums earned and 12.5% higher net investment income. The top line beat the Zacks Consensus Estimate by 0.5%.
Underwriting income of $60.5 million increased 48.6% year over year. The combined ratio improved 450 bps year over year to 85.1. Our estimate was 97.8.
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SIGI Misses Q3 Earnings Estimates, Ups Dividend, Okays Share Buyback
Key Takeaways
Selective Insurance Group (SIGI - Free Report) reported third-quarter 2025 operating income of $1.75 per share, which missed the Zacks Consensus Estimate by 4.9%. The bottom line, however, increased 25% year over year.
The company’s performance in the quarter reflects solid underwriting income, lower catastrophe losses, average renewal pure price increase and lower loss and loss expenses.
Behind the Headlines
Total revenues of $1.4 billion increased 8.9% from the year-ago quarter’s figure, primarily due to higher net premiums written, net premiums earned and net investment income earned. The top line beat the Zacks Consensus Estimate by 0.4%.
Selective Insurance Group, Inc. Price, Consensus and EPS Surprise
Selective Insurance Group, Inc. price-consensus-eps-surprise-chart | Selective Insurance Group, Inc. Quote
On a year-over-year basis, net premiums written (NPW) increased 4% to $1.2 billion, driven by renewal pure price increases. Average renewal pure price contracted 90 basis points year over year to 9.6%. Our estimate for NPW was $1.3 billion.
Net investment income increased 18% year over year to $110 million.
Net catastrophe losses of $24.9 million were narrower than the year-ago loss of $148.8 million. Non-catastrophe property loss and loss expenses were $169.6 million, wider than the year-ago loss of $146.7 million.
Underwriting income of $16.7 million increased more than threefold year over year. The combined ratio of 98.6 improved 90 basis points year over year. The Zacks Consensus Estimate was 97.6. Our estimate was also 97.6.
Total expenses increased 7.7% year over year to $1.2 billion, primarily due to higher loss and loss expense incurred. Our estimate was $1.9 billion.
Segmental Results
Standard Commercial Lines’ NPW was up 4% year over year to $940.8 million. The premium growth reflected average renewal pure price increases of 8.9% and retention of 82%. Our estimate was $962.8 million.
The combined ratio deteriorated 190 basis points (bps) to 101.1. The Zacks Consensus Estimate was 98.9 and our estimate was 97.
Standard Personal Lines’ NPW decreased 6% year over year to $104.2 million due to deliberate profit improvement actions. New business decreased 20%, while renewal pure price was 16% and retention was 79%. The figure was lower than our estimate of $120.1 million.
The combined ratio improved 1200 bps on a year-over-year basis to 110.1. The Zacks Consensus Estimate was pegged at 99.3, while our estimate was 124.8.
Excess & Surplus Lines’ NPW was up 14% year over year to $162.9 million, driven by average renewal pure price increases of 8.3%. Our estimate was $180.6 million.
The combined ratio improved 700 bps to 76.2. The Zacks Consensus Estimate was pegged at 88.7, while our estimate was 83.5.
Financial Update
Selective Insurance exited the third quarter of 2025 with total assets of $15 billion, 11% above the level at the end of December 2024.
Long-term debt of $902.3 million surged 78% from the 2024 end level. Debt-to-total capitalization deteriorated 650 bps to 20.5% from the 2024 end level.
As of Sept. 30, 2025, adjusted book value per share was $54.46, up 12% year over year.
Operating return on common equity was 13.2%, up 110 bps year over year.
Share Repurchase and Dividend Update
Selective Insurance repurchased $36 million worth of shares in the third quarter.
The board of directors authorized a quarterly cash dividend of 43 cents per share, marking a 13% increase in its quarterly dividend and the 12th consecutive annual increase. The dividend will be paid out on Dec. 1 to shareholders of record at the close of business on Nov. 14, 2025.
The board of directors authorized a new share repurchase program under which it may repurchase shares worth up to $200 million. The program will be effective from Oct. 27, 2025. The company’s existing share repurchase program, which had $19.9 million of shares remaining as of Sept. 30, 2025, will remain effective through Oct. 24, 2025.
2025 Guidance
SIGI estimates a GAAP combined ratio of 97% to 98%.
Selective Insurance estimates an after-tax net investment income of $420 million, up from the prior guidance of $415 million.
The overall effective tax rate is expected to be around 21.5%. Weighted average shares were 61.1 million on a fully diluted basis.
Zacks Rank
SIGI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Progressive Corporation’s (PGR - Free Report) third-quarter 2025 earnings per share of $4.05 missed the Zacks Consensus Estimate by 20.3%. Operating revenues of $22.2 billion missed the Zacks Consensus Estimate by 0.6%. However, the bottom line increased 13.1% year over year while the top line increased 12.7%.
Net premiums written were $21.3 billion in the quarter, up 10% from $19.5 billion a year ago. Net premiums earned grew 14% to $20.8 billion. The reported figure missed the Zacks Consensus Estimate of $21.1 billion.
The Travelers Companies (TRV - Free Report) reported third-quarter 2025 core income of $8.14 per share, which beat the Zacks Consensus Estimate by 35.4%. The bottom line increased 55% year over year. Travelers’ total revenues increased 5% from the year-ago quarter to $12.44 billion, primarily driven by higher premiums, net investment income, fee income, and other revenues. The top-line figure beat the Zacks Consensus Estimate by 0.7%.
Net written premiums increased 1% year over year to a record $11.47 billion. The underwriting gain doubled year over year to $1.4 billion. The consolidated underlying combined ratio of 83.9 improved 170 bps year over year. The combined ratio improved 590 bps year over year to 87.3 due to lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development.
RLI Corp. (RLI - Free Report) reported third-quarter 2025 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 33.9%. The bottom line increased 27.7% from the prior-year quarter. Operating revenues in the reported quarter were $449 million, up 5.3% year over year, driven by 4.7% higher net premiums earned and 12.5% higher net investment income. The top line beat the Zacks Consensus Estimate by 0.5%.
Underwriting income of $60.5 million increased 48.6% year over year. The combined ratio improved 450 bps year over year to 85.1. Our estimate was 97.8.