Selective Insurance falls as Q3 earnings miss overshadows revenue beat

Investing.com -- Selective Insurance Group, Inc. (NASDAQ:SIGI) shares tumbled 5.4% in after-hours trading Wednesday after the insurer reported third-quarter adjusted earnings that fell short of analyst expectations, despite posting stronger-than-expected revenue.

The New Jersey-based property and casualty insurer reported non-GAAP operating income of $1.75 per diluted share for the third quarter, missing the analyst estimate of $1.94. Revenue came in at $1.36 billion, above the consensus estimate of $1.24 billion. The company’s combined ratio was 98.6%, a slight improvement from 99.5% in the same period last year.

The earnings miss was primarily driven by $40 million in unfavorable prior year casualty reserve development, which added 3.3 percentage points to the combined ratio. This reserve strengthening was mainly in standard commercial lines.

"Our full-year combined ratio outlook remains at 97 to 98%. With a 98.3% combined ratio through the first nine months of the year and strong net investment income, we delivered year-to-date operating ROE of 12.6%," said John J. Marchioni, Chairman, President and Chief Executive Officer.

Net premiums written increased 4% YoY to $1.21 billion, driven by renewal pure price increases of 9.6%. Net investment income rose 18% to $110 million after-tax, contributing 13.6 points to the company’s annualized ROE.

Selective’s board approved a 13% increase in its quarterly dividend to $0.43 per common share and authorized a new $200 million share repurchase program to replace its prior program. During the quarter, the company repurchased $36 million of common stock.

For 2025, Selective maintained its combined ratio guidance of 97% to 98% and raised its after-tax net investment income forecast to $420 million from $415 million previously.

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