Selective Insurance Group has announced its financial results for the second quarter of 2025, reporting net income growth to $83.6 million from $65.6 million in the same period last year, 12% increase in net premiums written (NPW) and an improved combined ratio of 100.2%.
The insurer’s combined ratio marks a 15.9-point improvement from a year ago. This was mainly driven by lower unfavourable prior year casualty reserve development, reduced net catastrophe losses and a decrease in non-catastrophe property losses.
At the same time, the company acknowledged catastrophe losses accounting for 6.7 points of the combined ratio and net unfavourable prior year casualty reserve development contributing 3.8 points, driven by $45 million of reserve strengthening in commercial lines.
“The combined ratio of 100.2% reflects continued pressures from elevated severities due to social inflation, which drove unfavourable prior year casualty reserve development in the quarter,” said John J. Marchioni, Chairman, President and Chief Executive Officer.
“To address the continued elevated level of loss costs, we are diligently working to improve profitability through pricing and underwriting actions. Our unique operating model and franchise value distribution enable us to focus on appropriate risk selection and granular pricing. This quarter, our disciplined approach contributed to slowing top-line growth.”
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“We believe that strong execution of our strategic initiatives will position us to deliver profitable growth in the current market environment,” concluded Marchioni.
Despite the challenges, NPW grew 5% from a year ago, fuelled by renewal pure price increases of 9.9%. Net investment income increased 18% from a year ago, to $101 million after-tax, and generated 13.0 points of annualized ROE in the quarter.
Overall, insurance segment performance reduced ROE by 0.2 points in the second quarter of 2025, Selective noted.
For this year’s first quarter, Standard Commercial Lines premiums – which represent 79% of total NPW – grew 6% from a year ago. The premium growth reflected average renewal pure price increases of 8.9% and lower retention of 83%.
The second quarter combined ratio for Standard Commercial Lines was 102.8%, down 16.0 points from a year ago. Lower unfavourable prior year casualty reserve development, net catastrophe losses, and non-catastrophe property losses drove the improvement.
The insurer’s Standard Personal Lines Segment – which represents 9% of total NPW – experienced a 5% decline in premiums from a year ago and new business falling 41%.
Selective stated its continued focus on growth in states with adequate rate approvals. Renewal pure price was 19.0% and retention was 79%.
The second quarter 2025 combined ratio improved 26.5 points from a year ago to 91.6%, benefiting from renewal pure price increases, lower catastrophe losses, non-catastrophe property losses, and current year casualty loss costs.
Premiums for the Excess and Surplus Lines – which represent 12% of total NPW – increased 9% from the prior-year period, driven by average renewal pure price increases of 9.3%.
Q2 2025 combined ratio was 89.8%, a 4.8-point improvement from a year ago, driven by lower catastrophe losses and non-catastrophe property losses. This was partially offset by higher current year casualty loss costs.
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