SELECTIVE INSURANCE GROUP, INC. (Exact Name of Registrant as Specified in Its Charter)" This is the title of the annual report (Form 10-K) filed by Selective Insurance Group, Inc. with the Securities and Exchange Commission (SEC) for the fiscal year ended December 31, 2025.
Selective Insurance Group, Inc. filed its annual report for the fiscal year ended December 31, 2025. The company reported total revenues of $3.4 billion, a 4.5% increase from the prior year. Net income was $444.8 million, a 10.3% increase from the prior year. The company’s book value per share increased by 5.1% to $43.45. The company’s return on equity was 12.1%, and its return on assets was 1.4%. The company’s financial condition remains strong, with a debt-to-capital ratio of 24.1% and a cash and investments balance of $1.4 billion. The company’s market value was $5.2 billion as of June 30, 2025.
Company Overview
MUSIC is a nationally-authorized non-admitted platform that provides insurance coverage to customers who generally cannot obtain coverage in the standard marketplace. The company has ten insurance subsidiaries that it collectively refers to as the “Insurance Subsidiaries.”
Critical Accounting Policies and Estimates
The company has identified three critical accounting policies and estimates that are crucial to its business operations and understanding of its results of operations:
Reserve for Loss and Loss Expense: Significant time can elapse between the occurrence of an insured loss, the reporting of a claim, and the final claim settlement and payment. The company establishes reserves as balance sheet liabilities to recognize liabilities for unpaid loss and loss expenses. As of December 31, 2025, the company had $7.2 billion in total loss and loss expense reserves, with $5.4 billion in IBNR reserves.
Investment Valuation and Allowance for Credit Losses on AFS Fixed Income Securities: The company records its AFS fixed income securities portfolio at fair value, and the related unrealized gains or losses are reflected in stockholders’ equity. The company also records an allowance for credit losses on these securities based on a risk-adjusted discounted cash flow analysis.
Reinsurance: Reinsurance recoverables on paid and unpaid loss and loss expense represent the company’s estimates of the amounts it will recover from reinsurers. The company records an allowance for credit losses on its reinsurance recoverable balance based on an evaluation of balances due from reinsurers and other available information.
Financial Highlights
In 2025, the company generated:
- Revenues of $5.3 billion, up 10% from 2024
- After-tax net investment income of $421 million, up 16% from 2024
- After-tax underwriting income of $107 million, compared to a loss of $105 million in 2024
- Net income of $466 million, up 125% from 2024
- Net income available to common stockholders of $457 million, up 131% from 2024
The company’s combined ratio improved to 97.2% in 2025, down from 103.0% in 2024, driven by lower catastrophe losses and lower prior year casualty reserve development.
Results of Operations by Segment
The company’s insurance operations are divided into three segments: Standard Commercial Lines, Standard Personal Lines, and E&S Lines.
Standard Commercial Lines Segment
- NPW grew 6% in 2025, driven by renewal pure price increases and exposure growth on renewal policies.
- The combined ratio improved to 98.3% in 2025, down from 104.2% in 2024, primarily due to a 6.6-point improvement in net unfavorable prior year casualty reserve development.
- The general liability line experienced $40 million of unfavorable prior year reserve development in 2025, down from $316 million in 2024, due to the ongoing impact of social inflation.
- The commercial automobile line experienced $125 million of unfavorable prior year reserve development in 2025, driven by increased severities in accident years 2022 through 2024.
- The workers compensation line experienced $90 million of favorable prior year reserve development in 2025, primarily due to improved loss severities.
Standard Personal Lines Segment
- NPW decreased 8% in 2025, primarily due to lower direct new business premiums as the company focused on its target mass affluent market.
- The combined ratio improved to 100.6% in 2025, down from 109.3% in 2024, as the company’s rate actions began to take effect.
- The personal automobile line experienced $15 million of unfavorable prior year reserve development in 2025, primarily driven by increased loss severities in the 2024 accident year related to the New Jersey portfolio.
E&S Lines Segment
- NPW grew 11% in 2025, benefiting from both property and casualty exposure growth on renewal policies, higher rates per exposure, and an increase in renewal policy count.
- The combined ratio improved to 87.8% in 2025, down from 89.7% in 2024, primarily due to a $10 million decrease in unfavorable prior year casualty reserve development.
- Current year casualty loss costs increased 3.1 points in 2025 compared to 2024, primarily due to increased severities related to social inflation.
Reinsurance
The company uses reinsurance to protect its capital resources and insure against losses on property and casualty risks. Key aspects of the company’s reinsurance program include:
- A reinsurance pooling agreement among the Insurance Subsidiaries to share premiums and losses.
- Property reinsurance treaties that provide coverage for large individual property losses and catastrophic events.
- Casualty reinsurance treaties that provide protection for both individual large casualty losses and catastrophic casualty losses.
- Terrorism reinsurance that provides a federal reinsurance backstop for terrorism losses.
- Flood reinsurance where all premiums and losses related to the company’s participation in the WYO program are 100% ceded to the federal government.
The company’s property catastrophe reinsurance program includes a primary excess of loss treaty and an indemnity reinsurance agreement with a special purpose insurer that issued a catastrophe bond. This program covers the company’s standard market and E&S business and provides $1.4 billion in coverage above a $100 million retention.
Outlook
In 2026, the company expects:
- A GAAP combined ratio of 96.5% to 97.5%, including 6 points of net catastrophe losses
- After-tax net investment income of $465 million
- An overall effective tax rate of 21.5%
- Weighted average shares of 61 million on a fully diluted basis
The company remains focused on improving its fundamentals across risk selection, individual policy pricing, and claims outcomes. It is also working to diversify its revenue and income within and across its three insurance segments, and further leveraging data analytics and technology to drive operational efficiency and improved underwriting and claim outcomes.
The company is committed to making strategic investments that fuel continued growth, innovation, and performance excellence. It is focused on growing with existing partners, strategically appointing new agency locations, and carefully expanding its geographic footprint. Since 2017, the company has added fourteen states to its Standard Commercial Lines footprint, and it expects to write new business in Montana and Wyoming by the end of 2026.
Overall, the company delivered a strong financial performance in 2025, exceeding its target non-GAAP operating ROE of 12% with a result of 14.2%. The company remains well-positioned for continued success, with a focus on improving its fundamentals, diversifying its business, and leveraging technology to drive future growth and profitability.
