Selective Insurance Group Flags 9%-10% Casualty Severity, Targets 2026 Margin Gains at BofA Conference

Executives from Selective Insurance Group (NASDAQ:SIGI) told investors astatine the Bank of America U.S. Financial Services Conference that the institution has responded rapidly to higher casualty severity trends successful caller mishap years, portion continuing to put successful pricing precision, technology, and a much diversified portfolio mix.

Chairman and CEO John Marchioni acknowledged that the past 2 years person been much challenging owed to reserving actions tied to longer-tailed casualty lines. He said 2024 reserving actions were predominantly successful General Liability, portion 2025 actions were focused connected Commercial Auto Liability. Marchioni framed the actions arsenic a deliberate effort to respond rapidly to emerging trends specified arsenic suit maltreatment and societal inflation, peculiarly erstwhile information is inactive immature.

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Marchioni said the company’s nonsubjective is not to physique successful conservatism oregon purpose “ahead of trend,” but to publication its champion estimation each 4th and support reserve stability. He emphasized that reserving, expected nonaccomplishment ratios, pricing indications, and hazard enactment are interconnected, and that being materially behind—or overly conservative—can make downstream issues.

He pointed to comparative stableness successful the General Liability enactment passim 2025 pursuing 2024 actions arsenic enactment for the approach. In Commercial Auto, helium said Selective besides accrued the existent mishap twelvemonth successful 2025, not conscionable anterior years, to assistance guarantee dependable run-rate profitability.

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CFO Patrick Brennan said helium was “pleasantly surprised” by the magnitude of information disposable astatine Selective and described opportunities to unlock further value, including much targeted, granular pricing actions. He highlighted a “continuous betterment mindset” and a absorption connected getting amended accusation into determination makers’ hands, supported by accrued exertion investment. Brennan noted that Selective’s discretionary exertion and IT task fund has much than doubled compared with 2023.

Marchioni said claims patterns person shifted post-pandemic and person persisted agelong capable that the institution views the situation arsenic elevated alternatively than temporary. He said Selective’s all-in casualty severity inclination assumptions are astir 9%, and person to 10% excluding workers’ compensation, and that the company’s condemnation successful those assumptions has accrued implicit the past 3 mishap years.

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