Selective (SIGI) Q4 2025 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Tue, April 21, 2026 astatine 12:49 PM CDT 35 min read

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Jan. 30, 2026

• Chairman, President, and Chief Executive Officer — John J. Marchioni

• Executive Vice President and Chief Financial Officer — Patrick Brennan

John J. Marchioni: Thanks, Brad, and bully morning. We are good positioned to physique connected caller momentum. In 2025, we delivered an ROE of 14.4% and an operating ROE of 14.2%. This exceeds our 10-year mean operating ROE of 12.1% and our 5-year mean of 12.5%. We are arrogant of our semipermanent way grounds and are taking wide steps to thrust aboriginal borderline improvement. In 2025, we grew publication worth per stock by 18% and returned $182 cardinal to shareholders done our communal dividends and stock repurchases astatine charismatic valuations. With our beardown superior position, we tin deploy superior successful respective ways that are accretive to semipermanent value, including continued investments to turn and diversify our business, on with opportunistic stock repurchases.

We person a beardown instauration with opportunities to thrust betterment crossed our organization. We delivered a 93.8% combined ratio successful the quarter, reducing our afloat twelvemonth combined ratio to 97.2%, conscionable extracurricular the 96% to 97% guidance we provided astatine the opening of the twelvemonth and astatine the debased extremity of the 97% to 98% guidance provided past quarter. Net premiums written maturation was 5% for the twelvemonth arsenic we executed deliberate actions to amended underwriting profitability. This remains our superior focus. However, we are besides executing strategies to enactment aboriginal maturation opportunities, including expanding our geographic footprint and broadening E&S organisation capabilities with retail access.

We judge we person the capabilities and strategy to further diversify our premium and outpace manufacture maturation successful coming years. In the 4th quarter, favorable workers' compensation improvement offset unfavorable anterior twelvemonth emergence successful the commercialized and idiosyncratic car lines and E&S casualty. There are besides respective smaller adjustments crossed aggregate lines of business, including umbrella, which was driven by auto. In 2024 and 2025, we took meaningful actions to fortify reserves. Our picks for older mishap years person held up well, and our actions person been progressively weighted to much caller mishap years. We are comfy with our wide carried reserve position.

We firmly judge our disciplined attack responds promptly and appropriately to emerging trends and ensures pricing targets support gait with an evolving outer environment, adjacent though it tin make short-term volatility. We volition instrumentality to our process, continuing to measure emerging information, considering hazard factors and booking our champion reserve estimates each quarter. We expected 2025 mishap twelvemonth margins to amended for commercialized automobile arsenic we person earned double-digit complaint increases implicit aggregate years that exceeded our assumed nonaccomplishment inclination of astir 8%. As 2025 progressed, we yet accrued commercialized car casualty nonaccomplishment outgo by astir 6 points. We besides accrued our expected severity inclination for commercialized car liability to astir 10%.