Selective Insurance's Q4 adjusted EPS beats estimates, premiums up 4%

Overview

• Insurance provider's Q4 adjusted EPS of $2.57 beat analyst expectations

• Net premiums written increased 4% yr/yr, driven by renewal price increases

• Combined ratio improved to 93.8% from 98.5% a year ago

Outlook

• Selective Insurance expects a GAAP combined ratio of 96.5% to 97.5% for 2026

• Company forecasts after-tax net investment income of $465 mln for 2026

• Anticipates an effective tax rate of 21.5% in 2026

Result Drivers

• PREMIUM GROWTH - Net premiums written increased 4% due to renewal price increases of 8.3%

• COMBINED RATIO IMPROVEMENT - Combined ratio improved to 93.8%, 4.7 points better YoY due to lack of prior year casualty reserve development

• INVESTMENT INCOME - After-tax net investment income increased 17% to $114 million, contributing to ROE

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the property & casualty insurance peer group is "buy"

• Wall Street's median 12-month price target for Selective Insurance Group Inc is $81.00, about 0.5% below its January 28 closing price of $81.37

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release: ID:nBw7lHjzda

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