Selective Insurance Group, Inc. (SIGI) | Investment Case

1. Company Snapshot

1.a. Company Description

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States.It operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments.The company offers property insurance products, which covers the financial consequences of accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and casualty insurance products that covers the financial consequences of employee injuries in the course of employment, and bodily injury and/or property damage to a third party, as well as flood insurance products.

It also invests in fixed income investments and commercial mortgage loans, as well as equity securities and alternative investment portfolio.The company offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents.Selective Insurance Group, Inc.

was founded in 1926 and is headquartered in Branchville, New Jersey.

Show Full description

1.b. Last Insights on SIGI

Selective Insurance Group's recent performance was driven by solid underwriting gains, a growing premium, and strategic investments. The company reported a $1.75 per share quarterly earnings, despite missing estimates. A $200M share buyback and a lifted dividend also contributed positively. Institutional investors, such as Frontier Capital Management Co. LLC, with a $20.11M stake, and Arkadios Wealth Advisors, with a 3,452-share acquisition, show confidence in the company. Analysts have a "Hold" rating, with one buy recommendation (Marketbeat.com).

1.c. Company Highlights

Last Price	84.76
Change Percentage	-0.40%
Open	85.48
Previous Close	85.1
Market Cap ( Millions)	5120
Volume	67356.68
Year High	93.38
Year Low	71.75
M A 50	84.26
M A 200	82.47

FCF Yield	23.55%
Dividend Yield	1.91%
ROE	13.59%
Debt / Equity	24.99%
Net Debt / EBIDTA	105.18%
Price To Book	1.43
Price Earnings Ratio	11.03
Price To FCF	4.25
Price To sales	0.96
EV / EBITDA	7.03

2. Selective Insurance Beats Expectations with Strong 2025 Performance

Selective Insurance Group reported a robust financial performance in 2025, with a 14.4% return on equity (ROE) and an operating ROE of 14.2%, exceeding their 10-year average operating ROE of 12.1%. The company's book value per share grew 18% in 2025, and they returned $182 million to shareholders through dividends and share repurchases. Earnings per share (EPS) came in at $2.57, beating analyst estimates of $2.24. The combined ratio for the quarter was 93.8%, and the full-year combined ratio was 97.2%, just outside their guidance range.

Publication Date: Feb -09

                                    📋 Highlights
                                    ROE Performance:
                                                Achieved 14.4% ROE in 2025, surpassing 10-year (12.1%) and 5-year (12.5%) averages.
Shareholder Returns:
                                                Returned $182 million to shareholders via dividends and buybacks; 18% book value per share growth in 2025.
Combined Ratio Guidance:
                                                2026 GAAP combined ratio of 96.5–97.5%, with underlying ratio of 90.5–91.5% (vs. 97.2% full-year 2025).
Reserve Adjustments:
                                                $190 million commercial auto reserves strengthened for 2024–2025 accident years; 2026 margins expected to improve via double-digit rate hikes.
Investment Income:
                                                Anticipated $465 million after-tax net investment income in 2026, +10% YoY; portfolio duration of 4.1 years, average credit quality A+.

                                

Segment Performance

In the quarter, Standard Commercial Lines premium growth was 5%, driven by a 7.5% renewal pure price increase. Excess and surplus lines premium grew 4% with average renewal pure price increases of 7.8%. Personal Lines net premiums written declined 8%, but target business was up 5%. The company expects strong operating margins in E&S to continue going forward, driven by maintained pricing and underwriting discipline.

Reserve Actions and Future Expectations

The company strengthened commercial auto reserves by approximately $190 million in 2025, primarily attributable to the 2024 and 2025 accident years. They expect 2026 accident year margins to improve, driven by double-digit rate increases over multiple years. For 2026, Selective expects a GAAP combined ratio between 96.5% and 97.5%, with an underlying combined ratio in the 90.5% to 91.5% range.

Valuation and Dividend Yield

With a Price-to-Book Ratio (P/B) of 1.52, the stock appears reasonably valued. The Dividend Yield is 1.74%, providing a relatively stable source of return for investors. The company's guidance implies an operating ROE in the 14% range, suggesting a strong potential for future returns.

Outlook and Growth Prospects

Analysts estimate next year's revenue growth at 4.8%. The company's focus on execution granularity and maintained pricing discipline is expected to drive stable retentions and growth in E&S as a percentage of overall premium in the long term. Geographic expansion is expected to continue to contribute to growth, tempering the overall performance.

3. NewsRoom

GSA Capital Partners LLP Has $1.46 Million Stock Position in Selective Insurance Group, Inc. $SIGI

Feb -18

Source: defenseworld.net

Selective Insurance Group, Inc. (SIGI) Presents at Bank of America Financial Services Conference 2026 Transcript

Feb -10

Source: seekingalpha.com

A Century Old And Still Undervalued: Selective Insurance's 2026 Outlook

Feb -09

Source: seekingalpha.com

Selective to Speak at the Bank of America Securities 2026 Financial Services Conference

Feb -02

Source: businesswire.com

Selective Insurance Group Q4 Earnings Call Highlights

Feb -01

Source: defenseworld.net

Selective Insurance Group, Inc. (SIGI) Q4 2025 Earnings Call Transcript

Jan -30

Source: seekingalpha.com

Selective Insurance 4Q Earnings Beat Estimates on Solid Underwriting

Jan -30

Source: zacks.com

Selective Insurance (SIGI) Reports Q4 Earnings: What Key Metrics Have to Say

Jan -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.35%)

6. Segments

Standard Commercial Lines

Expected Growth: 9%

Selective Insurance Group's 9% growth in Standard Commercial Lines is driven by a combination of factors, including a strong underwriting discipline, strategic pricing, and a diversified portfolio of small to medium-sized businesses. Additionally, investments in digital capabilities and data analytics have enhanced customer experience, improved risk selection, and increased operational efficiency.

Excess and Surplus Lines

Expected Growth: 8%

Selective Insurance Group's Excess and Surplus Lines segment growth of 8% is driven by increasing demand for specialty insurance products, expansion into new markets, and strategic partnerships. Additionally, the company's expertise in underwriting and risk management, as well as its ability to adapt to changing market conditions, have contributed to its growth in this segment.

Investments

Expected Growth: 12%

Selective Insurance Group's 12% growth is driven by strategic investments in digital transformation, expansion into new markets, and a focus on niche commercial lines. Additionally, the company's strong underwriting discipline, favorable loss reserve development, and solid capital position have contributed to its growth momentum.

Standard Personal Lines

Expected Growth: 11%

Selective Insurance Group's 11% growth in Standard Personal Lines is driven by increasing demand for auto and homeowners insurance, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation, improved underwriting capabilities, and enhanced customer experience have contributed to its growth momentum.

7. Detailed Products

Personal Lines

Insurance products for individuals and families, including auto, homeowners, and umbrella insurance

Commercial Lines

Insurance products for businesses, including commercial auto, general liability, and workers' compensation insurance

Flood Insurance

Insurance products that provide protection against flood damage to homes and businesses

Excess and Surplus Lines

Specialized insurance products for unique or hard-to-place risks

Reinsurance

Insurance products for other insurance companies, providing additional coverage and risk management

8. Selective Insurance Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Selective Insurance Group, Inc. operates in a highly regulated industry, which limits the threat of substitutes. Additionally, the company's diversified product offerings and strong brand recognition reduce the likelihood of customers switching to alternative products or services.

Bargaining Power Of Customers

Selective Insurance Group, Inc. has a large customer base, which gives customers some bargaining power. However, the company's strong brand reputation and diversified product offerings mitigate this power to some extent.

Bargaining Power Of Suppliers

Selective Insurance Group, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position and long-term relationships with suppliers also limit supplier power.

Threat Of New Entrants

The insurance industry is highly regulated, and new entrants face significant barriers to entry, including high capital requirements and complex regulatory hurdles. Selective Insurance Group, Inc.'s established brand and strong market position also make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share. Selective Insurance Group, Inc. faces intense competition from larger rivals, which can lead to pricing pressure and increased marketing expenses.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	14.83%
Debt Cost	6.68%
Equity Weight	85.17%
Equity Cost	6.68%
WACC	6.68%
Leverage	17.42%

11. Quality Control: Selective Insurance Group, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Hanover Insurance

A-Score: 6.8/10

Value: 7.2

Growth: 4.8

Quality: 6.7

Yield: 4.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

RLI

A-Score: 6.6/10

Value: 5.5

Growth: 6.9

Quality: 8.4

Yield: 8.0

Momentum: 1.5

Volatility: 9.3

1-Year Total Return ->

Loews

A-Score: 6.1/10

Value: 6.3

Growth: 6.7

Quality: 5.3

Yield: 0.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

Selective Insurance

A-Score: 5.3/10

Value: 7.7

Growth: 6.0

Quality: 6.8

Yield: 3.0

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

Kinsale Capital Group

A-Score: 5.2/10

Value: 4.1

Growth: 9.7

Quality: 8.8

Yield: 0.0

Momentum: 3.0

Volatility: 5.7

1-Year Total Return ->

Kemper

A-Score: 4.8/10

Value: 7.8

Growth: 3.7

Quality: 6.2

Yield: 5.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-9.33%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.68%

Selective Insurance Group, Inc. - US8163001071

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SIGI

1.c. Company Highlights

Average Growth

Medium Volatility

Average Quality

Earnings Miss

Revenues Beats

Stable Momentum

Average Yield

Weak Momentum

Revenues Miss

Fairly Valued

Cheaper

2. Selective Insurance Beats Expectations with Strong 2025 Performance

Segment Performance

Reserve Actions and Future Expectations

Valuation and Dividend Yield

Outlook and Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.35%)

6. Segments

Standard Commercial Lines

Expected Growth: 9%

Excess and Surplus Lines

Expected Growth: 8%

Investments

Expected Growth: 12%

Standard Personal Lines

Expected Growth: 11%

7. Detailed Products

Personal Lines

Commercial Lines

Flood Insurance

Excess and Surplus Lines

Reinsurance

8. Selective Insurance Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Selective Insurance Group, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

84.76$

Current Price

84.76$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA