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- **Operating Performance**: 13.2% Q3 operating ROE, with full-year target of 14%, despite 98.6% combined ratio driven by New Jersey casualty reserve issues.
- **Financial Strength**: 26% EPS growth, $110M investment income, and 13% dividend increase highlight strong capital management.
- **Strategic Focus**: Commercial auto rate hikes (8.9%), E&S expansion, and AI-driven efficiency to offset social inflation pressures.
- **Reserve Confidence**: External reviews validate reserves, with no claims management issues identified.

**【CEO Summary Section】**
- Delivered an operating return on equity (ROE) of 13.2% for the quarter, with a full-year target of 14%.
- Combined ratio for the quarter was 98.6%, driven by 3.3 points of unfavorable prior year casualty reserve development, primarily in New Jersey's commercial auto line.
- Implemented strategic actions in commercial auto, including rate increases (8.9% renewal pure price), tighter underwriting guidelines, and telematics solutions to address rising severity trends.
- Emphasized long-term profitability over short-term growth, with a focus on risk selection, diversification, and AI-driven efficiency.

**【CFO Financial Commentary】**
- Fully diluted EPS of $1.85, up 26% year-over-year; non-GAAP operating EPS of $1.75, up 25%.
- After-tax net investment income of $110 million, up 18% YoY, contributing 13.6 points to ROE.
- Full-year guidance updated to a GAAP combined ratio of 97%-98%, including 4 points of catastrophe losses (down from 6 points previously) and 2 points of prior year reserve development.
- Announced a 13% dividend increase and $36 million in share repurchases, with a new $200 million repurchase authorization.

**【Q&A Key Highlights】**
- **Commercial Auto Challenges**: New Jersey accounts for 15% of commercial auto premium, with severity trends driven by social inflation. Actions include rate hikes, underwriting tightening, and telematics adoption.
- **Reserve Confidence**: External reviews confirm reserves are above industry central estimates, with no evidence of claims management issues.
- **Growth Strategy**: Prioritizes profitable growth through diversification (e.g., E&S expansion, personal lines target market focus) and disciplined expense management.
- **Capital Management**: Maintains 20%-25% earnings return via dividends, with opportunistic share buybacks reflecting confidence in stock valuation.

Selective Insurance (SIGI)-23 Oct 25-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

SIGIP

SIGIP fundamentals

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