Key Highlights

  • Combined ratio improved to 96.8% from 98.6% a year earlier.
  • Net premiums written fell 7% to USD 1.12 billion.
  • Non-GAAP Operating Income rose 35% per share to USD 2.37.
  • The quarterly Dividend rose 12% to USD 0.48 per share.

Underwriting Results

Selective Insurance (NASDAQ:SIGI) reported third-quarter 2026 results on Thursday. Net Income was USD 126.4 million, or USD 2.11 per diluted share, against USD 113.0 million, or USD 1.85. Non-GAAP operating income was USD 141.7 million, or USD 2.37 per share, against USD 106.7 million, or USD 1.75. Return on common Equity was 15.1% and non-GAAP operating return was 16.9%.

The combined ratio was 96.8%, 1.8 points better than a year earlier. The loss and loss expense ratio fell to 64.6% from 67.9%, while the Underwriting expense ratio rose to 32.1% from 30.6%. Catastrophe losses were 5.4 points against 2.1 points. The company recorded no prior-year casualty reserve development, against 3.3 points of unfavorable development a year earlier. Underwriting income after tax was USD 29.5 million against USD 13.2 million.

Premiums and Pricing

Net premiums written fell 7% to USD 1,122.8 million, and net premiums earned fell 2% to USD 1,180.2 million. Standard Commercial Lines, 77% of the total, fell 8% to USD 867.5 million, which the company tied to targeted retention actions and lower new business. Renewal pure price increases averaged 5.6% overall and 5.7% in Standard Commercial Lines, where retention was 82%. The segment combined ratio was 97.9% against 101.1%.

CEO John Marchioni said the company is leaning into underwriting and pricing rigor in a competitive market, including targeted pricing actions, a better portfolio mix and disciplined new Business growth. He said those actions have affected near-term premium growth. Nine-month net premiums written were USD 3,569.0 million, down 4%, and the nine-month combined ratio was 97.7% against 98.3%.

Investment Income and Book Value

Net Investment income earned rose 16% to USD 160.5 million, or USD 127.3 million after tax, which contributed 15.2 points of annualized return on equity. Over nine months, after-tax investment income was USD 359.6 million, up 17%, and net income was USD 348.8 million, or USD 5.80 per diluted share, against USD 304.3 million, or USD 4.97. Nine-month non-GAAP operating income was USD 361.3 million, or USD 6.01 per share.

Book value per common share was USD 55.02, up 1% from a year earlier and down 5% from the prior quarter, which the company attributed mainly to higher interest rates. Adjusted Book Value per share, which excludes accumulated other comprehensive income, was USD 62.00, up 11% from a year earlier and up 2% from the prior quarter. Weighted average diluted shares were 59.9 million against 61.0 million.

Capital Returns

The company returned 63% of after-tax net income in the quarter through the regular dividend and USD 55 million of share repurchases. The board raised the quarterly dividend 12% to USD 0.48 per share, the thirteenth consecutive annual increase, and authorized a new USD 200 million repurchase program. USD 53 million remained under the previous authorization at Sept. 30.

Indicators to Follow

Operating income per share rose 35% while net premiums written fell 7%, a gap that reflects a 3.3 point swing in reserve development, a 1.0 point drop in non-catastrophe property losses and a 16% rise in investment income. Reference points include premium trends in Standard Commercial Lines, renewal pure price and retention, catastrophe losses relative to the 5.4 points reported, the underwriting expense ratio, and repurchases under the USD 253 million combined capacity.