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• Selective Insurance is like a Travelers or Hartford, serving businesses and individuals primarily through independent agents.
• It's similar to an Allstate or Liberty Mutual, but with a stronger focus on commercial insurance and distributed exclusively through independent agents.

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• Commercial Lines Insurance: Providing a comprehensive suite of property and casualty insurance coverages for businesses across various industries.
• Personal Lines Insurance: Offering property and casualty insurance products, including homeowners, automobile, and umbrella policies, for individuals and families.
• Surety Bonds: Issuing financial guarantees to ensure contractual performance, legal obligations, or payment for licenses and permits.

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Selective Insurance (symbol: SIGI) does not primarily sell to a few major identifiable customer companies in the way a B2B supplier might. Instead, it operates an insurance business that serves a broad and diverse base of policyholders across different segments through independent agents. Therefore, its customers are best described by categories rather than specific companies.

The company primarily serves the following categories of customers:

1. Small to Medium-sized Businesses (SMBs): This is Selective Insurance's largest customer segment. SMBs purchase a wide range of commercial property and casualty insurance products, including general liability, commercial auto, workers' compensation, commercial property, and business owner's policies. These customers typically operate across various industries and represent a significant portion of Selective's premium writings.

2. Individuals and Households: Selective Insurance also provides personal lines insurance to individual consumers. This category includes policies such as private passenger automobile insurance, homeowners insurance, and flood insurance, protecting personal assets and liabilities for families and individuals.

3. Public Entities: Within its commercial lines offerings, Selective Insurance specializes in providing tailored insurance solutions for various public sector organizations. This includes municipalities, schools, counties, and other governmental agencies, which require specific coverages for their unique operations and exposures.

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• Guidewire Software (GWRE)

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John J. Marchioni, Chairman of the Board, President and Chief Executive Officer

Mr. Marchioni joined Selective in 1998 as a Government Affairs Specialist. He held several leadership positions including Assistant Vice President in Government Affairs, Vice President, Director of Government Affairs, Vice President and Strategic Business Unit Leader, and Senior Vice President, Director of Personal Lines and Flood. He was promoted to Executive Vice President, Chief Field Operations Officer in 2007 and President and Chief Operating Officer in 2013. He served as President and Chief Executive Officer from February 2020 until May 3, 2022, when he assumed his current role. Before joining Selective, he was Vice President of Government Relations for the Commerce & Industry Association of New Jersey.

Patrick S. Brennan, Executive Vice President, Chief Financial Officer

Mr. Brennan was appointed Chief Financial Officer, effective October 1, 2024. He brings nearly two decades of insurance industry and public company executive experience. Prior to joining Selective, he served as Treasurer of The Progressive Corporation for eight years, where he oversaw treasury, capital strategy, risk management, and investor relations functions. His earlier career also includes key positions in the Treasury department at IBM Corporation, focusing on funding and foreign exchange strategy, and roles in treasury and business analysis at Ohio Savings Bank.

Brenda M. Hall, Executive Vice President, Chief Operating Officer, Standard Lines

Ms. Hall oversees corporate commercial lines and personal lines underwriting and regional operations. She joined Selective in 2001 and has held various leadership roles, including Vice President, Underwriting. She was promoted to Senior Vice President, Director of Field Underwriting in 2008, and to Senior Vice President, Chief Strategic Operations Officer in 2015, where she was responsible for the development, implementation, and oversight of the company’s strategic plan and the integration of predictive modeling into underwriting operations.

Cyndi Bennett, Executive Vice President, Chief Human Resources Officer

Ms. Bennett is responsible for Selective's human resources strategy, encompassing talent management, benefits, diversity, and compensation. She joined Selective in 2006 as Compensation Manager and progressed through leadership roles including Assistant Vice President and Vice President of Compensation. She was promoted to Vice President, Compensation and Benefits in 2012 and assumed her current role in 2020.

Joseph O. Eppers, Executive Vice President and Chief Investment Officer

Mr. Eppers is responsible for overseeing Selective's investment portfolio and the investments related to employee benefit plans. He chairs the Management Investment Committee and is responsible for developing and executing the company's investment strategy, considering risk and projected return. He joined Selective in 2015 as Senior Vice President, Chief Investment Officer, bringing 20 years of professional investment experience. Before Selective, he was a Director at BlackRock within the Financial Institutions Group and previously served as Senior Vice President of Investments at Endurance Specialty Holdings Ltd.

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The key risks to Selective Insurance (SIGI) include its exposure to social inflation and adverse casualty reserve development, the inherent risk of catastrophe losses, and intense market competition.

1. Social Inflation and Adverse Casualty Reserve Development: Selective Insurance faces significant risk from social inflation, which refers to the trend of rising insurance costs due to increased litigation, larger jury awards, and broader definitions of liability. The company has a high exposure, approximately 45%, to lawsuit-prone lines of insurance, particularly contractor insurance, primarily due to its U.S.-centric operations. This exposure can significantly impact loss picks and future reserving actions, potentially eroding profitability and shareholder value if social inflation accelerates. Selective Insurance has experienced multiple casualty charges, totaling $371 million over five quarters, which has led to investor uncertainty regarding the adequacy of its reserving practices and the potential for future charges. Unfavorable prior-year casualty reserve development has been reported, including $100 million in Q4 2024 and $45 million in Q2 2025, largely driven by recent accident years in general liability and excess and surplus lines.
2. Exposure to Catastrophe Losses: As a property and casualty insurer, Selective Insurance is inherently exposed to catastrophe losses stemming from natural disasters and weather-related events. Such events pose a risk to the company's business, introducing volatility to its results. For instance, catastrophe losses contributed to the company's combined ratio of 103.0% in 2024, and its revised guidance for 2025 anticipates approximately 6 points of catastrophe losses. These losses can exceed expectations or reinsurance treaty limits, thereby increasing underwriting risk and potentially having a material adverse effect on financial performance.
3. Intense Market Competition: Selective Insurance operates in a dynamic and highly competitive property and casualty insurance sector. The company faces robust competition from both national and super-regional insurers, who vie for market share through pricing, service, and product innovation. This competitive environment can lead to pricing pressures and affect customer retention. For example, increased competition in the Excess and Surplus (E&S) market is noted as a challenge, and the competitive landscape has contributed to a slight fall in retention for standard commercial lines.

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• The escalating impact of climate change, manifesting as an increasing frequency and severity of catastrophic weather events (e.g., hurricanes, floods, wildfires, severe convective storms). This leads to higher claims costs, greater volatility in underwriting results, challenges in accurately pricing risk, and rising reinsurance expenses, directly impacting Selective Insurance's core property and casualty business model.
• Digital disruption and new business models driven by Insurtechs and technology-first competitors. These entities leverage advanced analytics, artificial intelligence, machine learning, and IoT data (e.g., telematics) to offer more granular and personalized pricing, streamline underwriting and claims processes for greater efficiency, and provide superior digital customer experiences. If Selective Insurance does not adequately adapt and innovate with these technologies and business models, it risks being outcompeted on price, efficiency, and customer satisfaction, leading to market share erosion and reduced profitability.

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Selective Insurance Group (SIGI) primarily offers a broad range of property and casualty insurance products and services to commercial and personal lines customers in the United States. Selective operates across 36 states and the District of Columbia, with limited operations in Canada and the European Union, and underwriting activity in the London (Lloyd's) and Bermuda markets. The addressable market sizes provided below are for the U.S. market.

U.S. Property and Casualty Insurance Market (Overall)

• In 2024, the U.S. Property, Casualty, and Direct Insurance market size was approximately $1.0 trillion.
• The market is projected to be valued at $1.10 trillion in 2025 and is expected to reach $1.33 trillion by 2030, growing at a CAGR of 3.96%.
• Another estimate values the U.S. property and casualty insurance market at $890 billion in 2024, with a projection to reach $2.02 trillion by 2034.
• Net premiums written for the U.S. property/casualty insurance sector totaled $932.5 billion in 2024.

U.S. Commercial Lines Insurance Market

Selective Insurance's commercial lines products include Business Owners Package Insurance, Commercial General Liability, Commercial Property, Commercial Auto, Workers' Compensation, Commercial Crime, Inland Marine, Commercial Surety, Commercial Umbrella Insurance, and various specialty lines.

• The U.S. commercial insurance market size reached approximately $294.6 billion in 2024.
• This market is anticipated to grow to $489.1 billion by 2033, with a compound annual growth rate (CAGR) of 5.20% from 2025 to 2033.
• Commercial lines account for about half of the U.S. property/casualty insurance industry premium.
• Direct premiums written for the commercial P&C segment were nearly $404 billion in a year where total U.S. P&C premiums were $797.6 billion (likely 2023 data).

U.S. Personal Lines Insurance Market

Selective Insurance's personal lines products include Personal Auto, Homeowner, Condominium, Renters, Personal Umbrella, and Flood Insurance.

• Personal lines of business in the U.S., encompassing homeowners, farmowners, and private auto insurance, reached $534.92 billion in direct premiums written in 2024.
• Personal lines accounted for 50.32% of the U.S. property and casualty insurance market size in 2024.
• Direct premiums written for personal lines were slightly over $386 billion in a year where total U.S. P&C premiums were $797.6 billion (likely 2023 data).
• Personal lines are expected to be the main driver of growth in the U.S. P&C insurance market in 2024 and 2025.

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Selective Insurance Group (NASDAQ: SIGI) is expected to drive future revenue growth over the next two to three years through a combination of strategic pricing, geographic expansion, and targeted growth in specific insurance lines.

1. Sustained Price Increases (Renewal Pure Pricing): Selective Insurance has demonstrated a commitment to implementing price increases across its insurance segments. In the third quarter of 2024, the company's efforts to raise pricing in response to loss emergence and elevated severity led to overall renewal pure pricing increases, notably 10.2% in general liability and 12% in commercial property. For the first quarter of 2024, overall renewal pure price was 8.1%, with Standard Commercial Lines increasing to 7.6% and Personal Lines seeing renewal pure pricing of 14.3%, with expectations of exceeding 20% for the full year 2024. The Excess and Surplus (E&S) Lines segment also saw a 9.3% average renewal pure price increase in the second quarter of 2025, contributing to its growth.
2. Geographic Expansion: A key part of Selective Insurance's growth strategy involves expanding its geographic footprint. In the third quarter of 2024, the company expanded its standard commercial lines into Washington, Oregon, and Nevada, with plans to enter Kansas, Montana, and Wyoming within the next two years. This expansion is part of a broader strategy to achieve a near national presence.
3. Growth in Excess and Surplus (E&S) Lines: The E&S lines segment has shown robust performance and is identified as a significant growth opportunity. In the third quarter of 2024, this segment experienced a 28% increase in net premiums written. The company is actively pursuing deliberate E&S strategies, including introducing new products, expanding its brokerage business, investing in operational efficiency, and providing retail agents with access to its E&S offerings.
4. Continued Growth in Standard Commercial Lines: Standard Commercial Lines represent a substantial portion of Selective Insurance's business, comprising 79% of its net premiums written. The company reported an 8% growth in net premiums written for its standard commercial lines in the third quarter of 2024. This segment's consistent performance and strategic focus on pricing and underwriting are expected to contribute to ongoing revenue expansion.
5. Growth in Net Investment Income: While not a direct driver of insurance underwriting revenue, net investment income is a crucial component of an insurer's overall financial performance and contributes significantly to the top line. In the third quarter of 2024, after-tax net investment income was $93 million, contributing 13.1 points to the return on equity. The second quarter of 2025 saw investment income increase to $101 million, up 18% year-over-year, with an attractive average new purchase yield of 5.7% pre-tax. This embedded book yield is anticipated to be a durable source of future investment income.

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Share Repurchases

• Selective Insurance's Board of Directors authorized a new share repurchase program of up to $200 million, effective October 27, 2025. This program replaced a prior $100 million authorization which was discontinued on October 24, 2025.
• The company repurchased approximately $61.46 million in shares from Q1 to Q3 2025, including $36 million in the third quarter of 2025 and $25.20 million in the first quarter of 2025.
• Significant repurchases in prior years included approximately $15.6 million in 2024 (sum of quarterly data), $7.9 million in 2023, and $19.0 million in 2022.

Share Issuance

• Selective Insurance reported minimal common stock issuance, with amounts consistently around $0.01 million for each of the years 2021, 2022, 2023, and 2024.

Outbound Investments

• The company's investment segment manages a substantial portfolio, with total invested assets growing to $8.69 billion as of December 31, 2023, and $9.7 billion as of year-end 2024.
• After-tax net investment income was $309.5 million in 2023, reflecting a 33% increase from 2022's $232.2 million, and a 42% increase from 2020 to 2021 where it reached $263 million.
• Strategic investments also include geographic market expansion for its Standard Commercial Lines business, adding five new states in 2024 and planning further expansion into additional states like Kansas, Montana, and Wyoming over the next two years.

Capital Expenditures

• Selective Insurance has made strategic investments in technology and operational enhancements. These include new platforms for Small Business and Excess & Surplus (E&S) lines, modernization of its claims system, and initiatives to enhance customer experience.
• The company's capital allocation also supports its geographic expansion, which contributes to its overall growth strategy.