Shefi Ben-Hutta
Editor at Coverager
Selective

2024 has been a challenging year for Selective

Selective hosted its Q3 2024 earnings call on October 22. Key highlights:

  • Year-to-date, operating ROE stands at 4.8%. Full-year guidance points to high single-digit ROE, falling short of the 12% target due to reserve adjustments in the first two quarters and higher-than-expected catastrophe (CAT) losses.
  • Selective prioritizes achieving combined ratios of 95% or better across all segments. The company’s approach varies by market dynamics and competitive positioning, maintaining stability for distribution partners and delivering shareholder value. “Priority one is delivering combined ratios in line with or better than our 95% target in each insurance segment.”
  • Pricing adjustments have intensified to address increased losses and severity. General liability renewal pricing rose from 7.6% in Q2 to 10.2% in Q3, with commercial property and auto renewals steady at 12% and 10.9%, respectively. Selective’s footprint expanded with the addition of Washington, Oregon, and Nevada, now totaling 35 states, with plans to enter Kansas, Montana, and Wyoming in the next two years. Standard Commercial Lines premiums written grew by 8%, driven by a 13.4% renewal premium increase, though CAT losses, including from Hurricane Helene, pushed the combined ratio to 99.2%.
  • Personal lines net premiums written decreased by 2% as the insurer focused on profitability with targeted rate increases in areas with rate adequacy. Renewal pricing reached 22.8%, and the average policy size rose 19%, reflecting a shift to the mass affluent segment. Retention dropped to 75%, down 13 points from Q3 2023.
  • Excess and surplus lines represent 12% of net premiums written.

“So far, 2024 has been a challenging year. I am proud of our team’s focus and commitment to executing our strategy. Our strong capital position gives us flexibility to manage through these market dynamics. Despite the quarter’s elevated catastrophe losses, we delivered an operating ROE of 12.1% in line with our target. We are confident in our ability to create value as we move forward. Let me now turn the call to Tony, who will discuss our quarterly financial results in more detail.”  – Selective CEO, President & Chairman, John Marchioni.

Did you know? Around 30% of Selective’s independent agents are also appointed with The Hanover, based on our analysis.

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