Selective Insurance Group Inc.

10/23/2026 | Press release | Distributed by Public on 10/23/2026 11:41

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements
The terms "Company," "we," "us," and "our" refer to Selective Insurance Group, Inc. (the "Parent") and its subsidiaries, except as expressly indicated or the context otherwise requires. Certain statements in this Quarterly Report on Form 10-Q, including information incorporated by reference, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a safe harbor for forward-looking statements under the Securities Act of 1933 and the Securities Exchange Act of 1934.
Forward-looking statements include our expectations, intentions, beliefs, projections, estimates, or forecasts regarding future events or financial performance. In some cases, forward-looking statements may be identified by words such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "believe," "intend," "estimate," "project," "predict," "potential," "pro forma," "seek," "target," "continue," "outlook," "guidance," "forecast," "goal," "likely," or the negative of such terms or other variations or similar expressions.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, activity levels, or performance to differ materially from those expressed or implied in the forward-looking statements. We discuss factors that could cause actual results to differ materially from those expressed in forward-looking statements in Part I, Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in our subsequent reports and filings with the United States ("U.S.") Securities and Exchange Commission ("SEC"). These risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors may emerge at any time. We cannot predict these new factors, their potential impact on our business, or the extent to which any factor - or combination of factors - may cause actual results to differ materially from those expressed in forward-looking statements.
Forward-looking statements are predictions based on the Company's current expectations and assumptions regarding future events. They are not guarantees or assurances of any outcomes, financial results, levels of activity, performance or achievements, and readers are cautioned not to place undue reliance on them. Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements, except as may be required by applicable law.
Introduction
We classify our business into four reportable segments:
•Standard Commercial Lines;
•Standard Personal Lines;
•Excess and Surplus Lines ("E&S Lines"); and
•Investments.
For additional information about these segments, refer to Note 9. "Segment Information" in Item 1. "Financial Statements." of this Form 10-Q and Note 12. "Segment Information" in Item 8. "Financial Statements and Supplementary Data." of our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report").
We write our Standard Commercial and Standard Personal Lines products and services through nine of our insurance subsidiaries, some of which participate in the federal government's National Flood Insurance Program's ("NFIP") Write Your Own Program. We write our E&S products through another subsidiary, Mesa Underwriters Specialty Insurance Company, a nationally authorized non-admitted carrier for customers who generally cannot obtain coverage in the standard marketplace. Collectively, we refer to our ten insurance subsidiaries as the "Insurance Subsidiaries."
The following is Management's Discussion and Analysis ("MD&A") of our financial condition and consolidated results of operations, including an evaluation of the amounts and certainty of cash flows from operations and outside sources, trends, and uncertainties that may have a material impact in future periods. Investors should read the MD&A in conjunction with Item 1. "Financial Statements." of this Form 10-Q and the consolidated financial statements in our 2025 Annual Report filed with the SEC.
In the MD&A, we discuss and analyze the following:
•Critical Accounting Policies and Estimates;
•Financial Highlights of Results for the third quarters ended September 30, 2026 ("Third Quarter 2026") and September 30, 2025 ("Third Quarter 2025"); and the nine-month periods ended September 30, 2026 ("Nine Months 2026") and September 30, 2025 ("Nine Months 2025")
•Results of Operations and Related Information by Segment;
•Income Taxes;
•Liquidity and Capital Resources; and
•Ratings.
Critical Accounting Policies and Estimates
Our unaudited interim consolidated financial statements include amounts for which we have made informed estimates and judgments for transactions not yet completed. These estimates and judgments affect the reported amounts in our consolidated financial statements. Our 2025 Annual Report outlines the estimates and judgments most critical to the preparation of the consolidated financial statements: (i) reserve for loss and loss expense; (ii) investment valuation and the allowance for credit losses on available-for-sale ("AFS") fixed income securities; and (iii) reinsurance. These estimates and judgments require our use of assumptions about highly uncertain matters that could change as facts and circumstances develop. Different estimates or judgments could result in materially different reported amounts. For additional information regarding our critical accounting policies and estimates, refer to pages 38 through 45 of our 2025 Annual Report.
Financial Highlights of Results for Third Quarter and Nine Months 2026 and Third Quarter and Nine Months 20251
Quarter ended
September 30, 		Change
% or Points 		Nine Months ended
September 30, 		Change
% or Points
($ and shares in thousands, except per share amounts) 2026 2025 2026 2025
Financial Data:
Revenues
$ 1,326,300 1,360,110 (2) % $ 4,072,260 3,972,041 3 %
After-tax net investment income 127,307 109,967 16 359,578 307,009 17
After-tax underwriting income (loss) 29,534 13,191 124 65,586 47,330 39
Net income (loss) before federal income tax 162,088 145,711 11 449,135 393,502 14
Net income (loss) 128,652 115,340 12 355,713 311,179 14
Net income (loss) available to common stockholders 126,352 113,040 12 348,813 304,279 15
Key Metrics:
Combined ratio 96.8 % 98.6 (1.8) pts 97.7 % 98.3 (0.6) pts
Invested assets per dollar of common stockholders' equity $ 3.54 3.36 5 % $ 3.54 3.36 5 %
Annualized after-tax yield on investment portfolio 4.4 % 4.1 0.3 pts 4.2
%
4.0 0.2 pts
Return on common equity ("ROE") 15.1 14.0 1.1 13.8 13.0 0.8
Net premiums written ("NPW") to statutory surplus $ 1.25 1.42 (12) % $ 1.25 1.42 (12)
%
Per Common Share Amounts:
Diluted net income (loss) per share $ 2.11 1.85 14 % $ 5.80 4.97 17 %
Book value per share 55.02 54.46 1 55.02 54.46 1
Dividends declared per share to common stockholders 0.43 0.38 13 1.29 1.14 13
Non-GAAP Information:
Non-GAAP operating income (loss)2
$ 141,714 106,675 33 % $ 361,276 294,437 23 %
Non-GAAP operating income (loss) per diluted common share2
2.37 1.75 35 6.01 4.81 25
Non-GAAP operating ROE2
16.9 % 13.2 3.7 pts 14.3 % 12.6 1.7 pts
Adjusted book value per common share2
$ 62.00 55.83 11 % $ 62.00 55.83 11 %
1Refer to the Glossary of Terms attached to our 2025 Annual Report as Exhibit 99.1 for definitions of terms used in this Form 10-Q.
2Non-GAAP operating income (loss), non-GAAP operating income (loss) per diluted common share, and non-GAAP operating ROE are comparable to net income (loss) available to common stockholders, net income (loss) available to common stockholders per diluted common share, and ROE, respectively, but exclude after-tax net realized and unrealized gains and losses on investments included in net income (loss). Adjusted book value per common share is comparable to book value per common share, but excludes total after-tax unrealized gains and losses on investments included in accumulated other comprehensive income (loss). These non-GAAP measures are important financial measures used by us, analysts, and investors because the timing of realized and unrealized investment gains and losses on securities in any given period is largely discretionary. In addition, net realized and unrealized investment gains and losses on investments could distort the analysis of trends.
The tables below provide reconciliations of our GAAP to non-GAAP measures:
Reconciliation of net income (loss) available to common stockholders to non-GAAP operating income (loss)
Quarter ended
September 30, 		Nine Months ended
September 30,
($ in thousands) 2026 2025 2026 2025
Net income (loss) available to common stockholders
$ 126,352 113,040 $ 348,813 304,279
Net realized and unrealized investment (gains) losses included in net income (loss), before tax
19,446 (8,057) 15,776 (12,458)
Tax on reconciling items (4,084) 1,692 (3,313) 2,616
Non-GAAP operating income (loss)
$ 141,714 106,675 $ 361,276 294,437
Reconciliation of net income (loss) available to common stockholders per diluted common share to non-GAAP operating income (loss) per diluted common share
Quarter ended
September 30, 		Nine Months ended
September 30,
2026 2025 2026 2025
Net income (loss) available to common stockholders per diluted common share
$ 2.11 1.85 $ 5.80 4.97
Net realized and unrealized investment (gains) losses included in net income (loss), before tax
0.32 (0.13) 0.26 (0.20)
Tax on reconciling items (0.06) 0.03 (0.05) 0.04
Non-GAAP operating income (loss) per diluted common share
$ 2.37 1.75 $ 6.01 4.81
Reconciliation of ROE to non-GAAP operating ROE Quarter ended
September 30, 		Nine Months ended
September 30,
2026 2025 2026 2025
ROE 15.1 % 14.0 13.8 % 13.0
Net realized and unrealized investment (gains) losses included in net income (loss), before tax
2.3 (1.0) 0.6 (0.5)
Tax on reconciling items (0.5) 0.2 (0.1) 0.1
Non-GAAP operating ROE 16.9 % 13.2 14.3 % 12.6
Reconciliation of book value per common share to adjusted book value per common share Quarter ended
September 30, 		Nine Months ended
September 30,
2026 2025 2026 2025
Book value per common share $ 55.02 54.46 $ 55.02 54.46
Total unrealized investment (gains) losses included in accumulated other comprehensive income (loss), before tax 8.84 1.73 8.84 1.73
Tax on reconciling items (1.86) (0.36) (1.86) (0.36)
Adjusted book value per common share $ 62.00 55.83 $ 62.00 55.83
The following table depicts the components of ROE and non-GAAP operating ROE:
ROE and non-GAAP operating ROE Components Quarter ended
September 30, 		Change Points Nine Months ended
September 30, 		Change Points
2026 2025 2026 2025
Standard Commercial Lines Segment 1.8 % (1.0) 2.8 0.7 % (0.1) 0.8
Standard Personal Lines Segment (0.3) (1.0) 0.7 0.3 - 0.3
E&S Lines Segment 2.0 3.6 (1.6) 1.6 2.1 (0.5)
Total insurance operations 3.5 1.6 1.9 2.6 2.0 0.6
Net investment income earned
15.2 13.6 1.6 14.2 13.2 1.0
Net realized and unrealized investment gains (losses) (1.8) 0.8 (2.6) (0.5) 0.4 (0.9)
Total investments segment 13.4 14.4 (1.0) 13.7 13.6 0.1
Other (1.8) (2.0) 0.2 (2.5) (2.6) 0.1
ROE 15.1 14.0 1.1 13.8 13.0 0.8
Net realized and unrealized investment (gains) losses, after tax 1.8 (0.8) 2.6 0.5 (0.4) 0.9
Non-GAAP operating ROE 16.9 13.2 3.7 14.3 12.6 1.7
In Third Quarter 2026, we delivered an ROE of 15.1% and a non-GAAP operating ROE of 16.9%, higher by 1.1 points and 3.7 points, respectively, compared to Third Quarter 2025. Improved underwriting results complemented strong after-tax net investment income of $127 million, which was up 16% from a year ago. The overall combined ratio of 96.8% for Third Quarter 2026 was 1.8 points better than 98.6% in Third Quarter 2025 and reflected a lower loss and loss expense ratio, partially offset by higher underwriting expenses. There was no prior year casualty reserve development in any segment or line of business in the quarter. Total insurance operations contributed 3.5 points of ROE in Third Quarter 2026, a 1.9-point increase from the prior-year quarter, primarily driven by improvement in Standard Commercial Lines.
On a year-to-date basis, our 13.8% ROE and 14.3% operating ROE were both higher than the 13.0% and 12.6%, respectively, generated in Nine Months 2025. Similar to the quarter, strong net investment income and underwriting performance in Nine Months 2026 drove the improvement.
Outlook
In Third Quarter 2026, we marked our ninth consecutive quarter of double-digit operating returns with an operating ROE of 16.9%, and returned $81 million to common stockholders through regular dividends and opportunistic share repurchases, reinforcing our commitment to delivering long-term value. As Selective celebrated its 100th anniversary this year, we are proud of our history, the work our employees do, and the value we deliver our policyholders, distribution partners, and shareholders. We remain focused on a set of key priorities across the company to drive future success, including:
•Relentlessly improving on the fundamentals across risk selection, individual policy pricing, and claims outcomes. Risk selection, granular and accurate risk pricing, and prompt, fair claims adjudication are foundational capabilities we have built over many decades and remain focused on today.
•Diversifying revenue and income within and across our three insurance segments. Growth levers include achieving greater market share and segment diversification in Standard Commercial Lines, potential geographic expansion in Standard Personal Lines, and increasing our product and distribution capabilities in E&S Lines and other specialty lines.
•Further leveraging the use of data analytics and technology, including general-purpose, industry-trained, and agentic artificial intelligence ("AI") solutions, to drive operational efficiency and improved underwriting and claim outcomes. Early AI successes in claims, underwriting, and risk management are delivering measurable outcomes in accuracy, speed, and productivity, positioning us to responsibly scale AI across the organization. We have also made considerable progress in modernizing our policy acquisition and claims systems. For example, system enhancements in our E&S Lines segment have created significant operational efficiency, positioning us for premium growth with limited headcount additions.
•Building a connected, accountable, and empowered organization by developing talent and aligning on prioritized goals.
We remain committed to making strategic investments that fuel continued growth, innovation, and performance excellence. As we position ourselves for the future, we have several strategies to grow market share profitably over time:
•In our existing footprint, we are focused on growing with existing partners and strategically appointing new agency locations. During Nine Months 2026, we added 120 agency locations and we had a net increase of 100 agency locations in 2025.
•Careful and deliberate geographic expansion. Since 2017, we have added sixteen states to our Standard Commercial Lines footprint, including Montana and Wyoming as of July 1, 2026. In Nine Months 2026, these expansion states produced $351 million in premium, representing approximately 8% of total direct premiums written.
Our full-year expectations for 2026 are as follows:
•A GAAP combined ratio of 96.5% to 97.5%, including net catastrophe losses of 5.5 points. Our combined ratio estimate assumes no prior year casualty reserve development, as we record our best estimate each quarter. We do not make assumptions about future reserve development;
•After-tax net investment income of $490 million, up from prior guidance of $480 million;
•An overall effective tax rate of 21.5%; and
•Weighted average shares of 59.9 million on a fully diluted basis, reflecting the shares repurchased in Nine Months 2026 and assuming no additional repurchases under our share repurchase authorizations.
Results of Operations and Related Information by Segment
Insurance Operations
The following table provides quantitative information for analyzing the combined ratio:
All Lines Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
Insurance Operations Results:
NPW $ 1,122,824 1,207,916 (7) % $ 3,569,026 3,736,988 (4) %
Net premiums earned ("NPE") 1,180,191 1,204,678 (2) 3,612,895 3,551,492 2
Less:
Loss and loss expense incurred 762,696 819,031 (7) 2,394,466 2,389,254 -
Net underwriting expenses incurred 379,197 368,073 3 1,133,307 1,099,316 3
Dividends to policyholders 913 876 4 2,103 3,010 (30)
Underwriting income (loss) $ 37,385 16,698 124 % $ 83,019 59,912 39 %
Combined Ratios:
Loss and loss expense ratio 64.6 % 67.9 (3.3) pts 66.2 % 67.2 (1.0) pts
Underwriting expense ratio 32.1 30.6 1.5 31.4 31.0 0.4
Dividends to policyholders ratio 0.1 0.1 - 0.1 0.1 -
Combined ratio 96.8 98.6 (1.8) 97.7 98.3 (0.6)
Lower NPW in Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods reflect reduced new business in a competitive environment and our granular pricing actions to drive lower retention on underperforming business. Retention in our Standard Commercial Lines segment reflects these actions at 82% in Third Quarter 2026 and 81% in Nine Months 2026. While enhancing underwriting profitability is a primary focus, we are also executing on strategies to support future growth opportunities, including expanding our geographic footprint and broadening our E&S distribution capabilities with retail access.
Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions) 2026 2025 2026 2025
Direct new business premiums $ 202.8 233.2 $ 622.8 732.3
Renewal pure price increases 5.6 % 9.6 6.4 % 9.9
NPE decreased 2% in Third Quarter 2026 and increased 2% in Nine Months 2026 compared to the same prior-year periods. The Third Quarter 2026 decline reflected the earned impact of lower NPW this year, while the Nine Months 2026 increase reflected growth in 2025.
Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
Loss and Loss Expense Incurred:
(Favorable) unfavorable prior year casualty reserve development $ - 40,000 (100) % $ - 90,000 (100) %
Current year casualty loss costs 544,065 584,502 (7) 1,683,386 1,629,501 3
Net catastrophe losses 64,099 24,899 157 207,990 148,188 40
Non-catastrophe property loss and loss expenses 154,532 169,630 (9) 503,090 521,565 (4)
Total loss and loss expense incurred 762,696 819,031 (7) 2,394,466 2,389,254 -
Impact on Loss and Loss Expense Ratio:
(Favorable) unfavorable prior year casualty reserve development -
%
3.3 (3.3)
pts
-
%
2.5 (2.5)
pts
Current year casualty loss costs 46.1 48.4 (2.3) 46.5 45.8 0.7
Net catastrophe losses 5.4 2.1 3.3 5.8 4.2 1.6
Non-catastrophe property loss and loss expenses 13.1 14.1 (1.0) 13.9 14.7 (0.8)
Total impact on loss and loss expense ratio
64.6 67.9 (3.3) 66.2 67.2 (1.0)
(Favorable)/Unfavorable Prior Year Casualty Reserve Development Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions) 2026 2025 2026 2025
General liability $ - - $ - 20.0
Commercial automobile - 35.0 - 60.0
Total Standard Commercial Lines - 35.0 - 80.0
Personal automobile - 5.0 - 10.0
Total Standard Personal Lines - 5.0 - 10.0
Total (favorable) unfavorable prior year casualty reserve development
$ - 40.0 $ - 90.0
(Favorable) unfavorable impact on loss ratio
- pts 3.3 - pts 2.5
The loss and loss expense ratio improved in both Third Quarter 2026 and Nine Months 2026 compared to the prior-year periods. There was no prior year casualty reserve development recorded this year, compared to unfavorable development in both the quarter and year-to-date periods last year. Current year casualty loss costs were lower in Third Quarter 2026 compared to Third Quarter 2025 reflecting the earned impact of the rate and underwriting actions during the quarter, while in Nine Months 2026, this improvement was offset by the increased loss trend assumptions that we recognized over the course of 2025 that are included in our expectations for 2026. In both Third Quarter 2026 and Nine Months 2026, property losses were higher compared to the prior-year periods due to normal variability in these losses.
As the table illustrates above, there was no prior year casualty reserve development in any segment or line of business in Third Quarter 2026 or Nine Months 2026. The unfavorable prior year casualty reserve development in Third Quarter 2025 and Nine Months 2025 was primarily driven by (i) our commercial automobile line of business that experienced increased severities in accident years 2022 through 2024 and (ii) umbrella claims within our general liability line of business driven by commercial automobile losses in accident years 2022 and 2023.
Underwriting Expenses
Our underwriting expense ratio increased 1.5 points and 0.4 points in Third Quarter 2026 and Nine Months 2026, respectively, compared to the prior-year periods, as lower NPE has put pressure on our underwriting expense ratio.
Standard Commercial Lines Segment
Quarter ended
September 30,
Change % or Points
Nine Months ended
September 30,
Change % or Points
($ in thousands) 2026 2025 2026 2025
Insurance Segments Results:
NPW $ 867,505 940,780 (8) % $ 2,821,741 2,962,009 (5) %
NPE 927,104 947,272 (2) 2,854,907 2,797,117 2
Less:
Loss and loss expense incurred 600,255 657,958 (9) 1,909,338 1,906,390 -
Net underwriting expenses incurred 306,786 298,614 3 918,912 891,119 3
Dividends to policyholders 913 876 4 2,103 3,010 (30)
Underwriting income (loss)
19,150 (10,176) (288) $ 24,554 (3,402) (822)
Combined Ratios:
Loss and loss expense ratio 64.7 % 69.5 (4.8) pts 66.8 % 68.1 (1.3) pts
Underwriting expense ratio 33.1 31.5 1.6 32.2 31.9 0.3
Dividends to policyholders ratio 0.1 0.1 - 0.1 0.1 -
Combined ratio 97.9 101.1 (3.2) 99.1 100.1 (1.0)
Lower NPW in Third Quarter 2026 and Nine Months 2026 compared to Third Quarter 2025 and Nine Months 2025 reflected reduced new business and targeted actions on our renewal portfolio. Stronger new business pricing, informed by our view of expected loss trends, combined with a competitive environment, drove lower acquisition rates on new business. We are leveraging our granular insights and differentiated operating model to drive higher renewal retention on our best-performing business and meaningfully lower retention on our underperforming business through appropriate rating and underwriting actions. While overall rate increases have moderated and retention has been impacted, we expect these mix improvement actions to contribute to improved profitability.
Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions) 2026 2025 2026 2025
Direct new business premiums $ 121.7 146.6 $ 377.7 477.0
Retention 82 % 82 % 81 % 82
Renewal pure price increases 5.7 8.9 6.4 8.9
NPE decreased 2% in Third Quarter 2026 and increased 2% in Nine Months 2026 compared to the same prior-year periods. The Third Quarter 2026 decline reflected the earned impact of lower NPW this year, while the Nine Months 2026 increase reflected NPW growth last year.
Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
Loss and Loss Expense Incurred:
(Favorable) unfavorable prior year casualty reserve development $ - 35,000 (100) % $ - 80,000 (100) %
Current year casualty loss costs 450,701 489,196 (8) 1,403,264 1,361,262 3
Net catastrophe losses 42,412 15,013 183 148,263 85,705 73
Non-catastrophe property loss and loss expenses 107,142 118,749 (10) 357,811 379,423 (6)
Total loss and loss expense incurred 600,255 657,958 (9) 1,909,338 1,906,390 -
Impact on Loss and Loss Expense Ratio:
(Favorable) unfavorable prior year casualty reserve development -
%
3.7 (3.7)
pts
-
%
2.9 (2.9)
pts
Current year casualty loss costs 48.5 51.7 (3.2) 49.1 48.5 0.6
Net catastrophe losses 4.6 1.6 3.0 5.2 3.1 2.1
Non-catastrophe property loss and loss expenses 11.6 12.5 (0.9) 12.5 13.6 (1.1)
Total impact on loss and loss expense ratio
64.7 69.5 (4.8) 66.8 68.1 (1.3)
The loss and loss expense ratio decreased 4.8 points in Third Quarter 2026 compared to Third Quarter 2025, primarily due to (i) no net prior year casualty reserve development in the current year quarter compared to 3.7 points of unfavorable prior year casualty reserve development in the year-ago quarter and (ii) lower current year casualty loss costs. These items were partially offset by period-to-period variability in property losses.
In Nine Months 2026, the loss and loss expense ratio decreased 1.3 points compared to Nine Months 2025, with higher current year loss costs and catastrophe losses more than offset by improvements in prior year casualty reserve development and non-catastrophe losses. The increase in catastrophe losses was driven by higher frequency and severity of winter storms and thunderstorm events that impacted our footprint this year compared to last.
The details of the prior year casualty reserve development by line of business were as follows:
(Favorable)/Unfavorable Prior Year Casualty Reserve Development Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions)
2026 2025 2026 2025
General liability $ - - $ - 20.0
Commercial automobile - 35.0 - 60.0
Workers compensation - - - -
Businessowners' policies - - - -
Bonds - - - -
Total Standard Commercial Lines
- 35.0 - 80.0
Prior year casualty reserve development in Third Quarter 2025 and Nine Months 2025 reflected (i) increased severities in accident years 2022 through 2024 in our commercial automobile line of business and (ii) increased severities in accident years 2022 and 2023 within our umbrella coverages in our general liability line of business related to commercial automobile claims.
Current year casualty loss costs were lower in Third Quarter 2026 compared to the prior-year quarter, primarily reflecting the earned impact of pricing and underwriting actions taken to improve rate adequacy. Higher current year casualty loss costs in Nine Months 2026 reflected the increased loss trend assumptions we recognized throughout 2025 and included in our expectations for 2026. Elevated severity trend assumptions attributable to social inflation on our general liability and commercial automobile liability lines of business, as well as elevated commercial automobile claim frequencies relative to expectations, drove the increase in current year casualty loss costs in Nine Months 2026. These increases were partially offset by lower workers compensation loss trends from decreasing claim frequencies in our 2026 expectations.
Underwriting Expenses
Our underwriting expense ratio increased 1.6 points in Third Quarter 2026 compared to Third Quarter 2025, as lower NPE has put pressure on our underwriting expense ratio.
Information about our most significant Standard Commercial Lines of business follows:
General Liability
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
NPW $ 276,335 303,531 (9) % $ 938,500 979,068 (4) %
Direct new business 36,053 41,781 (14) 108,709 140,100 (22)
Retention 83 % 82 1 82 % 82 -
Renewal pure price increases 7.9 11.4 (3.5) 8.6 11.8 (3.2)
NPE $ 302,146 312,556 (3) % $ 935,936 913,086 3 %
Underwriting income (loss)
(20,053) (20,747) (3) (63,562) (67,955) (6)
Combined ratio 106.6 % 106.6 - pts 106.8 % 107.4 (0.6) pts
% of total Standard Commercial Lines NPW 32 32 33 33
NPW was down in Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods, reflecting deliberate actions to enhance underwriting profitability. In sectors and markets where pricing does not align with our view of rate need, we are taking targeted underwriting actions, including (i) revising underwriting guidelines, (ii) tightening coverage offerings, and (iii) reducing writings.
NPE decreased 3% in Third Quarter 2026 and increased 3% in Nine Months 2026 compared to the same prior-year periods. The Third Quarter 2026 decline reflected the earned impact of lower NPW this year, while the Nine Months 2026 increase reflected NPW growth last year.
The combined ratio was flat in Third Quarter 2026 and decreased 0.6 points in Nine Months 2026 compared to the same prior-year periods, driven by a lower loss and loss expense ratio partially offset by higher underwriting expenses. The components of the loss and loss expense ratio follow:
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30,
Change % or Points
($ in thousands) 2026 2025 2026 2025
Loss and Loss Expense Incurred:
(Favorable) unfavorable prior year casualty reserve development $ - - - % $ - 20,000 (100) %
Current year casualty loss costs 223,089 238,516 (6) 696,199 672,800 3
Total loss and loss expense incurred 223,089 238,516 (6) 696,199 692,800 -
Impact on Loss and Loss Expense Ratio:
(Favorable) unfavorable prior year casualty reserve development -
%
- -
pts
-
%
2.2 (2.2)
pts
Current year casualty loss costs 73.8 76.3 (2.5) 74.4 73.7 0.7
Total impact on loss and loss expense ratio
73.8 76.3 (2.5) 74.4 75.9 (1.5)
The general liability line of business has experienced a long-term historical trend of meaningful severity increases, partially offset by claim frequency decreases. We attribute the increased severities to elevated social inflation, which we view as an industry dynamic characterized by higher claimant propensity for attorney representation and litigation, longer settlement times, and higher settlement values. Certain jurisdictions with expanded liability theories and higher damage awards pose increased challenges. We are closely monitoring these jurisdictions and the broader trends across our business.
These dynamics have impacted our view of current year loss costs. The increased loss trend assumptions that we recognized over the course of 2025 that are included in our expectations for 2026, drove a 0.7-point increase in current year loss costs in Nine Months 2026 compared to the same prior-year period. In Third Quarter 2026, however, current year casualty loss costs decreased 2.5 points compared to the year-ago quarter, reflecting the earned impact of the rate and underwriting actions.
We did not record any prior year casualty reserve development in Third Quarter 2026 and Nine Months 2026. We recorded $20 million of unfavorable prior year casualty reserve development in Nine Months 2025, which was driven by increased severities on umbrella coverages related to commercial automobile claims, in accident years 2022 and 2023.
The underwriting expense ratio increased 2.5 points in Third Quarter 2026 compared to Third Quarter 2025, and 0.9 points in Nine Months 2026 compared to Nine Months 2025, as lower NPE has put pressure on our underwriting expense ratio.
Commercial Automobile
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
NPW $ 260,058 292,905 (11) % $ 851,453 918,525 (7) %
Direct new business 26,835 37,986 (29) 82,766 125,852 (34)
Retention 80 % 82 (2) 80 % 83 (3)
Renewal pure price increases
7.6 10.0 (2.4) 8.7 10.3 (1.6)
NPE $ 281,698 294,014 (4) % $ 869,489 866,358 - %
Underwriting income (loss)
(5,751) (51,791) (89) (5,536) (52,572) (89)
Combined ratio 102.0 % 117.6 (15.6) pts 100.6 % 106.1 (5.5) pts
% of total Standard Commercial Lines NPW 30 31 30 31
NPW decreased 11% in Third Quarter 2026 and 7% in Nine Months 2026 compared to the same prior-year periods, driven by underwriting actions to improve profitability, such as achieving renewal pure price increases and tightening underwriting guidelines for fleet exposures. Lower renewal pure price increases this year compared to last were driven by a reduction in rates for physical damage that were partially offset by higher commercial automobile liability rates.
NPE decreased 4% in Third Quarter 2026 and slightly increased in Nine Months 2026 compared to the same prior-year periods. The Third Quarter 2026 decline reflected the earned impact of lower NPW this year, while the Nine Months 2026 increase reflected NPW growth last year.
The combined ratio improved 15.6 points in Third Quarter 2026 and 5.5 points in Nine Months 2026 compared to the same prior-year periods, and included the following:
Quarter ended
September 30,
Change % or Points
Nine Months ended
September 30,
Change % or Points
($ in thousands) 2026 2025 2026 2025
Loss and Loss Expense Incurred:
(Favorable) unfavorable prior year casualty reserve development $ - 35,000 (100) % $ - 60,000 (100) %
Current year casualty loss costs 161,035 178,781 (10) 493,533 465,339 6
Net catastrophe losses 1,839 1,533 20 4,623 7,144 (35)
Non-catastrophe property loss and loss expenses 37,211 43,544 (15) 114,062 126,789 (10)
Total loss and loss expense incurred 200,085 258,858 (23) 612,218 659,272 (7)
Impact on Loss and Loss Expense Ratio:
(Favorable) unfavorable prior year casualty reserve development - % 11.9 (11.9)
pts
- % 6.9 (6.9)
pts
Current year casualty loss costs 57.1 60.9 (3.8) 56.8 53.9 2.9
Net catastrophe losses 0.7 0.5 0.2 0.5 0.8 (0.3)
Non-catastrophe property loss and loss expenses 13.2 14.8 (1.6) 13.1 14.6 (1.5)
Total impact on loss and loss expense ratio
71.0 88.1 (17.1) 70.4 76.2 (5.8)
We did not record any prior year casualty reserve development in Third Quarter 2026 and Nine Months 2026, compared to unfavorable prior year casualty reserve development of $35.0 million in Third Quarter 2025 and $60.0 million in Nine Months 2025, driven by increased severities in the state of New Jersey for accident years 2022 through 2024. Current year casualty loss costs were lower in Third Quarter 2026 compared to the same prior-year period, primarily reflecting the earned impact of pricing and underwriting actions taken to improve rate adequacy and profitability, while in Nine Months 2026 compared to Nine Months 2025, this improvement was offset by the increased loss trend assumptions we recognized throughout 2025 that are included in our expectations for 2026.
In the aggregate, net catastrophe and non-catastrophe property losses were 1.4 points lower in Third Quarter 2026 and 1.8 points lower in Nine Months 2026 compared to the same prior-year periods. This reduction was driven by (i) the earned impact of renewal pure price increases and (ii) period-to-period variability of catastrophe and non-catastrophe property losses.
Commercial Property1
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
NPW $ 199,922 207,689 (4) % $ 597,741 611,873 (2) %
Direct new business 40,224 40,980 (2) 122,800 125,532 (2)
Retention 79 % 80 (1) 79 % 81 (2)
Renewal pure price increases
3.3 8.4 (5.1) 4.0 8.3 (4.3)
NPE $ 197,020 194,037 2 % $ 597,129 571,594 4 %
Underwriting income (loss)
33,311 56,521 (41) 60,491 93,974 (36)
Combined ratio 83.1 % 70.9 12.2 pts 89.9 % 83.6 6.3 pts
% of total Standard Commercial Lines NPW 23 22 21 21
1Includes Inland Marine.
NPW decreased 4% in Third Quarter 2026 and 2% in Nine Months 2026 compared to the same prior-year periods, reflecting lower new business and deliberate actions to strengthen underwriting profitability.
Growth in NPE of 2% in Third Quarter 2026 and 4% in Nine Months 2026 reflected the impact of NPW growth through the first quarter of 2026, but was pressured by the impact of lower NPW for the last two quarters.
The combined ratio increased 12.2 points in Third Quarter 2026 compared to Third Quarter 2025, and 6.3 points in Nine Months 2026 compared to Nine Months 2025, and included the following:
Third Quarter 2026 Third Quarter 2025
($ in thousands)
Loss and Loss Expense Incurred Impact on
Combined Ratio 		Loss and Loss Expense Incurred Impact on
Combined Ratio 		Change in Ratio
Net catastrophe losses $ 36,369 18.4 pts 13,089 6.7 11.7 pts
Non-catastrophe property loss and loss expenses 55,359 28.1 55,616 28.8 (0.7)
Total $ 91,728 46.5 68,705 35.5 11.0
Nine Months 2026 Nine Months 2025
($ in thousands)
Loss and Loss Expense Incurred Impact on
Combined Ratio 		Loss and Loss Expense Incurred Impact on
Combined Ratio 		Change in Ratio
Net catastrophe losses $ 127,663 21.4 pts 63,388 11.1 10.3 pts
Non-catastrophe property loss and loss expenses 200,723 33.6 215,394 37.7 (4.1)
Total $ 328,386 55.0 278,782 48.8 6.2
In the aggregate, net catastrophe and non-catastrophe property losses were higher in both Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods. The increase in net catastrophe losses was driven by higher frequency and severity of winter storms and thunderstorm events that impacted our footprint this year compared to last. This was partially offset by lower non-catastrophe property losses due to normal period-to-period variability in property losses.
Workers Compensation
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
NPW $ 61,827 65,707 (6) % $ 221,140 234,856 (6) %
Direct new business 6,870 10,945 (37) 24,416 36,782 (34)
Retention 81 % 83 (2) 81 % 83 (2)
Renewal pure price increases (decreases) (3.3) (3.7) 0.4 (3.4) (3.7) 0.3
NPE $ 73,583 75,528 (3) % $ 235,310 236,588 (1) %
Underwriting income (loss)
327 (3,474) (109) 2,084 (11,052) (119)
Combined ratio 99.6 % 104.6 (5.0) pts 99.1 % 104.7 (5.6) pts
% of total Standard Commercial Lines NPW 7 7 8 8
NPW decreased 6% in Third Quarter 2026 and 6% in Nine Months 2026 compared to the same prior-year periods, primarily due to negative rate changes and lower new business. The rate level reductions were driven by continued decreases in workers compensation rating bureau loss costs, which form the basis for our filed rating plans, and heavily influence marketplace pricing for this line of business. Additionally, retention was lower compared to the same prior-year periods, resulting from underwriting actions taken to improve profitability.
The combined ratio decreased 5.0 points in Third Quarter 2026 and 5.6 points in Nine Months 2026 compared to the same prior-year periods and included the following:
Third Quarter 2026 Third Quarter 2025
($ in thousands)
Loss and Loss Expense Incurred Impact on
Combined Ratio 		Loss and Loss Expense Incurred Impact on
Combined Ratio 		Change in Ratio
(Favorable) unfavorable prior year casualty reserve development $ - - pts - - - pts
Current year casualty loss costs 52,786 71.8 58,349 77.3 (5.5)
Total
$ 52,786 71.8 $ 58,349 77.3 (5.5)
Nine Months 2026 Nine Months 2025
($ in thousands)
Loss and Loss Expense Incurred Impact on
Combined Ratio 		Loss and Loss Expense Incurred Impact on
Combined Ratio 		Change in Ratio
(Favorable) unfavorable prior year casualty reserve development $ - - pts - - - pts
Current year casualty loss costs 171,648 72.9 183,176 77.5 (4.6)
Total $ 171,648 72.9 $ 183,176 77.5 (4.6)
Lower current year casualty loss costs in Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods were primarily driven by decreased claim frequencies leading to improved loss trends. In addition, the combined ratio benefited from a 1.3-point reduction in the underwriting expense ratio in Nine Months 2026 compared to the same prior-year period, primarily driven by lower commissions on this line of business.
Standard Personal Lines Segment
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
Insurance Segments Results:
NPW $ 95,998 104,248 (8) % $ 279,969 302,217 (7) %
NPE 95,325 101,519 (6) 292,992 307,551 (5)
Less:
Loss and loss expense incurred 73,507 89,290 (18) 211,810 235,936 (10)
Net underwriting expenses incurred 24,866 22,472 11 72,644 71,271 2
Underwriting income (loss) $ (3,048) (10,243) (70) $ 8,538 344 2,382
Combined Ratios:
Loss and loss expense ratio 77.1 % 88.0 (10.9) pts 72.3 % 76.7 (4.4) pts
Underwriting expense ratio 26.1 22.1 4.0 24.8 23.2 1.6
Combined ratio 103.2 110.1 (6.9) 97.1 99.9 (2.8)
Lower NPW and NPE in Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods were driven by reductions in direct new business and lower renewal pure price increases. New business decreased 36% in Third Quarter 2026 and 29% in Nine Months 2026 compared to the same prior-year periods, driven by (i) market conditions, including an increasingly competitive market for auto insurance and (ii) restrictions we have in place to manage overall growth in the State of New Jersey. We have received regulatory approvals for increased rate levels in most of our footprint states and are focused on growth in our target market segment where we believe our rates are adequate. In Third Quarter 2026 and Nine Months 2026 we achieved renewal pure price increases of 8.1% and 9.3%, respectively.
The following table depicts direct new business, retention, and renewal pure price increases for the Third Quarter 2026 and Nine Months 2026:
Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions) 2026 2025 2026 2025
Direct new business premiums1
$ 8.2 12.8 $ 24.1 34.6
Retention 80 % 79 79 % 77
Renewal pure price increases 8.1 16.9 9.3 19.8
1Excludes our Flood direct premiums written, which are 100% ceded to the NFIP and do not impact NPW.
Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
Loss and Loss Expense Incurred:
(Favorable) unfavorable prior year casualty reserve development $ - 5,000 (100) % $ - 10,000 (100) %
Current year casualty loss costs 24,482 32,223 (24) 77,196 87,405 (12)
Net catastrophe losses 18,342 12,160 51 43,480 33,864 28
Non-catastrophe property loss and loss expenses 30,683 39,907 (23) 91,134 104,667 (13)
Total loss and loss expense incurred 73,507 89,290 (18) 211,810 235,936 (10)
Impact on Loss and Loss Expense Ratio:
(Favorable) unfavorable prior year casualty reserve development - % 4.9 (4.9) pts - % 3.3 (3.3) pts
Current year casualty loss costs 25.8 31.8 (6.0) 26.4 28.4 (2.0)
Net catastrophe losses 19.2 12.0 7.2 14.8 11.0 3.8
Non-catastrophe property loss and loss expenses 32.2 39.3 (7.1) 31.1 34.0 (2.9)
Total impact on loss and loss expense ratio 77.2 88.0 (10.8) 72.3 76.7 (4.4)
The loss and loss expense ratio decreased 10.8 points in Third Quarter 2026 and 4.4 points in Nine Months 2026 compared to the same prior-year periods. The absence of unfavorable prior year casualty reserve development in the 2026 periods contributed 4.9 points to this variance for the quarter and 3.3 points for the year-to-date period. Prior year casualty reserve development was as follows:
(Favorable)/Unfavorable Prior Year Casualty Reserve Development Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions) 2026 2025 2026 2025
Homeowners $ - - - -
Personal automobile - 5.0 - 10.0
Total Standard Personal Lines - 5.0 - 10.0
The unfavorable prior year casualty reserve development of $5.0 million in Third Quarter 2025 and $10.0 million in Nine Months 2025 was primarily driven by increased severities in accident year 2024 related to the New Jersey portfolio.
Lower non-catastrophe property losses and current year casualty loss costs reduced the loss and loss expense ratio in Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods. The decrease in non-catastrophe property losses was primarily due to normal period-to-period variability associated with such losses. These amounts were partially offset by higher net catastrophe losses compared to the same prior-year periods due to higher frequency and severity of weather-related catastrophe events impacting our footprint.
Underwriting Expenses
Our underwriting expense ratio increased 4.0 points and 1.6 points in Third Quarter 2026 and Nine Months 2026, respectively, compared to the prior-year periods, as lower NPE has put pressure on our underwriting expense ratio.
E&S Lines Segment
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30,
Change % or Points
($ in thousands) 2026 2025 2026 2025
Insurance Segments Results:
NPW $ 159,321 162,888 (2) % $ 467,316 472,762 (1) %
NPE 157,762 155,887 1 464,996 446,824 4
Less:
Loss and loss expense incurred 88,934 71,783 24 273,318 246,928 11
Net underwriting expenses incurred 47,545 46,987 1 141,751 136,926 4
Underwriting income (loss) 21,283 37,117 (43) 49,927 62,970 (21)
Combined Ratios:
Loss and loss expense ratio 56.4 % 46.1 10.3 pts 58.8 % 55.3 3.5 pts
Underwriting expense ratio 30.1 30.1 - 30.5 30.6 (0.1)
Combined ratio 86.5 76.2 10.3 89.3 85.9 3.4
Increased competition in the marketplace and our continued underwriting discipline contributed to a decline in NPW of 2% in Third Quarter 2026 and 1% in Nine Months 2026 compared to the same prior-year periods. This NPW decline was primarily due to more capacity entering the excess and surplus lines marketplace and the admitted markets' expansion in appetite for business previously written by excess and surplus lines companies. NPW included the impact of the following:
Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions) 2026 2025 2026 2025
Direct new business premiums $ 72.8 73.9 $ 221.0 220.8
Retention 63 % 61 62 % 63
Renewal pure price increases 1.5 8.3 2.7 8.7
Despite the decline in NPW during 2026, NPE grew 1% in Third Quarter 2026 and 4% in Nine Months 2026 compared to the same prior-year periods, driven by growth in NPW in 2025 and the corresponding earnings of those premiums written.
Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
Quarter ended
September 30, 		Change % or Points Nine Months ended
September 30, 		Change % or Points
($ in thousands) 2026 2025 2026 2025
Loss and Loss Expense Incurred:
Current year casualty loss costs $ 68,882 63,083 9
%
$ 202,926 180,834 12
%
Net catastrophe losses 3,345 (2,274) (247) 16,247 28,619 (43)
Non-catastrophe property loss and loss expenses 16,707 10,974 52 54,145 37,475 44
Total loss and loss expense incurred 88,934 71,783 24 273,318 246,928 11
Impact on Loss and Loss Expense Ratio:
Current year casualty loss costs 43.7
%
40.6 3.1
pts
43.7
%
40.4 3.3
pts
Net catastrophe losses 2.1 (1.5) 3.6 3.5 6.5 (3.0)
Non-catastrophe property loss and loss expenses 10.6 7.0 3.6 11.6 8.4 3.2
Total impact on loss and loss expense ratio
56.4 46.1 10.3 58.8 55.3 3.5
The loss and loss expense ratio increased 10.3 points in Third Quarter 2026 compared to Third Quarter 2025, impacted by (i) higher current year casualty loss costs, primarily driven by higher embedded severity assumptions due to social inflation, (ii) higher non-catastrophe property loss and loss expenses, reflecting normal period-to-period variability associated with property losses, and (iii) higher net catastrophe losses due to higher frequency and severity of weather-related events that impacted our footprint.
The loss and loss expense ratio increased 3.5 points in Nine Months 2026 compared to Nine Months 2025. In Nine Months 2026, higher current year casualty loss costs and non-catastrophe property losses were partially offset by lower net catastrophe losses compared to Nine Months 2025, which included losses from the California Palisades Fire that impacted the first quarter of 2025.
Reinsurance
We successfully completed negotiations of our July 1, 2026 excess of loss treaties that cover Standard Commercial Lines, Standard Personal Lines, and E&S Lines.
We renewed the Casualty Excess of Loss Treaty ("Casualty Treaty") with coverage for $87 million in excess of a $3 million retention per loss occurrence, which is the same as the expiring treaty. We continue to retain a portion of the first layer through an 8% co-participation, compared to a 20% co-participation in the expiring treaty. The 2026 treaty year deposit premium increased primarily due to increased premium rates and lower co-participation in the first layer.
We also renewed the Property Excess of Loss Treaty ("Property Treaty") with the same retention as the expiring treaty, but with a $20 million increase in limit. The treaty now provides coverage for $115 million in excess of a $5 million retention for losses on a per-risk basis. The treaty year deposit premium decreased modestly, primarily driven by a reduction in rates.
The following table summarizes the Casualty Treaty and Property Treaty arrangements covering our Insurance Subsidiaries:
Treaty Name Reinsurance Coverage Terrorism Coverage
Casualty Treaty (covers all insurance operations)
There are six layers covering $87 million in excess of $3 million. Losses other than terrorism losses are subject to the following:
- 92% of $3 million in excess of $3 million layer provides 81 reinstatements, $246 million annual aggregate limit;
- 100% of $6 million in excess of $6 million layer provides 15 reinstatements, $96 million annual aggregate limit;
- 100% of $9 million in excess of $12 million layer provides three reinstatements, $36 million annual aggregate limit;
- 100% of $9 million in excess of $21 million layer provides one reinstatement, $18 million annual aggregate limit;
- 100% of $20 million in excess of $30 million layer provides one reinstatement, $40 million annual aggregate limit; and
- 100% of $40 million in excess of $50 million layer provides one reinstatement, $80 million annual aggregate limit.
x.x
All NBCR losses are excluded. All other losses stemming from the acts of terrorism are subject to the following:
- 92% of $3 million in excess of $3 million layer with $15 million net annual terrorism aggregate limit;
- 100% of $6 million in excess of $6 million layer with $30 million net annual terrorism aggregate limit;
- 100% of $9 million in excess of $12 million layer with $27 million net annual terrorism aggregate limit;
- 100% of $9 million in excess of $21 million layer with $18 million net annual terrorism aggregate limit;
- 100% of $20 million in excess of $30 million layer with $40 million net annual terrorism aggregate limit; and
- 100% of $40 million in excess of $50 million layer with $80 million net annual terrorism aggregate limit.
Property Treaty (covers all insurance operations)
There are three layers covering 100% of $115 million in excess of $5 million. Losses other than Terrorism Risk Insurance Program Reauthorization Act ("TRIPRA") certified losses are subject to the following reinstatements and annual aggregate limits:
- $5 million in excess of $5 million layer provides 15 reinstatements, $80 million in aggregate limits;
- $30 million in excess of $10 million layer provides four reinstatements, $150 million in aggregate limits; and
- $80 million in excess of $40 million layer provides one reinstatement, $160 million in aggregate limits.
All nuclear, biological, chemical, and radioactive ("NBCR") losses are excluded regardless of whether or not they are certified under the TRIPRA. For non-NBCR losses, the treaty distinguishes between acts committed on behalf of foreign persons or foreign interests ("Foreign Terrorism") and those that are not. The treaty provides annual aggregate limits for Foreign Terrorism (other than NBCR) acts of $15 million for the first layer, $60 million for the second layer, and $80 million for the third layer. Non-Foreign Terrorism losses (other than NBCR) are covered to the same extent as non-terrorism losses.
Investments
Our Investments segment's objectives are to maximize the economic value of our investment portfolio by achieving stable, risk-adjusted after-tax net investment income and generating long-term growth in book value per share. Our strategies consider prevailing market conditions, our enterprise risk tolerances, and other risk implications by:
•Maximizing the portfolio's overall total return by investing (i) the premiums from our insurance operations, (ii) amounts generated through our capital management strategies, including debt and equity security issuances, and (iii) profits of our business; and
•Maintaining (i) a well-diversified portfolio across issuers, sectors, and asset classes and (ii) a fixed income securities portfolio with high credit quality and acceptable duration and maturity profiles to provide ample liquidity.
The effective duration of our fixed income and short-term investments was 4.5 years as of September 30, 2026. We monitor and manage the effective duration to maximize yield while managing interest rate risk at an acceptable level. We buy and sell investments with the intent of maximizing investment returns in the current market environment, while balancing capital preservation and ensuring adequate liquidity to support our insurance business.
Our fixed income and short-term investments represented 91% of invested assets at September 30, 2026, and 92% at December 31, 2025, and had a weighted average credit rating of "A+" as of both dates. Investment grade holdings represented 96% of the total fixed income and short-term investment portfolio as of September 30, 2026, and 97% as of December 31, 2025.
For further details on the composition, credit quality, and various risks to which our portfolio is subject, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk." of our 2025 Annual Report.
Total Invested Assets
($ in thousands) September 30, 2026 December 31, 2025 Change
Total invested assets $ 11,486,698 11,302,440 2 %
Invested assets per dollar of common stockholders' equity 3.54 3.32 7
Components of unrealized gains (losses) - before tax:
Fixed income securities (521,374) (88,415) 490 %
Equity securities 17,935 14,311 25
Net unrealized gains (losses) - before tax (503,439) (74,104) 579
Components of unrealized gains (losses) - after tax:
Fixed income securities (411,885) (69,848) 490
Equity securities 14,169 11,306 25
Net unrealized gains (losses) - after tax (397,716) (58,542) 579
Invested assets increased $184.3 million as of September 30, 2026, compared to December 31, 2025, primarily reflecting our active investment of operating cash flows, which were 23% of NPW in Nine Months 2026. Invested assets included a $433.0 million increase in pre-tax net unrealized losses in our fixed income portfolio primarily due to higher interest rates as of September 30, 2026, compared to December 31, 2025.
Net Investment Income
Net investment income earned components were as follows:
Quarter ended
September 30, 		Change
% or Points 		Nine Months ended
September 30, 		Change
% or Points
($ in thousands) 2026 2025 2026 2025
Fixed income securities $ 137,589 117,242 17 % $ 398,857 338,057 18 %
Commercial mortgage loans ("CMLs") 4,148 3,999 4 12,463 11,375 10
Equity securities 5,376 5,164 4 15,098 13,639 11
Short-term investments 3,384 5,712 (41) 12,081 17,212 (30)
Alternative investments 15,187 11,769 29 30,670 22,852 34
Other investments 139 171 (19) 625 565 11
Investment expenses (5,342) (5,402) (1) (16,763) (16,386) 2
Net investment income earned - before tax 160,481 138,655 16 453,031 387,314 17
Net investment income tax expense (33,174) (28,688) 16 (93,453) (80,305) 16
Net investment income earned - after tax $ 127,307 109,967 16 $ 359,578 307,009 17
Effective tax rate 20.7 % 20.7 - pts 20.6 % 20.7 (0.1) pts
Annualized after-tax yield on fixed income investments 4.4 4.1 0.3 4.4 4.1 0.3
Annualized after-tax yield on investment portfolio 4.4 4.1 0.3 4.2 4.0 0.2
The increase in after-tax net investment income earned in both Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods, was primarily driven by (i) active portfolio management resulting in higher after-tax portfolio yield and (ii) operating cash flow deployment.
Realized and Unrealized Gains and Losses
When evaluating securities for sale, our general philosophy is to reduce our exposure to securities and sectors based on economic evaluations of whether (i) the fundamentals for that security or sector have deteriorated or (ii) the timing is appropriate to trade opportunistically for other securities with better economic-return characteristics. Net realized and unrealized gains and losses for the indicated periods were as follows:
Quarter ended
September 30, 		Change
% 		Nine Months ended
September 30, 		Change
%
($ in thousands) 2026 2025 2026 2025
Net realized gains (losses) on disposals $ 10,581 (575) (1,940) % $ 6,129 (1,471) (517) %
Net unrealized gains (losses) on equity securities (17,691) 7,802 (327) 3,624 12,492 (71)
Net credit loss benefit (expense) on fixed income investments
(12,318) 830 (1,584) (25,123) 2,196 (1,244)
Losses on securities for which we have the intent to sell (18) - 100 (406) (759) (47)
Total net realized and unrealized investment gains (losses) $ (19,446) 8,057 (341) $ (15,776) 12,458 (227)
The change in net realized and unrealized investment losses in Third Quarter 2026 and Nine Months 2026 compared to net realized and unrealized investment gains in the same prior-year periods, was primarily driven by (i) a decrease in valuations reflecting the current public equities market and (ii) an increase in net credit loss expense on fixed income investments, primarily due to higher interest rates in Third Quarter 2026 and Nine Months 2026 compared to the same prior-year periods. The higher interest rates increased unrealized losses on our fixed income investments, thereby increasing the amount of recognized credit losses.
Income Taxes
The following table provides information regarding income taxes.
Quarter ended
September 30, 		Nine Months ended
September 30,
($ in millions) 2026 2025 2026 2025
Income tax expense
$ 33.4 30.4 $ 93.4 82.3
Effective tax rate1
20.9 % 21.2 21.1 % 21.3
1The effective tax rate is calculated by taking "Total income tax expense (benefit)" divided by "Income (loss) before income tax" less "Preferred stock dividends" on our Consolidated Statements of Income.
Liquidity and Capital Resources
Capital resources and liquidity reflect our ability to generate cash flows from business operations, borrow funds at competitive rates, and raise new capital to meet our operating and growth needs.
Liquidity
We manage liquidity by generating sufficient cash flows to meet our business operations' short-term and long-term cash requirements. We adjust our liquidity requirements based on economic conditions, market conditions, and future cash flow commitments, as discussed further below.
Sources of Liquidity
The Parent's sources of cash historically have consisted of dividends from the Insurance Subsidiaries, the Parent's investment portfolio, borrowings under third-party lines of credit, intercompany revolving demand loan agreements with certain Insurance Subsidiaries, and the issuance of equity (common or preferred) and debt securities. We continue to monitor these sources, considering our short-term and long-term liquidity and capital preservation strategies.
The Parent's cash and components of its investment portfolio were as follows:
($ in thousands) September 30, 2026 December 31, 2025
Fixed income securities $ 223,682 254,851
Equity securities 52,311 49,978
Short-term investments 101,413 78,973
Alternative investments 21,027 21,603
Cash 101 248
Total investments and cash $ 398,534 405,653
Short-term investments have historically been maintained in "AAA" rated money market funds and fixed income securities are comprised of high-quality, liquid government and corporate securities.
The amount and composition of the Parent's investment portfolio may change over time based on various factors, including the amount and availability of dividends from our Insurance Subsidiaries, investment income, expenses, other Parent cash needs, such as dividends payable to stockholders, asset allocation investment decisions, inorganic growth opportunities, debt retirement, and share repurchases. We have an established target for the Parent to maintain liquid investments of at least twice its expected annual net cash outflow needs.
Insurance Subsidiary Dividends
The Insurance Subsidiaries generate liquidity through insurance float, created by collecting premiums and earning investment income before paying claims. The float period can extend over many years. Our investment portfolio consists of securities with maturity dates that continually provide a source of cash flow for claims payments in the ordinary course of business. To protect our Insurance Subsidiaries' capital, we purchase reinsurance coverage for significantly large claims or catastrophes that may occur.
The Insurance Subsidiaries paid $230 million in total dividends to the Parent in Nine Months 2026. As of December 31, 2025, our allowable ordinary maximum dividend is $466 million for 2026. All Insurance Subsidiary dividends to the Parent are (i) subject to the approval and/or review of its domiciliary state insurance regulator and (ii) generally payable only from earned statutory surplus reported in its annual statements as of the preceding December 31. Although domiciliary state insurance regulators have historically approved Insurance Subsidiary dividends, there is no assurance they will approve future dividends.
New Jersey corporate law also limits the maximum amount of dividends the Parent can pay our stockholders if either (i) the Parent would be unable to pay its debts as they become due in the usual course of business or (ii) the Parent's total assets would be less than its total liabilities. The Parent's ability to pay dividends to stockholders is also impacted by (i) covenants in its credit agreement that obligate it, among other things, to maintain a minimum consolidated net worth and a maximum ratio of consolidated debt to total capitalization, and (ii) the terms of our preferred stock that prohibit dividends from being declared or paid on our common stock if dividends are not declared and paid, or made payable, on all outstanding preferred stock for the latest completed dividend period.
For additional information regarding dividend restrictions and financial covenants, where applicable, see Note 11. "Indebtedness," Note 17. "Equity," and Note 22. "Statutory Financial Information, Capital Requirements, and Restrictions on Dividends and Transfers of Funds" in Item 8. "Financial Statements and Supplementary Data." of our 2025 Annual Report.
Line of Credit
On June 30, 2025, the Parent entered into a Credit Agreement with the lenders named therein (the "Lenders") and Wells Fargo Bank, National Association, as administrative agent ("Line of Credit"). Under the Line of Credit, the Lenders have agreed to provide the Parent with a $100 million revolving credit facility that can be increased to $200 million with the Lenders' consent. The Line of Credit will mature on June 30, 2028, and has a variable interest rate based on the Parent's debt ratings. In the second quarter of 2026, we executed a $1.0 million overnight borrowing on the Line of Credit as a periodic validation of processes for accessing capital and liquidity resources. No additional borrowings were made under the Line of Credit in Nine Months 2026. For additional information regarding the Line of Credit and corresponding representations, warranties, and covenants, see Note 11. "Indebtedness" in Item 8. "Financial Statements and Supplementary Data." of our 2025 Annual Report.
Four Insurance Subsidiaries are members of Federal Home Loan Bank ("FHLB") branches, as shown in the following table. Membership requires the ownership of branch stock and includes the right to access liquidity. All Federal Home Loan Bank of Indianapolis ("FHLBI") and Federal Home Loan Bank of New York ("FHLBNY") borrowings are required to be secured by investments pledged as collateral. For additional information regarding collateral outstanding, refer to Note 4. "Investments" in Item 1. "Financial Statements." of this Form 10-Q.
Branch Insurance Subsidiary Member
FHLBI
Selective Insurance Company of South Carolina1
Selective Insurance Company of the Southeast1
FHLBNY
Selective Insurance Company of America
Selective Insurance Company of New York ("SICNY")
1These subsidiaries are jointly referred to as the "Indiana Subsidiaries" because they are domiciled in Indiana.
The Line of Credit permits aggregate borrowings from the FHLBI and the FHLBNY up to 10% of the respective member company's admitted assets for the previous year. SICNY is domiciled in New York, which limits its FHLBNY borrowings to the lesser of 5% of admitted assets for the most recently completed fiscal quarter or 10% of the previous year-end's admitted assets. As of September 30, 2026, we had remaining capacity of $691.4 million for FHLB borrowings, with a $28.6 million additional stock purchase requirement to allow the member companies to borrow their remaining capacity amounts. We currently have a $60 million borrowing outstanding from FHLBI, which is due for repayment on December 16, 2026.
Short-term Borrowings
We made no material short-term borrowings from FHLB branches during Nine Months 2026; however in the second quarter of 2026, we executed an insignificant overnight borrowing from FHLBNY as a periodic validation of processes for accessing capital and liquidity resources.
Intercompany Loan Agreements
The Parent has lending agreements with the Indiana Subsidiaries, approved by the Indiana Department of Insurance, that provide the Parent with additional intercompany liquidity. Like the Line of Credit, these lending agreements limit the Parent's borrowings from the Indiana Subsidiaries to 10% of the admitted assets of the respective Indiana Subsidiary. The outstanding balance on these intercompany loans was $35.0 million as of both September 30, 2026 and December 31, 2025. The remaining capacity under these intercompany loan agreements was $198.0 million as of both September 30, 2026 and December 31, 2025. We have other insurance regulator-approved intercompany agreements that facilitate liquidity management between the Parent and the Insurance Subsidiaries to enhance flexibility.
Capital Market Activities
The Parent had no private or public stock issuances during Nine Months 2026.
In October 2025, the Company announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase issued and outstanding shares of common stock up to $200 million, exclusive of any excise tax impact. During Nine Months 2026, we repurchased 1,300,663 shares of our common stock for $116.9 million, excluding commissions paid and estimated excise tax. We had $53.1 million of remaining capacity under that program as of September 30, 2026.
On October 22, 2026, the Company announced that its Board of Directors authorized a new share repurchase program under which the Company may repurchase issued and outstanding shares of common stock up to $200 million, exclusive of any excise tax impact, bringing the total available for repurchases to $253.1 million. This new program is effective as of immediately following the completion of the repurchases authorized under the prior stock repurchase program and has no expiration date.
Uses of Liquidity
The Parent uses the liquidity generated from the sources discussed above to pay dividends to our stockholders, among other things. Dividends on shares of the Parent's common and preferred stock are declared and paid at the discretion of the Board of Directors ("Board") based on our operating results, financial condition, capital requirements, contractual restrictions, and other relevant factors. Our Board declared:
• A 12% increase in the quarterly cash dividend on common stock, to $0.48 per common share payable December 1, 2026, to holders of record as of November 16, 2026; and
• A quarterly cash dividend of $287.50 per share on our 4.60% Non-Cumulative Preferred Stock, Series B (equivalent to $0.28750 per depositary share) payable on December 15, 2026, to holders of record as of November 30, 2026.
Our ability to meet our interest and principal repayment obligations on our debt and our ability to continue to pay dividends to our stockholders is dependent on (i) liquidity at the Parent, (ii) the ability of the Insurance Subsidiaries to pay dividends, if necessary, and/or (iii) the availability of other sources of liquidity to the Parent.
Restrictions on the Insurance Subsidiaries' ability to declare and pay dividends without alternative liquidity options, could materially affect our ability to service debt and pay dividends on common and preferred stock.
Capital Resources
Capital resources ensure we can pay policyholder claims, furnish the financial strength to support underwriting insurance risks, and facilitate continued business growth. At September 30, 2026, we had GAAP stockholders' equity of $3.4 billion and statutory surplus of $3.7 billion. With total debt of $902 million at September 30, 2026, our debt-to-capital ratio was 20.7%. For additional information on our statutory surplus, see Note 22. "Statutory Financial Information, Capital Requirements, and Restrictions on Dividends and Transfers of Funds" in Item 8. "Financial Statements and Supplementary Data." of our 2025 Annual Report.
Our current and long-term material cash requirements associated with (i) loss and loss expense reserves, (ii) contractual obligations under operating and financing leases for office space and equipment, and (iii) notes payable, funded primarily with operating cash flows, have not materially changed since December 31, 2025. The Insurance Subsidiaries' net loss and loss expense reserves duration was 3.0 years at December 31, 2025.
The following table summarizes certain contractual obligations we had at September 30, 2026, that may require us to invest additional amounts into our investment portfolio, which we would fund primarily with operating cash flows.
($ in millions) Amount of Obligation
Fixed income securities $ 645.8
Alternative investments 364.5
Equity securities 14.2
CMLs 14.2
Total $ 1,038.7
There is no certainty (i) these additional investments will be required or (ii) about the timing of funding. We expect to have the capacity to fund these commitments through our normal operating and investing activities as they come due.
Our other cash requirements include, without limitation, dividends to stockholders, capital expenditures, and other operating expenses, including commissions to our distribution partners, labor costs, premium taxes, general and administrative expenses, and income taxes.
As of September 30, 2026 and December 31, 2025, we had no (i) material guarantees on behalf of others and trading activities involving non-exchange traded contracts accounted for at fair value, (ii) material transactions with related parties other than those disclosed in Note 18. "Related Party Transactions" in Item 8. "Financial Statements and Supplementary Data." of our 2025 Annual Report and Note 14. "Related Party Transactions" in Item 1. "Financial Statements." of this Form 10-Q, and (iii) material relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes. Consequently, we are not exposed to any material financing, liquidity, market, or credit risk related to off-balance sheet arrangements.
We continually monitor our cash requirements and the capital resources we maintain at the holding company and Insurance Subsidiary levels. As part of our long-term capital strategy, we strive to maintain capital metrics that support our targeted financial strength relative to the macroeconomic environment. Based on our analysis and market conditions, we may take a variety of actions, including, without limitation, contributing capital to the Insurance Subsidiaries, issuing additional debt and/or equity securities, repurchasing existing debt, repurchasing shares of the Parent's common stock, and adjusting common stockholders' dividends.
Our capital management strategy is intended to protect the interests of the Insurance Subsidiaries' policyholders and our stockholders, and to enhance our financial strength and underwriting capacity. We have a strong capital base and high-quality underwriting portfolio, positioning us well to capitalize on potential market opportunities.
Book value per common share decreased to $55.02 as of September 30, 2026, from $56.74 as of December 31, 2025. The reduction was primarily attributable to a $5.80 increase in after-tax net unrealized losses on our fixed income securities portfolio and $1.29 in common stockholder dividends, partially offset by $5.80 of net income per diluted common share. The increase in after-tax unrealized losses on our fixed income securities portfolio was primarily driven by an increase in benchmark U.S. Treasury rates. Our adjusted book value per share, which is book value per share excluding total after-tax unrealized gains or losses on investments included in accumulated other comprehensive income (loss), increased to $62.00 as of September 30, 2026, from $57.91 as of December 31, 2025.
Cash Flows
Net cash provided by operating activities decreased to $817.7 million in Nine Months 2026, compared to $856.8 million in Nine Months 2025, primarily driven by lower levels of cash received for premiums.
Net cash used in investing activities decreased to $618.2 million in Nine Months 2026, compared to $1.2 billion in Nine Months 2025. Nine Months 2025 was elevated as a result of investing proceeds from our $400 million, 5.9% Senior Note issuance in February 2025. These proceeds also drove the $262 million in net cash provided by financing activities in Nine Months 2025, compared to net cash used in financing activities in Nine Months 2026 of $202 million.
Ratings
Our ratings remain the same as reported in our "Overview" section of Item 1. "Business." of our 2025 Annual Report and are as follows:
Nationally Recognized Statistical Rating Organizations
Financial Strength Rating Outlook
AM Best Company A+ Stable
Moody's Investors Services
A2 Stable
Fitch Ratings ("Fitch") A+ Stable
Standard & Poor's Global Ratings ("S&P") A Stable
On April 29, 2026, Fitch affirmed our "A+" rating with a "stable" outlook. In taking this rating action, Fitch cited our (i) business profile as having favorable competitive positioning within our core standard lines businesses, driven by strong independent agency relationships and (ii) strong capital position.
On September 29, 2026, S&P affirmed our "A" rating with a "stable" outlook. In taking this rating action, S&P cited our (i) strong balance sheet and track record of disciplined loss reserve management and (ii) improving operating performance through targeted pricing, business mix adjustments, and enhanced risk segmentation.
On October 15, 2026, Moody's affirmed our "A2" rating with a "stable" outlook. In taking this rating action, Moody's cited our (i) solid regional franchise focused on small-to-midsize commercial accounts, (ii) strong independent agency relationships, (iii) long record of underwriting profitability, and (iv) high-quality investment portfolio.
Selective Insurance Group Inc. published this content on October 23, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 23, 2026 at 17:41 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]