Our success is based on a unique combination of competitive advantages. Taken together, they create a winning formula for Selective. They include the following:
- A unique operating model that places empowered decision-makers alongside our customers and distribution partners.
- A franchise-value distribution model, defined by our meaningful and close business relationships with a group of high-quality distribution partners.
- An ability to develop and integrate sophisticated technology tools that our front-line employees use to inform risk selection, pricing, and claims decisions.
- A commitment to delivering a superior omnichannel customer experience enhanced by people and technology.
- A highly engaged and aligned team of extremely talented employees.
Financial Performance
Over the past 10 years, we have generated consistent and profitable net premiums written growth that has exceeded the industry average. In 2024, financial results fell short of our expectations. Elevated catastrophe losses and our social inflation-related reserving actions drove the 103% combined ratio. However, book value per share increased 6% and non-GAAP return on equity (ROE) was 7.1%, benefiting from after-tax net investment income of $363 million.
Our disciplined execution, strong underwriting culture, and enterprise risk management have, over time, delivered profitable growth and a track record that few in our industry can match – ultimately resulting in long-term value creation for our shareholders.
Path for Profitable Growth
We are well-positioned to navigate the on-going challenges of elevated economic and social inflation and financial market volatility. In 2025, we are focused on delivering on our strategy for disciplined and profitable growth within our insurance operation segments including:
- Implementing underwriting refinements in our general liability line of business, including managing limits and coverage grants in challenging jurisdictions, driving improved terms and conditions, and focusing production on better-performing classes of business;
- Continuing to expand our Standard Commercial Lines market share by (i) increasing our share towards a 12% target of our agents' premiums and (ii) strategically appointing new agents;
- In 2024, we began writing Standard Commercial Lines business in Maine, Nevada, Oregon, Washington, and West Virginia. Our geographic expansion in recent years allows us to compete more effectively against national insurers and diversify our portfolio risk. We expect to enter Kansas, Montana, and Wyoming over the next two years. After that, our pace of geographic expansion should moderate as we move closer to our goal of operating our Standard Commercial Lines business with a near national footprint.
- Achieving E&S Lines renewal pure price increases that reflect forward loss trend expectations and continuing to invest in product expansion, risk evaluation, and operational efficiency for small and middle market E&S lines accounts.
- Continuing to refine our underwriting approach and pricing factors and achieving overall Standard Personal Lines renewal pure price increases that exceed loss trends; grow our mass affluent customer base in states where we have filed and obtained approvals of adequate rates; and seek improved homeowners line of business profitability by expanding the use of new policy terms and conditions, including (i) coverage for older roofs based on depreciation schedules rather than replacement cost and (ii) implementing mandatory wind/hail deductibles in states exposed to severe convective storms, where law permits.
Customer Focus
We continue to enhance our customer servicing capabilities, which remain a differentiator in the marketplace. Over the past several years, we have focused on providing our customers with a superior “omni-channel” experience whereby they are able to engage with us in a 24-hour, 365-day environment – in the manner of their choosing. In addition to developing customer self-servicing capabilities, we have introduced initiatives such as proactive messaging and other value-added services. These value-added services are designed to enhance our customers’ resilience and sustainability. This blend of employee- and technology-driven services and solutions offers our customers choices for engagement and promotes a superior experience across all channels.
History of Financial Strength
Selective has maintained a financial strength rating of A or better by A.M. Best Rating Services for more than 90 years. This rating demonstrates the financial stability of the organization that is so important to our customers, distribution partners, and shareholders. In late 2021, A.M. Best upgraded our financial strength rating to A+, reflecting our consistently superior operating performance and solid financial position. We have a strong capital base with $3.1 billion of equity and a prudent debt-to-capital ratio of 14.0% as of year-end 2024.
As of year-end 2024, Selective maintained an $9.7 billion investment portfolio with a conservative fixed income securities and short-term investments average rating of “A+”. We also protect our balance sheet with a conservative reinsurance program, and maintain prudent reserving practices.