[10-Q] Selective Insurance Group, Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
U Power Limited (Nasdaq: UCAR) filed a Rule 424(b)(5) prospectus supplement for a small registered direct offering aimed at raising fresh working capital.
- Securities: 445,000 Class A ordinary shares at $2.50 each and pre-funded warrants for up to 106,628 shares (exercise price $0.0001) sold to one institutional investor. A concurrent private placement issues 551,628 five-year warrants (exercise price $2.50) that are exempt from registration.
- Gross proceeds: US $1.379 million; net to issuer ≈ US $1.283 million after 7 % placement fee and up to $40k expenses payable to Maxim Group.
- Market context: Offer equals ~13.6 % of the public float and remains within the one-third-of-float limit under Form F-3, I.B.5.
- Dilution: Additional equity plus potential exercise of a total 658,256 warrants could raise dilution risk for existing holders.
- Use of proceeds: general working capital to advance EV battery-swapping (UOTTA) commercialization; specific allocations not detailed.
- Key risks reiterated: PRC regulatory intervention, HFCAA delisting threat, data-security reviews, evolving CSRC filing regime, Cayman holding-company structure and no near-term dividends. Pre-funded warrants lack a public market.
- Status: Closing expected 25 Jul 2025, subject to customary conditions.
U Power Limited (Nasdaq: UCAR) ha depositato un supplemento al prospetto secondo la Regola 424(b)(5) per un'offerta diretta registrata di piccole dimensioni finalizzata a raccogliere nuovo capitale operativo.
- Strumenti finanziari: 445.000 azioni ordinarie di Classe A a 2,50 dollari ciascuna e warrant prefinanziati per un massimo di 106.628 azioni (prezzo di esercizio 0,0001 $) venduti a un unico investitore istituzionale. Una collocazione privata concomitante emette 551.628 warrant quinquennali (prezzo di esercizio 2,50 $) esenti da registrazione.
- Proventi lordi: 1,379 milioni di dollari USA; netto per l’emittente circa 1,283 milioni di dollari USA dopo una commissione di collocamento del 7% e fino a 40.000 dollari di spese a favore di Maxim Group.
- Contesto di mercato: L’offerta corrisponde a circa il 13,6% del flottante pubblico e resta entro il limite di un terzo del flottante previsto dal modulo F-3, I.B.5.
- Diluizione: L’equity aggiuntiva e l’eventuale esercizio di un totale di 658.256 warrant potrebbero aumentare il rischio di diluizione per gli azionisti esistenti.
- Utilizzo dei proventi: Capitale operativo generale per favorire la commercializzazione del sistema di sostituzione batterie EV (UOTTA); allocazioni specifiche non dettagliate.
- Principali rischi ribaditi: interventi regolatori della RPC, minaccia di delisting HFCAA, revisioni sulla sicurezza dei dati, evoluzione del regime di deposito CSRC, struttura societaria con holding nelle Cayman e assenza di dividendi a breve termine. I warrant prefinanziati non dispongono di un mercato pubblico.
- Stato: Chiusura prevista per il 25 luglio 2025, soggetta a condizioni consuete.
U Power Limited (Nasdaq: UCAR) presentó un suplemento al prospecto bajo la Regla 424(b)(5) para una pequeña oferta directa registrada destinada a recaudar nuevo capital de trabajo.
- Valores: 445,000 acciones ordinarias Clase A a $2.50 cada una y warrants prefinanciados para hasta 106,628 acciones (precio de ejercicio $0.0001) vendidos a un solo inversor institucional. Una colocación privada concurrente emite 551,628 warrants a cinco años (precio de ejercicio $2.50) exentos de registro.
- Ingresos brutos: 1.379 millones de dólares; neto para el emisor ≈ 1.283 millones de dólares tras una comisión de colocación del 7% y hasta $40,000 en gastos pagaderos a Maxim Group.
- Contexto de mercado: La oferta equivale a ~13.6% del flotante público y se mantiene dentro del límite de un tercio del flotante según el Formulario F-3, I.B.5.
- Dilución: Capital adicional más el posible ejercicio de un total de 658,256 warrants podrían aumentar el riesgo de dilución para los accionistas existentes.
- Uso de ingresos: Capital de trabajo general para impulsar la comercialización del sistema de intercambio de baterías para vehículos eléctricos (UOTTA); no se detallan asignaciones específicas.
- Riesgos clave reiterados: intervención regulatoria en la RPC, amenaza de exclusión por HFCAA, revisiones de seguridad de datos, régimen de presentación CSRC en evolución, estructura de sociedad holding en las Islas Caimán y ausencia de dividendos a corto plazo. Los warrants prefinanciados no cuentan con un mercado público.
- Estado: Cierre esperado el 25 de julio de 2025, sujeto a condiciones habituales.
U Power Limited (나스닥: UCAR)은 신규 운전자본 조달을 위한 소규모 등록 직접 공모를 위해 규칙 424(b)(5) 보충 설명서를 제출했습니다.
- 증권: 기관 투자자 한 곳에 주당 2.50달러의 클래스 A 보통주 445,000주와 최대 106,628주 행사 가격 0.0001달러의 선납 워런트가 판매되었습니다. 동시에 등록 면제 대상인 5년 만기 행사 가격 2.50달러의 워런트 551,628주가 사모 발행됩니다.
- 총 수익: 137만 9천 달러; 7% 배치 수수료 및 Maxim Group에 지급되는 최대 4만 달러 비용 차감 후 순수익 약 128만 3천 달러.
- 시장 상황: 이번 공모는 공개 유통 주식의 약 13.6%에 해당하며, Form F-3, I.B.5에 따른 유통 주식 1/3 제한 내에 있습니다.
- 희석: 추가 주식과 총 658,256 워런트 행사 가능성으로 기존 주주에 대한 희석 위험이 증가할 수 있습니다.
- 수익금 사용처: EV 배터리 교환(UOTTA) 상용화를 위한 일반 운전자본; 구체적 배분 내역은 미공개.
- 주요 위험 재확인: 중국 규제 개입, HFCAA 상장폐지 위협, 데이터 보안 검토, CSRC 신고 체계 변화, 케이맨 홀딩 구조, 단기 배당 없음. 선납 워런트는 공개 시장이 없습니다.
- 상태: 통상적인 조건 충족 시 2025년 7월 25일 마감 예정.
U Power Limited (Nasdaq : UCAR) a déposé un supplément au prospectus conformément à la règle 424(b)(5) pour une petite offre directe enregistrée visant à lever de nouveaux fonds de roulement.
- Valeurs mobilières : 445 000 actions ordinaires de classe A à 2,50 $ chacune et des bons de souscription préfinancés pour jusqu’à 106 628 actions (prix d’exercice de 0,0001 $) vendus à un investisseur institutionnel unique. Un placement privé simultané émet 551 628 bons de souscription d’une durée de cinq ans (prix d’exercice de 2,50 $) exemptés d’enregistrement.
- Produit brut : 1,379 million de dollars américains ; net pour l’émetteur ≈ 1,283 million de dollars après une commission de placement de 7 % et jusqu’à 40 000 $ de frais payables à Maxim Group.
- Contexte de marché : L’offre représente environ 13,6 % du flottant public et reste dans la limite d’un tiers du flottant selon le formulaire F-3, I.B.5.
- Dilution : Des capitaux propres supplémentaires ainsi que l’exercice potentiel de 658 256 bons de souscription au total pourraient accroître le risque de dilution pour les actionnaires existants.
- Utilisation des fonds : fonds de roulement général pour faire avancer la commercialisation du système d’échange de batteries EV (UOTTA) ; affectations spécifiques non détaillées.
- Principaux risques rappelés : intervention réglementaire en RPC, menace de radiation HFCAA, revues de sécurité des données, régime d’enregistrement CSRC en évolution, structure de holding aux îles Caïmans et absence de dividendes à court terme. Les bons de souscription préfinancés ne disposent pas de marché public.
- Statut : Clôture prévue le 25 juillet 2025, sous réserve des conditions habituelles.
U Power Limited (Nasdaq: UCAR) hat einen Nachtrag zum Prospekt gemäß Regel 424(b)(5) für ein kleines, direkt registriertes Angebot eingereicht, um frisches Betriebskapital zu beschaffen.
- Wertpapiere: 445.000 Class A Stammaktien zu je 2,50 USD sowie vorfinanzierte Warrants für bis zu 106.628 Aktien (Ausübungspreis 0,0001 USD), verkauft an einen institutionellen Investor. Gleichzeitig erfolgt eine Privatplatzierung von 551.628 Fünf-Jahres-Warrants (Ausübungspreis 2,50 USD), die von der Registrierung befreit sind.
- Bruttoerlös: 1,379 Mio. USD; Netto für den Emittenten ca. 1,283 Mio. USD nach 7 % Platzierungsgebühr und bis zu 40.000 USD Kosten, zahlbar an die Maxim Group.
- Marktkontext: Das Angebot entspricht etwa 13,6 % des Streubesitzes und bleibt innerhalb der Ein-Drittel-Streubesitz-Grenze gemäß Formular F-3, I.B.5.
- Verwässerung: Zusätzliches Eigenkapital sowie die potenzielle Ausübung von insgesamt 658.256 Warrants könnten das Verwässerungsrisiko für bestehende Inhaber erhöhen.
- Verwendung der Erlöse: Allgemeines Betriebskapital zur Förderung der Kommerzialisierung des EV-Batterietauschsystems (UOTTA); keine detaillierten Zuordnungen angegeben.
- Wichtige Risiken erneut hervorgehoben: Regulatorische Eingriffe der VR China, HFCAA-Delisting-Gefahr, Datenschutzprüfungen, sich entwickelndes CSRC-Meldeverfahren, Cayman-Holding-Struktur und keine kurzfristigen Dividenden. Vorfinanzierte Warrants haben keinen öffentlichen Markt.
- Status: Abschluss voraussichtlich am 25. Juli 2025, vorbehaltlich üblicher Bedingungen.
Positive
- Capital infusion of roughly US$1.28 m provides near-term liquidity without bank debt.
- Pricing parity: Warrants strike at the offering price ($2.50), aligning future exercise with investor interests.
- Regulatory compliance: Company confirms possession of all required PRC licences and no CAC review trigger.
Negative
- Dilution risk: Up to 658,256 additional shares from warrants plus 445,000 new shares reduce existing holder ownership by ~15 %.
- Minimal proceeds relative to operating needs may necessitate further dilutive financings.
- Ongoing PRC uncertainties (CSRC filings, data security, HFCAA) could impair listing status and valuation.
- Liquidity concern: Pre-funded warrants lack a trading market, limiting investor exit options.
Insights
TL;DR: Small raise improves liquidity but adds dilution; strategically neutral.
The $1.28 m net inflow extends runway yet is immaterial relative to FY-24 cash burn. Because shares plus 658k potential warrant shares equal ~15 % of current outstanding, dilution outweighs capital inflow. Pricing at a 15 % discount to the prior $2.93 close suggests limited institutional appetite. However, the deal preserves Form F-3 capacity and signals that UCAR can still tap U.S. markets despite heightened PRC scrutiny. Impact: modestly negative for per-share value, neutral for financing flexibility.
TL;DR: Filing highlights persistent China policy exposure; no new permissions required yet.
The supplement restates extensive PRC legal caveats—CSRC filing obligations, CAC data reviews, HFCAA delisting risk—yet counsel affirms all current licences are in place and cybersecurity review not triggered. No immediate approval appears necessary for this raise, but future offerings must be filed within three business days post-closing. Investors remain exposed to sudden rule shifts that could impair offshore capital access or force restructuring. Overall regulatory stance: unchanged, still high-risk but manageable at present.
U Power Limited (Nasdaq: UCAR) ha depositato un supplemento al prospetto secondo la Regola 424(b)(5) per un'offerta diretta registrata di piccole dimensioni finalizzata a raccogliere nuovo capitale operativo.
- Strumenti finanziari: 445.000 azioni ordinarie di Classe A a 2,50 dollari ciascuna e warrant prefinanziati per un massimo di 106.628 azioni (prezzo di esercizio 0,0001 $) venduti a un unico investitore istituzionale. Una collocazione privata concomitante emette 551.628 warrant quinquennali (prezzo di esercizio 2,50 $) esenti da registrazione.
- Proventi lordi: 1,379 milioni di dollari USA; netto per l’emittente circa 1,283 milioni di dollari USA dopo una commissione di collocamento del 7% e fino a 40.000 dollari di spese a favore di Maxim Group.
- Contesto di mercato: L’offerta corrisponde a circa il 13,6% del flottante pubblico e resta entro il limite di un terzo del flottante previsto dal modulo F-3, I.B.5.
- Diluizione: L’equity aggiuntiva e l’eventuale esercizio di un totale di 658.256 warrant potrebbero aumentare il rischio di diluizione per gli azionisti esistenti.
- Utilizzo dei proventi: Capitale operativo generale per favorire la commercializzazione del sistema di sostituzione batterie EV (UOTTA); allocazioni specifiche non dettagliate.
- Principali rischi ribaditi: interventi regolatori della RPC, minaccia di delisting HFCAA, revisioni sulla sicurezza dei dati, evoluzione del regime di deposito CSRC, struttura societaria con holding nelle Cayman e assenza di dividendi a breve termine. I warrant prefinanziati non dispongono di un mercato pubblico.
- Stato: Chiusura prevista per il 25 luglio 2025, soggetta a condizioni consuete.
U Power Limited (Nasdaq: UCAR) presentó un suplemento al prospecto bajo la Regla 424(b)(5) para una pequeña oferta directa registrada destinada a recaudar nuevo capital de trabajo.
- Valores: 445,000 acciones ordinarias Clase A a $2.50 cada una y warrants prefinanciados para hasta 106,628 acciones (precio de ejercicio $0.0001) vendidos a un solo inversor institucional. Una colocación privada concurrente emite 551,628 warrants a cinco años (precio de ejercicio $2.50) exentos de registro.
- Ingresos brutos: 1.379 millones de dólares; neto para el emisor ≈ 1.283 millones de dólares tras una comisión de colocación del 7% y hasta $40,000 en gastos pagaderos a Maxim Group.
- Contexto de mercado: La oferta equivale a ~13.6% del flotante público y se mantiene dentro del límite de un tercio del flotante según el Formulario F-3, I.B.5.
- Dilución: Capital adicional más el posible ejercicio de un total de 658,256 warrants podrían aumentar el riesgo de dilución para los accionistas existentes.
- Uso de ingresos: Capital de trabajo general para impulsar la comercialización del sistema de intercambio de baterías para vehículos eléctricos (UOTTA); no se detallan asignaciones específicas.
- Riesgos clave reiterados: intervención regulatoria en la RPC, amenaza de exclusión por HFCAA, revisiones de seguridad de datos, régimen de presentación CSRC en evolución, estructura de sociedad holding en las Islas Caimán y ausencia de dividendos a corto plazo. Los warrants prefinanciados no cuentan con un mercado público.
- Estado: Cierre esperado el 25 de julio de 2025, sujeto a condiciones habituales.
U Power Limited (나스닥: UCAR)은 신규 운전자본 조달을 위한 소규모 등록 직접 공모를 위해 규칙 424(b)(5) 보충 설명서를 제출했습니다.
- 증권: 기관 투자자 한 곳에 주당 2.50달러의 클래스 A 보통주 445,000주와 최대 106,628주 행사 가격 0.0001달러의 선납 워런트가 판매되었습니다. 동시에 등록 면제 대상인 5년 만기 행사 가격 2.50달러의 워런트 551,628주가 사모 발행됩니다.
- 총 수익: 137만 9천 달러; 7% 배치 수수료 및 Maxim Group에 지급되는 최대 4만 달러 비용 차감 후 순수익 약 128만 3천 달러.
- 시장 상황: 이번 공모는 공개 유통 주식의 약 13.6%에 해당하며, Form F-3, I.B.5에 따른 유통 주식 1/3 제한 내에 있습니다.
- 희석: 추가 주식과 총 658,256 워런트 행사 가능성으로 기존 주주에 대한 희석 위험이 증가할 수 있습니다.
- 수익금 사용처: EV 배터리 교환(UOTTA) 상용화를 위한 일반 운전자본; 구체적 배분 내역은 미공개.
- 주요 위험 재확인: 중국 규제 개입, HFCAA 상장폐지 위협, 데이터 보안 검토, CSRC 신고 체계 변화, 케이맨 홀딩 구조, 단기 배당 없음. 선납 워런트는 공개 시장이 없습니다.
- 상태: 통상적인 조건 충족 시 2025년 7월 25일 마감 예정.
U Power Limited (Nasdaq : UCAR) a déposé un supplément au prospectus conformément à la règle 424(b)(5) pour une petite offre directe enregistrée visant à lever de nouveaux fonds de roulement.
- Valeurs mobilières : 445 000 actions ordinaires de classe A à 2,50 $ chacune et des bons de souscription préfinancés pour jusqu’à 106 628 actions (prix d’exercice de 0,0001 $) vendus à un investisseur institutionnel unique. Un placement privé simultané émet 551 628 bons de souscription d’une durée de cinq ans (prix d’exercice de 2,50 $) exemptés d’enregistrement.
- Produit brut : 1,379 million de dollars américains ; net pour l’émetteur ≈ 1,283 million de dollars après une commission de placement de 7 % et jusqu’à 40 000 $ de frais payables à Maxim Group.
- Contexte de marché : L’offre représente environ 13,6 % du flottant public et reste dans la limite d’un tiers du flottant selon le formulaire F-3, I.B.5.
- Dilution : Des capitaux propres supplémentaires ainsi que l’exercice potentiel de 658 256 bons de souscription au total pourraient accroître le risque de dilution pour les actionnaires existants.
- Utilisation des fonds : fonds de roulement général pour faire avancer la commercialisation du système d’échange de batteries EV (UOTTA) ; affectations spécifiques non détaillées.
- Principaux risques rappelés : intervention réglementaire en RPC, menace de radiation HFCAA, revues de sécurité des données, régime d’enregistrement CSRC en évolution, structure de holding aux îles Caïmans et absence de dividendes à court terme. Les bons de souscription préfinancés ne disposent pas de marché public.
- Statut : Clôture prévue le 25 juillet 2025, sous réserve des conditions habituelles.
U Power Limited (Nasdaq: UCAR) hat einen Nachtrag zum Prospekt gemäß Regel 424(b)(5) für ein kleines, direkt registriertes Angebot eingereicht, um frisches Betriebskapital zu beschaffen.
- Wertpapiere: 445.000 Class A Stammaktien zu je 2,50 USD sowie vorfinanzierte Warrants für bis zu 106.628 Aktien (Ausübungspreis 0,0001 USD), verkauft an einen institutionellen Investor. Gleichzeitig erfolgt eine Privatplatzierung von 551.628 Fünf-Jahres-Warrants (Ausübungspreis 2,50 USD), die von der Registrierung befreit sind.
- Bruttoerlös: 1,379 Mio. USD; Netto für den Emittenten ca. 1,283 Mio. USD nach 7 % Platzierungsgebühr und bis zu 40.000 USD Kosten, zahlbar an die Maxim Group.
- Marktkontext: Das Angebot entspricht etwa 13,6 % des Streubesitzes und bleibt innerhalb der Ein-Drittel-Streubesitz-Grenze gemäß Formular F-3, I.B.5.
- Verwässerung: Zusätzliches Eigenkapital sowie die potenzielle Ausübung von insgesamt 658.256 Warrants könnten das Verwässerungsrisiko für bestehende Inhaber erhöhen.
- Verwendung der Erlöse: Allgemeines Betriebskapital zur Förderung der Kommerzialisierung des EV-Batterietauschsystems (UOTTA); keine detaillierten Zuordnungen angegeben.
- Wichtige Risiken erneut hervorgehoben: Regulatorische Eingriffe der VR China, HFCAA-Delisting-Gefahr, Datenschutzprüfungen, sich entwickelndes CSRC-Meldeverfahren, Cayman-Holding-Struktur und keine kurzfristigen Dividenden. Vorfinanzierte Warrants haben keinen öffentlichen Markt.
- Status: Abschluss voraussichtlich am 25. Juli 2025, vorbehaltlich üblicher Bedingungen.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
For the quarterly period ended: June 30, 2025
or
For the transition period from_____________________________to_____________________________
Commission File Number: 001-33067
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (973) 948-3000
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol (s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | Emerging growth company | ||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 18, 2025, there were 60,850,304 shares of common stock, par value $2.00 per share, outstanding.
Table of Contents
| SELECTIVE INSURANCE GROUP, INC. | ||||||||
| Table of Contents | ||||||||
| Page No. | ||||||||
PART I. FINANCIAL INFORMATION | 1 | |||||||
Item 1. | Financial Statements | 1 | ||||||
Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 | 1 | |||||||
Unaudited Consolidated Statements of Income for the Quarter and Six Months Ended June 30, 2025 and 2024 | 2 | |||||||
Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Quarter and Six Months Ended June 30, 2025 and 2024 | 3 | |||||||
Unaudited Consolidated Statements of Stockholders' Equity for the Quarter and Six Months Ended June 30, 2025 and 2024 | 4 | |||||||
Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 | 5 | |||||||
Notes to Unaudited Interim Consolidated Financial Statements | 6 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | ||||||
Forward-Looking Statements | 28 | |||||||
Introduction | 29 | |||||||
Critical Accounting Policies and Estimates | 29 | |||||||
Financial Highlights of Results for Second Quarter and Six Months 2025 and 2024 | 30 | |||||||
Results of Operations and Related Information by Segment | 33 | |||||||
Federal Income Taxes | 45 | |||||||
Liquidity and Capital Resources | 45 | |||||||
Ratings | 49 | |||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 49 | ||||||
Item 4. | Controls and Procedures | 49 | ||||||
PART II. OTHER INFORMATION | 50 | |||||||
Item 1. | Legal Proceedings | 50 | ||||||
Item 1A. | Risk Factors | 50 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 50 | ||||||
Item 3. | Defaults Upon Senior Securities | 50 | ||||||
Item 4. | Mine Safety Disclosures | 50 | ||||||
Item 5. | Other Information | 51 | ||||||
Item 6. | Exhibits | 51 | ||||||
Signatures | 52 | |||||||
Table of Contents
| PART I. FINANCIAL INFORMATION | |||||
| ITEM 1. FINANCIAL STATEMENTS. | |||||
| SELECTIVE INSURANCE GROUP, INC. CONSOLIDATED BALANCE SHEETS | Unaudited | |||||||||||||
| ($ in thousands, except share amounts) | June 30, 2025 | December 31, 2024 | ||||||||||||
| ASSETS | ||||||||||||||
| Investments: | ||||||||||||||
Fixed income securities, held-to-maturity – at carrying value (fair value: $ | $ | |||||||||||||
| Less: allowance for credit losses | ||||||||||||||
| Fixed income securities, held-to-maturity, net of allowance for credit losses | ||||||||||||||
Fixed income securities, available-for-sale – at fair value (allowance for credit losses: $ | ||||||||||||||
Commercial mortgage loans – at carrying value (fair value: $ | ||||||||||||||
| Less: allowance for credit losses | ( | ( | ||||||||||||
| Commercial mortgage loans, net of allowance for credit losses | ||||||||||||||
Equity securities – at fair value (cost: $ | ||||||||||||||
| Short-term investments | ||||||||||||||
| Alternative investments | ||||||||||||||
| Other investments | ||||||||||||||
| Total investments (Note 4 and 5) | $ | |||||||||||||
| Cash | ||||||||||||||
| Restricted cash | ||||||||||||||
| Accrued investment income | ||||||||||||||
| Premiums receivable | ||||||||||||||
| Less: allowance for credit losses (Note 6) | ( | ( | ||||||||||||
| Premiums receivable, net of allowance for credit losses | ||||||||||||||
| Reinsurance recoverable | ||||||||||||||
| Less: allowance for credit losses (Note 7) | ( | ( | ||||||||||||
| Reinsurance recoverable, net of allowance for credit losses | ||||||||||||||
| Prepaid reinsurance premiums | ||||||||||||||
| Current federal income tax | ||||||||||||||
| Deferred federal income tax | ||||||||||||||
Property and equipment – at cost, net of accumulated depreciation and amortization of: $ | ||||||||||||||
| Deferred policy acquisition costs | ||||||||||||||
| Goodwill | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Liabilities: | ||||||||||||||
| Reserve for loss and loss expense (Note 8) | $ | |||||||||||||
| Unearned premiums | ||||||||||||||
| Long-term debt | ||||||||||||||
| Current federal income tax | ||||||||||||||
| Accrued salaries and benefits | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | $ | |||||||||||||
| Stockholders’ Equity: | ||||||||||||||
Preferred stock of $ | $ | |||||||||||||
Authorized shares: | ||||||||||||||
Common stock of $ | ||||||||||||||
Authorized shares | ||||||||||||||
Issued: | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive income (loss) (Note 11) | ( | ( | ||||||||||||
Treasury stock – at cost (shares: | ( | ( | ||||||||||||
| Total stockholders’ equity | $ | |||||||||||||
| Commitments and contingencies | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | |||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
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| SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| ($ in thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Net premiums earned | $ | $ | ||||||||||||||||||||||||
| Net investment income earned | ||||||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | ( | |||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Loss and loss expense incurred | ||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | ||||||||||||||||||||||||||
| Other insurance expenses | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Corporate expenses | ||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||
Income (loss) before federal income tax | ( | |||||||||||||||||||||||||
Federal income tax expense (benefit): | ||||||||||||||||||||||||||
| Current | ( | |||||||||||||||||||||||||
| Deferred | ( | ( | ||||||||||||||||||||||||
Total federal income tax expense (benefit) | ( | |||||||||||||||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||||||||||||||
| Preferred stock dividends | ||||||||||||||||||||||||||
Net income (loss) available to common stockholders | $ | ( | $ | |||||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
Net income (loss) available to common stockholders - Basic | $ | ( | $ | |||||||||||||||||||||||
Net income (loss) available to common stockholders - Diluted | $ | ( | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
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SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | |||||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
| Unrealized gains (losses) on investment securities: | ||||||||||||||||||||||||||
| Unrealized holding gains (losses) arising during period | ( | ( | ||||||||||||||||||||||||
| Unrealized gains (losses) on securities with credit loss recognized in earnings | ( | ( | ||||||||||||||||||||||||
| Amounts reclassified into net income (loss): | ||||||||||||||||||||||||||
| Net realized (gains) losses on disposals and losses on intent-to-sell available-for-sale securities | ( | ( | ( | |||||||||||||||||||||||
| Credit loss (benefit) expense | ( | ( | ||||||||||||||||||||||||
| Total unrealized gains (losses) on investment securities | ( | ( | ||||||||||||||||||||||||
| Defined benefit pension and post-retirement plans: | ||||||||||||||||||||||||||
| Amounts reclassified into net income (loss): | ||||||||||||||||||||||||||
| Net actuarial loss | ||||||||||||||||||||||||||
| Total defined benefit pension and post-retirement plans | ||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
| Comprehensive income (loss) | $ | ( | $ | ( | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
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| SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| ($ in thousands, except share and per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Preferred stock: | ||||||||||||||||||||||||||
| Beginning of period | $ | $ | ||||||||||||||||||||||||
| Issuance of preferred stock | ||||||||||||||||||||||||||
| End of period | ||||||||||||||||||||||||||
| Common stock: | ||||||||||||||||||||||||||
| Beginning of period | ||||||||||||||||||||||||||
| Dividend reinvestment plan | ||||||||||||||||||||||||||
| Stock purchase and compensation plans | ||||||||||||||||||||||||||
| End of period | ||||||||||||||||||||||||||
| Additional paid-in capital: | ||||||||||||||||||||||||||
| Beginning of period | ||||||||||||||||||||||||||
| Dividend reinvestment plan | ||||||||||||||||||||||||||
| Stock purchase and compensation plans | ||||||||||||||||||||||||||
| End of period | ||||||||||||||||||||||||||
| Retained earnings: | ||||||||||||||||||||||||||
| Beginning of period | ||||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||
| Dividends to preferred stockholders | ( | ( | ( | ( | ||||||||||||||||||||||
| Dividends to common stockholders | ( | ( | ( | ( | ||||||||||||||||||||||
| End of period | ||||||||||||||||||||||||||
| Accumulated other comprehensive income (loss): | ||||||||||||||||||||||||||
| Beginning of period | ( | ( | ( | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
| End of period | ( | ( | ( | ( | ||||||||||||||||||||||
| Treasury stock: | ||||||||||||||||||||||||||
| Beginning of period | ( | ( | ( | ( | ||||||||||||||||||||||
| Acquisition of treasury stock - share repurchase authorization | ( | |||||||||||||||||||||||||
| Acquisition of treasury stock - shares acquired related to employee share-based compensation plans | ( | ( | ( | ( | ||||||||||||||||||||||
| End of period | ( | ( | ( | ( | ||||||||||||||||||||||
| Total stockholders’ equity | $ | $ | ||||||||||||||||||||||||
| Dividends declared per preferred share | $ | $ | ||||||||||||||||||||||||
| Dividends declared per common share | $ | $ | ||||||||||||||||||||||||
| Preferred stock, shares outstanding: | ||||||||||||||||||||||||||
| Beginning of period | ||||||||||||||||||||||||||
| Issuance of preferred stock | ||||||||||||||||||||||||||
| End of period | ||||||||||||||||||||||||||
| Common stock, shares outstanding: | ||||||||||||||||||||||||||
| Beginning of period | ||||||||||||||||||||||||||
| Dividend reinvestment plan | ||||||||||||||||||||||||||
| Stock purchase and compensation plan | ||||||||||||||||||||||||||
| Acquisition of treasury stock - share repurchase authorization | ( | |||||||||||||||||||||||||
| Acquisition of treasury stock - shares acquired related to employee share-based compensation plans | ( | ( | ( | ( | ||||||||||||||||||||||
| End of period | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
4
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| SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | Six Months ended June 30, | |||||||||||||
| ($ in thousands) | 2025 | 2024 | ||||||||||||
| Operating Activities | ||||||||||||||
| Net income (loss) | $ | |||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Stock-based compensation expense | ||||||||||||||
| Undistributed gains of equity method investments | ( | ( | ||||||||||||
| Distributions in excess of current year income of equity method investments | ||||||||||||||
| Net realized and unrealized (gains) losses | ( | |||||||||||||
| Loss (gain) on disposal of fixed assets | ( | |||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Increase in reserve for loss and loss expense, net of reinsurance recoverable | ||||||||||||||
| Increase in unearned premiums, net of prepaid reinsurance | ||||||||||||||
| (Increase) decrease in net federal income taxes | ( | ( | ||||||||||||
| Increase in premiums receivable | ( | ( | ||||||||||||
| Increase in deferred policy acquisition costs | ( | ( | ||||||||||||
| Increase in accrued investment income | ( | ( | ||||||||||||
| Increase (decrease) in accrued salaries and benefits | ( | ( | ||||||||||||
| (Increase) decrease in other assets | ( | ( | ||||||||||||
| Increase (decrease) in other liabilities | ( | ( | ||||||||||||
| Net cash provided by (used in) operating activities | ||||||||||||||
| Investing Activities | ||||||||||||||
| Purchases of fixed income securities, held-to-maturity | ( | |||||||||||||
| Purchases of fixed income securities, available-for-sale | ( | ( | ||||||||||||
| Purchases of commercial mortgage loans | ( | ( | ||||||||||||
| Purchases of equity securities | ( | ( | ||||||||||||
| Purchases of alternative investments and other investments | ( | ( | ||||||||||||
| Purchases of short-term investments | ( | ( | ||||||||||||
| Sales of fixed income securities, available-for-sale | ||||||||||||||
| Proceeds from commercial mortgage loans | ||||||||||||||
| Sales of short-term investments | ||||||||||||||
| Redemption and maturities of fixed income securities, held-to-maturity | ||||||||||||||
| Redemption and maturities of fixed income securities, available-for-sale | ||||||||||||||
| Sales of equity securities | ||||||||||||||
| Sales of alternative investments | ||||||||||||||
| Distributions from alternative investments and other investments | ||||||||||||||
| Purchases of property and equipment | ( | ( | ||||||||||||
| Net cash provided by (used in) investing activities | ( | ( | ||||||||||||
| Financing Activities | ||||||||||||||
| Dividends to preferred stockholders | ( | ( | ||||||||||||
| Dividends to common stockholders | ( | ( | ||||||||||||
| Acquisition of treasury stock | ( | ( | ||||||||||||
| Net proceeds from stock purchase and compensation plans | ||||||||||||||
Proceeds from borrowings (net of debt issuance costs of $ | ||||||||||||||
| Repayments of finance lease obligations | ( | ( | ||||||||||||
| Net cash provided by (used in) financing activities | ( | |||||||||||||
| Net increase (decrease) in cash and restricted cash | ( | ( | ||||||||||||
| Cash and restricted cash, beginning of period | ||||||||||||||
| Cash and restricted cash, end of period | $ | |||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
5
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NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The words "Company," "we," "us," or "our" refer to Selective Insurance Group, Inc. (the "Parent") and its subsidiaries, except as expressly indicated or the context requires otherwise. We have prepared our interim unaudited consolidated financial statements ("Financial Statements") in conformity with (i) United States ("U.S.") generally accepted accounting principles ("GAAP"), and (ii) the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. These require management to make estimates and assumptions that affect the reported financial statement balances and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. All significant intercompany accounts and transactions are eliminated in consolidation.
Our Financial Statements reflect all adjustments that, in our opinion, are normal, recurring, and necessary for a fair presentation of our results of operations and financial condition. Our Financial Statements cover the second quarters ended June 30, 2025 ("Second Quarter 2025") and June 30, 2024 ("Second Quarter 2024"), and the six-month periods ended June 30, 2025 ("Six Months 2025") and June 30, 2024 ("Six Months 2024"). Our Financial Statements do not include all information and disclosures required by GAAP and the SEC for audited annual financial statements. Because interim period results of operations are not necessarily indicative of full-year results, our Financial Statements should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Annual Report") filed with the SEC.
NOTE 2. Adoption of Accounting Pronouncements
We adopted no accounting pronouncements in Six Months 2025.
Pronouncements to be effective in the future
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 amends disclosure requirements to provide greater transparency on income taxes. The following additional disclosures are required annually: (i) specific required categories in the rate reconciliation, (ii) additional information for reconciling items that meet a quantitative threshold, (iii) the amount of income taxes paid disaggregated by jurisdiction, and (iv) income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Amendments can be applied prospectively. Retrospective application and early adoption are permitted. As it only requires additional disclosure, ASU 2023-09 will not have a material impact on our financial condition or results of operations.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires disaggregated disclosure of income statement expenses. This ASU does not change the expense captions on the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. This ASU can be applied prospectively. Retrospective application and early adoption are permitted. As ASU 2024-03 only requires additional disclosure, it will not have a material impact on our financial condition and results of operations.
6
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NOTE 3. Statements of Cash Flows
Supplemental cash flow information was as follows:
| Six Months ended June 30, | ||||||||||||||
| ($ in thousands) | 2025 | 2024 | ||||||||||||
| Cash paid (received) during the period for: | ||||||||||||||
| Interest | $ | |||||||||||||
| Federal income tax | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
| Operating cash flows from operating leases | ||||||||||||||
| Operating cash flows from financing leases | ||||||||||||||
| Financing cash flows from finance leases | ||||||||||||||
| Non-cash items: | ||||||||||||||
Corporate actions related to equity securities1 | ||||||||||||||
Corporate actions related to fixed income securities, available-for-sale ("AFS")1 | ||||||||||||||
| Conversion of AFS fixed income securities to equity securities | ||||||||||||||
Conversion of commercial mortgage loan ("CML") to alternative investment | ||||||||||||||
| Assets acquired under finance lease arrangements | ||||||||||||||
| Assets acquired under operating lease arrangements | ||||||||||||||
| Non-cash purchase of property and equipment | ||||||||||||||
1Examples of corporate actions include like-kind exchanges, non-cash acquisitions, and stock splits.
The following table provides a reconciliation of cash and restricted cash reported within the Consolidated Balance Sheets to the amount reported in the Consolidated Statements of Cash Flows:
| ($ in thousands) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Cash | $ | |||||||||||||
| Restricted cash | ||||||||||||||
| Total cash and restricted cash shown in the Consolidated Statements of Cash Flows | $ | |||||||||||||
Amounts in restricted cash represent cash received from the National Flood Insurance Program ("NFIP") that can only be used to pay flood claims under the Write Your Own program.
NOTE 4. Investments
(a) Information regarding our AFS securities as of June 30, 2025 and December 31, 2024, were as follows:
| June 30, 2025 | Cost/ Amortized Cost | Allowance for Credit Losses | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||
| AFS fixed income securities: | ||||||||||||||||||||||||||||||||
| U.S. government and government agencies | $ | ( | ||||||||||||||||||||||||||||||
| Foreign government | ( | ( | ||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ||||||||||||||||||||||||||||||
| Collateralized loan obligations ("CLO") and other asset-backed securities ("ABS") | ( | ( | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities ("RMBS") | ( | ( | ||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities ("CMBS") | ( | ( | ||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ( | |||||||||||||||||||||||||||||
7
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| December 31, 2024 | Cost/ Amortized Cost | Allowance for Credit Losses | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||
| AFS fixed income securities: | ||||||||||||||||||||||||||||||||
| U.S. government and government agencies | $ | ( | ||||||||||||||||||||||||||||||
| Foreign government | ( | ( | ||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ||||||||||||||||||||||||||||||
| CLO and other ABS | ( | ( | ||||||||||||||||||||||||||||||
| RMBS | ( | ( | ||||||||||||||||||||||||||||||
| CMBS | ( | |||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ( | |||||||||||||||||||||||||||||
The following tables provide a roll forward of the allowance for credit losses on our AFS fixed income securities for the indicated periods:
| Quarter ended June 30, 2025 | Beginning Balance | Current Provision for Securities without Prior Allowance | Initial Allowance for Purchased Credit Deteriorated Assets with Credit Deterioration | Increase (Decrease) on Securities with Prior Allowance, excluding intent (or Requirement) to Sell Securities | Reductions for Securities Sold | Reductions for Securities Identified as Intent (or Requirement) to Sell during the Period | Ending Balance | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign government | $ | |||||||||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| CLO and other ABS | ( | |||||||||||||||||||||||||||||||||||||||||||
| RMBS | ( | |||||||||||||||||||||||||||||||||||||||||||
| CMBS | ( | |||||||||||||||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Quarter ended June 30, 2024 | Beginning Balance | Current Provision for Securities without Prior Allowance | Initial Allowance for Purchased Credit Deteriorated Assets with Credit Deterioration | Increase (Decrease) on Securities with Prior Allowance, excluding intent (or Requirement) to Sell Securities | Reductions for Securities Sold | Reductions for Securities Identified as Intent (or Requirement) to Sell during the Period | Ending Balance | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign government | $ | ( | ||||||||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | |||||||||||||||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| CLO and other ABS | ( | |||||||||||||||||||||||||||||||||||||||||||
| RMBS | ( | |||||||||||||||||||||||||||||||||||||||||||
| CMBS | ||||||||||||||||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ||||||||||||||||||||||||||||||||||||||||||
| Six Months ended June 30, 2025 | Beginning Balance | Current Provision for Securities without Prior Allowance | Initial Allowance for Purchased Credit Deteriorated Assets with Credit Deterioration | Increase (Decrease) on Securities with Prior Allowance, excluding intent (or Requirement) to Sell Securities | Reductions for Securities Sold | Reductions for Securities Identified as Intent (or Requirement) to Sell during the Period | Ending Balance | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign government | $ | |||||||||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| CLO and other ABS | ( | |||||||||||||||||||||||||||||||||||||||||||
| RMBS | ( | |||||||||||||||||||||||||||||||||||||||||||
| CMBS | ||||||||||||||||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ( | |||||||||||||||||||||||||||||||||||||||||
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| Six Months ended June 30, 2024 | Beginning Balance | Current Provision for Securities without Prior Allowance | Initial Allowance for Purchased Credit Deteriorated Assets with Credit Deterioration | Increase (Decrease) on Securities with Prior Allowance, excluding intent (or Requirement) to Sell Securities | Reductions for Securities Sold | Reductions for Securities Identified as Intent (or Requirement) to Sell during the Period | Ending Balance | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign government | $ | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| CLO and other ABS | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| RMBS | ( | |||||||||||||||||||||||||||||||||||||||||||
| CMBS | ||||||||||||||||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ( | |||||||||||||||||||||||||||||||||||||||||
During Six Months 2025 and Six Months 2024, we had no write-offs or recoveries of our AFS fixed income securities.
For information on our methodology and significant inputs used to measure expected credit losses, our accounting policy for recognizing write-offs of uncollectible amounts, and our treatment of accrued interest, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report. Accrued interest on AFS securities was $84.1 million as of June 30, 2025, and $74.3 million as of December 31, 2024. We did not record any material write-offs of accrued interest in Six Months 2025 and Six Months 2024.
(b) Quantitative information about unrealized losses on our AFS portfolio follows:
| June 30, 2025 | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||||
| ($ in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
| AFS fixed income securities: | ||||||||||||||||||||||||||||||||||||||
| U.S. government and government agencies | $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Foreign government | ( | ( | ||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| CLO and other ABS | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| RMBS | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| CMBS | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| December 31, 2024 | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||||
| ($ in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
| AFS fixed income securities: | ||||||||||||||||||||||||||||||||||||||
| U.S. government and government agencies | $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Foreign government | ( | ( | ||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Corporate securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| CLO and other ABS | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| RMBS | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| CMBS | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total AFS fixed income securities | $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||
We currently do not intend to sell any of the securities summarized in the tables above, nor do we believe we will be required to sell any of them. The decrease in gross unrealized losses at June 30, 2025, compared to December 31, 2024, was driven by a decrease in benchmark U.S. Treasury rates. Considering these factors and our review of these securities under our credit loss policy as described in Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report, we have concluded that no additional allowance for credit loss is required on these balances beyond the allowance for credit loss recorded as of June 30, 2025. This conclusion reflects our current judgment about the financial position and future prospects of the entities that issued the investment security and underlying collateral.
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(c) AFS and held-to-maturity ("HTM") fixed income securities at June 30, 2025, by contractual maturity are shown below. The maturities of RMBS, CMBS, CLO and other ABS securities were calculated using each security's expected maturities. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| AFS | HTM | |||||||||||||||||||
| ($ in thousands) | Fair Value | Carrying Value | Fair Value | |||||||||||||||||
| Due in one year or less | $ | |||||||||||||||||||
| Due after one year through five years | ||||||||||||||||||||
| Due after five years through 10 years | ||||||||||||||||||||
| Due after 10 years | ||||||||||||||||||||
| Total fixed income securities | $ | |||||||||||||||||||
(d) The following table summarizes our alternative investment portfolio by strategy:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Carrying Value | Remaining Commitment | Maximum Exposure to Loss | Carrying Value | Remaining Commitment | Maximum Exposure to Loss | ||||||||||||||||||||||||||||||||
| Alternative Investments | ||||||||||||||||||||||||||||||||||||||
| Private equity | $ | |||||||||||||||||||||||||||||||||||||
| Private credit | ||||||||||||||||||||||||||||||||||||||
| Real assets | ||||||||||||||||||||||||||||||||||||||
| Total alternative investments | $ | |||||||||||||||||||||||||||||||||||||
We are contractually committed to make additional investments up to the remaining commitments stated above. We did not provide any non-contractual financial support during 2025 or 2024.
The following table shows gross summarized financial information for our alternative investments portfolio, including the portion we do not own. As the majority of these investments report results to us on a one-quarter lag, the summarized financial statement information is for the 3- and 6-month periods ended March 31:
| Income Statement Information | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net investment income (loss) | $ | $ | ( | |||||||||||||||||||||||
| Realized gains | ||||||||||||||||||||||||||
| Net change in unrealized appreciation (depreciation) | ||||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||
| Alternative investment income included in "Net investment income earned" on our Consolidated Statements of Income | $ | $ | ||||||||||||||||||||||||
(e) We have pledged certain AFS fixed income securities as collateral related to our borrowing relationships with the Federal Home Loan Bank of Indianapolis ("FHLBI") and the Federal Home Loan Bank of New York ("FHLBNY"). We also had certain securities on deposit with various state and regulatory agencies at June 30, 2025, to comply with insurance laws. We retain all rights regarding all securities pledged as collateral.
The following table summarizes the market value of these securities at June 30, 2025:
| ($ in millions) | FHLBI Collateral | FHLBNY Collateral | State and Regulatory Deposits | Total | ||||||||||||||||||||||
| U.S. government and government agencies | $ | |||||||||||||||||||||||||
| Obligations of states and political subdivisions | ||||||||||||||||||||||||||
| RMBS | ||||||||||||||||||||||||||
| CMBS | ||||||||||||||||||||||||||
| Total pledged as collateral | $ | |||||||||||||||||||||||||
(f) We did not have exposure to any credit concentration risk of a single issuer greater than 10
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(g) The components of pre-tax net investment income earned were as follows:
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Fixed income securities | $ | $ | ||||||||||||||||||||||||
CMLs | ||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||
| Alternative investments | ||||||||||||||||||||||||||
| Other investments | ||||||||||||||||||||||||||
| Investment expenses | ( | ( | ( | ( | ||||||||||||||||||||||
| Net investment income earned | $ | $ | ||||||||||||||||||||||||
The increase in net investment income earned in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods was primarily driven by active portfolio management, operating cash flow deployment, and net proceeds from the issuance of our 5.90 % Senior Notes in the first quarter of 2025. For additional information regarding our 5.90 % Senior Notes issuance, see Note 12. "Indebtedness" in Item 1. "Financial Statements" of this Form 10-Q.
(h) The following table summarizes net realized and unrealized investment gains and losses for the periods indicated:
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Gross gains on sales | $ | $ | ||||||||||||||||||||||||
| Gross losses on sales | ( | ( | ( | ( | ||||||||||||||||||||||
| Net realized gains (losses) on disposals | ( | ( | ||||||||||||||||||||||||
| Net unrealized gains (losses) on equity securities | ( | |||||||||||||||||||||||||
| Net credit loss benefit (expense) on fixed income securities, AFS | ( | ( | ||||||||||||||||||||||||
Net credit loss benefit (expense) on CMLs | ( | ( | ( | |||||||||||||||||||||||
| Losses on securities for which we have the intent to sell | ( | ( | ( | |||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | $ | $ | ( | |||||||||||||||||||||||
Net unrealized gains and losses recognized in income on equity securities, as reflected in the table above, included the following:
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Unrealized gains (losses) recognized in income on equity securities: | ||||||||||||||||||||||||||
| On securities remaining in our portfolio at end of period | $ | $ | ||||||||||||||||||||||||
| On securities sold in period | ( | ( | ||||||||||||||||||||||||
| Total unrealized gains (losses) recognized in income on equity securities | $ | ( | $ | |||||||||||||||||||||||
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NOTE 5. Fair Value Measurements
The financial assets in our investment portfolio are primarily measured at fair value as disclosed on the Consolidated Balance Sheets. The following table presents the carrying amounts and fair values of our financial liabilities as of June 30, 2025, and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| ($ in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||||||||
| Long-term debt: | ||||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||
| Subtotal long-term debt | ||||||||||||||||||||||||||
| Unamortized debt issuance costs | ( | ( | ||||||||||||||||||||||||
| Finance lease obligations | ||||||||||||||||||||||||||
| Total long-term debt | $ | |||||||||||||||||||||||||
For discussion regarding the fair value techniques of our financial instruments, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
The following tables provide quantitative disclosures of our financial assets that were measured and recorded at fair value at June 30, 2025, and December 31, 2024:
| June 30, 2025 | Fair Value Measurements Using | |||||||||||||||||||||||||
| ($ in thousands) | Assets Measured at Fair Value | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
| Description | ||||||||||||||||||||||||||
| Measured on a recurring basis: | ||||||||||||||||||||||||||
| AFS fixed income securities: | ||||||||||||||||||||||||||
| U.S. government and government agencies | $ | |||||||||||||||||||||||||
| Foreign government | ||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ||||||||||||||||||||||||||
| Corporate securities | ||||||||||||||||||||||||||
| CLO and other ABS | ||||||||||||||||||||||||||
| RMBS | ||||||||||||||||||||||||||
| CMBS | ||||||||||||||||||||||||||
| Total AFS fixed income securities | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
Common stock1 | ||||||||||||||||||||||||||
| Preferred stock | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||
| Total assets measured at fair value | $ | |||||||||||||||||||||||||
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| December 31, 2024 | Fair Value Measurements Using | |||||||||||||||||||||||||
| ($ in thousands) | Assets Measured at Fair Value | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
| Description | ||||||||||||||||||||||||||
| Measured on a recurring basis: | ||||||||||||||||||||||||||
| AFS fixed income securities: | ||||||||||||||||||||||||||
| U.S. government and government agencies | $ | |||||||||||||||||||||||||
| Foreign government | ||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ||||||||||||||||||||||||||
| Corporate securities | ||||||||||||||||||||||||||
| CLO and other ABS | ||||||||||||||||||||||||||
| RMBS | ||||||||||||||||||||||||||
| CMBS | ||||||||||||||||||||||||||
| Total AFS fixed income securities | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
Common stock1 | ||||||||||||||||||||||||||
| Preferred stock | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||
| Total assets measured at fair value | $ | |||||||||||||||||||||||||
The following tables provide a summary of Level 3 changes in Six Months 2025 and Six Months 2024:
| June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Obligations of States and Political Subdivisions | Corporate Securities | CLO and Other ABS | RMBS | CMBS | Common Stock | Total | |||||||||||||||||||||||||||||||||||||
Fair value, December 31, 2024 | $ | |||||||||||||||||||||||||||||||||||||||||||
| Total net gains (losses) for the period included in: | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) ("OCI") | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net realized and unrealized gains (losses) | ||||||||||||||||||||||||||||||||||||||||||||
| Net investment income earned | ||||||||||||||||||||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||||||||||||||||||||||
| Issuances | ||||||||||||||||||||||||||||||||||||||||||||
| Settlements | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Transfers into Level 3 | ||||||||||||||||||||||||||||||||||||||||||||
| Transfers out of Level 3 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Fair value, June 30, 2025 | $ | |||||||||||||||||||||||||||||||||||||||||||
| Change in unrealized gains (losses) for the period included in earnings for assets held at period end | ||||||||||||||||||||||||||||||||||||||||||||
| Change in unrealized gains (losses) for the period included in OCI for assets held at period end | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
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| June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Obligation of state and Political Subdivisions | Corporate Securities | CLO and Other ABS | RMBS | CMBS | Common Stock | Total | ||||||||||||||||||||||||||||||||||
Fair value, December 31, 2023 | $ | ||||||||||||||||||||||||||||||||||||||||
| Total net gains (losses) for the period included in: | |||||||||||||||||||||||||||||||||||||||||
| OCI | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net realized and unrealized gains (losses) | |||||||||||||||||||||||||||||||||||||||||
| Net investment income earned | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| Purchases | |||||||||||||||||||||||||||||||||||||||||
| Sales | |||||||||||||||||||||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||||||||||||||||||||
| Settlements | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||
| Transfers into Level 3 | |||||||||||||||||||||||||||||||||||||||||
| Transfers out of Level 3 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Fair value, June 30, 2024 | $ | ||||||||||||||||||||||||||||||||||||||||
| Change in unrealized gains (losses) for the period included in earnings for assets held at period end | |||||||||||||||||||||||||||||||||||||||||
| Change in unrealized gains (losses) for the period included in OCI for assets held at period end | ( | ( | |||||||||||||||||||||||||||||||||||||||
The following tables present quantitative information about the significant unobservable inputs used in the fair value measurements of Level 3 assets at June 30, 2025, and December 31, 2024:
| June 30, 2025 | ||||||||||||||||||||||||||||||||
| ($ in thousands) | Assets Measured at Fair Value | Valuation Techniques | Unobservable Inputs | Range | Weighted Average | |||||||||||||||||||||||||||
| Internal valuations: | ||||||||||||||||||||||||||||||||
| Corporate securities | $ | Discounted Cash Flow | Illiquidity Spread | ( | ||||||||||||||||||||||||||||
| CLO and other ABS | Discounted Cash Flow | Illiquidity Spread | ( | |||||||||||||||||||||||||||||
| Total internal valuations | ||||||||||||||||||||||||||||||||
Other1 | ||||||||||||||||||||||||||||||||
| Total Level 3 securities | $ | |||||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| ($ in thousands) | Assets Measured at Fair Value | Valuation Techniques | Unobservable Inputs | Range | Weighted Average | |||||||||||||||||||||||||||
Internal valuations: | ||||||||||||||||||||||||||||||||
| Corporate securities | $ | Discounted Cash Flow | Illiquidity Spread | ( | ||||||||||||||||||||||||||||
| CLO and other ABS | Discounted Cash Flow | Illiquidity Spread | ( | |||||||||||||||||||||||||||||
| Total internal valuations | ||||||||||||||||||||||||||||||||
Other1 | ||||||||||||||||||||||||||||||||
| Total Level 3 securities | $ | |||||||||||||||||||||||||||||||
For the securities in the tables above valued using a discounted cash flow analysis, we apply an illiquidity spread in determining fair value. An increase in this assumption would result in a lower fair value measurement.
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The following tables provide quantitative information about our financial assets and liabilities that were not measured at fair value, but were disclosed as such at June 30, 2025, and December 31, 2024:
| June 30, 2025 | Fair Value Measurements Using | |||||||||||||||||||||||||
| ($ in thousands) | Assets/ Liabilities Disclosed at Fair Value | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
| Financial Assets | ||||||||||||||||||||||||||
| HTM: | ||||||||||||||||||||||||||
| Corporate securities | $ | |||||||||||||||||||||||||
| Total HTM fixed income securities | ||||||||||||||||||||||||||
| CMLs | $ | |||||||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||||||||
| Long-term debt: | ||||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||
| Total long-term debt | $ | |||||||||||||||||||||||||
| December 31, 2024 | Fair Value Measurements Using | |||||||||||||||||||||||||
| ($ in thousands) | Assets/ Liabilities Disclosed at Fair Value | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
| Financial Assets | ||||||||||||||||||||||||||
| HTM: | ||||||||||||||||||||||||||
| Corporate securities | $ | |||||||||||||||||||||||||
| Total HTM fixed income securities | ||||||||||||||||||||||||||
| CMLs | $ | |||||||||||||||||||||||||
| Financial Liabilities | ||||||||||||||||||||||||||
| Long-term debt: | ||||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||
| Total long-term debt | $ | |||||||||||||||||||||||||
NOTE 6. Allowance for Credit Losses on Premiums Receivable
The following table provides a roll forward of the allowance for credit losses on our premiums receivable balance for the indicated periods:
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||
| Current period change for expected credit losses | ||||||||||||||||||||||||||
| Write-offs charged against the allowance for credit losses | ( | ( | ( | ( | ||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||
| Allowance for credit losses, end of period | $ | $ | ||||||||||||||||||||||||
For a discussion of the methodology used to evaluate our estimate of expected credit losses on premiums receivable, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
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NOTE 7. Reinsurance
We evaluate and monitor the financial condition of our reinsurers under voluntary reinsurance arrangements to minimize our exposure to significant losses from reinsurer insolvencies. The following tables provide (i) a disaggregation of our reinsurance recoverable balance by financial strength rating and (ii) an aging analysis of our past due reinsurance recoverable balances as of June 30, 2025, and December 31, 2024:
| June 30, 2025 | ||||||||||||||||||||
| ($ in thousands) | Current | Past Due | Total Reinsurance Recoverables | |||||||||||||||||
| Financial strength rating of rated reinsurers | ||||||||||||||||||||
| A++ | $ | |||||||||||||||||||
| A+ | ||||||||||||||||||||
| A | ||||||||||||||||||||
| A- | ||||||||||||||||||||
| Total rated reinsurers | ||||||||||||||||||||
| Non-rated reinsurers | ||||||||||||||||||||
| Federal and state pools | ||||||||||||||||||||
| Other than federal and state pools | ||||||||||||||||||||
| Total non-rated reinsurers | ||||||||||||||||||||
| Total reinsurance recoverable, gross | $ | |||||||||||||||||||
| Less: allowance for credit losses | ( | |||||||||||||||||||
| Total reinsurance recoverable, net | ||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||
| ($ in thousands) | Current | Past Due | Total Reinsurance Recoverables | |||||||||||||||||
| Financial strength rating of rated reinsurers | ||||||||||||||||||||
| A++ | $ | |||||||||||||||||||
| A+ | ||||||||||||||||||||
| A | ||||||||||||||||||||
| A- | ||||||||||||||||||||
| Total rated reinsurers | ||||||||||||||||||||
| Non-rated reinsurers | ||||||||||||||||||||
| Federal and state pools | ||||||||||||||||||||
| Other than federal and state pools | ||||||||||||||||||||
| Total non-rated reinsurers | ||||||||||||||||||||
| Total reinsurance recoverable, gross | $ | |||||||||||||||||||
| Less: allowance for credit losses | ( | |||||||||||||||||||
| Total reinsurance recoverable, net | ||||||||||||||||||||
The $196.3 million decrease in "Federal and state pools" as of June 30, 2025, compared to December 31, 2024, primarily relates to claim payments on Hurricane Helene losses reserved for at December 31, 2024. These losses relate to our participation in the NFIP Write Your Own Program, and are 100 % ceded to the NFIP.
The following table provides a roll forward of the allowance for credit losses on our reinsurance recoverable balance for the periods indicated:
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||
| Current period change for expected credit losses | ||||||||||||||||||||||||||
| Write-offs charged against the allowance for credit losses | ||||||||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||||
| Allowance for credit losses, end of period | $ | $ | ||||||||||||||||||||||||
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For a discussion of the methodology used to evaluate our estimate of expected credit losses on our reinsurance recoverable balance, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
The following table lists direct, assumed, and ceded reinsurance amounts for premiums written, premiums earned, and loss and loss expense incurred for the indicated periods. For more information about reinsurance, refer to Note 9. "Reinsurance" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Premiums written: | ||||||||||||||||||||||||||
| Direct | $ | $ | ||||||||||||||||||||||||
| Assumed | ||||||||||||||||||||||||||
| Ceded | ( | ( | ( | ( | ||||||||||||||||||||||
| Net | ||||||||||||||||||||||||||
| Premiums earned: | ||||||||||||||||||||||||||
| Direct | ||||||||||||||||||||||||||
| Assumed | ||||||||||||||||||||||||||
| Ceded | ( | ( | ( | ( | ||||||||||||||||||||||
| Net | ||||||||||||||||||||||||||
Loss and loss expense incurred: | ||||||||||||||||||||||||||
| Direct | ||||||||||||||||||||||||||
| Assumed | ||||||||||||||||||||||||||
| Ceded | ( | ( | ( | ( | ||||||||||||||||||||||
| Net | $ | $ | ||||||||||||||||||||||||
NOTE 8. Reserve for Loss and Loss Expense
The table below provides a roll forward of the reserve for loss and loss expense for beginning and ending reserve balances:
| Six Months ended June 30, | ||||||||||||||
| ($ in thousands) | 2025 | 2024 | ||||||||||||
| Gross reserve for loss and loss expense, at beginning of period | $ | |||||||||||||
| Less: reinsurance recoverable on unpaid loss and loss expense, at beginning of period | ||||||||||||||
| Net reserve for loss and loss expense, at beginning of period | ||||||||||||||
| Incurred loss and loss expense for claims occurring in the: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ||||||||||||||
| Total incurred loss and loss expense | ||||||||||||||
| Paid loss and loss expense for claims occurring in the: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ||||||||||||||
| Total paid loss and loss expense | ||||||||||||||
| Net reserve for loss and loss expense, at end of period | ||||||||||||||
| Add: Reinsurance recoverable on unpaid loss and loss expense, at end of period | ||||||||||||||
| Gross reserve for loss and loss expense, at end of period | $ | |||||||||||||
Prior year reserve development in Six Months 2025 was unfavorable by $34.6 million, consisting of $50.0 million of unfavorable casualty reserve development, partially offset by $15.4 million of favorable property reserve development. Our Standard Commercial Lines segment drove the unfavorable casualty reserve development consisting of (i) $25.0 million in our commercial automobile line of business, related to increased severities primarily in accident years 2022 through 2024 and (ii) $20.0 million in our general liability line of business, driven by higher severities primarily in accident years 2022 and 2023. We also had unfavorable development of $5.0 million in our personal automobile line of business, primarily related to increased severities in accident year 2024.
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Prior year reserve development in Six Months 2024 was unfavorable by $187.1 million, consisting of $211.0 million of unfavorable casualty reserve development, partially offset by $23.9 million of favorable property reserve development. Our Standard Commercial Lines segment drove the unfavorable casualty reserve development consisting of (i) $216.0 million in our general liability line of business, primarily driven by increased severities in accident years 2020 through 2023, (ii) $10.0 million in our commercial automobile line of business, partially offset by (iii) $15.0 million of favorable casualty reserve development in our workers compensation line of business.
Additionally in Six Months 2024, in our Standard Personal Lines segment, we had unfavorable casualty reserve development of $5.0 million in our personal automobile line of business, offset by favorable development of $5.0 million in our homeowners line of business.
NOTE 9. Segment Information
We evaluate the results of our four reportable segments as follows:
•Our Standard Commercial Lines, Standard Personal Lines, and E&S Lines are evaluated on (i) before and after-tax underwriting results (net premiums earned, incurred loss and loss expense, policyholder dividends, policy acquisition costs, and other underwriting expenses), (ii) their return on equity ("ROE") contribution, and (iii) their combined ratios.
•Our Investments segment is primarily evaluated on after-tax net investment income and its ROE contribution. After-tax net realized and unrealized gains and losses are also included in our Investments segment results.
In computing each segment's results, we do not make adjustments for interest expense or corporate expenses. No segment has a separate investment portfolio or allocated assets.
(a) The following table presents revenues by segments and a reconciliation to consolidated revenue.
| Revenue by Segment | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Standard Commercial Lines: | ||||||||||||||||||||||||||
| Net premiums earned: | ||||||||||||||||||||||||||
| General liability | $ | $ | ||||||||||||||||||||||||
| Commercial automobile | ||||||||||||||||||||||||||
| Commercial property | ||||||||||||||||||||||||||
| Workers compensation | ||||||||||||||||||||||||||
| Businessowners' policies | ||||||||||||||||||||||||||
| Bonds | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Miscellaneous income | ||||||||||||||||||||||||||
| Total Standard Commercial Lines revenue | ||||||||||||||||||||||||||
| Standard Personal Lines: | ||||||||||||||||||||||||||
| Net premiums earned: | ||||||||||||||||||||||||||
| Personal automobile | ||||||||||||||||||||||||||
| Homeowners | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Miscellaneous income | ||||||||||||||||||||||||||
| Total Standard Personal Lines revenue | ||||||||||||||||||||||||||
| E&S Lines: | ||||||||||||||||||||||||||
| Net premiums earned: | ||||||||||||||||||||||||||
| Casualty lines | ||||||||||||||||||||||||||
| Property lines | ||||||||||||||||||||||||||
| Miscellaneous income | ||||||||||||||||||||||||||
| Total E&S Lines revenue | ||||||||||||||||||||||||||
| Investments: | ||||||||||||||||||||||||||
| Net investment income earned | ||||||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | ( | |||||||||||||||||||||||||
| Total Investments revenue | ||||||||||||||||||||||||||
| Total revenues | $ | $ | ||||||||||||||||||||||||
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(b) The following tables present information about our segments' pre- and after-tax income, significant expenses, and reconciliations to consolidated results for the periods indicated.
| Quarter Ended June 30, 2025 | Standard Commercial Lines | Standard Personal Lines | E&S Lines | Total Insurance Operations | Investments | Total Reportable Segments | ||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||
Total segment revenues | $ | |||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred: | ||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | ||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expense | ||||||||||||||||||||||||||||||||||||||
| (Favorable)/unfavorable prior year casualty reserve development | ||||||||||||||||||||||||||||||||||||||
Current year casualty loss costs | ||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | ||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred: | ||||||||||||||||||||||||||||||||||||||
| Commissions to distribution partners | ||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||||||||||||||||||||||||
Other segment expenses | ||||||||||||||||||||||||||||||||||||||
| Total net underwriting expenses incurred | ||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders | ||||||||||||||||||||||||||||||||||||||
| Segment income (loss), before federal income tax | ( | ( | ||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit | ( | ( | ||||||||||||||||||||||||||||||||||||
| Segment income (loss), after federal income tax | ( | |||||||||||||||||||||||||||||||||||||
| Reconciliation of segment income (loss) to consolidated income before and after federal income tax | ||||||||||||||||||||||||||||||||||||||
| Total segment income (loss) | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||||||||||||||||||||
| Corporate expenses | ( | |||||||||||||||||||||||||||||||||||||
| Income before federal income tax | ||||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on segment income (loss) | ( | |||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on interest and corporate expenses | ||||||||||||||||||||||||||||||||||||||
| Total federal income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | ( | |||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders | ||||||||||||||||||||||||||||||||||||||
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| Quarter Ended June 30, 2024 | Standard Commercial Lines | Standard Personal Lines | E&S Lines | Total Insurance Operations | Investments | Total Reportable Segments | ||||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||||||||
Total segment revenues | $ | |||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred: | ||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | ||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expense | ||||||||||||||||||||||||||||||||||||||
| (Favorable)/unfavorable prior year casualty reserve development | ||||||||||||||||||||||||||||||||||||||
Current year casualty loss costs | ||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | ||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred: | ||||||||||||||||||||||||||||||||||||||
| Commissions to distribution partners | ||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||||||||||||||||||||||||
Other segment expenses | ||||||||||||||||||||||||||||||||||||||
| Total net underwriting expenses incurred | ||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders | ||||||||||||||||||||||||||||||||||||||
| Segment income (loss), before federal income tax | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||||||||
| Segment income (loss), after federal income tax | ( | ( | ||||||||||||||||||||||||||||||||||||
| Reconciliation of segment income (loss) to consolidated income before and after federal income tax | ||||||||||||||||||||||||||||||||||||||
| Total segment income (loss) | ( | |||||||||||||||||||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||||||||||||||||||||
| Corporate expenses | ( | |||||||||||||||||||||||||||||||||||||
| Income before federal income tax | ( | |||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on segment income (loss) | ||||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on interest and corporate expenses | ||||||||||||||||||||||||||||||||||||||
| Total federal income tax (expense) benefit | ||||||||||||||||||||||||||||||||||||||
| Net income | ( | |||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | ( | |||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders | ( | |||||||||||||||||||||||||||||||||||||
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| Six Months ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Standard Commercial Lines | Standard Personal Lines | E&S Lines | Total Insurance Operations | Investments | Total Reportable Segments | ||||||||||||||||||||||||||||||||
Total segment revenues | $ | |||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred: | ||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | ||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expense | ||||||||||||||||||||||||||||||||||||||
| (Favorable)/unfavorable prior year casualty reserve development | ||||||||||||||||||||||||||||||||||||||
Current year casualty loss costs | ||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | ||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred: | ||||||||||||||||||||||||||||||||||||||
| Commissions to distribution partners | ||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||||||||||||||||||||||||
Other segment expenses | ||||||||||||||||||||||||||||||||||||||
| Total net underwriting expenses incurred | ||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders | ||||||||||||||||||||||||||||||||||||||
| Segment income (loss), before federal income tax | ||||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Segment income (loss), after federal income tax | ||||||||||||||||||||||||||||||||||||||
| Reconciliation of segment income (loss) to consolidated income before and after federal income tax | ||||||||||||||||||||||||||||||||||||||
| Total segment income (loss) | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||||||||||||||||||||
| Corporate expenses | ( | |||||||||||||||||||||||||||||||||||||
| Income before federal income tax | ||||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on segment income (loss) | ( | |||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on interest and corporate expenses | ||||||||||||||||||||||||||||||||||||||
| Total federal income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | ( | |||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders | ||||||||||||||||||||||||||||||||||||||
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| Six Months ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Standard Commercial Lines | Standard Personal Lines | E&S Lines | Total Insurance Operations | Investments | Total Reportable Segments | ||||||||||||||||||||||||||||||||
Total segment revenues | $ | |||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred: | ||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | ||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expense | ||||||||||||||||||||||||||||||||||||||
| (Favorable)/unfavorable prior year casualty reserve development | ||||||||||||||||||||||||||||||||||||||
Current year casualty loss costs | ||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | ||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred: | ||||||||||||||||||||||||||||||||||||||
| Commissions to distribution partners | ||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||||||||||||||||||||||||
Other segment expenses | ||||||||||||||||||||||||||||||||||||||
| Total net underwriting expenses incurred | ||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders | ||||||||||||||||||||||||||||||||||||||
| Segment income (loss), before federal income tax | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit | ( | ( | ||||||||||||||||||||||||||||||||||||
| Segment income (loss), after federal income tax | ( | |||||||||||||||||||||||||||||||||||||
| Reconciliation of segment income (loss) to consolidated income before and after federal income tax | ||||||||||||||||||||||||||||||||||||||
| Total segment income (loss) | ||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | |||||||||||||||||||||||||||||||||||||
| Corporate expenses | ( | |||||||||||||||||||||||||||||||||||||
| Income before federal income tax | ||||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on segment income (loss) | ( | |||||||||||||||||||||||||||||||||||||
| Federal income tax (expense) benefit on interest and corporate expenses | ||||||||||||||||||||||||||||||||||||||
| Total federal income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | ( | |||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders | ||||||||||||||||||||||||||||||||||||||
The "Other segment expenses" primarily consist of (i) fees paid for licenses, (ii) depreciation expense, and (iii) general overhead items to operate our business operations, including travel, postage, telephone, and utility expenses. "Loss and loss expense incurred" includes a portion of salaries and employee benefits related to claims personnel.
(c) The following tables present reconciliations of our segments' ROE contributions and combined ratios to consolidated results.
ROE | Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| Standard Commercial Lines segment | ( | % | ( | % | ( | ||||||||||||||||||||||||
| Standard Personal Lines segment | ( | ( | |||||||||||||||||||||||||||
| E&S Lines segment | |||||||||||||||||||||||||||||
| Total insurance operations | ( | ( | ( | ||||||||||||||||||||||||||
Net investment income earned | |||||||||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | |||||||||||||||||||||||||||||
| Total investments segment | |||||||||||||||||||||||||||||
| Other | ( | ( | ( | ( | |||||||||||||||||||||||||
| ROE | ( | ||||||||||||||||||||||||||||
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Combined Ratio | Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||||||||||||||||
| Standard Commercial Lines: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expense incurred | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expenses incurred1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to policyholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Standard Personal Lines: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expenses incurred1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
E&S Lines: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expense incurred | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expenses incurred1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Insurance Operations: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net premiums earned | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss and loss expense incurred | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net underwriting expenses incurred1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to policyholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
1"Net underwriting expenses incurred" includes "Other income" allocated to each reportable segment.
NOTE 10. Retirement Plans
The primary pension plan for our employees is the Retirement Income Plan for Selective Insurance Company of America (the "Pension Plan"). The Pension Plan is closed to new entrants, and its benefits ceased accruing after March 31, 2016. For more information about Selective Insurance Company of America's ("SICA") retirement plans, see Note 15. "Retirement Plans" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
The following tables provide information about the Pension Plan:
| Pension Plan | ||||||||||||||||||||||||||
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net Periodic Pension Cost (Benefit): | ||||||||||||||||||||||||||
| Interest cost | $ | $ | ||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
| Amortization of unrecognized net actuarial loss | ||||||||||||||||||||||||||
Total net periodic pension cost (benefit)1 | $ | ( | ( | $ | ( | ( | ||||||||||||||||||||
| Pension Plan | ||||||||||||||
| Six Months ended June 30 | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Weighted-Average Expense Assumptions: | ||||||||||||||
| Discount rate | % | % | ||||||||||||
| Effective interest rate for calculation of interest cost | ||||||||||||||
| Expected return on plan assets | ||||||||||||||
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NOTE 11. Comprehensive Income (Loss)
The components of comprehensive income (loss), both gross and net of tax, for Second Quarter 2025 and Six Months 2025 and Second Quarter 2024 and Six Months 2024 were as follows:
| Second Quarter 2025 | ||||||||||||||||||||
| ($ in thousands) | Gross | Tax | Net | |||||||||||||||||
Net income (loss) | $ | |||||||||||||||||||
| Components of OCI: | ||||||||||||||||||||
Unrealized gains (losses) on investment securities: | ||||||||||||||||||||
| Unrealized holding gains (losses) during the period | ||||||||||||||||||||
| Unrealized gains (losses) on securities with credit loss recognized in earnings | ||||||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net realized (gains) losses on disposals and intent-to-sell AFS securities | ( | ( | ( | |||||||||||||||||
| Credit loss (benefit) expense | ( | ( | ( | |||||||||||||||||
| Total unrealized gains (losses) on investment securities | ||||||||||||||||||||
| Defined benefit pension and post-retirement plans: | ||||||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net actuarial (gain) loss | ||||||||||||||||||||
| Total defined benefit pension and post-retirement plans | ||||||||||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||
| Comprehensive income (loss) | $ | |||||||||||||||||||
| Second Quarter 2024 | ||||||||||||||||||||
| ($ in thousands) | Gross | Tax | Net | |||||||||||||||||
Net income (loss) | $ | ( | ( | ( | ||||||||||||||||
| Components of OCI: | ||||||||||||||||||||
| Unrealized gains (losses) on investment securities: | ||||||||||||||||||||
| Unrealized holding gains (losses) during the period | ( | ( | ( | |||||||||||||||||
| Unrealized gains (losses) on securities with credit loss recognized in earnings | ( | ( | ( | |||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net realized (gains) losses on disposals and intent-to-sell AFS securities | ||||||||||||||||||||
| Credit loss (benefit) expense | ||||||||||||||||||||
| Total unrealized gains (losses) on investment securities | ( | ( | ( | |||||||||||||||||
| Defined benefit pension and post-retirement plans: | ||||||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net actuarial (gain) loss | ||||||||||||||||||||
| Total defined benefit pension and post-retirement plans | ||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||
| Comprehensive income (loss) | $ | ( | ( | ( | ||||||||||||||||
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| Six Months 2025 | ||||||||||||||||||||
| ($ in thousands) | Gross | Tax | Net | |||||||||||||||||
Net income (loss) | $ | |||||||||||||||||||
| Components of OCI: | ||||||||||||||||||||
Unrealized gains (losses) on investment securities: | ||||||||||||||||||||
| Unrealized holding gains (losses) during the period | ||||||||||||||||||||
| Unrealized gains (losses) on securities with credit loss recognized in earnings | ||||||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net realized (gains) losses on disposals and intent-to-sell AFS securities | ( | ( | ( | |||||||||||||||||
| Credit loss (benefit) expense | ( | ( | ( | |||||||||||||||||
| Total unrealized gains (losses) on investment securities | ||||||||||||||||||||
| Defined benefit pension and post-retirement plans: | ||||||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net actuarial (gain) loss | ||||||||||||||||||||
| Total defined benefit pension and post-retirement plans | ||||||||||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||
| Comprehensive income (loss) | $ | |||||||||||||||||||
| Six Months 2024 | ||||||||||||||||||||
| ($ in thousands) | Gross | Tax | Net | |||||||||||||||||
Net income (loss) | $ | |||||||||||||||||||
| Components of OCI: | ||||||||||||||||||||
| Unrealized gains (losses) on investment securities: | ||||||||||||||||||||
| Unrealized holding gains (losses) during the period | ( | ( | ( | |||||||||||||||||
| Unrealized gains (losses) on securities with credit loss recognized in earnings | ( | ( | ( | |||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net realized (gains) losses on disposals and intent-to-sell AFS securities | ( | ( | ( | |||||||||||||||||
| Credit loss (benefit) expense | ||||||||||||||||||||
| Total unrealized gains (losses) on investment securities | ( | ( | ( | |||||||||||||||||
| Defined benefit pension and post-retirement plans: | ||||||||||||||||||||
Amounts reclassified into net income (loss): | ||||||||||||||||||||
| Net actuarial (gain) loss | ||||||||||||||||||||
| Total defined benefit pension and post-retirement plans | ||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||
| Comprehensive income (loss) | $ | ( | ( | ( | ||||||||||||||||
The following table shows each component of accumulated other comprehensive income (loss) ("AOCI") (net of taxes), including balances and changes, as of June 30, 2025:
| June 30, 2025 | Net Unrealized Gains (Losses) on Investment Securities | Defined Benefit Pension and Post-Retirement Plans | Total AOCI | |||||||||||||||||||||||||||||
| ($ in thousands) | Credit Loss Related1 | All Other | Investments Subtotal | |||||||||||||||||||||||||||||
Balance, December 31, 2024 | $ | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||
| OCI before reclassifications | ||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Net current period OCI | ||||||||||||||||||||||||||||||||
Balance, June 30, 2025 | $ | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||
1Represents change in unrealized gains (losses) on securities with credit loss recognized in earnings.
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The reclassifications out of AOCI were as follows:
| Quarter ended June 30, | Six Months ended June 30, | Affected Line Item in the Unaudited Consolidated Statements of Income | |||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Net realized (gains) losses on disposals and intent-to-sell AFS securities | |||||||||||||||||||||||||||||
Net realized (gains) losses | $ | ( | $ | ( | ( | Net realized and unrealized investment gains (losses) | |||||||||||||||||||||||
Tax (benefit) expense | ( | Total federal income tax expense (benefit) | |||||||||||||||||||||||||||
Net of taxes | ( | ( | ( | Net income (loss) | |||||||||||||||||||||||||
| Credit loss related | |||||||||||||||||||||||||||||
| Credit loss (benefit) expense | ( | ( | Net realized and unrealized investment gains (losses) | ||||||||||||||||||||||||||
Tax (benefit) expense | ( | ( | Total federal income tax expense (benefit) | ||||||||||||||||||||||||||
Net of taxes | ( | ( | Net income (loss) | ||||||||||||||||||||||||||
| Defined benefit pension and post-retirement life plans | |||||||||||||||||||||||||||||
| Net actuarial loss | Loss and loss expense incurred | ||||||||||||||||||||||||||||
| Net actuarial loss | Other insurance expenses | ||||||||||||||||||||||||||||
Total | Income (loss) before federal income tax | ||||||||||||||||||||||||||||
| Tax (benefit) expense | ( | ( | ( | ( | Total federal income tax expense (benefit) | ||||||||||||||||||||||||
| Net of taxes | Net income (loss) | ||||||||||||||||||||||||||||
| Total reclassifications for the period | $ | ( | $ | ( | Net income (loss) | ||||||||||||||||||||||||
NOTE 12. Indebtedness
The table below provides a summary of our outstanding debt at June 30, 2025, and December 31, 2024:
| Outstanding Debt | Issuance Date | Maturity Date | Interest Rate | Original Amount | 2025 | Carry Value | ||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Unamortized Issuance Costs | Debt Discount | June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Long-term | ||||||||||||||||||||||||||||||||||||||||||||||||||
| FHLBI | 12/16/2016 | 12/16/2026 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Senior Notes | 11/16/2004 | 11/15/2034 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Senior Notes | 2/20/2025 | 4/15/2035 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Senior Notes | 11/3/2005 | 11/1/2035 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Senior Notes | 3/1/2019 | 3/1/2049 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Finance lease obligations | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total long-term debt | ||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Debt Activity
On June 30, 2025, the Parent entered into a Credit Agreement (the "Line of Credit") with the lenders named therein (the "Lenders") and Wells Fargo Bank, National Association, as administrative agent. 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. The Parent, as borrower, was a party to a credit agreement dated November 7, 2022, for a $50 million revolving credit facility, which could be increased to $125 million with the consent of the lenders (the "Prior Credit Agreement"). The Prior Credit Agreement was scheduled to mature on November 7, 2025. The Parent terminated the Prior Credit Agreement in conjunction with entering into the Line of Credit. The termination of the Prior Credit Agreement did not result in any penalties to the Parent. There were no borrowings under the Line of Credit or the Prior Credit Agreement during Six Months 2025.
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Our Line of Credit contains representations, warranties, and covenants that are customary for credit facilities of this type, including, without limitation, financial covenants under which we are obligated to maintain a minimum consolidated net worth, a maximum ratio of consolidated debt to total capitalization, and covenants limiting our ability to: (i) merge or liquidate; (ii) incur debt or liens; (iii) dispose of assets; (iv) make investments and acquisitions; and (v) engage in transactions with affiliates.
The table below outlines information regarding certain covenants in the Line of Credit:
| Required as of | Actual as of | ||||||||||||||||
| June 30, 2025 | June 30, 2025 | ||||||||||||||||
Consolidated net worth1 | Not less than | $ | $ | ||||||||||||||
Debt to total capitalization ratio1 | Not to exceed | ||||||||||||||||
1Calculated in accordance with the Line of Credit.
In addition to the above requirements, the Line of Credit contains a cross-default provision that provides that the Line of Credit will be in default if we fail to comply with any condition, covenant, or agreement (including payment of principal and interest when due on any debt with an aggregate principal amount of at least $30 million) that causes or permits the acceleration of principal. The Line of Credit also limits borrowings from the FHLBI and the FHLBNY to 10 % of the respective member company's admitted assets for the previous year.
Long-Term Debt Activity
In the first quarter of 2025, we issued $400 million of 5.90 % Senior Notes due 2035 at a discount of $0.1 million, resulting in $395.9 million of net proceeds after debt issuance costs of approximately $4.1 million. The 5.90 % Senior Notes will pay interest on April 15 and October 15 of each year, beginning on October 15, 2025. The proceeds from this debt issuance are being used for general corporate purposes, including supporting organic growth.
For additional information on our indebtedness and debt covenants, see Note 11. "Indebtedness" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
NOTE 13. Equity
On December 2, 2020, we announced that our Board of Directors authorized a $100 million share repurchase program, with no set expiration or termination date. Our repurchase program does not obligate us to acquire any particular common stock amount. The program grants management discretion to determine the timing and amount of any share repurchases under the authorization based on market conditions and other considerations. In Six Months 2025, we repurchased 233,611 shares of our common stock under the program for $19.4 million, including commissions. All repurchases were completed in the first quarter of 2025, and we had $56.1 million of remaining program capacity as of June 30, 2025.
NOTE 14. Earnings per Common Share
The following table presents the calculations of earnings per common share ("EPS") on a basic and diluted basis:
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| (in thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
Net income (loss) available to common stockholders: | $ | ( | $ | |||||||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||||||||||||||
| Effect of dilutive securities - stock compensation plans | ||||||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||||||||||||||
| EPS: | ||||||||||||||||||||||||||
| Basic | $ | ( | $ | |||||||||||||||||||||||
| Diluted | ( | |||||||||||||||||||||||||
NOTE 15. Litigation
As of June 30, 2025, we do not believe we are involved in any legal action that could have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
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In the ordinary course of conducting business, we are parties in various legal actions. Most are claims litigation involving our ten insurance subsidiaries (collectively referred to as "Insurance Subsidiaries") as (i) liability insurers defending or providing indemnity for third-party claims brought against our customers, (ii) insurers defending first-party coverage claims brought against them, or (iii) liability insurers seeking declaratory judgment on our insurance coverage obligations. We account for such activity by establishing unpaid loss and loss expense reserves. Considering potential losses and defense costs reserves, we expect that any potential ultimate liability for ordinary course claims litigation will not be material to our consolidated financial condition, results of operations, or cash flows.
From time to time, our Insurance Subsidiaries are named as defendants in other legal actions, some asserting claims for substantial amounts. Plaintiffs may style these actions as class actions and seek judicial certification of a state or national class for allegations involving our business practices, such as improper medical provider reimbursement under workers compensation and personal and commercial automobile insurance policies or improper reimbursement for automobile parts. Similarly, our Insurance Subsidiaries can be named defendants in individual actions seeking extra-contractual damages, punitive damages, or penalties, often alleging bad faith in handling insurance claims. We believe we have valid defenses to these allegations and account for such activity by establishing unpaid loss and loss expense reserves. Considering estimated losses and defense costs reserves, we expect that any potential ultimate liability for these other legal actions will not be material to our consolidated financial condition. Litigation outcomes are inherently unpredictable and the amounts sought in certain actions are large or indeterminate. Adverse outcomes could have a material adverse effect on our consolidated results of operations or cash flows in the quarterly or annual period in which they occur.
NOTE 16. Subsequent Events
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") became law. The legislation extends and modifies multiple tax provisions, some affecting our taxes in current and future years. By rule, we must reflect tax changes in the enactment period, which was July 2025. Accordingly, we are currently analyzing the Act's impact, including provisions that allow 100% bonus depreciation and full expensing of domestic research and development expenses.
ITEM 2. 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” defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a forward-looking statement safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements discuss our intentions, beliefs, projections, estimations, or forecasts of future events and financial performance. They involve uncertainties and known and unknown risks and other factors that may cause actual results, activity levels, or performance to materially differ from those in or implied by the forward-looking statements. In some cases, forward-looking statements include the words "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "attribute," "confident," "strong," "target," "project," "intend," "believe," "estimate," "predict," "potential," "pro forma," "seek," "likely," "continue," or comparable terms. Our forward-looking statements are only predictions; we cannot guarantee or assure that such expectations will prove correct. We undertake no obligation to publicly update or revise any forward-looking statements for any reason except as may be required by law.
We discuss the factors that could cause our actual results to differ materially from our projections, forecasts, or estimates in forward-looking statements in Item 1A. "Risk Factors." in Part II. "Other Information" of this Form 10-Q. These risk factors may not be exhaustive. We operate in a constantly changing business environment, and new risk factors may emerge at any time. We cannot predict these new risk factors, their impact on our businesses, or the extent to which one or any combination of factors may cause actual results to differ materially from any forward-looking statements. Given these risks, uncertainties, and assumptions, the forward-looking events we discuss might not occur.
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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 more details 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, 2024 ("2024 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 2024 Annual Report filed with the United States ("U.S.") Securities and Exchange Commission.
In the MD&A, we will discuss and analyze the following:
•Critical Accounting Policies and Estimates;
•Financial Highlights of Results for the second quarters ended June 30, 2025 ("Second Quarter 2025") and June 30, 2024 ("Second Quarter 2024"); and the six-month periods ended June 30, 2025 ("Six Months 2025") and June 30, 2024 ("Six Months 2024")
•Results of Operations and Related Information by Segment;
•Federal 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. Such estimates and judgments affect the reported amounts in the consolidated financial statements. As outlined in our 2024 Annual Report, those estimates and judgments most critical to the preparation of the consolidated financial statements involved the following: (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 make them subject to change as facts and circumstances develop. If we applied different estimates and judgments, the financial statements might have reported materially different amounts. For additional information regarding our critical accounting policies and estimates, refer to pages 38 through 45 of our 2024 Annual Report.
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Financial Highlights of Results for Second Quarter and Six Months 2025 and Second Quarter and Six Months 20241
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | ||||||||||||||||||||||||||||||||||||||||||||
| ($ and shares in thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Financial Data: | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 1,326,745 | 1,196,005 | 11 | % | $ | 2,611,931 | 2,360,964 | 11 | % | |||||||||||||||||||||||||||||||||||||
| After-tax net investment income | 101,421 | 86,262 | 18 | 197,042 | 171,902 | 15 | |||||||||||||||||||||||||||||||||||||||||
| After-tax underwriting income (loss) | (1,914) | (137,208) | (99) | 34,139 | (122,174) | (128) | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) before federal income tax | 108,905 | (80,098) | (236) | 247,791 | 22,468 | 1,003 | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 85,943 | (63,319) | (236) | 195,839 | 19,199 | 920 | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) available to common stockholders | 83,643 | (65,619) | (227) | 191,239 | 14,599 | 1,210 | |||||||||||||||||||||||||||||||||||||||||
| Key Metrics: | |||||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 100.2 | % | 116.1 | (15.9) | pts | 98.2 | % | 107.3 | (9.1) | pts | |||||||||||||||||||||||||||||||||||||
| Invested assets per dollar of common stockholders' equity | $ | 3.33 | 3.31 | 1 | % | $ | 3.33 | 3.31 | 1 | % | |||||||||||||||||||||||||||||||||||||
| Annualized after-tax yield on investment portfolio | 3.9 | % | 3.9 | — | pts | 3.9 | % | 3.9 | — | pts | |||||||||||||||||||||||||||||||||||||
| Return on common equity ("ROE") | 10.7 | (9.5) | 20.2 | 12.5 | 1.1 | 11.4 | |||||||||||||||||||||||||||||||||||||||||
| Net premiums written ("NPW") to statutory surplus | $ | 1.45 | 1.64 | (12) | % | 1.45 | 1.64 | (12) | % | ||||||||||||||||||||||||||||||||||||||
| Per Common Share Amounts: | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted net income (loss) per share | $ | 1.36 | (1.08) | (226) | % | $ | 3.12 | 0.24 | 1,200 | % | |||||||||||||||||||||||||||||||||||||
| Book value per share | 52.09 | 44.74 | 16 | 52.09 | 44.74 | 16 | |||||||||||||||||||||||||||||||||||||||||
| Dividends declared per share to common stockholders | 0.38 | 0.35 | 9 | 0.76 | 0.70 | 9 | |||||||||||||||||||||||||||||||||||||||||
| Non-GAAP Information: | |||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating income (loss)2 | $ | 80,348 | (66,644) | (221) | % | $ | 187,762 | 14,866 | 1,163 | % | |||||||||||||||||||||||||||||||||||||
Non-GAAP operating income (loss) per diluted common share2 | 1.31 | (1.10) | (219) | 3.06 | 0.24 | 1,175 | |||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating ROE2 | 10.3 | % | (9.6) | 19.9 | pts | 12.3 | % | 1.1 | 11.2 | pts | |||||||||||||||||||||||||||||||||||||
Adjusted book value per common share2 | $ | 54.48 | 49.67 | 10 | % | $ | 54.48 | 49.67 | 10 | % | |||||||||||||||||||||||||||||||||||||
1Refer to the Glossary of Terms attached to our 2024 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 June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 83,643 | (65,619) | $ | 191,239 | 14,599 | ||||||||||||||||||||
Net realized and unrealized investment (gains) losses included in net income (loss), before tax | (4,172) | (1,297) | (4,401) | 338 | ||||||||||||||||||||||
| Tax on reconciling items | 877 | 272 | 924 | (71) | ||||||||||||||||||||||
Non-GAAP operating income (loss) | $ | 80,348 | (66,644) | $ | 187,762 | $ | 14,866 | |||||||||||||||||||
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 June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
Net income (loss) available to common stockholders per diluted common share | $ | 1.36 | (1.08) | $ | 3.12 | 0.24 | ||||||||||||||||||||
Net realized and unrealized investment (gains) losses included in net income (loss), before tax | (0.07) | (0.02) | (0.07) | — | ||||||||||||||||||||||
| Tax on reconciling items | 0.02 | — | 0.01 | — | ||||||||||||||||||||||
Non-GAAP operating income (loss) per diluted common share | $ | 1.31 | (1.10) | $ | 3.06 | 0.24 | ||||||||||||||||||||
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| Reconciliation of ROE to non-GAAP operating ROE | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| ROE | 10.7 | % | (9.5) | 12.5 | % | 1.1 | ||||||||||||||||||||
Net realized and unrealized investment (gains) losses included in net income (loss), before tax | (0.5) | (0.2) | (0.3) | — | ||||||||||||||||||||||
| Tax on reconciling items | 0.1 | 0.1 | 0.1 | — | ||||||||||||||||||||||
| Non-GAAP operating ROE | 10.3 | % | (9.6) | 12.3 | % | 1.1 | ||||||||||||||||||||
| Reconciliation of book value per common share to adjusted book value per common share | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Book value per common share | $ | 52.09 | 44.74 | $ | 52.09 | 44.74 | ||||||||||||||||||||
| Total unrealized investment (gains) losses included in accumulated other comprehensive income (loss), before tax | 3.03 | 6.25 | 3.03 | 6.25 | ||||||||||||||||||||||
| Tax on reconciling items | (0.64) | (1.32) | (0.64) | (1.32) | ||||||||||||||||||||||
| Adjusted book value per common share | $ | 54.48 | 49.67 | $ | 54.48 | 49.67 | ||||||||||||||||||||
The following table depicts the components of ROE and non-GAAP operating ROE:
| ROE and non-GAAP operating ROE Components | Quarter ended June 30, | Change Points | Six Months ended June 30, | Change Points | ||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||
| Standard Commercial Lines Segment | (2.6) | % | (18.4) | 15.8 | 0.4 | % | (8.6) | 9.0 | ||||||||||||||||||||||||||||||||||||
| Standard Personal Lines Segment | 0.9 | (2.2) | 3.1 | 0.5 | (1.4) | 1.9 | ||||||||||||||||||||||||||||||||||||||
| E&S Lines Segment | 1.5 | 0.7 | 0.8 | 1.3 | 1.2 | 0.1 | ||||||||||||||||||||||||||||||||||||||
| Total insurance operations | (0.2) | (19.9) | 19.7 | 2.2 | (8.8) | 11.0 | ||||||||||||||||||||||||||||||||||||||
Net investment income earned | 13.0 | 12.5 | 0.5 | 12.9 | 12.5 | 0.4 | ||||||||||||||||||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) | 0.4 | 0.1 | 0.3 | 0.2 | — | 0.2 | ||||||||||||||||||||||||||||||||||||||
| Total investments segment | 13.4 | 12.6 | 0.8 | 13.1 | 12.5 | 0.6 | ||||||||||||||||||||||||||||||||||||||
| Other | (2.5) | (2.2) | (0.3) | (2.8) | (2.6) | (0.2) | ||||||||||||||||||||||||||||||||||||||
| ROE | 10.7 | (9.5) | 20.2 | 12.5 | 1.1 | 11.4 | ||||||||||||||||||||||||||||||||||||||
| Net realized and unrealized investment (gains) losses, after tax | (0.4) | (0.1) | (0.3) | (0.2) | — | (0.2) | ||||||||||||||||||||||||||||||||||||||
| Non-GAAP operating ROE | 10.3 | (9.6) | 19.9 | 12.3 | 1.1 | 11.2 | ||||||||||||||||||||||||||||||||||||||
In Second Quarter 2025, we delivered an ROE of 10.7% and a non-GAAP operating ROE of 10.3%, driven by strong investment income, which was 18% higher compared to Second Quarter 2024. ROE improved 20.2 points and non-GAAP operating ROE improved by 19.9 points in Second Quarter 2025 compared to Second Quarter 2024. Our overall combined ratio of 100.2% for Second Quarter 2025, which was 15.9 points better than the 116.1% in Second Quarter 2024, drove the higher ROE contributions from each insurance segment. Underwriting results were impacted by unfavorable prior year casualty reserve development, with $45 million in Second Quarter 2025 compared to $176 million in Second Quarter 2024. Higher paid loss emergence, which we largely attribute to the continued impacts of social inflation, drove the unfavorable development in both years.
In Six Months 2025, our ROE was 12.5% and our non-GAAP operating ROE was 12.3%, exceeding our 12% target. The improvement from Six Months 2024 was driven by after-tax underwriting income of $34.1 million this year compared to an underwriting loss of $122.2 million last year, resulting in an 11.0-point higher ROE. All three insurance segments contributed to the higher ROE. Consistent with Second Quarter 2024, the underwriting loss in Six Months 2024 was primarily attributable to unfavorable prior year casualty reserve development of $211 million, and to a lesser extent, an increase in current year loss costs.
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Outlook
The insurance industry faces significant uncertainty around the macroeconomic environment, including financial market performance, international trade including the ultimate impact of tariffs, and elevated and uncertain loss trends driven by social inflation. Despite this challenging environment, we delivered a 12.3% operating ROE in Six Months 2025 and remain focused on executing our strategy to manage risk while driving long-term, profitable growth by:
•Achieving renewal pure price increases above expected loss trend. We continue to price new and renewal business incorporating our latest view of loss trends and profitability relative to our long-term combined ratio target of 95%. In Six Months 2025, overall renewal pure pricing across our three insurance segments was 10.1%, up 1.5 points from a year ago.
•Deploying granular underwriting refinements. In sectors and jurisdictions where market 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.
•Seeking to diversify our insurance segments’ mix of business over the long term. Our relatively higher-than-peer casualty premium mix has benefited our results when property lines have been challenged, and our historical catastrophe losses are lower than the industry average. For the same reason, the current social inflationary environment impacts us differently than our peers.
We believe it is prudent to prioritize improving underwriting margins, which will temper NPW growth in the current environment. NPW grew 5% in Second Quarter 2025 compared to Second Quarter 2024, reflecting our disciplined underwriting and pricing strategy in a competitive market. Policy retention declined modestly as we executed these strategies in a granular fashion. We will maintain a balanced approach and make investments to support future growth. As we position ourselves for the future, we have several strategies to profitably grow market share:
•In our existing footprint, we are focused on growing with existing partners and strategically appointing new agency locations. During Six Months 2025, we added sixty agency locations. In full-year 2024, we had a net increase of two hundred agency locations.
•Careful and deliberate geographic expansion continues to provide growth opportunities. Since 2017, we have added thirteen states to our Standard Commercial Lines footprint, with five last year. In 2024, these thirteen states produced $350 million in premium, which represented approximately 8% of total NPW and approximately 1% marginal total premium growth. We expect to write new business in Kansas by the end of 2025, and in Montana and Wyoming by the end of 2026.
•Technology investments are critical to ensure efficiency and scale. We are actively developing and executing artificial intelligence use cases to enhance underwriting scalability and claims outcomes. We have also made considerable progress modernizing our policy acquisition and claims systems. For example, system enhancements in our E&S Lines segment have created significant operational efficiency, with the segment’s premium production up significantly with limited headcount growth.
After contemplating Six Months 2025 results, our full-year 2025 guidance is as follows:
•A GAAP combined ratio between 97% and 98%, up 1 point from prior guidance of 96% to 97%, including net catastrophe losses of 6 points and the impact of prior year casualty reserve development reported through Six Months 2025. Our combined ratio estimate assumes no additional prior year casualty reserve development and no further change in loss cost estimates. We do not make assumptions about future reserve development as we book our best estimate each quarter;
•After-tax net investment income of $415 million, up from prior guidance of $405 million;
•An overall effective tax rate of approximately 21.5%; and
•Weighted average shares of 61.5 million on a fully diluted basis, including the shares repurchased in Six Months 2025 and assuming no additional repurchases under our existing share repurchase authorization.
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Results of Operations and Related Information by Segment
Insurance Operations
The following table provides quantitative information for analyzing the combined ratio:
| All Lines | Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Insurance Operations Results: | |||||||||||||||||||||||||||||||||||||||||||||||
NPW | $ | 1,288,629 | 1,226,101 | 5 | % | $ | 2,529,072 | 2,382,722 | 6 | % | |||||||||||||||||||||||||||||||||||||
| Net premiums earned (“NPE”) | 1,188,057 | 1,080,231 | 10 | 2,346,814 | 2,131,175 | 10 | |||||||||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred | 823,898 | 925,548 | (11) | 1,570,223 | 1,629,840 | (4) | |||||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred | 365,431 | 327,310 | 12 | 731,243 | 651,677 | 12 | |||||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders | 1,151 | 1,054 | 9 | 2,134 | 4,308 | (50) | |||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | $ | (2,423) | (173,681) | (99) | % | $ | 43,214 | (154,650) | (128) | % | |||||||||||||||||||||||||||||||||||||
| Combined Ratios: | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense ratio | 69.3 | % | 85.7 | (16.4) | pts | 66.9 | % | 76.5 | (9.6) | pts | |||||||||||||||||||||||||||||||||||||
| Underwriting expense ratio | 30.8 | 30.3 | 0.5 | 31.2 | 30.6 | 0.6 | |||||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders ratio | 0.1 | 0.1 | — | 0.1 | 0.2 | (0.1) | |||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 100.2 | 116.1 | (15.9) | 98.2 | 107.3 | (9.1) | |||||||||||||||||||||||||||||||||||||||||
NPW grew 5% in Second Quarter 2025 and 6% in Six Months 2025 compared to the same prior-year periods, driven by renewal pure price increases that were partially offset by a modest decrease in policy count and lower new business. In addition to the below, NPW also benefited from exposure growth on renewal policies.
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Direct new business premiums | $ | 248.1 | 267.4 | $ | 499.4 | 528.2 | ||||||||||||||||||||
| Renewal pure price increases | 9.9 | % | 9.1 | 10.1 | % | 8.6 | ||||||||||||||||||||
NPE grew 10% in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods, reflecting NPW growth over the last 12 months.
Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and Loss Expense Incurred: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | $ | 45,000 | 176,000 | (74) | % | $ | 50,000 | 211,000 | (76) | % | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 525,727 | 473,526 | 11 | 1,044,999 | 916,404 | 14 | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 79,932 | 90,534 | (12) | 123,289 | 145,776 | (15) | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 173,239 | 185,488 | (7) | 351,935 | 356,660 | (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | 823,898 | 925,548 | (11) | 1,570,223 | 1,629,840 | (4) | ||||||||||||||||||||||||||||||||||||||||||||
Impact on Loss and Loss Expense Ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | 3.8 | % | 16.3 | (12.5) | pts | 2.1 | % | 9.9 | (7.8) | pts | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 44.2 | 43.8 | 0.4 | 44.5 | 43.1 | 1.4 | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 6.7 | 8.4 | (1.7) | 5.3 | 6.8 | (1.5) | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 14.6 | 17.2 | (2.6) | 15.0 | 16.7 | (1.7) | ||||||||||||||||||||||||||||||||||||||||||||
Total impact on loss and loss expense ratio | 69.3 | 85.7 | (16.4) | 66.9 | 76.5 | (9.6) | ||||||||||||||||||||||||||||||||||||||||||||
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Prior Year Casualty Reserve Development and Current Year Casualty Loss Costs
Details of prior year casualty reserve development by line of business follow:
| (Favorable)/Unfavorable Prior Year Casualty Reserve Development | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||
| General liability | $ | 20.0 | 166.0 | $ | 20.0 | 216.0 | ||||||||||||||||||||||||||
| Commercial automobile | 25.0 | 10.0 | 25.0 | 10.0 | ||||||||||||||||||||||||||||
| Workers compensation | — | — | — | (15.0) | ||||||||||||||||||||||||||||
| Total Standard Commercial Lines | 45.0 | 176.0 | 45.0 | 211.0 | ||||||||||||||||||||||||||||
| Homeowners | — | — | — | (5.0) | ||||||||||||||||||||||||||||
| Personal automobile | — | — | 5.0 | 5.0 | ||||||||||||||||||||||||||||
| Total Standard Personal Lines | — | — | 5.0 | — | ||||||||||||||||||||||||||||
| E&S | — | — | — | — | ||||||||||||||||||||||||||||
Total (favorable) unfavorable prior year casualty reserve development | $ | 45.0 | 176.0 | $ | 50.0 | 211.0 | ||||||||||||||||||||||||||
(Favorable) unfavorable impact on loss ratio | 3.8 | pts | 16.3 | 2.1 | pts | 9.9 | ||||||||||||||||||||||||||
Paid loss severities in recent prior accident years continued to show higher-than-expected emergence, leading us to record unfavorable prior year casualty reserve development in Second Quarter 2025 of (i) $25 million in our commercial automobile line of business primarily driven by accident years 2022 through 2024, and (ii) $20.0 million in our general liability line of business primarily driven by accident years 2022 and 2023.
The unfavorable prior year casualty reserve development in Second Quarter 2024 and Six Months 2024 was primarily driven by our general liability line of business that experienced increased severities in accident years 2020 through 2023.
The reduction in the prior year casualty reserve development was partially offset by higher current year loss costs in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods, driven by elevated severity trend assumptions attributable to social inflation on our general liability and E&S casualty lines of business.
For additional qualitative discussion on prior year casualty reserve development and current year casualty loss costs, refer to the insurance segment sections below.
Property Losses
Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by 4.3 points in Second Quarter 2025 and 3.2 points in Six Months 2025 compared to the same prior-year periods. The net catastrophe loss and loss expense ratio was 1.7 points lower in Second Quarter 2025 and 1.5 points lower in Six Months 2025 compared to the same prior-year periods, as fewer storms impacted our footprint. The non-catastrophe property loss and loss expense ratio was 2.6 points lower in Second Quarter 2025 and 1.7 points lower in Six Months 2025 compared to the same prior-year periods, reflecting (i) the earned impact of higher renewal pure price increases in 2025, (ii) lower claim frequencies, and (iii) normal variability from period to period of non-catastrophe property losses.
For additional qualitative discussion on non-catastrophe property loss and loss expenses, refer to the insurance segment sections below.
Underwriting Expenses
The underwriting expense ratio increased 0.5 points in Second Quarter 2025 and 0.6 points in Six Months 2025 compared to the same prior-year periods, primarily due to higher profit-based compensation to our distribution partners and employees, reflecting comparatively improved results.
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Standard Commercial Lines Segment
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Insurance Segments Results: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| NPW | $ | 1,018,004 | 963,129 | 6 | % | $ | 2,021,229 | 1,894,806 | 7 | % | ||||||||||||||||||||||||||||||||||||||||
| NPE | 937,635 | 853,493 | 10 | 1,849,845 | 1,687,603 | 10 | ||||||||||||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred | 666,766 | 747,954 | (11) | 1,248,432 | 1,303,787 | (4) | ||||||||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred | 295,862 | 265,366 | 11 | 592,505 | 530,008 | 12 | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders | 1,151 | 1,054 | 9 | 2,134 | 4,308 | (50) | ||||||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | (26,144) | (160,881) | (84) | $ | 6,774 | (150,500) | (105) | |||||||||||||||||||||||||||||||||||||||||||
| Combined Ratios: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense ratio | 71.1 | % | 87.6 | (16.5) | pts | 67.5 | % | 77.2 | (9.7) | pts | ||||||||||||||||||||||||||||||||||||||||
| Underwriting expense ratio | 31.6 | 31.1 | 0.5 | 32.0 | 31.4 | 0.6 | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to policyholders ratio | 0.1 | 0.1 | — | 0.1 | 0.3 | (0.2) | ||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 102.8 | 118.8 | (16.0) | 99.6 | 108.9 | (9.3) | ||||||||||||||||||||||||||||||||||||||||||||
NPW and NPE growth in Second Quarter 2025 and Six Months 2025, compared to the same prior-year periods, primarily reflected renewal pure price increases and strong exposure growth on renewal policies, partially offset by lower new business and lower retention.
| Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Direct new business premiums | $ | 158.2 | 168.4 | $ | 330.3 | 340.4 | |||||||||||||||||||||||||||||
| Retention | 83 | % | 85 | 83 | % | 85 | |||||||||||||||||||||||||||||
| Renewal pure price increases | 8.9 | 7.9 | 9.0 | 7.8 | |||||||||||||||||||||||||||||||
Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and Loss Expense Incurred: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | $ | 45,000 | 176,000 | (74) | % | $ | 45,000 | 211,000 | (79) | % | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 439,002 | 396,591 | 11 | 872,065 | 763,888 | 14 | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 50,881 | 50,858 | — | 70,692 | 89,353 | (21) | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 131,883 | 124,505 | 6 | 260,675 | 239,546 | 9 | ||||||||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | 666,766 | 747,954 | (11) | 1,248,432 | 1,303,787 | (4) | ||||||||||||||||||||||||||||||||||||||||||||
Impact on Loss and Loss Expense Ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | 4.8 | % | 20.6 | (15.8) | pts | 2.4 | % | 12.5 | (10.1) | pts | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 46.8 | 46.4 | 0.4 | 47.2 | 45.2 | 2.0 | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 5.4 | 6.0 | (0.6) | 3.8 | 5.3 | (1.5) | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 14.1 | 14.6 | (0.5) | 14.1 | 14.2 | (0.1) | ||||||||||||||||||||||||||||||||||||||||||||
Total impact on loss and loss expense ratio | 71.1 | 87.6 | (16.5) | 67.5 | 77.2 | (9.7) | ||||||||||||||||||||||||||||||||||||||||||||
Prior Year Casualty Reserve Development and Current Year Casualty Loss Costs
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 June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| General liability | $ | 20.0 | 166.0 | $ | 20.0 | 216.0 | ||||||||||||||||||||
| Commercial automobile | 25.0 | 10.0 | 25.0 | 10.0 | ||||||||||||||||||||||
| Workers compensation | — | — | — | (15.0) | ||||||||||||||||||||||
Total Standard Commercial Lines | 45.0 | 176.0 | 45.0 | 211.0 | ||||||||||||||||||||||
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The reduction in unfavorable prior year reserve development in Second Quarter 2025 and Six Months 2025 was partially offset by higher current year casualty loss costs. The increase in current year casualty loss costs in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods was primarily driven by higher loss trend expectations and increased claim severities, which we attribute to the continued impacts of social inflation. Prior-year severities developed adversely over the course of 2024 and impacted our view of current year loss costs for 2025, resulting in higher current year casualty loss costs this year compared to last.
Refer to the line of business sections below for qualitative discussion on the significant drivers of unfavorable prior year casualty reserve development and current year casualty loss costs.
Property Losses
Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by an aggregate 1.1 points in Second Quarter 2025 and 1.6 points in Six Months 2025 compared to the same prior-year periods. Net catastrophe losses were 0.6 points lower in Second Quarter 2025 and 1.5 points lower in Six Months 2025 compared to the same periods last year, driven by lower frequency of wind and winter storm events. Non-catastrophe property losses were 0.5 points lower in Second Quarter 2025 and 0.1 points lower in Six Months 2025 compared to the same periods last year, driven by the factors described in the "Insurance Operations" section above.
Underwriting Expenses
The underwriting expense ratio increased 0.5 points in Second Quarter 2025 and 0.6 points Six Months 2025 compared to the same prior-year periods. These increases were primarily due to higher profit-based compensation to our distribution partners and employees, reflecting comparatively improved results.
Information about our most significant Standard Commercial Lines of business follows:
| General Liability | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter ended June 30, | Change % or Points1 | Six Months ended June 30, | Change % or Points1 | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| NPW | $ | 341,641 | 319,955 | 7 | % | $ | 675,537 | 627,399 | 8 | % | ||||||||||||||||||||||||||||||||||||||||
| Direct new business | 44,655 | 50,293 | n/a | 98,319 | 100,522 | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| Retention | 83 | % | 86 | n/a | 83 | % | 86 | n/a | ||||||||||||||||||||||||||||||||||||||||||
| Renewal pure price increases | 11.9 | 7.6 | n/a | 12.0 | 7.0 | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| NPE | $ | 305,843 | 280,097 | 9 | % | $ | 600,530 | 553,512 | 8 | % | ||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | (31,295) | (166,109) | (81) | (47,208) | (195,550) | (76) | ||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 110.2 | % | 159.3 | (49.1) | pts | 107.9 | % | 135.3 | (27.4) | pts | ||||||||||||||||||||||||||||||||||||||||
| % of total Standard Commercial Lines NPW | 34 | 33 | 33 | 33 | ||||||||||||||||||||||||||||||||||||||||||||||
NPW grew 7% in Second Quarter 2025 and 8% in Six Months 2025 compared to the same prior-year periods, benefiting from renewal pure price increases and renewal exposure growth.
The combined ratio decreased 49.1 points in Second Quarter 2025 and 27.4 points in Six Months 2025 compared to the same prior-year periods and included the following:
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and Loss Expense Incurred: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | $ | 20,000 | 166,000 | (88) | % | $ | 20,000 | 216,000 | (91) | % | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 220,610 | 193,986 | 14 | 434,284 | 359,341 | 21 | ||||||||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | 240,610 | 359,986 | (33) | 454,284 | 575,341 | (21) | ||||||||||||||||||||||||||||||||||||||||||||
Impact on Loss and Loss Expense Ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | 6.5 | % | 59.3 | (52.8) | pts | 3.3 | % | 39.0 | (35.7) | pts | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 72.2 | 69.2 | 3.0 | 72.4 | 64.9 | 7.5 | ||||||||||||||||||||||||||||||||||||||||||||
Total impact on loss and loss expense ratio | 78.7 | 128.5 | (49.8) | 75.7 | 103.9 | (28.2) | ||||||||||||||||||||||||||||||||||||||||||||
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We recorded $20 million of unfavorable prior year casualty reserve development in Second Quarter 2025 and Six Months 2025, compared to $166 million and $216 million in Second Quarter 2024 and Six Months 2024, respectively. While less this year, we attribute the unfavorable development to the same social inflationary factors that drove reported development in Second Quarter 2024 and Six Months 2024. Specifically, the development in Second Quarter 2025 was primarily driven by increased severities in accident years 2022 and 2023 and the development in Second Quarter 2024 and Six Months 2024 was driven by increased severities in accident years 2023 and prior.
The general liability line of business has experienced a long-term historical trend of meaningful severity increases, partially offset by claim frequency decreases. Prior-year severities developed adversely, which have impacted our view of more recent accident years in 2024 and 2025. 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.
Partially offsetting the decrease in unfavorable prior year casualty reserve development was a 3.0-point increase in current year casualty loss costs in Second Quarter 2025 and a 7.5-point increase in Six Months 2025 compared to the same prior-year periods, driven by higher social inflation-related severities primarily in accident years 2022 and 2023 than was observed and responded to throughout 2024. These actions produced full-year 2024 casualty loss costs of 67.0%, compared with 69.2% in Second Quarter 2024 and 64.9% in Six Months 2024. The 2025 ratio reflects the increased losses recognized in the 2024 accident year and elevated loss trend expectations.
We believe that social inflation and elevated loss trends continue to support an elevated near-term pricing environment. In response, we have a heightened focus on prudent underwriting and appropriate pricing. Our renewal pure price increase in this line of business was 11.9% in Second Quarter 2025, in line with 12.0% from last quarter and up from 10.6% for the fourth quarter of 2024. In sectors and jurisdictions where market 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.
The underwriting expense ratio increased 0.7 points in Second Quarter 2025 and 1.0 points in Six Months 2025 compared to the same prior-year periods, as discussed in the "Total Standard Commercial Lines" section above.
| Commercial Automobile | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter ended June 30, | Change % or Points1 | Six Months ended June 30, | Change % or Points1 | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| NPW | $ | 312,966 | 297,293 | 5 | % | $ | 625,620 | 582,894 | 7 | % | ||||||||||||||||||||||||||||||||||||||||
| Direct new business | 41,996 | 45,253 | n/a | 87,866 | 93,048 | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| Retention | 83 | % | 86 | n/a | 84 | % | 86 | n/a | ||||||||||||||||||||||||||||||||||||||||||
Renewal pure price increases | 10.4 | 10.8 | n/a | 10.5 | 10.6 | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| NPE | $ | 288,759 | 260,652 | 11 | % | $ | 572,344 | 512,372 | 12 | % | ||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | (8,425) | (1,196) | 604 | (781) | (934) | 16 | ||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 102.9 | % | 100.5 | 2.4 | pts | 100.1 | % | 100.2 | (0.1) | pts | ||||||||||||||||||||||||||||||||||||||||
| % of total Standard Commercial Lines NPW | 31 | 31 | 31 | 31 | ||||||||||||||||||||||||||||||||||||||||||||||
1n/a: not applicable.
NPW grew 5% in Second Quarter 2025 and 7% in Six Months 2025 compared to the same prior-year periods, primarily benefiting from renewal pure price increases and retention, which was lower this year compared to last.
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The combined ratio increased 2.4 points in Second Quarter 2025 and decreased 0.1 in Six Months 2025 compared to the same prior-year periods, and included the following:
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and Loss Expense Incurred: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | $ | 25,000 | 10,000 | 150 | % | $ | 25,000 | 10,000 | 150 | % | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 141,819 | 133,584 | 6 | 286,558 | 263,162 | 9 | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 4,134 | 2,626 | 57 | 5,611 | 4,045 | 39 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 40,697 | 39,122 | 4 | 83,245 | 83,459 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | 211,650 | 185,332 | 14 | 400,414 | 360,666 | 11 | ||||||||||||||||||||||||||||||||||||||||||||
Impact on Loss and Loss Expense Ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | 8.7 | % | 3.8 | 4.9 | pts | 4.4 | % | 2.0 | 2.4 | pts | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 49.1 | 51.4 | (2.3) | 50.0 | 51.3 | (1.3) | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 1.4 | 1.0 | 0.4 | 1.0 | 0.8 | 0.2 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 14.1 | 15.0 | (0.9) | 14.5 | 16.3 | (1.8) | ||||||||||||||||||||||||||||||||||||||||||||
Total impact on loss and loss expense ratio | 73.3 | 71.2 | 2.1 | 69.9 | 70.4 | (0.5) | ||||||||||||||||||||||||||||||||||||||||||||
We recorded $25 million of unfavorable prior year casualty reserve development in Second Quarter 2025 and Six Months 2025 due to increased severities primarily in accident years 2022 through 2024. The unfavorable prior year casualty reserve development in Second Quarter 2024 and Six Months 2024 was primarily due to increased severities in accident year 2023. Current year casualty loss costs were lower in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods, driven by the mix of property and liability coverages within this line of business.
Non-catastrophe property loss and loss expenses decreased 0.9 points in Second Quarter 2025 and 1.8 points in Six Months 2025 compared to the same prior-year periods, primarily due to (i) the earned impact of higher renewal pure price increases and (ii) period-to-period variability of non-catastrophe property losses.
Commercial Property1 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter ended June 30, | Change % or Points2 | Six Months ended June 30, | Change % or Points2 | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| NPW | $ | 207,930 | 195,440 | 6 | % | $ | 404,184 | 369,952 | 9 | % | ||||||||||||||||||||||||||||||||||||||||
| Direct new business | 43,137 | 40,756 | n/a | 84,553 | 79,296 | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| Retention | 81 | % | 84 | n/a | 82 | % | 84 | n/a | ||||||||||||||||||||||||||||||||||||||||||
Renewal pure price increases | 7.8 | 9.8 | n/a | 8.1 | 10.3 | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| NPE | $ | 191,027 | 168,511 | 13 | % | $ | 377,557 | 330,064 | 14 | % | ||||||||||||||||||||||||||||||||||||||||
Underwriting income (loss) | 7,441 | (3,029) | (346) | 37,453 | 6,538 | (473) | ||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 96.1 | % | 101.8 | (5.7) | pts | 90.1 | % | 98.0 | (7.9) | pts | ||||||||||||||||||||||||||||||||||||||||
| % of total Standard Commercial Lines NPW | 20 | 20 | 20 | 20 | ||||||||||||||||||||||||||||||||||||||||||||||
1includes Inland Marine.
2n/a: not applicable.
NPW grew 6% in Second Quarter 2025 and 9% in Six Months 2025 compared to the same prior-year periods, primarily benefiting from renewal pure price increases and exposure growth on renewal policies.
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The combined ratio decreased 5.7 points in Second Quarter 2025 and 7.9 points in Six Months 2025 compared to the same prior-year periods and included the following:
| Second Quarter 2025 | Second Quarter 2024 | |||||||||||||||||||||||||||||||||||||
($ 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 | $ | 33,938 | 17.8 | pts | 41,523 | 24.6 | (6.8) | pts | ||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 83,204 | 43.6 | 71,904 | 42.7 | 0.9 | |||||||||||||||||||||||||||||||||
| Total | $ | 117,142 | 61.4 | 113,427 | 67.3 | (5.9) | ||||||||||||||||||||||||||||||||
| Six Months 2025 | Six Months 2024 | |||||||||||||||||||||||||||||||||||||
($ 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 | $ | 50,300 | 13.3 | pts | 74,387 | 22.5 | (9.2) | pts | ||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 159,778 | 42.3 | 134,294 | 40.7 | 1.6 | |||||||||||||||||||||||||||||||||
| Total | $ | 210,078 | 55.6 | 208,681 | 63.2 | (7.6) | ||||||||||||||||||||||||||||||||
While non-catastrophe property losses were slightly higher, net catastrophe losses were lower in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods, as discussed in the "Standard Commercial Lines Segment" section above.
| Workers Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter ended June 30, | Change % or Points1 | Six Months ended June 30, | Change % or Points1 | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| NPW | $ | 83,003 | 84,850 | (2) | % | $ | 169,149 | 183,633 | (8) | % | ||||||||||||||||||||||||||||||||||||||||
| Direct new business | 12,103 | 14,222 | n/a | 25,837 | 32,706 | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| Retention | 83 | % | 85 | n/a | 84 | % | 85 | n/a | ||||||||||||||||||||||||||||||||||||||||||
| Renewal pure price increases (decreases) | (4.3) | (2.9) | n/a | (3.7) | (2.8) | n/a | ||||||||||||||||||||||||||||||||||||||||||||
| NPE | $ | 82,024 | 82,316 | — | % | $ | 161,060 | 170,093 | (5) | % | ||||||||||||||||||||||||||||||||||||||||
| Underwriting income | (2,900) | 3,869 | (175) | (7,578) | 22,062 | (134) | ||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 103.5 | % | 95.3 | 8.2 | pts | 104.7 | % | 87.0 | 17.7 | pts | ||||||||||||||||||||||||||||||||||||||||
| % of total Standard Commercial Lines NPW | 8 | 9 | 8 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||
1n/a: not applicable.
NPW decreased 2% in Second Quarter 2025 and 8% in Six Months 2025 compared to the same prior-year periods, primarily due to decreases in renewal pure price and direct new business.
The combined ratio increased 8.2 points in Second Quarter 2025 and 17.7 points in Six Months 2025 compared to the same prior-year periods and included the following:
| Second Quarter 2025 | Second Quarter 2024 | |||||||||||||||||||||||||||||||||||||
($ 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 | 63,284 | 77.1 | 57,189 | 69.5 | 7.6 | |||||||||||||||||||||||||||||||||
Total | $ | 63,284 | 77.1 | $ | 57,189 | 69.5 | 7.6 | |||||||||||||||||||||||||||||||
| Six Months 2025 | Six Months 2024 | |||||||||||||||||||||||||||||||||||||
($ 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 | (15,000) | (8.8) | 8.8 | pts | ||||||||||||||||||||||||||||||
| Current year casualty loss costs | 124,827 | 77.5 | 118,003 | 69.3 | 8.2 | |||||||||||||||||||||||||||||||||
| Total | $ | 124,827 | 77.5 | $ | 103,003 | 60.5 | 17.0 | |||||||||||||||||||||||||||||||
There was no prior year casualty reserve development in Second Quarter 2025 and Six Months 2025. The favorable prior year casualty reserve development in Six Months 2024 was primarily due to lower loss severities in accident years 2021 and prior.
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The combined ratio was also adversely impacted by an increase in current year casualty loss costs of 7.6 points in Second Quarter 2025 and 8.2 points in Six Months 2025, primarily driven by negative rate changes combined with positive loss trends. These rate level reductions are 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.
Standard Personal Lines Segment
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Insurance Segments Results: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| NPW | $ | 110,456 | 116,149 | (5) | % | $ | 197,969 | 216,053 | (8) | % | ||||||||||||||||||||||||||||||||||||||||
| NPE | 102,377 | 106,421 | (4) | 206,032 | 210,267 | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred | 69,977 | 101,440 | (31) | 146,646 | 185,784 | (21) | ||||||||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred | 23,850 | 24,282 | (2) | 48,799 | 49,119 | (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Underwriting income (loss) | $ | 8,550 | (19,301) | (144) | $ | 10,587 | (24,636) | 143 | ||||||||||||||||||||||||||||||||||||||||||
| Combined Ratios: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense ratio | 68.3 | % | 95.3 | (27.0) | pts | 71.2 | % | 88.3 | (17.1) | pts | ||||||||||||||||||||||||||||||||||||||||
| Underwriting expense ratio | 23.3 | 22.8 | 0.5 | 23.7 | 23.4 | 0.3 | ||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 91.6 | 118.1 | (26.5) | 94.9 | 111.7 | (16.8) | ||||||||||||||||||||||||||||||||||||||||||||
NPW decreased 5% in Second Quarter 2025 and 8% in Six Months 2025 compared to the same prior-year periods, driven primarily by direct new business reductions. New business decreased 41% in Second Quarter 2025 and 50% in Six Months 2025 compared to the same prior-year periods. New policy counts decreased 54% in Second Quarter 2025 and 61% in Six Months 2025 compared to the same prior-year periods, as we focused on growth in states where our rate levels are adequate and narrowed our appetite to mass affluent market business. We have also significantly curtailed production, including restricting new business in certain states, like New Jersey, our biggest market, where we believe our filed rates do not support profitability. The following table depicts our reductions in direct new business and retention for the Second Quarter 2025 and Six Months 2025:
| Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
Direct new business premiums1 | $ | 12.9 | 22.0 | $ | 21.8 | 43.3 | |||||||||||||||||||||||||||||
| Retention | 79 | % | 78 | 77 | % | 80 | |||||||||||||||||||||||||||||
| Renewal pure price increases | 19.0 | 20.7 | 21.3 | 17.7 | |||||||||||||||||||||||||||||||
1Excludes our Flood direct premiums written, which are 100% ceded to the NFIP and do not impact NPW.
We are seeing profitability improvements in this line of business, as we are obtaining positive results from the actions we took to refine our pricing factors and prioritize rate filings to mitigate inflationary impacts. Our more significant rate increases began to take effect early in 2023 and increased in number and magnitude throughout 2024. We expect 2025 rate changes to remain above loss trends but moderate compared to our 2024 rate increases. Through our actions, we achieved renewal pure price increases of 19.0% in Second Quarter 2025 and 21.3% in Six Months 2025. We are continuing to seek improved homeowners profitability by expanding the use of new policy terms and conditions, including (i) coverage for roofs based on a depreciated value considering the age of the roof rather than full replacement cost and (ii) where allowed by law, mandatory wind/hail deductibles in states exposed to severe convective storms.
The change in NPE in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods resulted from the same impacts to NPW described above.
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Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and Loss Expense Incurred: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | $ | — | — | n/a | % | $ | 5,000 | — | n/a | % | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 27,115 | 30,694 | (12) | 55,183 | 61,315 | (10) | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 14,591 | 25,396 | (43) | 21,704 | 37,241 | (42) | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 28,271 | 45,350 | (38) | 64,759 | 87,228 | (26) | ||||||||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | 69,977 | 101,440 | (31) | 146,646 | 185,784 | (21) | ||||||||||||||||||||||||||||||||||||||||||||
Impact on Loss and Loss Expense Ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Favorable) unfavorable prior year casualty reserve development | — | % | — | — | pts | 2.4 | % | — | 2.4 | pts | ||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 26.4 | 28.8 | (2.4) | 26.9 | 29.1 | (2.2) | ||||||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 14.3 | 23.9 | (9.6) | 10.5 | 17.7 | (7.2) | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 27.6 | 42.6 | (15.0) | 31.4 | 41.5 | (10.1) | ||||||||||||||||||||||||||||||||||||||||||||
Total impact on loss and loss expense ratio | 68.3 | 95.3 | (27.0) | 71.2 | 88.3 | (17.1) | ||||||||||||||||||||||||||||||||||||||||||||
Property Losses
Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by an aggregate 24.6 points in Second Quarter 2025 and 17.3 points in Six Months 2025 compared to the same prior-year periods. Non-catastrophe property loss and loss expense ratios were lower in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods due to (i) the earned impact of higher renewal pure price increases in 2025 and (ii) period-to-period variability of catastrophe and non-catastrophe losses. Net catastrophe losses were lower in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods due to lower frequency and severity of weather-related catastrophe events this year compared to last year.
Prior Year Casualty Reserve Development and Current Year Casualty Loss Costs
Details of the prior year casualty reserve development by line of business follow:
| (Favorable)/Unfavorable Prior Year Casualty Reserve Development | Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Homeowners | $ | — | — | — | (5.0) | |||||||||||||||||||||
| Personal automobile | — | — | 5.0 | 5.0 | ||||||||||||||||||||||
| Total Standard Personal Lines | — | — | 5.0 | — | ||||||||||||||||||||||
Unfavorable prior year casualty reserve development in Six Months 2025 included $5.0 million in personal automobile, primarily driven by increased severities in accident year 2024. In Six Months 2024, prior year casualty reserve development reflected (i) $5.0 million of favorable development in our homeowners line, primarily due to lower loss severities in accident years 2021 and prior, offset by (ii) $5.0 million of unfavorable development on our personal automobile line of business, primarily driven by increased loss severities in accident years 2021 through 2023.
Current year casualty loss costs decreased 2.4 points in Second Quarter 2025 and 2.2 points in Six Months 2025 compared to the same prior-year periods, primarily due to the earned impact of rate increases.
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E&S Lines Segment
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Insurance Segments Results: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| NPW | $ | 160,169 | 146,823 | 9 | % | $ | 309,874 | 271,863 | 14 | % | ||||||||||||||||||||||||||||||||||||||||
| NPE | 148,045 | 120,317 | 23 | 290,937 | 233,305 | 25 | ||||||||||||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense incurred | 87,155 | 76,154 | 14 | 175,145 | 140,269 | 25 | ||||||||||||||||||||||||||||||||||||||||||||
| Net underwriting expenses incurred | 45,719 | 37,662 | 21 | 89,939 | 72,550 | 24 | ||||||||||||||||||||||||||||||||||||||||||||
| Underwriting income (loss) | 15,171 | 6,501 | 133 | 25,853 | 20,486 | 26 | ||||||||||||||||||||||||||||||||||||||||||||
| Combined Ratios: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss expense ratio | 58.9 | % | 63.3 | (4.4) | pts | 60.2 | % | 60.1 | 0.1 | pts | ||||||||||||||||||||||||||||||||||||||||
| Underwriting expense ratio | 30.9 | 31.3 | (0.4) | 30.9 | 31.1 | (0.2) | ||||||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 89.8 | 94.6 | (4.8) | 91.1 | 91.2 | (0.1) | ||||||||||||||||||||||||||||||||||||||||||||
NPW and NPE growth in Second Quarter 2025 and Six Months 2025 compared to the same prior-year periods included:
| Quarter ended June 30, | Six Months ended June 30, | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Direct new business premiums | $ | 77.0 | 77.0 | $ | 147.2 | 144.5 | |||||||||||||||||||||||||||||
| Retention | 65 | 64 | 65 | 64 | |||||||||||||||||||||||||||||||
| Renewal pure price increases | 9.3 | % | 6.4 | 9.0 | % | 5.9 | |||||||||||||||||||||||||||||
NPW and NPE growth in Second Quarter 2025 and Six Months 2025 benefited from (i) both property and casualty exposure growth on renewal policies and (ii) higher rates per exposure.
Loss and Loss Expenses
The following table provides quantitative information for analyzing loss and loss expense incurred:
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Loss and Loss Expense Incurred: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | $ | 59,610 | 46,241 | 29 | % | $ | 117,751 | 91,201 | 29 | % | ||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 14,460 | 14,280 | 1 | 30,893 | 19,182 | 61 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 13,085 | 15,633 | (16) | 26,501 | 29,886 | (11) | ||||||||||||||||||||||||||||||||||||||||||||
| Total loss and loss expense incurred | 87,155 | 76,154 | 14 | 175,145 | 140,269 | 25 | ||||||||||||||||||||||||||||||||||||||||||||
Impact on Loss and Loss Expense Ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Current year casualty loss costs | 40.3 | % | 38.4 | 1.9 | pts | 40.5 | % | 39.1 | 1.4 | pts | ||||||||||||||||||||||||||||||||||||||||
| Net catastrophe losses | 9.8 | 11.9 | (2.1) | 10.6 | 8.2 | 2.4 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-catastrophe property loss and loss expenses | 8.8 | 13.0 | (4.2) | 9.1 | 12.8 | (3.7) | ||||||||||||||||||||||||||||||||||||||||||||
Total impact on loss and loss expense ratio | 58.9 | 63.3 | (4.4) | 60.2 | 60.1 | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||
The loss and loss expense ratio decreased 4.4 points in Second Quarter 2025 compared to Second Quarter 2024, primarily driven by a 2.1-point decrease in catastrophe losses and a 4.2-point decrease in non-catastrophe property losses. The combined ratio impact of these property losses was influenced by (i) the impact of higher rates per exposure and (ii) normal period-to-period variability associated with property losses. Partially offsetting the lower property losses were higher current year loss costs, primarily driven by increased severities due to social inflation.
The loss and loss expense ratio was flat in Six Months 2025 compared to Six Months 2024 as higher net catastrophe losses and current year loss costs were offset by lower non-catastrophe property losses. Our Six Months 2025 catastrophe losses were impacted by the January 2025 California Palisades Fire, which added 1.4 points to our loss and loss expense ratio.
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Reinsurance
We successfully completed negotiations of our July 1, 2025 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 $3 million retention per loss occurrence, increasing our retention by $1 million. The first layer was modified with an increase in net retention from $2 million to $3 million, and we continue to retain a portion of the layer through a 20% co-participation. The 2025 treaty year deposit premium decreased primarily due to the increased retention and co-participation, partially offset by higher projected subject earned premium due to growth in our book of business.
We also renewed the Property Excess of Loss Treaty ("Property Treaty") with the same retention as the expiring treaty, but with a $30 million increase in limit. The treaty now provides coverage for $95 million in excess of a $5 million retention for losses on a per risk basis. The treaty year deposit premium increased modestly, reflecting higher projected subject earned premium due to growth in our book of business and the increased treaty limit.
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: - 80% of $3 million in excess of $3 million layer provides 65 reinstatements, $198 million annual aggregate limit; - 100% of $6 million in excess of $6 million layer provides 14 reinstatements, $90 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 | All NBCR losses are excluded. All other losses stemming from the acts of terrorism are subject to the following: - 80% 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 $95 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; - $20 million in excess of $10 million layer provides four reinstatements, $100 million in aggregate limits; and - $70 million in excess of $30 million layer provides one reinstatement, $140 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 $70 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 generate long-term growth in book value per share, considering prevailing market conditions, our enterprise risk tolerances, and other risk implications. We aim to accomplish this 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 high credit quality fixed income securities portfolio with a duration and maturity profile at an acceptable risk level that provides ample liquidity.
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The effective duration of our fixed income and short-term investments was 4.2 years as of June 30, 2025. 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 92% of invested assets at June 30, 2025 and December 31, 2024. These investments had (i) a weighted average credit rating of "A+" as of both June 30, 2025 and December 31, 2024, and (ii) investment grade holdings representing 96% of the total fixed income and short-term investment portfolio at June 30, 2025, and 97% at December 31, 2024.
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 2024 Annual Report.
| Total Invested Assets | |||||||||||||||||||||||
| ($ in thousands) | June 30, 2025 | December 31, 2024 | Change | ||||||||||||||||||||
| Total invested assets | $ | 10,553,552 | 9,651,297 | 9 | % | ||||||||||||||||||
| Invested assets per dollar of common stockholders' equity | 3.33 | 3.31 | 1 | ||||||||||||||||||||
| Components of unrealized gains (losses) – before tax: | |||||||||||||||||||||||
| Fixed income securities | (184,118) | (316,796) | (42) | % | |||||||||||||||||||
| Equity securities | 6,806 | 2,116 | 222 | ||||||||||||||||||||
| Net unrealized gains (losses) – before tax | (177,312) | (314,680) | (44) | ||||||||||||||||||||
| Components of unrealized gains (losses) – after tax: | |||||||||||||||||||||||
| Fixed income securities | (145,453) | (250,269) | (42) | ||||||||||||||||||||
| Equity securities | 5,377 | 1,671 | 222 | ||||||||||||||||||||
| Net unrealized gains (losses) – after tax | (140,076) | (248,598) | (44) | ||||||||||||||||||||
Invested assets increased $902.3 million at June 30, 2025, compared to December 31, 2024, primarily reflecting (i) net proceeds from the issuance of our 5.9% Senior Notes in the first quarter of 2025, (ii) our active investment of operating cash flows, which were 18% of NPW in Six Months 2025, and (iii) a $137.4 million reduction in pre-tax net unrealized losses in our fixed income and equity securities portfolios from lower interest rates and strong performance of U.S. equities during Six Months 2025. For additional information about our 5.9% Senior Notes, see Note 12. "Indebtedness" in Item 1. "Financial Statements" of this Form 10-Q.
Net Investment Income
Net investment income earned components were as follows:
| Quarter ended June 30, | Change % or Points | Six Months ended June 30, | Change % or Points | |||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| Fixed income securities | $ | 115,733 | 93,935 | 23 | % | $ | 220,815 | 188,037 | 17 | % | ||||||||||||||||||||||||||||||||||
| Commercial mortgage loans ("CMLs") | 3,761 | 3,145 | 20 | 7,376 | 5,939 | 24 | ||||||||||||||||||||||||||||||||||||||
| Equity securities | 4,908 | 1,877 | 161 | 8,475 | 6,785 | 25 | ||||||||||||||||||||||||||||||||||||||
| Short-term investments | 5,267 | 4,680 | 13 | 11,500 | 8,199 | 40 | ||||||||||||||||||||||||||||||||||||||
| Alternative investments | 4,004 | 10,517 | (62) | 11,083 | 17,398 | (36) | ||||||||||||||||||||||||||||||||||||||
| Other investments | 163 | 118 | 38 | 394 | 381 | 3 | ||||||||||||||||||||||||||||||||||||||
| Investment expenses | (5,868) | (5,630) | 4 | (10,984) | (10,248) | 7 | ||||||||||||||||||||||||||||||||||||||
| Net investment income earned – before tax | 127,968 | 108,642 | 18 | 248,659 | 216,491 | 15 | ||||||||||||||||||||||||||||||||||||||
| Net investment income tax expense | (26,547) | (22,380) | 19 | (51,617) | (44,589) | 16 | ||||||||||||||||||||||||||||||||||||||
| Net investment income earned – after tax | $ | 101,421 | 86,262 | 18 | $ | 197,042 | 171,902 | 15 | ||||||||||||||||||||||||||||||||||||
| Effective tax rate | 20.7 | % | 20.6 | 0.1 | pts | 20.8 | % | 20.6 | 0.2 | pts | ||||||||||||||||||||||||||||||||||
| Annualized after-tax yield on fixed income investments | 4.2 | 3.9 | 0.3 | 4.1 | 3.9 | 0.2 | ||||||||||||||||||||||||||||||||||||||
| Annualized after-tax yield on investment portfolio | 3.9 | 3.9 | — | 3.9 | 3.9 | — | ||||||||||||||||||||||||||||||||||||||
After-tax net investment income earned increased 18% in Second Quarter 2025 and 15% in Six Months 2025 compared to the same prior-year periods, primarily driven by active portfolio management, operating cash flow deployment, and net proceeds from the issuance of our 5.9% Senior Notes in the first quarter of 2025. For additional information about our 5.9% Senior Notes, see Note 12. "Indebtedness" in Item 1. "Financial Statements" of this Form 10-Q.
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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 June 30, | Change % | Six Months ended June 30, | Change % | |||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| Net realized gains (losses) on disposals | $ | (240) | 3,136 | (108) | % | $ | (896) | 3,306 | (127) | % | ||||||||||||||||||||||||||||||||||
| Net unrealized gains (losses) on equity securities | 3,640 | (93) | (4,014) | 4,690 | 599 | 683 | ||||||||||||||||||||||||||||||||||||||
| Net credit loss benefit (expense) on fixed income securities, AFS | 887 | (1,233) | (172) | 1,516 | (3,883) | (139) | ||||||||||||||||||||||||||||||||||||||
| Net credit loss benefit (expense) on CMLs | (115) | (32) | 259 | (150) | 136 | (210) | ||||||||||||||||||||||||||||||||||||||
| Losses on securities for which we have the intent to sell | — | (481) | (100) | (759) | (496) | 53 | ||||||||||||||||||||||||||||||||||||||
| Total net realized and unrealized investment gains (losses) | $ | 4,172 | 1,297 | 222 | $ | 4,401 | (338) | (1,402) | ||||||||||||||||||||||||||||||||||||
Federal Income Taxes
The following table provides information about federal income taxes and reconciles federal income tax at the corporate rate to the effective tax rate:
| Quarter ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Tax at statutory rate | $ | 22,870 | (16,821) | $ | 52,036 | 4,718 | ||||||||||||||||||||
| Tax-advantaged interest | (275) | (354) | (500) | (756) | ||||||||||||||||||||||
| Dividends received deduction | (53) | (79) | (103) | (117) | ||||||||||||||||||||||
| Executive compensation | 251 | 634 | 1,425 | 1,957 | ||||||||||||||||||||||
| Stock-based compensation | 8 | (15) | (487) | (1,454) | ||||||||||||||||||||||
| Other | 161 | (144) | (419) | (1,079) | ||||||||||||||||||||||
Federal income tax expense (benefit) | $ | 22,962 | (16,779) | $ | 51,952 | 3,269 | ||||||||||||||||||||
| Income before federal income tax, less preferred stock dividends | $ | 106,605 | (82,398) | $ | 243,191 | 17,868 | ||||||||||||||||||||
| Effective tax rate | 21.5 | % | 20.4 | 21.4 | % | 18.3 | ||||||||||||||||||||
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") became law. The legislation extends and modifies multiple tax provisions, some affecting current and future years. By rule, we must reflect tax changes in the enactment period, which was July 2025. Accordingly, we are analyzing the Act's impact, including provisions that allow 100% bonus depreciation and full expensing of domestic research and development expenses.
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.
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The Parent's cash and components of its investment portfolio were as follows:
| ($ in thousands) | June 30, 2025 | December 31, 2024 | ||||||||||||
Fixed income securities | $ | 314,050 | 268,486 | |||||||||||
Equity securities | 58,511 | 53,248 | ||||||||||||
Short-term investments | 145,681 | 62,223 | ||||||||||||
Alternative investments | 20,157 | 18,443 | ||||||||||||
Cash | 60 | 91 | ||||||||||||
Total investments and cash | $ | 538,459 | 402,491 | |||||||||||
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. Our target is 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. Given the long payment patterns of certain 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.
Our Insurance Subsidiaries may pay dividends to the Parent company. The Insurance Subsidiaries did not declare or pay cash dividends to the Parent in Six Months 2025. As of December 31, 2024, our allowable ordinary maximum dividend is $290 million for 2025. 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 dividends, there is no assurance they will approve future Insurance Subsidiary 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 2024 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. This agreement replaced a prior credit agreement that the Parent terminated in conjunction with entering into the Line of Credit. No borrowings were made under either credit facility in Six Months 2025. For additional information regarding the Line of Credit and corresponding representations, warranties, and covenants, see Note 12. "Indebtedness" in Item 1. "Financial Statements" of this Form 10-Q.
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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 June 30, 2025, we had remaining capacity of $610.0 million for FHLB borrowings, with a $25.0 million additional stock purchase requirement to allow the member companies to borrow their remaining capacity amounts.
Short-term Borrowings
We made no short-term borrowings from FHLB branches during Six Months 2025.
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 June 30, 2025 and December 31, 2024. The remaining capacity under these intercompany loan agreements was $171.8 million as of both June 30, 2025 and December 31, 2024. 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
In Six Months 2025, the Parent issued $400 million of 5.90% Senior Notes due 2035, resulting in net proceeds of $395.9 million after a $0.1 million discount and debt issuance costs of approximately $4.1 million. The proceeds from this debt issuance are being used for general corporate purposes, including supporting organic growth with a $200 million capital contribution to the Insurance Subsidiaries in March 2025. The Parent had no private or public stock issuances during Six Months 2025.
During Six Months 2025, we repurchased 233,611 shares of our common stock under our existing share repurchase program for $19.4 million, an $82.87 average price per share, excluding commissions paid. We had $56.1 million of remaining capacity under our share repurchase program as of June 30, 2025. For additional information on the share repurchase program, refer to Note 17. "Equity" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
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 quarterly cash dividend on common stock of $0.38 per common share that is payable September 2, 2025, to holders of record on August 15, 2025; 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 September 15, 2025, to holders of record as of August 29, 2025.
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. Our next borrowing principal repayment is $60 million to FHLBI due on December 16, 2026.
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Restrictions on the ability of the Insurance Subsidiaries 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 the business of underwriting insurance risks, and facilitate continued business growth. At June 30, 2025, we had GAAP stockholders' equity of $3.4 billion and statutory surplus of $3.3 billion. With total debt of $902.7 million at June 30, 2025, our debt-to-capital ratio was 21.1%. For additional information on our statutory surplus, see Note 22. "Statutory Financial Information, Capital Requirements, and Restrictions on Dividends and Transfers of Funds" in Item 8. "Financial Statements and Supplementary Data." of our 2024 Annual Report.
The following table summarizes certain contractual obligations we had at June 30, 2025, that may require us to invest additional amounts into our investment portfolio, which we would fund primarily with operating cash flows.
| ($ in millions) | Amount of Obligation | |||||||
| Alternative and other investments | $ | 306.1 | ||||||
| Non-publicly traded collateralized loan obligations in our fixed income securities portfolio | 188.3 | |||||||
| Non-publicly traded common stock within our equity portfolio | 21.1 | |||||||
| CMLs | 20.7 | |||||||
| Privately-placed corporate securities | 60.1 | |||||||
| Total | $ | 596.3 | ||||||
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.
The following table provides future cash payments on our notes payable as of June 30, 2025, including our 5.9% Senior Notes, details about which are included in the "Capital Markets" discussion above and Note 12. "Indebtedness" in Item 1. "Financial Statements." of this Form 10-Q:
| Payment Due by Period | ||||||||||||||||||||||||||||||||
| Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||||||||||||||
| ($ in millions) | Total | |||||||||||||||||||||||||||||||
| Notes payable | $ | 910.0 | — | 60.0 | — | 850.0 | ||||||||||||||||||||||||||
| Interest on debt obligation | 733.7 | 55.2 | 100.9 | 100.1 | 477.5 | |||||||||||||||||||||||||||
| Total | $ | 1,643.7 | 55.2 | 160.9 | 100.1 | 1,327.5 | ||||||||||||||||||||||||||
Our current and long-term material cash requirements associated with (i) loss and loss expense reserves and (ii) contractual obligations under operating and financing leases for office space and equipment have not materially changed since December 31, 2024. The Insurance Subsidiaries' net loss and loss expense reserves duration was 3.0 years at December 31, 2024.
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 June 30, 2025, and December 31, 2024, 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 2024 Annual Report, 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.
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Our capital management strategy is intended to protect the interests of the policyholders of the Insurance Subsidiaries and our stockholders and enhance our financial strength and underwriting capacity. We have a solid capital base and high-quality underwriting portfolio, positioning us well to leverage potential market opportunities.
Book value per common share increased 9% to $52.09 as of June 30, 2025, from $47.99 as of December 31, 2024, primarily driven by $3.12 in net income (loss) available to common stockholders per diluted common share and a $1.74 decrease in after-tax net unrealized losses on our fixed income securities portfolio, partially offset by $0.76 in dividends to our common stockholders. A decline in benchmark U.S. Treasury rates primarily drove the decrease in net unrealized losses on our fixed income securities. 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 $54.48 as of June 30, 2025, from $52.10 as of December 31, 2024.
Cash Flows
Net cash provided by operating activities increased to $450.9 million in Six Months 2025, compared to $380.3 million in Six Months 2024, primarily driven by higher levels of cash received for premiums. For more information on our underwriting results, refer to "Insurance Operations" above in this MD&A.
Net cash used in investing activities increased to $799.5 million in Six Months 2025, compared to $333.3 million in Six Months 2024, primarily due to the investment of proceeds from our 5.9% Senior Note issuance in Six Months 2025. These proceeds also drove the $323.8 million in net cash provided by financing activities in Six Months 2025, compared to $49.4 million in net cash used in financing activities in Six Months 2024. Partially offsetting cash proceeds from the 5.9% Senior Notes issuance was cash used for share repurchases.
Ratings
Our ratings 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 | A | Stable | ||||||||||||
On May 7, 2025, Fitch reaffirmed 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
There have been no material changes in the information about market risk set forth in our 2024 Annual Report.
ITEM 4. CONTROLS AND PROCEDURES.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this report. In performing this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework ("COSO Framework") in 2013. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of the end of such period are (i) effective in recording, processing, summarizing, and reporting information on a timely basis that we are required to disclose in the reports that we file or submit under the Exchange Act, and (ii) effective in ensuring that information that we are required to disclose in the reports that we file or submit under the Exchange Act is appropriately accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions about required disclosure. No changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) occurred during Second Quarter 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Incidental to our insurance operations, we are routinely engaged in legal proceedings with inherently unpredictable outcomes that could have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods. For additional information regarding our legal risks, refer to Note 15. "Litigation" in Item 1. "Financial Statements." of this Form 10-Q and Item 1A. "Risk Factors." below in Part II. "Other Information." As of June 30, 2025, we have no material pending legal proceedings that could have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
ITEM 1A. RISK FACTORS.
Certain risk factors can significantly impact our business, liquidity, capital resources, results of operations, financial condition, and debt ratings. These risk factors might affect, alter, or change our actions in executing our long-term capital strategy. Examples include, without limitation, contributing capital to any or all of the Insurance Subsidiaries, issuing additional debt and/or equity securities, repurchasing our existing debt and/or equity securities, or increasing or decreasing common stockholders' dividends. We operate in a continually changing business environment, and new risk factors that we cannot predict or assess may emerge at any time. Consequently, we can neither predict such new risk factors nor assess the potential future impact on our business. Except as discussed below, there have been no material changes from the risk factors disclosed in Item 1A. "Risk Factors." in our 2024 Annual Report.
Changes in international trade policy could adversely and materially affect our business, results of operations, financial condition, and growth.
Changes in international trade policies and tariffs by the United States and other countries, particularly large trading partners like Canada, China, and Mexico, could (i) impact our claims severity across multiple lines of business and cause adverse reserve development by increasing costs for materials and parts used in claims involving real property and personal property, including commercial and personal automobiles and (ii) negatively affect our investments' fair value and/or our level of investment income.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
The following table provides information regarding our purchases of our common stock in Second Quarter 2025:
| Period | Total Number of Shares Purchased1 | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs2 | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Announced Programs (in millions)2 | ||||||||||||||||||||||
April 1 – 30, 2025 | 1,026 | $ | 86.67 | — | $ | — | ||||||||||||||||||||
May 1 – 31, 2025 | 1,271 | 87.87 | — | — | ||||||||||||||||||||||
June 1 – 30, 2025 | 672 | 85.80 | — | — | ||||||||||||||||||||||
| Total | 2,969 | $ | 86.99 | — | $ | — | ||||||||||||||||||||
1Total number of shares purchased includes 2,969 shares purchased from employees to satisfy tax withholding obligations associated with the vesting of their restricted stock units.
2On December 2, 2020, we announced our Board authorized a $100 million share repurchase program with no set expiration or termination date. Our repurchase program does not obligate us to acquire any particular amount of our common stock. Management will determine the timing and amount of any share repurchases under the authorization at its discretion based on market conditions and other considerations.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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ITEM 5. OTHER INFORMATION.
During the three months ended June 30, 2025, no director or officer of the Company adopted terminated
ITEM 6. EXHIBITS.
| Exhibit No. | ||||||||
*31.1 | Certification of Chief Executive Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
*31.2 | Certification of Chief Financial Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
**32.1 | Certification of Chief Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
**32.2 | Certification of Chief Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| **101 | The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements. | |||||||
| **104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in iXBRL. | |||||||
* Filed herewith.
** Furnished and not filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
SELECTIVE INSURANCE GROUP, INC.
Registrant
| Date: | July 25, 2025 | By: /s/ John J. Marchioni | ||||||||||||
| John J. Marchioni | ||||||||||||||
| Chairman of the Board, President and Chief Executive Officer | ||||||||||||||
| (principal executive officer) | ||||||||||||||
| Date: | July 25, 2025 | By: /s/ Patrick S. Brennan | ||||||||||||
Patrick S. Brennan | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(principal financial officer) | ||||||||||||||
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FAQ
How many new UCAR shares are being issued in this offering?
The company is issuing 445,000 Class A ordinary shares plus pre-funded warrants convertible into up to 106,628 shares.
What gross and net proceeds will U Power Limited (UCAR) receive?
Gross proceeds are US$1.379 million; estimated net proceeds after fees and expenses are about US$1.283 million.
At what price are the shares and warrants being sold?
Each share (or pre-funded warrant) is priced at $2.50; pre-funded warrants have a token $0.0001 exercise price.
Will the new warrants trade publicly?
No. The pre-funded warrants are unlisted and have no expected public market, limiting their liquidity.
Does UCAR need new PRC approvals for this U.S. offering?
Counsel states no additional PRC permissions are currently required, but a CSRC filing must occur within three working days after completion.
How might this financing affect existing shareholders?
Issuance of new shares and potential warrant exercises will dilute percentage ownership and could pressure the share price.
Selective Ins Gr
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8.00M
Insurance - Property & Casualty
Fire, Marine & Casualty Insurance
United States
BRANCHVILLE