By Chris Munro

April 23 - (The Insurer) - Selective Insurance Group booked a 2.1 point improvement in its Q1 2025 combined ratio to 96.1% on the back of lower catastrophe losses and reduced unfavorable prior year development, although the carrier’s operating earnings came in below analysts’ expectations.

Branchville, New Jersey-based Selective’s combined ratio stood at 96.1% for the first three months of 2025, compared with the prior-year period’s 98.2%.

The improvement reflected a 2.6 point decrease in its loss and loss expense ratio to 64.4%, which more than offset a 70 basis point increase in its underwriting expense ratio to 31.6%.

Selective’s dividends to policyholders ratio was 0.1% in 2025’s first quarter, compared with Q1 2024’s 0.3%.

The carrier faced 3.7 points of net catastrophe losses in the first quarter, down from the prior-year period’s 5.3 points.

Non-catastrophe property losses and loss expenses fell by 0.9 points year on year to 15.4 points, while Selective suffered 0.4 points of unfavorable prior year reserve development on casualty lines in Q1 2025, compared with 3.3 points in 2024’s first quarter.

The business booked after-tax net underwriting income of $36.1 million for the first quarter of 2025, up from the $15.0 million generated during the same stretch last year.

Selective ended Q1 2025 with operating income per diluted common share of $1.76, an increase on the prior-year period’s $1.33, but short of the $1.86 that was the consensus estimate of seven analysts, as per S&P Capital IQ.

Company-wide net premiums written $(NPW.SI)$ totalled $1.24 billion, up 7% year on year, with the growth driven by rate and non-rate actions as Selective sought to drive profitability while “prudently” growing its business.

“Average renewal pure price increased 10.3%, up 2.2 points from a year ago,” said Selective.

Selective’s after-tax net investment income was $95.6 million in 2025’s first quarter, compared with $85.6 million in Q1 2024.

The carrier’s standard commercial lines segment generated a Q1 2025 combined ratio of 96.4%, down 2.4 points year on year, fuelled by no prior year casualty reserve development and lower net catastrophe losses.

Standard commercial lines’ NPW increased 8% year on year to $1.00 billion, with the growth reflecting average renewal pure price increases of 9.1% and “stable” retention of 85%.

Within the standard commercial lines business, Selective’s chairman, president and CEO John Marchioni noted general liability pricing accelerated to 12.0% in Q1 2025, up from 10.6% in 2024’s fourth quarter and 6.5% in the first quarter of last year.

In standard personal lines, Selective posted a combined ratio of 98.0%, an improvement of 7.1 points from 2024’s first quarter, which reflected the benefit of renewal pure price increases, along with lower catastrophe and non-catastrophe property losses.

That improvement was however partly offset by 4.8 points of unfavorable prior year casualty reserve development in personal auto, compared with nil in Q1 2024.

Standard personal lines NPW fell by 12% year on year to $87.5 million, driven by what Selective described as “deliberate profit improvement actions."

In its E&S business, Selective posted a combined ratio of 92.5%, an increase of 4.9 points year on year, as higher catastrophe losses were partially offset by lower non-catastrophe property losses.

E&S NPW increased 20% year on year to $149.7 million on strong policy count growth, average renewal pure price increases of 8.7%, and new business growth of 4%.

“Our operating ROE of 14.4% for the first quarter was a positive start to the year and our full-year combined ratio guidance remains at 96% to 97%,” said Marchioni.

“Total renewal pure price increased 10.3% in the quarter, up from 8.1% a year ago,” he added.

“Our underwriting portfolio remains stable, and our most profitable segments drove growth,” the executive explained.