Selective Insurance Reports Disappointing Quarterly Losses, Shares Plunge 18.2%

Selective Insurance Group, Inc. reported disappointing quarterly results after the market closed on Thursday, which led analysts to adjust their forecasts for the company. The earnings report revealed quarterly losses of $1.10 per share, falling short of the analyst consensus estimate of $1.49 per share. Additionally, the company’s sales for the quarter totaled $1.196 billion, which also did not meet expectations, as analysts had projected sales of $1.204 billion.

In response to the weak results, John J. Marchioni, Chairman, President, and CEO of Selective Insurance, acknowledged the challenges faced during the quarter. He noted that underwriting performance did not meet the company’s high standards and attributed this to a significant increase in loss severity linked to social inflation. Marchioni explained that the company’s reserving actions are based on thorough quarterly reviews to better address the ongoing trend of elevated and uncertain loss costs. He stated that Selective remains committed to its stable underwriting portfolio and plans to further increase prices to tackle these updated loss cost expectations.

Following the underwhelming earnings announcement, Selective Insurance’s shares fell sharply, closing down 18.2% at $82.08 on Friday. The decline in stock price prompted analysts to reevaluate their price targets for Selective, reflecting the impact of the company’s weaker financial performance on future projections. The company aims to improve its situation in the coming months, with expectations of better pricing trends, especially for Standard Commercial Lines, in the latter half of 2024.