It has been about a month since the last earnings report for Selective Insurance (SIGI). Shares have added about 7.5% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Selective Insurance due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Selective Insurance Q1 Earnings Miss Estimates, Revenues Increase Y/Y
Selective Insurance Group reported first-quarter 2026 operating income of $1.69 per share, which missed the Zacks Consensus Estimate by 2.3%. The bottom line decreased 11% year over year.
The company’s quarterly performance reflects significantly higher catastrophe losses and weaker underwriting, partially offset by strong investment income tailwinds.
Behind the Headlines
Operating revenues of $1.4 billion increased 6.4% from the year-ago quarter’s level, driven primarily by higher net premiums earned and net investment income. However, the top line misses the Zacks Consensus Estimate by 0.5%.
On a year-over-year basis, net premiums written ("NPW") decreased 1% to $1.3 billion, due to a decline in standard personal lines and standard commercial lines. The figure was on par with our estimate.
After-tax net investment income increased 18% year over year to $113 million.
Underwriting income of $17 million declined 53% year over year, caused by higher catastrophe losses and an increased loss ratio.
The combined ratio deteriorated 220 basis points year over year to 98.3. The Zacks Consensus Estimate was 98.3, while our estimate was 98.1
Total expenses rose 7% year over year to $1.2 billion, mainly due to loss expenses incurred, corporate expenses and other expenses. The figure was on par with our estimate.
Segmental Results
Standard Commercial Lines’ NPW was down 1% year over year to $992.4 million, due to lower new business. This was below our estimate of $908.4 million.
The combined ratio was 100.2, deteriorating by 380 basis points year over year. The Zacks Consensus Estimate was 99, while our estimate was 98.1.
Standard Personal Lines’ NPW declined 6% year over year to $82.5 million, reflecting reduced new business volume, while underwriting performance improved meaningfully. The average renewal price rose 10.1%, and retention was 78%. The figure was below our estimate of $89.6 million.
The combined ratio was 92.8, improved significantly by 520 basis points. The Zacks Consensus Estimate was pegged at 101, while our estimate was 106.5.
Excess & Surplus Lines’ NPW rose 1% year over year to $150.7 million, driven by average renewal pure price increases of 4.1%. Our estimate was $174 million.
The combined ratio was 89.5, improving 300 basis points year over year. The Zacks Consensus Estimate was pegged at 87.2, while our estimate was 90.1.
Financial Update
Selective Insurance exited the first quarter of 2026 with total assets of $15.3 billion, up 1% from the December-end 2025 level.
Long-term debt remained stable at $901.9 million, while adjusted book value per share rose 2% to $58.94 as of March 31, 2026.
Operating return on common equity in the first quarter was 12%, contracted 14.4% a year ago.
Share Repurchase and Dividend Update
During the first quarter of 2026, the company repurchased shares worth $30 million.
A quarterly cash dividend of 43 cents per common share is payable on June 1, 2026, to its shareholders of record as of May 15.
2026 Guidance
SIGI estimates a GAAP combined ratio of 96.5-97.5.
Selective Insurance estimates after-tax net investment income of $465 million.
SIGI assumes no prior-year casualty reserve development.
The overall effective tax rate is expected to be around 21.5%.
Weighted average shares are estimated to be 60.5 million on a fully diluted basis.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
VGM Scores
Currently, Selective Insurance has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Selective Insurance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Selective Insurance Group, Inc. (SIGI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).