SELECTIVE INSURANCE GROUP INC
For the period ended Mar 31, 2025. Filed Apr 25, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 25, 2025
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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 March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Insurance Operations Results: | |||||
| NPW | $1,240,443 | 1,156,621 | 7 | % | |
| Net premiums earned (“NPE”) | 1,158,757 | 1,050,944 | 10 | ||
| Less: | |||||
| Loss and loss expense incurred | 746,325 | 704,292 | 6 | ||
| Net underwriting expenses incurred | 365,812 | 324,367 | 13 | ||
| Dividends to policyholders | 983 | 3,254 | (70) | ||
| Underwriting income (loss) | $45,637 | 19,031 | 140 | % | |
| Combined Ratios: | |||||
| Loss and loss expense ratio | 64.4 | % | 67.0 | (2.6) | pts |
| Underwriting expense ratio | 31.6 | 30.9 | 0.7 | ||
| Dividends to policyholders ratio | 0.1 | 0.3 | (0.2) | ||
| Combined ratio | 96.1 | 98.2 | (2.1) | ||
The NPW and NPE growth in First Quarter 2025 compared to First Quarter 2024 reflected overall renewal pure price increases and direct new business. In addition, NPW and NPE growth in First Quarter 2025 benefited from stable retention in our Standard Commercial Lines and E&S Lines and exposure growth on renewal policies.
| Quarter ended March 31, | ||
|---|---|---|
| ($ in millions) | 2025 | 2024 |
| Direct new business premiums | $251.3 | 260.8 |
| Renewal pure price increases | 10.3% | 8.1 |
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Loss and Loss Expense Incurred: | |||||
| (Favorable) unfavorable prior year casualty reserve development | $5,000 | 35,000 | (86) | % | |
| Current year casualty loss costs | 519,272 | 442,878 | 17 | ||
| Net catastrophe losses | 43,357 | 55,242 | (22) | ||
| Non-catastrophe property loss and loss expenses | 178,696 | 171,172 | 4 | ||
| Total loss and loss expense incurred | 746,325 | 704,292 | 6 | ||
| Impact on Loss and Loss Expense Ratio: | |||||
| (Favorable) unfavorable prior year casualty reserve development | 0.4 | % | 3.3 | (2.9) | pts |
| Current year casualty loss costs | 44.9 | 42.1 | 2.8 | ||
| Net catastrophe losses | 3.7 | 5.3 | (1.6) | ||
| Non-catastrophe property loss and loss expenses | 15.4 | 16.3 | (0.9) | ||
| Total impact on loss and loss expense ratio | 64.4 | 67.0 | (2.6) | ||
Details of prior year casualty reserve development by line of business follow:
| (Favorable)/Unfavorable Prior Year Casualty Reserve Development | Quarter ended March 31, | ||
|---|---|---|---|
| ($ in millions) · 2025 · 2024 | |||
| General liability | $— | 50.0 | |
| Workers compensation | — | (15.0) | |
| Total Standard Commercial Lines | — | 35.0 | |
| Homeowners | — | (5.0) | |
| Personal automobile | 5.0 | 5.0 | |
| Total Standard Personal Lines | 5.0 | — | |
| Total (favorable) unfavorable prior year casualty reserve development | $5.0 | 35.0 | |
| (Favorable) unfavorable impact on loss ratio | 0.4 | pts | 3.3 |
The reduction in unfavorable prior year reserve development was partially offset by higher current year casualty loss costs. The increase in current year loss costs in First Quarter 2025 compared to First Quarter 2024 was primarily due to increased severities related to social inflation on our general liability and E&S casualty lines of business.
For additional qualitative discussion on prior year casualty reserve development and current year casualty loss costs, refer to the insurance segment sections below.
Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by 2.5 points in the aggregate in First Quarter 2025 compared to First Quarter 2024. The net catastrophe loss and loss expense ratio was 1.6 points lower in First Quarter 2025 compared to First Quarter 2024, as fewer and less severe storms impacted our footprint. The non-catastrophe property loss and loss expense ratio was 0.9 points lower in First Quarter 2025 compared to First Quarter 2024, reflecting (i) the earned impact of higher renewal pure price increases in 2025, (ii) lower claim frequencies, and (iii) normal variability from period to period of non-catastrophe weather.
For additional qualitative discussion on non-catastrophe property loss and loss expenses, refer to the insurance segment sections below.
Underwriting Expenses
The underwriting expense ratio increased 0.7 points in First Quarter 2025 compared to First Quarter 2024, primarily due to higher profit-based compensation to our distribution partners. In First Quarter 2024, the underwriting expense ratio also included the benefit of a state plan assessment reimbursement.
Standard Commercial Lines Segment
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Insurance Segments Results: | |||||
| NPW | $1,003,225 | 931,677 | 8 | % | |
| NPE | 912,210 | 834,110 | 9 | ||
| Less: | |||||
| Loss and loss expense incurred | 581,666 | 555,833 | 5 | ||
| Net underwriting expenses incurred | 296,643 | 264,642 | 12 | ||
| Dividends to policyholders | 983 | 3,254 | (70) | ||
| Underwriting income (loss) | 32,918 | 10,381 | 217 | ||
| Combined Ratios: | |||||
| Loss and loss expense ratio | 63.8 | % | 66.7 | (2.9) | pts |
| Underwriting expense ratio | 32.5 | 31.7 | 0.8 | ||
| Dividends to policyholders ratio | 0.1 | 0.4 | (0.3) | ||
| Combined ratio | 96.4 | 98.8 | (2.4) | ||
NPW and NPE growth in First Quarter 2025 compared to First Quarter 2024 primarily reflected (i) renewal pure price increases, (ii) strong exposure growth on renewal policies, and (iii) strong retention as the following table shows:
| Quarter ended March 31, | |||
|---|---|---|---|
| ($ in millions) · 2025 · 2024 | |||
| Direct new business premiums | $172.2 | 172.1 | |
| Retention | 85 | % | 86 |
| Renewal pure price increases | 9.1 | 7.6 | |
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Loss and Loss Expense Incurred: | |||||
| (Favorable) unfavorable prior year casualty reserve development | $— | 35,000 | (100) | % | |
| Current year casualty loss costs | 433,064 | 367,297 | 18 | ||
| Net catastrophe losses | 19,811 | 38,495 | (49) | ||
| Non-catastrophe property loss and loss expenses | 128,791 | 115,041 | 12 | ||
| Total loss and loss expense incurred | 581,666 | 555,833 | 5 | ||
| Impact on Loss and Loss Expense Ratio: | |||||
| (Favorable) unfavorable prior year casualty reserve development | — | % | 4.2 | (4.2) | pts |
| Current year casualty loss costs | 47.5 | 44.1 | 3.4 | ||
| Net catastrophe losses | 2.2 | 4.6 | (2.4) | ||
| Non-catastrophe property loss and loss expenses | 14.1 | 13.8 | 0.3 | ||
| Total impact on loss and loss expense ratio | 63.8 | 66.7 | (2.9) | ||
The details of the prior year casualty reserve development by line of business were as follows:
| (Favorable)/Unfavorable Prior Year Casualty Reserve Development | Quarter ended March 31, | |
|---|---|---|
| ($ in millions) | 2025 | 2024 |
| General liability | $— | 50.0 |
| Workers compensation | — | (15.0) |
| Total Standard Commercial Lines | — | 35.0 |
The reduction in unfavorable prior year reserve development was partially offset by higher current year casualty loss costs. The increase in current year casualty loss costs in First Quarter 2025 compared to First Quarter 2024 was primarily due to increased severities related to social inflation.
Refer to the line of business sections below for qualitative discussion on the significant drivers of unfavorable prior year casualty reserve development and current year casualty loss costs.
Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by 2.1 points in the aggregate in First Quarter 2025 compared to First Quarter 2024. Net catastrophe losses were 2.4 points lower than last year, driven by lower frequency and severity of wind and winter storm events.
Underwriting Expenses
The underwriting expense ratio increased 0.8 points in First Quarter 2025 compared to First Quarter 2024, primarily due to higher profit-based compensation to our distribution partners. In First Quarter 2024, the underwriting expense ratio also included the benefit of a state plan assessment reimbursement.
A discussion of our most significant Standard Commercial Lines of business follows:
| General Liability | |||||
|---|---|---|---|---|---|
| Quarter ended March 31, · Change % or Points1 | |||||
| ($ in thousands) · 2025 · 2024 | |||||
| NPW | $333,896 | 307,444 | 9 | % | |
| Direct new business | 53,665 | 50,229 | n/a | ||
| Retention | 85 | % | 87 | n/a | |
| Renewal pure price increases | 12.0 | 6.5 | n/a | ||
| NPE | $294,687 | 273,415 | 8 | % | |
| Underwriting income (loss) | (15,913) | (29,441) | (46) | ||
| Combined ratio | 105.4 | % | 110.8 | (5.4) | pts |
| % of total Standard Commercial Lines NPW | 33 | 33 | |||
NPW grew 9% in First Quarter 2025 compared to First Quarter 2024, benefiting from renewal pure price increases, exposure growth on renewal policies, and stable retention.
The combined ratio decreased 5.4 points in First Quarter 2025 compared to First Quarter 2024 and included the following:
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Loss and Loss Expense Incurred: | |||||
| (Favorable) unfavorable prior year casualty reserve development | $— | 50,000 | (100) | % | |
| Current year casualty loss costs | 213,674 | 165,355 | 29 | ||
| Total loss and loss expense incurred | 213,674 | 215,355 | (1) | ||
| Impact on Loss and Loss Expense Ratio: | |||||
| (Favorable) unfavorable prior year casualty reserve development | — | % | 18.3 | (18.3) | pts |
| Current year casualty loss costs | 72.5 | 60.5 | 12.0 | ||
| Total impact on loss and loss expense ratio | 72.5 | 78.8 | (6.3) | ||
We did not record any prior year casualty reserve development in First Quarter 2025. The unfavorable prior year casualty reserve development in First Quarter 2024 was primarily due to social inflation, which resulted in higher 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 extended into more recent accident years in 2024 after previously impacting the pre-pandemic period. 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 an increase in current year casualty loss costs of 12.0 points in First Quarter 2025 compared to First Quarter 2024, primarily driven by higher severities due to social inflation in the more recent accident years that was observed and responded to during the course of 2024. These actions produced full-year 2024 casualty loss costs of 67.0%, compared with 60.5% in First Quarter 2024. The 2025 ratio reflects the increase recognized in the 2024 accident year, as well as elevated loss trend expectations for the line.
We believe that social inflation and elevated loss trends are an industry dynamic, which we expect to continue to support an elevated near-term pricing environment. Given the consistency in our underwriting appetite and risk profile over time, we have focused primarily on prudent underwriting and appropriate pricing. Our renewal pure price increase in this line of business accelerated to 12.0% in First Quarter 2025, up from 10.6% last quarter, and 8.6% for full-year 2024.
The underwriting expense ratio increased 1.2 points in First Quarter 2025 compared to First Quarter 2024, as discussed in the "Total Standard Commercial Lines" section above.
| Commercial Automobile | |||||
|---|---|---|---|---|---|
| Quarter ended March 31, · Change % or Points1 | |||||
| ($ in thousands) · 2025 · 2024 | |||||
| NPW | $312,654 | 285,601 | 9 | % | |
| Direct new business | 45,871 | 47,795 | n/a | ||
| Retention | 85 | % | 86 | n/a | |
| Renewal pure price increases | 10.6 | 10.4 | n/a | ||
| NPE | $283,585 | 251,720 | 13 | % | |
| Underwriting income (loss) | 7,644 | 262 | 2,818 | ||
| Combined ratio | 97.3 | % | 99.9 | (2.6) | pts |
| % of total Standard Commercial Lines NPW | 31 | 31 | |||
NPW grew 9% in First Quarter 2025 compared to First Quarter 2024, primarily benefiting from renewal pure price increases and stable retention. Stable retention and direct new business contributed to a 1% growth of in-force vehicle counts as of March 31, 2025, compared to March 31, 2024.
The combined ratio decreased 2.6 points in First Quarter 2025 compared to First Quarter 2024, and included the following:
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Loss and Loss Expense Incurred: | |||||
| Current year casualty loss costs | $144,739 | 129,579 | 12 | % | |
| Net catastrophe losses | 1,477 | 1,418 | 4 | ||
| Non-catastrophe property loss and loss expenses | 42,548 | 44,337 | (4) | ||
| Total loss and loss expense incurred | 188,764 | 175,334 | 8 | ||
| Impact on Loss and Loss Expense Ratio: | |||||
| Current year casualty loss costs | 51.1 | % | 51.5 | (0.4) | pts |
| Net catastrophe losses | 0.5 | 0.6 | (0.1) | ||
| Non-catastrophe property loss and loss expenses | 15.0 | 17.6 | (2.6) | ||
| Total impact on loss and loss expense ratio | 66.6 | 69.7 | (3.1) | ||
Non-catastrophe property loss and loss expenses decreased in First Quarter 2025 compared to First Quarter 2024, primarily due to the earned impact of renewal price increases.
| Quarter ended March 31, · Change % or Points2 | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| NPW | $196,254 | 174,512 | 12 | % | |
| Direct new business | 41,416 | 38,540 | n/a | ||
| Retention | 84 | % | 85 | n/a | |
| Renewal pure price increases | 8.5 | 10.9 | n/a | ||
| NPE | $186,530 | 161,553 | 15 | % | |
| Underwriting income (loss) | 30,012 | 9,567 | 214 | ||
| Combined ratio | 83.9 | % | 94.1 | (10.2) | pts |
| % of total Standard Commercial Lines NPW | 20 | 19 | |||
1 includes Inland Marine.
2 n/a: not applicable.
NPW grew 12% in First Quarter 2025 compared to First Quarter 2024, primarily benefiting from renewal pure price increases, stable retention, and exposure growth on renewal policies.
The combined ratio decreased 10.2 points in First Quarter 2025 compared to First Quarter 2024 and included the following:
| First Quarter 2025 · First Quarter 2024 | |||||||
|---|---|---|---|---|---|---|---|
| ($ in millions) · Loss and Loss Expense Incurred · Impact on Combined Ratio · Loss and Loss Expense Incurred · Impact on Combined Ratio · Change in Ratio | |||||||
| Net catastrophe losses | $16.4 | 8.8 | pts | 32.9 | 20.3 | (11.5) | pts |
| Non-catastrophe property loss and loss expenses | 76.6 | 41.1 | 62.4 | 38.6 | 2.5 | ||
| Total | $93.0 | 49.9 | 95.3 | 58.9 | (9.0) | ||
Net catastrophe losses were lower in First Quarter 2025 compared to First Quarter 2024, as discussed in the "Standard Commercial Lines Segment" section above.
| Workers Compensation | |||||
|---|---|---|---|---|---|
| Quarter ended March 31, · Change % or Points1 | |||||
| ($ in thousands) · 2025 · 2024 | |||||
| NPW | $86,146 | 98,783 | (13) | % | |
| Direct new business | 13,734 | 18,483 | n/a | ||
| Retention | 84 | % | 85 | n/a | |
| Renewal pure price increases (decreases) | (3.2) | (2.6) | n/a | ||
| NPE | $79,036 | 87,777 | (10) | % | |
| Underwriting income | (4,678) | 18,193 | (126) | ||
| Combined ratio | 105.9 | % | 79.3 | 26.6 | pts |
| % of total Standard Commercial Lines NPW | 9 | 11 | |||
NPW decreased 13% in First Quarter 2025 compared to First Quarter 2024, primarily due to decreases in renewal pure price and direct new business.
The combined ratio increased 26.6 points in First Quarter 2025 compared to First Quarter 2024 and included the following:
| First Quarter 2025 · First Quarter 2024 | |||||||
|---|---|---|---|---|---|---|---|
| ($ in millions) · 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 | (15.0) | (17.1) | 17.1 | pts |
| Current year casualty loss costs | 61.5 | 77.8 | 60.8 | 69.3 | 8.5 | ||
| Total | $61.5 | 77.8 | $45.8 | 52.2 | 25.6 | ||
There was no prior year casualty reserve development in First Quarter 2025. The favorable prior year casualty reserve development in First Quarter 2024 was primarily due to improved loss severities in accident years 2021 and prior.
In First Quarter 2025, the combined ratio was adversely impacted by an increase in current year casualty loss costs of 8.5 points, primarily driven by loss trend outpacing rate level reductions. These rate level reductions are driven by continued decreases in workers compensation rating bureau loss costs, which we use to supplement our data in determining premium rates for this line of business.
Standard Personal Lines Segment
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Insurance Segments Results: | |||||
| NPW | $87,513 | 99,904 | (12) | % | |
| NPE | 103,655 | 103,846 | — | ||
| Less: | |||||
| Loss and loss expense incurred | 76,669 | 84,344 | (9) | ||
| Net underwriting expenses incurred | 24,949 | 24,837 | — | ||
| Underwriting income (loss) | $2,037 | (5,335) | (138) | ||
| Combined Ratios: | |||||
| Loss and loss expense ratio | 73.9 | % | 81.2 | (7.3) | pts |
| Underwriting expense ratio | 24.1 | 23.9 | 0.2 | ||
| Combined ratio | 98.0 | 105.1 | (7.1) | ||
NPW decreased 12% in First Quarter 2025 compared to First Quarter 2024. The decrease in First Quarter 2025 compared to First Quarter 2024 was primarily due to direct new business and retention reductions, partially offset by renewal pure price increases and higher average policy sizes from our mass affluent market strategy. New business decreased 58% and new policy counts decreased 68% in First Quarter 2025 compared to First Quarter 2024 as we focused on growth in states where our rate levels are adequate, and where we anticipate profitable growth. We have also significantly curtailed production, including restricting new business in certain states, like New Jersey, our biggest market, where filed rates do not support a path to profitability. The following table depicts our reductions in direct new business and retention:
| Quarter ended March 31, | |||
|---|---|---|---|
| ($ in millions) · 2025 · 2024 | |||
| Direct new business premiums1 | $8.9 | 21.3 | |
| Retention | 75 | % | 83 |
| Renewal pure price increases | 24.1 | 14.3 | |
1 Excludes our Flood direct premiums written, which are 100% ceded to the NFIP and do not impact NPW.
We are taking actions to improve the profitability of this business, refine our pricing factors, and prioritize rate filings to mitigate inflationary impacts. Our more significant rate increases began to take effect early in 2023 and increased in number and magnitude through 2024. We expect 2025 rate changes to remain above loss trends but moderate compared to our rate increases in 2024. Directly related to our actions, we achieved a renewal pure price increase of 24.1% in First Quarter 2025. We also are continuing to seek improved homeowners profitability by expanding the use of new policy terms and conditions, including (i) coverage for older roofs based on a schedule of factors rather than replacement cost and (ii) where allowed by law, mandatory wind/hail deductibles in states exposed to severe convective storms.
The change in NPE in First Quarter 2025 compared to First Quarter 2024 resulted from the same impacts to NPW described above.
| Quarter ended March 31, · Change % or Points | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | ||||||
| Loss and Loss Expense Incurred: | ||||||
| (Favorable) unfavorable prior year casualty reserve development | $5,000 | — | n/a | % | ||
| Current year casualty loss costs | 28,067 | 30,621 | (8) | |||
| Net catastrophe losses | 7,113 | 11,845 | (40) | |||
| Non-catastrophe property loss and loss expenses | 36,489 | 41,878 | (13) | |||
| Total loss and loss expense incurred | 76,669 | 84,344 | (9) | |||
| Impact on Loss and Loss Expense Ratio: | ||||||
| (Favorable) unfavorable prior year casualty reserve development | 4.8 | % | — | 4.8 | pts | |
| Current year casualty loss costs | 27.0 | 29.5 | (2.5) | |||
| Net catastrophe losses | 6.9 | 11.4 | (4.5) | |||
| Non-catastrophe property loss and loss expenses | 35.2 | 40.3 | (5.1) | |||
| Total impact on loss and loss expense ratio | 73.9 | 81.2 | (7.3) | |||
Details of the prior year casualty reserve development by line of business follow:
| (Favorable)/Unfavorable Prior Year Casualty Reserve Development | Quarter ended March 31, | |
|---|---|---|
| ($ in millions) | 2025 | 2024 |
| Homeowners | $— | (5.0) |
| Personal automobile | 5.0 | 5.0 |
| Total Standard Personal Lines | 5.0 | — |
Prior year casualty reserve development in First Quarter 2025 included $5.0 million in personal automobile, primarily driven by increased severities in accident year 2024. Our homeowners line of business experienced $5.0 million of favorable prior year casualty reserve development in First Quarter 2024, primarily due to lower loss severities in accident years 2021 and prior. This favorable development was offset by $5.0 million of unfavorable prior year casualty reserve development on our personal automobile line of business in First Quarter 2024, primarily driven by increased loss severities in accident years 2021 through 2023.
Current year casualty loss costs decreased 2.5 points in First Quarter 2025 compared to First Quarter 2024, primarily due to the earned impact of significant rate increases.
Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by 9.6 points in the aggregate in First Quarter 2025 compared to First Quarter 2024. Non-catastrophe property loss and loss expense ratios were lower in First Quarter 2025 compared to First Quarter 2024 due to (i) the earned impact of higher renewal pure price increases in 2025 and (ii) variability from period to period of catastrophe and non-catastrophe losses. Net catastrophe losses were lower in First Quarter 2025 compared to First Quarter 2024 due to lower frequency and severity of events this year compared to the same prior-year period.
E&S Lines Segment
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Insurance Segments Results: | |||||
| NPW | $149,705 | 125,040 | 20 | % | |
| NPE | 142,892 | 112,988 | 26 | ||
| Less: | |||||
| Loss and loss expense incurred | 87,990 | 64,115 | 37 | ||
| Net underwriting expenses incurred | 44,220 | 34,888 | 27 | ||
| Underwriting income (loss) | 10,682 | 13,985 | (24) | ||
| Combined Ratios: | |||||
| Loss and loss expense ratio | 61.6 | % | 56.7 | 4.9 | pts |
| Underwriting expense ratio | 30.9 | 30.9 | — | ||
| Combined ratio | 92.5 | 87.6 | 4.9 | ||
NPW and NPE growth in First Quarter 2025 compared to First Quarter 2024 included:
| Quarter ended March 31, | |||
|---|---|---|---|
| ($ in millions) · 2025 · 2024 | |||
| Direct new business premiums | $70.2 | 67.4 | |
| Renewal pure price increases | 8.7 | % | 5.2 |
NPW and NPE growth in First Quarter 2025 also benefited from (i) both property and casualty exposure growth on renewal policies, (ii) higher rates per exposure, and (iii) higher new business production.
| Quarter ended March 31, · Change % or Points | |||||
|---|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | |||||
| Loss and Loss Expense Incurred: | |||||
| Current year casualty loss costs | $58,141 | 44,960 | 29 | % | |
| Net catastrophe losses | 16,433 | 4,902 | 235 | ||
| Non-catastrophe property loss and loss expenses | 13,416 | 14,253 | (6) | ||
| Total loss and loss expense incurred | 87,990 | 64,115 | 37 | ||
| Impact on Loss and Loss Expense Ratio: | |||||
| Current year casualty loss costs | 40.7 | % | 39.8 | 0.9 | pts |
| Net catastrophe losses | 11.5 | 4.3 | 7.2 | ||
| Non-catastrophe property loss and loss expenses | 9.4 | 12.6 | (3.2) | ||
| Total impact on loss and loss expense ratio | 61.6 | 56.7 | 4.9 | ||
The loss and loss expense ratio increased 4.9 points in First Quarter 2025 compared to First Quarter 2024, primarily driven by a 4.0-point aggregate increase in property losses in First Quarter 2025 compared to First Quarter 2024. Our First Quarter 2025 catastrophe losses were impacted by (i) the January 2025 California Palisades Fire, which added 2.9 points to our loss and loss expense ratio and (ii) severe wind and thunderstorm events impacting our footprint in March 2025.
We experienced lower non-catastrophe property loss and loss expenses in First Quarter 2025 compared to First Quarter 2024, reflecting the continued period to period variability normally associated with property lines of business.
Current year casualty loss cost increased 0.9 points in First Quarter 2025, negatively affecting the loss and loss expense ratio compared to First Quarter 2024, primarily driven by increased severities due to social inflation.
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.
The effective duration of our fixed income and short-term investments was 4.1 years as of March 31, 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 March 31, 2025 and December 31, 2024. These investments had (i) a weighted average credit rating of "A+" as of March 31, 2025 and December 31, 2024, and (ii) investment grade holdings representing 97% of the total fixed income and short-term investment portfolio at March 31, 2025 and 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) · March 31, 2025 · December 31, 2024 · Change | ||||
| Total invested assets | $10,295,310 | 9,651,297 | 7 | % |
| Invested assets per dollar of common stockholders' equity | 3.37 | 3.31 | 2 | |
| Components of unrealized gains (losses) – before tax: | ||||
| Fixed income securities | (235,676) | (316,796) | (26) | % |
| Equity securities | 3,166 | 2,116 | 50 | |
| Net unrealized gains (losses) – before tax | (232,510) | (314,680) | (26) | |
| Components of unrealized gains (losses) – after tax: | ||||
| Fixed income securities | (186,184) | (250,269) | (26) | |
| Equity securities | 2,501 | 1,671 | 50 | |
| Net unrealized gains (losses) – after tax | (183,683) | (248,598) | (26) | |
Invested assets increased $644.0 million at March 31, 2025, compared to December 31, 2024, primarily reflecting: (i) net proceeds from the issuance of our 5.9% Senior Notes in First Quarter 2025; (ii) our active investment of operating cash flows, which were 23% of NPW in First Quarter 2025; and (iii) pre-tax net unrealized gains in our fixed income and equity securities portfolios of $82.2 million due to a reduction in interest rates and strong performance of U.S. equities during First Quarter 2025. For additional information about our 5.9% Senior Notes, see Note 12. "Indebtedness" in Item 1. "Financial Statements" of this Form 10-Q.
Net Investment Income
Net investment income earned components were as follows:
| Quarter ended March 31, · Change % or Points | ||||
|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | ||||
| Fixed income securities | $105,082 | 94,102 | 12 | % |
| Commercial mortgage loans ("CMLs") | 3,615 | 2,794 | 29 | |
| Equity securities | 3,567 | 4,908 | (27) | |
| Short-term investments | 6,233 | 3,519 | 77 | |
| Alternative investments | 7,079 | 6,881 | 3 | |
| Other investments | 231 | 263 | (12) | |
| Investment expenses | (5,116) | (4,618) | 11 | |
| Net investment income earned – before tax | 120,691 | 107,849 | 12 | |
| Net investment income tax expense | (25,070) | (22,209) | 13 | |
| Net investment income earned – after tax | $95,621 | 85,640 | 12 | |
| Effective tax rate | 20.8% | 20.6 | 0.2 | pts |
| Annualized after-tax yield on fixed income investments | 4.0 | 4.0 | — | |
| Annualized after-tax yield on investment portfolio | 3.8 | 3.9 | (0.1) | |
After-tax net investment income earned increased 12% in First Quarter 2025 compared to First Quarter 2024, primarily driven by active portfolio management, operating cash flow deployment, and net proceeds from the issuance of our 5.9% Senior Notes in First Quarter 2025. For additional information about our 5.9% Senior Notes, see Note 12. "Indebtedness" in Item 1. "Financial Statements" of this Form 10-Q.
Realized and Unrealized Gains and Losses
When evaluating securities for sale, our general philosophy is to reduce our exposure to securities and sectors based on economic evaluations of whether (i) the fundamentals for that security or sector have deteriorated or (ii) the timing is appropriate to trade opportunistically for other securities with better economic-return characteristics. Net realized and unrealized gains and losses for the indicated periods were as follows:
| Quarter ended March 31, · Change% | ||||
|---|---|---|---|---|
| ($ in thousands) · 2025 · 2024 | ||||
| Net realized gains (losses) on disposals | $(656) | 170 | (486) | % |
| Net unrealized gains (losses) on equity securities | 1,050 | 692 | 52 | |
| Net credit loss benefit (expense) on fixed income securities, AFS | 629 | (2,650) | (124) | |
| Net credit loss benefit (expense) on CMLs | (35) | 168 | (121) | |
| Losses on securities for which we have the intent to sell | (759) | (15) | N/M | |
| Total net realized and unrealized investment gains (losses) | $229 | (1,635) | (114) | |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.