SELECTIVE INSURANCE GROUP INC

Insurance Operations

The following table provides quantitative information for analyzing the combined ratio:

NPW grew 4% in Third Quarter 2025 and 6% in Nine 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.

NPE grew 8% in Third Quarter 2025 and 9% in Nine Months 2025 compared to the same prior-year periods, reflecting NPW growth over the last 12 months.

Details of prior year casualty reserve development by line of business follow:

A re-acceleration of severity growth, primarily in accident year 2024 and concentrated within New Jersey, led us to record unfavorable prior year casualty reserve development in Third Quarter 2025 of (i) $35 million in our commercial automobile line of business, and (ii) $5 million in our personal automobile line of business. Nine Months 2025 had unfavorable prior year casualty reserve development of (i) $60 million in our commercial automobile line of business primarily driven by accident years 2022 through 2024, (ii) $10 million in our personal automobile line of business primarily driven by accident year 2024, and (iii) $20 million in our general liability line of business driven by accident years 2022 through 2024. The year-to-date unfavorable prior year casualty reserve development was driven by paid severities that continued to show higher-than-expected emergence.

The unfavorable prior year casualty reserve development in Third Quarter 2024 and Nine Months 2024 was primarily driven by our general liability line of business that experienced increased severities in accident years 2020 through 2023.

Current year loss costs were higher in Third Quarter 2025 and Nine 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, and responding to prior year development in our commercial automobile line of business.

Additional qualitative discussion on prior year casualty reserve development and current year casualty loss costs is included in the insurance segment sections below.

Net catastrophe and non-catastrophe property losses were 10.4 points lower in Third Quarter 2025 and 5.7 points lower in Nine Months 2025 compared to the same prior-year periods. The net catastrophe loss and loss expense ratio was 11.3 points lower in Third Quarter 2025 and 4.9 points lower in Nine 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 0.9 points higher in Third Quarter 2025 and 0.8 points lower in Nine 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 period-to-period variability of non-catastrophe property losses.

Additional qualitative discussion on non-catastrophe property loss and loss expenses is included in the insurance segment sections below.

Underwriting Expenses

The underwriting expense ratio was flat in Third Quarter 2025 and increased 0.4 points in Nine 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.

Standard Commercial Lines Segment

NPW and NPE growth in Third Quarter 2025 and Nine 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 retention.

The details of the prior year casualty reserve development by line of business were as follows:

Third Quarter 2025 saw increased unfavorable prior year reserve development and higher current year casualty loss costs. Nine Months 2025 experienced lower unfavorable prior year reserve development, partially offset by higher current year casualty loss costs. The increase in current year casualty loss costs in Third Quarter 2025 and Nine Months 2025 compared to the same prior-year periods was primarily driven by elevated severity trend assumptions attributable to social inflation on our general liability line of business, and responding to prior year development in our commercial automobile line of business.

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 an aggregate 8.4 points in Third Quarter 2025 and 3.8 points in Nine Months 2025 compared to the same prior-year periods. Net catastrophe losses were 9.9 points lower in Third Quarter 2025 and 4.3 points lower in Nine Months 2025 compared to the same periods last year, driven by lower frequency of wind, winter storm, and hurricane events. Non-catastrophe property losses were 1.5 points higher in Third Quarter 2025 and 0.5 points lower in Nine 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 slightly by 0.1 points in Third Quarter 2025 and 0.5 points Nine Months 2025 compared to the same prior-year periods. The Nine Months 2025 increase was 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:

NPW grew 4% in Third Quarter 2025 and 7% in Nine Months 2025 compared to the same prior-year periods, benefiting from renewal pure price increases and renewal exposure growth.

The combined ratio increased 11.3 points in Third Quarter 2025 and decreased 14.3 points in Nine Months 2025 compared to the same prior-year periods and included the following:

We recorded unfavorable prior year casualty reserve development of $20 million in Nine Months 2025, compared to $216 million in Nine Months 2024. We attribute the unfavorable development in both periods to the ongoing, broad-based social inflationary factors impacting this line. Development in Nine Months 2025 was driven by increased severities in accident years 2022 through 2024. Development in Nine Months 2024 was driven by increased severities in accident years 2020 through 2023.

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.

We experienced an 11.7-point increase in current year casualty loss costs in Third Quarter 2025 and a 8.9-point increase in Nine Months 2025 compared to the same prior-year periods, driven by higher social inflation-related severities primarily in accident years 2022 and 2023 that we observed and responded to throughout 2024. These actions produced full-year 2024 casualty loss costs of 67.0%, compared with 64.6% in Third Quarter 2024 and 64.8% in Nine Months 2024. The 2025 ratio reflects the increased losses recognized in the 2024 accident year.

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 11.4% in Third Quarter 2025, in line with 11.9% 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.

NPW grew 4% in Third Quarter 2025 and 6% in Nine 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.

The combined ratio increased 15.4 points in Third Quarter 2025 and 5.2 in Nine Months 2025 compared to the same prior-year periods, and included the following:

We recorded $35 million of unfavorable prior year casualty reserve development in Third Quarter 2025 driven by increased severities in the state of New Jersey for accident year 2024, and $60 million in Nine Months 2025 primarily for increased severities in accident years 2022 through 2024. Current year casualty loss costs were higher in Third Quarter 2025 and Nine Months 2025 compared to the same prior-year periods, driven by the factors described in the "Insurance Operations" section above and by the mix of property and liability coverages within this line of business.

Non-catastrophe property loss and loss expenses decreased 1.2 points in Third Quarter 2025 and 1.6 points in Nine 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.

1Includes Inland Marine.

2 n/a: not applicable.

NPW grew 7% in Third Quarter 2025 and 8% in Nine Months 2025 compared to the same prior-year periods, primarily benefiting from renewal pure price increases and exposure growth on renewal policies.

The combined ratio decreased 45.2 points in Third Quarter 2025 and 20.7 points in Nine Months 2025 compared to the same prior-year periods and included the following:

While non-catastrophe property losses were slightly higher, net catastrophe losses were meaningfully lower in Third Quarter 2025 and Nine Months 2025 compared to the same prior-year periods, as discussed in the "Standard Commercial Lines Segment" section above.

NPW decreased 7% in Third Quarter 2025 and 8% in Nine 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 14.7 points in Third Quarter 2025 and 16.7 points in Nine Months 2025 compared to the same prior-year periods and included the following:

There was no prior year casualty reserve development in Third Quarter 2025 and Nine Months 2025. The favorable prior year casualty reserve development in Nine Months 2024 was primarily due to lower loss severities in accident years 2021 and prior.

The combined ratio was adversely impacted by an increase in current year casualty loss costs of 8.1 points in Third Quarter 2025 and 8.1 points in Nine 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

NPW decreased 6% in Third Quarter 2025 and 8% in Nine Months 2025 compared to the same prior-year periods, primarily driven by lower direct new business. New business decreased 20% in Third Quarter 2025 and 42% in Nine Months 2025 compared to the same prior-year periods. New policy counts decreased 34% in Third Quarter 2025 and 55% in Nine Months 2025 compared to the same prior-year periods. We have received regulatory approvals for increased rate levels in most of our footprint states and are focused on growth where we believe our rates are adequate.

The following table depicts our reductions in direct new business and retention for the Third Quarter 2025 and Nine Months 2025:

1 Excludes our Flood direct premiums written, which are 100% ceded to the NFIP and do not impact NPW.

The change in NPE in Third Quarter 2025 and Nine Months 2025 compared to the same prior-year periods resulted from the same impacts to NPW described above.

Underwriting results for this segment improved in Third Quarter 2025 and Nine Months 2025 compared to the same prior-year periods 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 16.9% in Third Quarter 2025 and 19.8% in Nine Months 2025. We are continuing to seek improved homeowners profitability by furthering 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.

Lower net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by an aggregate 22.8 points in Third Quarter 2025 and 19.2 points in Nine Months 2025 compared to the same prior-year periods. Net catastrophe losses reflected lower frequency and severity of weather-related catastrophe events this year compared to last year.

Details of the prior year casualty reserve development by line of business follow:

Unfavorable prior year casualty reserve development was $5 million in personal automobile in Third Quarter 2025 and $10 million in personal automobile in Nine Months 2025 related to accident year 2024. The development was primarily driven by increased severities related to the New Jersey portfolio. In Nine 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 increased 7.2 points in Third Quarter 2025 and 0.8 points in Nine Months 2025 compared to the same prior-year periods, 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 the current year loss costs for 2025, resulting in higher current year casualty loss costs this year compared to last.

E&S Lines Segment

NPW and NPE growth in Third Quarter 2025 and Nine Months 2025 compared to the same prior-year periods included:

NPW and NPE growth in Third Quarter 2025 and Nine Months 2025 benefited from (i) both property and casualty exposure growth on renewal policies, (ii) higher rates per exposure, and (iii) an increase in renewal policy count.

The loss and loss expense ratio decreased 6.4 points in Third Quarter 2025 and 2.2 points in Nine Months 2025 compared to the same prior-year periods. This decrease was primarily driven by (i) lower catastrophe losses and non-catastrophe property losses due to normal period-to-period variability associated with property losses and (ii) the impact of higher rates per exposure. Partially offsetting the lower property losses were higher current year casualty loss costs, primarily driven by increased severities due to social inflation.

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 a $3 million retention per loss occurrence. 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 first 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:

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 September 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 September 30, 2025 and December 31, 2024. These investments had (i) a weighted average credit rating of "A+" as of both September 30, 2025 and December 31, 2024, and (ii) investment grade holdings representing 97% of the total fixed income and short-term investment portfolio at both September 30, 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.

Invested assets increased $1.4 billion at September 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 23% of NPW in Nine Months 2025, and (iii) a $224.4 million reduction in pre-tax net unrealized losses in our fixed income and equity securities portfolios primarily due to lower interest rates and strong performance of U.S. equities during Nine 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:

After-tax net investment income earned increased 18% in Third Quarter 2025 and 16% in Nine 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.

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: