Selective Insurance Exceeds Profit Expectations with Strong Q4 Performance
01.02.2026 - 18:34:05
Selective Insurance Group Inc. has kicked off 2026 on a high note, propelled by a fourth-quarter earnings report that significantly outpaced market forecasts. The company’s latest financial results highlight a notable improvement in underwriting efficiency, setting a confident tone for the year ahead.
- Q4 2025 Adjusted EPS: $2.57 (Consensus Expectation: ~$2.18)
- Q4 2025 Revenue: $1.36 billion (an 8.6% year-over-year increase)
- Combined Ratio: 93.8% (compared to 98.5% in the prior-year period)
- 2026 Forecast for Net Investment Income: ~$465 million
Profitability Surge Driven by Underwriting Discipline
The property and casualty insurer reported adjusted earnings per share of $2.57 for the final quarter of 2025, a figure that comfortably exceeded the range of analyst estimates, which clustered between $2.08 and $2.24. Revenue growth was solid, reaching $1.36 billion, precisely matching Wall Street's projections for the period.
A deeper look reveals the primary driver of the earnings beat: a substantially improved combined ratio. This critical measure of underwriting profitability fell to 93.8%, down from 98.5% a year earlier. Any reading below 100% indicates an underwriting profit, and the nearly five-point drop signals a sharp enhancement in operational efficiency. This strength was further reflected in the quarter's operating return on equity, which came in at a robust 18.7%.
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Management Sets Sights on Continued Strength in 2026
Buoyed by the strong finish to 2025, Selective Insurance's leadership has outlined optimistic targets for the current fiscal year. The company is guiding for a combined ratio in the range of 96.5% to 97.5%. Furthermore, management anticipates net investment income to rise approximately 10% year-over-year to around $465 million. The firm is targeting an operating return on equity of roughly 14% for 2026.
Investors can also look forward to the next quarterly dividend, which has been declared for payment on March 2, 2026. With a market capitalization of approximately $5.08 billion, the company's shares recently closed at $84.08, trading steadily within a 52-week range of $71.75 to $95.79.
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