Net Loss of $1.08 per Diluted Common Share and Non-GAAP Operating Loss1 of $1.10 per Diluted Common Share; Return on Common Equity ("ROE") of (9.5)% and Non-GAAP Operating ROE1 of (9.6)% Quarterly Analyst Conference Call Rescheduled for Friday, July 19, 2024, at 8:00 AM ET In the second quarter of 2024: Net premiums written ("NPW") increased 13% compared to the second quarter of 2023; The GAAP combined ratio was 116.1%, compared to 100.2% in the second quarter of 2023; Commercial Lines renewal pure price increases averaged 7.9%, up 1.2 points from 6.7% in the second quarter of 2023; After-tax net investment income was $86 million, up 11% from the second quarter of 2023; Book value per common share was $44.74, down 3% from last quarter; and Adjusted book value per common share¹ was $49.67, down 3% from last quarter. BRANCHVILLE, N.J., July 18, 2024 /PRNewswire/ -- Selective Insurance Group, Inc. (NASDAQ:SIGI) reported financial results for the second quarter ended June 30, 2024, with a net loss per diluted common share of $1.08 and a non-GAAP operating loss1 per diluted common share of $1.10. For the quarter, Selective reported a combined ratio of 116.1%. Net unfavorable prior year casualty reserve development of $176 million increased the combined ratio by 16.3 points. Catastrophe losses of $91 million increased the combined ratio by 8.4 points. NPW increased 13% from a year ago, with growth across all three insurance segments. After-tax net investment income was $86 million, up 11% from a year ago. Non-GAAP operating ROE1 was (9.6)%. "This was a challenging quarter. We did not meet our high standard as underwriting performance fell below our target. The unfavorable prior year casualty reserve development was driven by elevated loss emergence in the quarter reflecting higher severity that we attribute to social inflation. Our reserving action is predicated on our in-depth quarterly reserve review and further strengthening to address elevated and uncertain loss trends," said John J. Marchioni, Chairman, President and Chief Executive Officer. "We have a very stable underwriting portfolio. To address our updated view of loss costs, we are responding with additional price increases. Our renewal pure price increase across all insurance segments was 9.1% in the quarter, including 7.9% for Standard Commercial Lines. General liability renewal pure pricing increased to 7.6%, up over a point from the first quarter. We expect Standard Commercial Lines renewal pure price will trend higher in the second half of 2024." "We maintain our disciplined focus and execution in the areas of risk selection, pricing, and claims management in the face of this challenging and dynamic loss trend environment. Our capital position remains strong and our underlying combined ratio of 91.4% positions us well moving forward. We are confident that we will quickly re-establish our strong earnings profile, consistently meeting or exceeding our 12% operating ROE target," concluded Mr. Marchioni. Operating Highlights Consolidated Financial Results Quarter ended June 30, Change Year-to-Date June 30, Change $ and shares in millions, except per share data 2024 2023 2024 2023 Net premiums written $ 1,226.1 1,084.9 13 % $ 2,382.7 2,084.7 14 % Net premiums earned 1,080.2 942.2 15 2,131.2 1,844.5 16 Net investment income earned 108.6 97.7 11 216.5 189.2 14 Net realized and unrealized gains (losses), pre-tax 1.3 (5.4) (124) (0.3) (2.1) (84) Total revenues 1,196.0 1,040.5 15 2,361.0 2,040.3 16 Net underwriting income (loss), after-tax (137.2) (1.2) NM (122.2) 29.7 (511) Net investment income, after-tax 86.3 77.8 11 171.9 150.9 14 Net income (loss) available to common stockholders (65.6) 56.3 (217) 14.6 146.6 (90) Non-GAAP operating income (loss)1 (66.6) 60.6 (210) 14.9 148.2 (90) Combined ratio 116.1 % 100.2 15.9 pts 107.3 % 98.0 9.3 pts Loss and loss expense ratio 85.7 68.6 17.1 76.5 65.8 10.7 Underwriting expense ratio 30.3 31.4 (1.1) 30.6 32.0 (1.4) Dividends to policyholders ratio 0.1 0.2 (0.1) 0.2 0.2 — Net catastrophe losses 8.4 pts 10.6 (2.2) 6.8 pts 8.4 (1.6) Non-catastrophe property losses and loss expenses 17.2 16.7 0.5 16.7 16.6 0.1 (Favorable) unfavorable prior year reserve development on casualty lines 16.3 (0.4) 16.7 9.9 (0.9) 10.8 Net income (loss) available to common stockholders per diluted common share $   (1.08) 0.92 (217) % $     0.24 2.41 (90) % Non-GAAP operating income (loss) per diluted common share1 (1.10) 0.99 (211) 0.24 2.44 (90) Weighted average diluted common shares 60.9 60.9 — 61.2 60.9 1 Book value per common share $   44.74 40.81 10 44.74 40.81 10 Adjusted book value per common share1 49.67 47.34 5 49.67 47.34 5 NM = not meaningful Overall Insurance Operations For the second quarter, overall NPW increased 13%, or $141 million, from a year ago, reflecting new business growth and effective management of our renewal portfolio. Average renewal pure price increased 9.1%, up 2.7 points from a year ago. Selective's 116.1% combined ratio in the quarter was 15.9 points higher than a year ago, primarily due to prior year casualty reserve development. Net unfavorable prior year casualty reserve development totaled $176 million, increasing the combined ratio by 16.3 points. A year ago, prior year casualty reserve development was a favorable $3.5 million, reducing the combined ratio by 0.4 points. The combined ratio, excluding net catastrophe losses and prior year casualty reserve development, was 91.4%, 1.4 points higher than a year ago. Overall, our insurance segments reduced ROE by 19.9 points in the second quarter of 2024. Standard Commercial Lines Segment For the second quarter, Standard Commercial Lines premiums (representing 79% of total NPW) grew 11% from a year ago. The premium growth reflected average renewal pure price increases of 7.9%, new business growth of 6%, strong exposure growth, and stable retention of 85%. The second quarter combined ratio was 118.8%, up 21.7 points from a year ago, primarily due to prior year casualty reserve development.  Prior year casualty reserve development in the quarter was an unfavorable $176 million, or 20.6 points, compared to $7.5 million, or 1.0 point, of favorable development a year ago. This quarter's prior year casualty reserve development included unfavorable general liability development of $166 million, primarily from increased severities in accident years 2020 through 2023 and $10 million of unfavorable commercial auto development. A year ago, workers compensation was the source of the favorable prior year casualty reserve development. The following table shows the variances in key quarter-to-date and year-to date measures: Standard Commercial Lines Segment Quarter ended June 30, Change Year-to-Date June 30, Change $ in millions 2024 2023 2024 2023 Net premiums written $       963.1 870.1 11 % $ 1,894.8 1,683.5 13 % Net premiums earned 853.5 762.7 12 1,687.6