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Selective Insurance Group (SIGI)
NASDAQ:SIGI
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Selective Insurance Group
(NASDAQ:SIGI)
74Outperform
Positive Factors
Investment Income
The company had $122.7 million of pre-tax net investment income, which was above consensus expectations.
Management Actions
Prudent management actions from Selective are seen going forward based on the appropriate reserving actions taken by management.
Negative Factors
Earnings Performance
Reported operating EPS of $1.62 missed consensus' $1.98.
Reserve Concerns
There is likely to remain elevated investor uncertainty surrounding the general casualty reserves following four reserve charges totaling $371 million over the past five quarters.
Selective Insurance Group (SIGI) vs. S&P 500 (SPY)
Market Cap
$5.41B
Dividend Yield1.63%
Average Volume (3M)404.82K
Price to Earnings (P/E)24.2
Beta (1Y)0.32
Revenue Growth13.37%
EPS Growth-35.09%
CountryUS
Employees2,800
SectorFinancial
Sector Strength88
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.76
Shares Outstanding60,774,445
10 Day Avg. Volume407,542
30 Day Avg. Volume404,820
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.24
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.38
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$90.25Price Target Upside0.58% Upside
Rating ConsensusHold
Number of Analyst Covering4
Selective Insurance Group Business Overview & Revenue Model
Company DescriptionSelective Insurance Group, Inc. (SIGI) is a prominent provider of property and casualty insurance products and services in the United States. The company primarily operates through its subsidiaries, offering a wide range of insurance products tailored for commercial and personal lines. Selective Insurance focuses on providing coverage solutions that include property, general liability, automobile, workers' compensation, and flood insurance, catering to both individual and business clients. The company is known for its strong regional presence, personalized service, and a robust network of independent agents that help deliver its comprehensive insurance offerings.
How the Company Makes MoneySelective Insurance Group generates revenue primarily through the underwriting of insurance policies and the subsequent collection of premiums from policyholders. The company's key revenue streams include commercial lines, which consist of business insurance products such as property, auto, and liability coverage, and personal lines, which focus on individual insurance products like homeowner's and auto insurance. Additionally, Selective Insurance earns investment income from its portfolio of invested assets, which includes fixed-income securities and equities. The company also benefits from strategic partnerships with independent insurance agents who distribute their products, enhancing its market reach and premium collection. Effective risk management and claims processing further contribute to maintaining profitability and operational efficiency.
Selective Insurance Group Financial Statement Overview
Summary
Selective Insurance Group shows a solid financial footing with commendable revenue growth and a strong balance sheet, providing a cushion against potential market volatility. Despite the high gross profit, profitability margins suggest room for operational improvements. Strong cash flow metrics further enhance the company's financial flexibility.Income Statement
Selective Insurance Group demonstrates solid revenue growth with a notable increase from the previous year, indicating a positive trajectory. The gross profit margin is exceptionally high, reflecting effective cost management. However, the net profit margin shows room for improvement, suggesting potential challenges in controlling non-core expenses. The EBIT and EBITDA margins are relatively modest, which may hint at operational inefficiencies compared to peers.75
Positive
Balance Sheet
The company's balance sheet is robust, with a strong equity base and a favorable equity ratio, underscoring financial stability. The debt-to-equity ratio is low, indicating conservative leverage and reduced financial risk. Return on equity is healthy, showcasing effective use of shareholder funds. Overall, the balance sheet reflects a strong financial position with minimal risk exposure.80
Positive
Cash Flow
Cash flow performance is strong with a significant operating cash flow relative to net income, indicating efficient cash generation from operations. Free cash flow growth is commendable, supporting potential reinvestment or shareholder returns. The free cash flow to net income ratio is robust, confirming a solid cash conversion rate. This reflects a healthy liquidity position and effective capital management.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.86B | 101.17M | 3.56B | 3.38B | 2.92B | Gross Profit |
| 4.86B | 91.55M | 3.55B | 3.38B | 2.92B | EBIT |
| 292.32M | 474.49M | 309.04M | 534.53M | 334.15M | EBITDA |
| 286.91M | 517.25M | 351.37M | 589.58M | 393.18M | Net Income Common Stockholders |
| 207.01M | 365.24M | 224.89M | 403.84M | 246.35M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 268.58M | 180.00K | 26.00K | 455.00K | 394.00K | Total Assets |
| 13.51B | 11.80B | 10.80B | 10.46B | 9.69B | Total Debt |
| 507.94M | 503.95M | 500.96M | 500.60M | 525.24M | Net Debt |
| 507.85M | 503.77M | 500.93M | 500.14M | 524.84M | Total Liabilities |
| 10.39B | 8.85B | 8.27B | 7.48B | 6.95B | Stockholders Equity |
| 3.12B | 2.95B | 2.53B | 2.98B | 2.74B |
| Cash Flow | Free Cash Flow | |||
| 1.07B | 736.28M | 776.39M | 749.26M | 531.98M | Operating Cash Flow |
| 1.10B | 758.91M | 802.41M | 771.42M | 554.04M | Investing Cash Flow |
| -947.38M | -686.36M | -734.45M | -618.78M | -688.17M | Financing Cash Flow |
| -102.75M | -84.49M | -87.82M | -122.81M | 141.38M |
Selective Insurance Group Technical Analysis
Positive
89.73
Price Trends
88.11
Positive
88.49
Positive
90.28
Negative
Market Momentum
0.33
Negative
54.92
Neutral
84.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SIGI, the sentiment is Positive. The current price of 89.73 is above the 20-day moving average (MA) of 88.66, above the 50-day MA of 88.11, and below the 200-day MA of 90.28, indicating a neutral trend. The MACD of 0.33 indicates Negative momentum. The RSI at 54.92 is Neutral, neither overbought nor oversold. The STOCH value of 84.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SIGI.
Selective Insurance Group Risk Analysis
Selective Insurance Group disclosed 20 risk factors in its most recent earnings report. Selective Insurance Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Selective Insurance Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $4.18B | 31.20 | 20.76% | ― | 46.90% | 43.99% | |
81 Outperform | $6.12B | 14.19 | 15.74% | 2.10% | 3.09% | 168.29% | |
76 Outperform | $6.85B | 24.47 | 17.99% | 0.78% | 9.18% | -16.06% | |
74 Outperform | $5.41B | 24.21 | 7.48% | 1.63% | 13.37% | -35.09% | |
67 Neutral | $4.58B | 19.89 | 0.61% | 0.06% | -4.09% | -94.77% | |
64 Neutral | $12.60B | 9.73 | 7.92% | 16985.68% | 12.21% | -5.55% | |
58 Neutral | $3.94B | 12.47 | 12.57% | 1.94% | -6.08% | ― |
* Financial Sector Average
Performance Comparison
SIGI
Selective Insurance Group
89.73
-5.83
-6.10%
RLI
RLI
74.62
4.23
6.01%
THG
Hanover Insurance
166.67
34.41
26.02%
KMPR
Kemper
64.28
4.29
7.15%
WTM
White Mountains Insurance Group
1,796.56
-2.50
-0.14%
PLMR
Palomar Holdings
159.93
76.81
92.41%
Selective Insurance Group Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: -1.29%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a solid financial performance overall, with significant growth in investment income and net premiums written. However, challenges remain in personal lines premiums and potential risks to investment income due to external volatility. The company is focused on strategic execution and maintaining profitability in a competitive environment.Q1-2025 Updates
Positive Updates
Solid Financial Performance
Net income available to common stockholders increased by 34% in the quarter, with fully diluted EPS and non-GAAP operating EPS both at $1.76. Return on equity and operating return on equity were both 14.4%.
Premium Growth
Net premiums written grew 7%, driven by strong performance in excess and surplus lines and standard commercial lines.
Improvement in Personal Lines
Personal Lines delivered a combined ratio of 98%, approximately seven points better than a year ago.
Strong Investment Income
After-tax net investment income was $96 million, up 12% from a year ago, with a 6% average new purchase yield.
Successful Debt Issuance
A successful $400 million senior notes issuance was completed, with strong investor support.
Negative Updates
Decline in Personal Lines Premiums
Personal lines premium decreased by 12% as the company focused on improving portfolio profitability.
Potential Pressure on Investment Income
The volatile external environment presents downside risk to net investment income guidance, particularly related to alternative investments.
Challenges in New Jersey
Lack of filed rates to support the necessary path to profitability in certain states, including New Jersey, led to significantly curtailed production in those states.
Company Guidance
In the Selective Insurance Group's First Quarter 2025 Earnings Conference Call, the company provided a comprehensive overview of its financial performance and guidance for the year. Key metrics included an overall combined ratio of 96.1%, an after-tax net investment income of $96 million, and a return on equity of 14.4%. Net premiums written grew by 7%, driven by gains in excess and surplus lines, while personal lines premiums decreased by 12% as efforts were made to enhance profitability. The company reaffirmed its full-year guidance, projecting a combined ratio between 96% and 97% and an underlying combined ratio of 90% to 91%. Renewal pure pricing saw a 10.3% increase, with standard commercial lines achieving a combined ratio of 96.4% and a 9.1% increase in renewal pure price. Excess and surplus lines experienced a 20% growth in policy count and a 92.5% combined ratio. The personal lines segment showed a 98% combined ratio improvement, bolstered by a significant 24.1% increase in renewal pure price. The company's robust capital position included $3.3 billion in GAAP equity, while the debt-to-capital ratio rose to 21.7% following a successful $400 million senior notes issuance. Despite macroeconomic uncertainties, Selective Insurance Group remains committed to strategic execution, focusing on underwriting, pricing actions, and maintaining profitability targets.Selective Insurance Group Corporate Events
Private Placements and FinancingFinancial Disclosures
Selective Insurance Group Reports Strong Q1 2025 Results
Positive
Apr 23, 2025
Selective Insurance Group reported its financial results for the first quarter of 2025, showing a net income per diluted common share of $1.76 and a return on common equity of 14.4%. The company experienced a 7% increase in net premiums written compared to the previous year, driven by a 10.3% rise in renewal pure price increases. The GAAP combined ratio improved to 96.1%, and net investment income rose by 12% to $96 million after-tax. The company also completed a $400 million senior note issuance to support organic growth.
Spark’s Take on SIGI Stock
According to Spark, TipRanks’ AI Analyst, SIGI is a Outperform.
Selective Insurance Group exhibits strong financial performance with robust cash flow and a solid balance sheet, but recent declines in revenue and operating earnings are concerning. Technical indicators suggest positive momentum, though valuation metrics indicate potential overvaluation. The earnings call highlighted growth in key areas but also significant challenges, particularly with reserve strengthening due to social inflation. Overall, the company’s strengths in financial management and market expansion are tempered by these recent operational challenges and valuation concerns.
To see Spark’s full report on SIGI stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.