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Selective Insurance Group
(NASDAQ:SIGI)
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Rating:69Neutral
Price Target:
$98.00
â–²(6.18% Upside)
Action:Downgraded
Date:09/17/26
The score is driven primarily by strong financial fundamentals—especially robust, high-quality free cash flow and solid recent profitability/ROE—supported by an attractive valuation (low P/E with a dividend). These positives are meaningfully tempered by weak technical momentum (below key moving averages with negative MACD) and an earnings-call outlook that, while benefiting from higher investment income guidance, includes near-term growth headwinds and loss-trend pressure (premium/new business declines and elevated commercial auto frequency).
Positive Factors
Strong cash generation
Sustained operating and free cash flow, with free cash flow closely tracking net income, indicates strong earnings quality and cash conversion. This gives Selective capacity to support claims obligations, invest in operations, return capital, and absorb periodic underwriting volatility without relying heavily on external funding.
Negative Factors
Premium and new-business contraction
The sharp decline in new business and overall written premiums creates a near-term growth headwind and can reduce operating leverage if fixed expenses are spread across a smaller book. Although management describes the actions as targeted underwriting discipline, sustained contraction could constrain scale and revenue growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained operating and free cash flow, with free cash flow closely tracking net income, indicates strong earnings quality and cash conversion. This gives Selective capacity to support claims obligations, invest in operations, return capital, and absorb periodic underwriting volatility without relying heavily on external funding.
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Selective Insurance Group (SIGI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.10B
Dividend Yield2.01%
Average Volume (3M)430.66K
Price to Earnings (P/E)10.6
Beta (1Y)0.37
Revenue Growth7.30%
EPS Growth32.16%
CountryUS
Employees2,800
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)8.06
Shares Outstanding59,569,120
10 Day Avg. Volume526,269
30 Day Avg. Volume430,656
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)1.42
Price to Sales (P/S)0.96
P/FCF Ratio4.28
Enterprise Value/Market Cap1.36
Enterprise Value/Revenue1.27
Enterprise Value/Gross Profit2.63
Enterprise Value/Ebitda7.70
Forecast
1Y Price Target
$101.00Price Target Upside9.43% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)8.12
Revenue Forecast (FY)$4.71B
Selective Insurance Group Business Overview & Revenue Model
Company Description
Selective Insurance Group, Inc. (SIGI) is a U.S.-based company that delivers a wide array of insurance products and services. Its business operations are structured across four primary divisions: Standard Commercial Lines, Standard Personal Lines,...
How the Company Makes Money
SIGI generates earnings primarily through its insurance underwriting operations and its investment portfolio.
1) Underwriting revenue (insurance operations)
- Premiums: The core source of revenue is written and earned premiums from property and c...
Selective Insurance Group Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Neutral
The call communicated a balanced picture: Selective delivered solid profitability and investment income growth (including double-digit operating ROE, 18% investment income growth, strong reinsurance placement and capital returns), and management highlighted disciplined portfolio actions and pricing gains across key lines. At the same time, deliberate underwriting actions and market dynamics drove notable declines in net premiums written and new business (e.g., standard commercial new business down 22%, personal new business down 36%), elevated commercial auto frequency and near-100% combined ratio in standard commercial lines. Management framed the premium declines as intentional portfolio improvement, but the near-term top-line and casualty-frequency pressures temper the outlook.Positive Updates
Strong Profitability and ROE
Reported fully diluted GAAP EPS of $2.11 and non-GAAP operating EPS of $1.95, producing a 14.8% GAAP ROE and a 13.7% operating ROE for the quarter; marked the 8th consecutive quarter with double-digit operating ROE.
Negative Updates
Decline in Net Premiums Written
Net premiums written declined 5% for the quarter overall; Standard Commercial Lines experienced a 6 percentage-point decline in net premiums written with lower new business and portfolio renewal actions each contributing roughly half of that decline.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Profitability and ROE
Reported fully diluted GAAP EPS of $2.11 and non-GAAP operating EPS of $1.95, producing a 14.8% GAAP ROE and a 13.7% operating ROE for the quarter; marked the 8th consecutive quarter with double-digit operating ROE.
Read all positive updates
Company Guidance
Selective's guidance for 2026 includes a GAAP combined ratio range of 96.5%–97.5% (assuming 6 points of catastrophe losses) and, given year‑to‑date results, management expects to be near the top of that range; after‑tax net investment income is now guided to $480 million (up from $465M) with Q2 after‑tax NII of $119M (up 18% YoY) that generated 13.9 points of ROE; the company continues to expect an expense ratio of about 31.5%, assumes an effective tax rate of 21.5% and a fully weighted average share count of 60.2 million, and retains a capital policy to return 20%–25% of earnings via dividends while opportunistically repurchasing shares (Q2 returned ~50% of after‑tax net income including $32M of buybacks and $108M remaining authorization); reinsurance renewals provide $87M excess of $3M retention for casualty (first layer co‑participation cut to 8%) and $115M excess of $5M per‑risk for property (a $20M increase).Selective Insurance Group Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.46B | 5.34B | 4.86B | 4.23B | 3.56B | 3.38B |
| Gross Profit | 2.63B | 2.18B | 321.30M | 518.07M | 340.26M | 562.78M |
| EBITDA | 901.73M | 671.59M | 321.71M | 517.25M | 351.37M | 589.58M |
| Net Income | 497.63M | 466.41M | 207.01M | 365.24M | 224.89M | 403.84M |
Balance Sheet | ||||||
| Total Assets | 15.62B | 14.13B | 12.36B | 11.08B | 9.96B | 9.82B |
| Cash, Cash Equivalents and Short-Term Investments | 379.44M | 17.96M | 63.02M | 13.27M | 25.21M | 45.06M |
| Total Debt | 900.96M | 1.01B | 555.67M | 547.62M | 549.18M | 543.35M |
| Total Liabilities | 11.95B | 10.52B | 9.24B | 8.12B | 7.44B | 6.84B |
| Stockholders Equity | 3.66B | 3.61B | 3.12B | 2.95B | 2.53B | 2.98B |
Cash Flow | ||||||
| Free Cash Flow | 1.19B | 1.19B | 1.07B | 736.28M | 776.39M | 749.26M |
| Operating Cash Flow | 1.23B | 1.23B | 1.10B | 758.91M | 802.41M | 771.42M |
| Investing Cash Flow | -1.02B | -1.49B | -947.38M | -686.36M | -734.45M | -618.78M |
| Financing Cash Flow | -235.52M | 207.48M | -102.75M | -84.49M | -87.82M | -122.81M |
Selective Insurance Group Technical Analysis
Negative
92.30
Price Trends
91.07
Negative
91.52
Negative
86.33
Negative
Market Momentum
-1.90
Positive
37.79
Neutral
30.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SIGI, the sentiment is Negative. The current price of 92.3 is above the 20-day moving average (MA) of 87.63, above the 50-day MA of 91.07, and above the 200-day MA of 86.33, indicating a bearish trend. The MACD of -1.90 indicates Positive momentum. The RSI at 37.79 is Neutral, neither overbought nor oversold. The STOCH value of 30.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $75.17B | 9.51 | 25.62% | 1.30% | 2.39% | 65.13% | |
83 Outperform | $10.30B | 17.84 | 24.52% | 2.65% | 3.65% | -7.67% | |
79 Outperform | $24.86B | 7.61 | 20.89% | 2.28% | 19.55% | 84.05% | |
77 Outperform | $11.53B | 12.15 | 20.01% | 5.05% | -1.43% | 25.53% | |
76 Outperform | $7.64B | 10.34 | 21.22% | 1.73% | 5.57% | 38.39% | |
69 Neutral | $5.10B | 10.62 | 13.87% | 2.01% | 7.30% | 32.16% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
SIGI
Selective Insurance Group
85.59
3.05
3.70%
AFG
American Financial Group
139.10
-1.17
-0.83%
CINF
Cincinnati Financial
161.95
0.38
0.23%
ERIE
Erie Indemnity Company
221.09
-89.87
-28.90%
THG
Hanover Insurance
219.43
38.42
21.22%
TRV
Travelers Companies
360.38
81.91
29.41%
Selective Insurance Group Corporate Events
Business Operations and StrategyExecutive/Board Changes
Selective Insurance Expands Board, Reappoints Independent Director
Positive
Sep 16, 2026
On September 16, 2026, Selective Insurance Group expanded its Board of Directors from 12 to 13 members and reappointed Wole C. Coaxum as a non-employee, independent director, with his term running until the 2027 annual shareholders’ meeting....
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Selective Insurance Posts Solid Q2 2026 Earnings Performance
Positive
Jul 23, 2026
Selective Insurance Group reported second-quarter 2026 results on July 23, 2026, with net income of $2.11 per diluted share and non-GAAP operating income of $1.95, as return on equity reached 14.8% and operating ROE 13.7%. Despite a 5% decline in ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.