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Selective Å˽ðÁ«´«Ã½Ó³»­ Group reported a 24% drop in fourth quarter 2024 net income as its chief executive admitted the year did “not meet expectations.”

Fourth quarter net income was $93.2 million compared to $122.5 million a year ago. Net income for the year was down 44% to $197.8 million from $356 million for 2023.

CEO John J. Marchioni said Branchville, New Jersey-based Selective took “meaningful actions to strengthen casualty reserves in response to social inflation.”

Selective recorded $100 million in unfavorable prior year reserve development in casualty during Q4, driven by recent accident years in general liability and excess and surplus lines. Most of the unfavorable reserve development was in commercial lines – $100 million in general liability offset by favorable development of $25 million in workers’ compensation. This added 8.5 points to the Q4 combined ratio in commercial lines, which came in at 100.2 compared to 93.1 during the same period in 2023. Net premiums written (NPW) in the standard commercial lines segment were up 9% for the last quarter of 2024 and up 11% for the year.

The holding company for 10 P/C insurers that offer standard and specialty commercial and personal insurance products via independent agents, reported an overall Q4 combined ratio of 98.5, up 4.8 points from the period a year ago. For the year, the combined ratio was 103 compared to 96.5 in 2023.

Selective’s E&S segment, which represents 14% of total NPW, saw the Q4 combined ratio shoot up to 93.1 from 76.2 a year ago. Prior-year reserve development on casualty lines of $20 million added 14.2 points compared to no adverse reserve development a year ago. New business in E&S grew 29% in Q4. Net premiums written were up 27% to $152.6 in Q4, and were up 29% to $567.2 for the year.

In the standard personal lines segment, net premiums written in Q4 decreased 3%. Retention was down and new business was cut in half during the period due to “deliberate profit-improvement actions,” Selective said. The combined ratio for the segment improved to 91.7 from 116.9 for Q4 and to 109.3 in 2024 from 121.7 in 2023.

Topics Profit Loss Casualty