SIGI Stock Forecast & Price Target

Selective Insurance Group Inc. has demonstrated substantial financial growth, with revenues rising to $365.7 million in 2024 from $282.8 million in 2022, primarily driven by improvements in the Other Liability segment. The company has also benefitted from rising interest rates, which have augmented capital inflows and contributed to a remarkable 12.9% return on equity after taxes in 2024. Additionally, Selective's E&S unit has shown solid performance, achieving sub-90 combined ratios in 2023/2024, and management appears committed to enhancing loss picks and improving IBNR positions, supporting a positive long-term outlook.

Selective Insurance Group Inc displays several key financial challenges contributing to a negative outlook. The company recorded a 103% combined ratio last year, which not only affected payout structures but led to a significant decline in cash incentive payouts, highlighting operational inefficiencies. Additionally, recurring issues with reserve adequacy and a history of missed guidance, particularly in the face of catastrophe losses, have undermined investor confidence and point to potential for further underwriting losses in the near term.