SELECTIVE INSURANCE GROUP INC (SIGI)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

The terms “Company,” “we,” “us,” and “our” refer to Selective Insurance Group, Inc. (the “Parent”) and its subsidiaries, except as expressly indicated or the context otherwise requires. Certain statements in this Quarterly Report on Form 10‑Q, including information incorporated by reference, are “forward‑looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The PSLRA provides a safe harbor for forward‑looking statements under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Forward‑looking statements include our expectations, intentions, beliefs, projections, estimates, or forecasts regarding future events or financial performance. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, activity levels, or performance to differ materially from those expressed or implied in the forward‑looking statements. In some cases, forward‑looking statements may be identified by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “believe,” “intend,” “estimate,” “project,” “predict,” “potential,” “pro forma,” “seek,” “target,” “continue,” or similar terms.

Forward‑looking statements are predictions only, and we cannot guarantee that the expectations expressed in such statements will prove correct. We undertake no obligation to publicly update or revise any forward‑looking statements, except as required by law.

We discuss factors that could cause actual results to differ materially from those expressed in forward‑looking statements in Item 1A, “Risk Factors,” of this Form 10‑Q. These risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors may emerge at any time. We cannot predict these new factors, their potential impact on our business, or the extent to which any factor – or combination of factors – may cause actual results to differ materially from those expressed in forward‑looking statements. In light of these risks, uncertainties, and assumptions, the forward‑looking events discussed in this report may not occur.

Introduction

We classify our business into four reportable segments:

•Standard Commercial Lines;

•Standard Personal Lines;

•Excess and Surplus Lines ("E&S Lines"); and

•Investments.

For additional information about these segments, refer to Note 9. "Segment Information" in Item 1. "Financial Statements." of this Form 10-Q and Note 12. "Segment Information" in Item 8. "Financial Statements and Supplementary Data." of our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report").

We write our Standard Commercial and Standard Personal Lines products and services through nine of our insurance subsidiaries, some of which participate in the federal government's National Flood Insurance Program's ("NFIP") Write Your Own Program. We write our E&S products through another subsidiary, Mesa Underwriters Specialty Insurance Company, a nationally authorized non-admitted carrier for customers who generally cannot obtain coverage in the standard marketplace. Collectively, we refer to our ten insurance subsidiaries as the "Insurance Subsidiaries."

The following is Management’s Discussion and Analysis ("MD&A") of our financial condition and consolidated results of operations, including an evaluation of the amounts and certainty of cash flows from operations and outside sources, trends, and uncertainties that may have a material impact in future periods. Investors should read the MD&A in conjunction with Item 1. "Financial Statements." of this Form 10-Q and the consolidated financial statements in our 2025 Annual Report filed with the United States ("U.S.") Securities and Exchange Commission.

In the MD&A, we discuss and analyze the following:

•Critical Accounting Policies and Estimates;

•Financial Highlights of Results for the second quarters ended June 30, 2026 ("Second Quarter 2026") and June 30, 2025 ("Second Quarter 2025"); and the six-month periods ended June 30, 2026 ("Six Months 2026") and June 30, 2025 ("Six Months 2025")

•Results of Operations and Related Information by Segment;

•Federal Income Taxes;

•Liquidity and Capital Resources; and

•Ratings.

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Critical Accounting Policies and Estimates

Our unaudited interim consolidated financial statements include amounts for which we have made informed estimates and judgments for transactions not yet completed. These estimates and judgments affect the reported amounts in our consolidated financial statements. Our 2025 Annual Report outlines the estimates and judgments most critical to the preparation of the consolidated financial statements: (i) reserve for loss and loss expense; (ii) investment valuation and the allowance for credit losses on available-for-sale ("AFS") fixed income securities; and (iii) reinsurance. These estimates and judgments require our use of assumptions about highly uncertain matters that could change as facts and circumstances develop. Different estimates or judgments could result in materially different reported amounts. For additional information regarding our critical accounting policies and estimates, refer to pages 38 through 45 of our 2025 Annual Report.

Financial Highlights of Results for Second Quarter and Six Months 2026 and Second Quarter and Six Months 20251

1Refer to the Glossary of Terms attached to our 2025 Annual Report as Exhibit 99.1 for definitions of terms used in this Form 10-Q.

2Non-GAAP operating income (loss), non-GAAP operating income (loss) per diluted common share, and non-GAAP operating ROE are comparable to net income (loss) available to common stockholders, net income (loss) available to common stockholders per diluted common share, and ROE, respectively, but exclude after-tax net realized and unrealized gains and losses on investments included in net income (loss). Adjusted book value per common share is comparable to book value per common share, but excludes total after-tax unrealized gains and losses on investments included in accumulated other comprehensive income (loss). These non-GAAP measures are important financial measures used by us, analysts, and investors because the timing of realized and unrealized investment gains and losses on securities in any given period is largely discretionary. In addition, net realized and unrealized investment gains and losses on investments could distort the analysis of trends.

The tables below provide reconciliations of our GAAP to non-GAAP measures:

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

The terms "Company," "we," "us," and "our" refer to Selective Insurance Group, Inc. (the "Parent") and its subsidiaries, except as expressly indicated or the context otherwise requires. Certain statements in this Annual Report on Form 10-K, including information incorporated by reference, are “forward-looking statements” defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a forward-looking statement safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements discuss our intentions, beliefs, projections, estimations, or forecasts of future events and financial performance. They involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, activity levels, or performance to materially differ from those in or implied by the forward-looking statements. In some cases, forward-looking statements include the words "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "attribute," "confident," "strong," "target," "project," "intend," "believe," "estimate," "predict," "potential," "pro forma," "seek," "likely," "continue," or comparable terms. Our forward-looking statements are only predictions; we cannot guarantee or assure that such expectations will prove correct. We undertake no obligation to publicly update or revise any forward-looking statements for any reason except as required by law.

We discuss the factors that could cause our actual results to differ materially from our projections, forecasts, or estimates in forward-looking statements in Item 1A. "Risk Factors." of this Form 10-K. These risk factors may not be exhaustive. We operate in a constantly changing business environment, and new risk factors may emerge at any time. We cannot predict these new risk factors, their impact on our businesses, or the extent to which one or any combination of factors may cause actual results to differ materially from any forward-looking statements. Given these risks, uncertainties, and assumptions, the forward-looking events we discuss might not occur.

Introduction

We classify our business into four reportable segments:

•Standard Commercial Lines;

•Standard Personal Lines;

•Excess and Surplus Lines ("E&S Lines"); and

•Investments.

For more details about these segments, refer to Note 1. "Organization" and Note 12. "Segment Information" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

We write our Standard Commercial and Standard Personal Lines products and services through nine of our insurance subsidiaries, some of which participate in the federal government's National Flood Insurance Program's ("NFIP") Write Your Own Program ("WYO"). We write our E&S products through another subsidiary, Mesa Underwriters Specialty Insurance

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Company ("MUSIC"), a nationally-authorized non-admitted platform for customers who generally cannot obtain coverage in the standard marketplace. Collectively, we refer to our ten insurance subsidiaries as the "Insurance Subsidiaries."

The following is Management's Discussion and Analysis ("MD&A") of our financial condition and consolidated results of operations, including an evaluation of the amounts and certainty of cash flows from operations and outside sources, trends, and uncertainties that may have a material impact in future periods. The MD&A discusses and analyzes our 2025 results compared to 2024. Investors should read the MD&A in conjunction with Item 8. "Financial Statements and Supplementary Data." of this Form 10-K. For discussion and analysis of our 2024 results compared to 2023, refer to Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations." of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

In the MD&A, we will discuss and analyze the following:

•Critical Accounting Policies and Estimates;

•Financial Highlights of Results for Years Ended December 31, 2025, 2024, and 2023;

•Results of Operations and Related Information by Segment;

•Federal Income Taxes; and

•Liquidity and Capital Resources.

Critical Accounting Policies and Estimates

We have identified the policies and estimates critical to our business operations and understanding of our results of operations. We consider the policies and estimates most critical to the preparation of the Financial Statements to be (i) reserve for loss and loss expense, (ii) investment valuation and the allowance for credit losses on available-for-sale ("AFS") fixed income securities, and (iii) reinsurance.

Reserve for Loss and Loss Expense

Significant time can elapse between the occurrence of an insured loss, the reporting of a claim to us, and the final claim settlement and payment. Insurers establish reserves as balance sheet liabilities to recognize liabilities for unpaid loss and loss expenses. The following tables provide case and incurred but not reported ("IBNR") reserves for loss and loss expenses and reinsurance recoverable on unpaid loss and loss expense as of December 31, 2025 and 2024:

1Includes our flood loss exposure related to our participation in the NFIP's WYO program, to which we cede 100% of our WYO flood losses.

2Includes general liability (97% of net reserves) and commercial auto liability coverages 3% of net reserves).

3Includes commercial property (94% of net reserves) and commercial auto property coverages 6% of net reserves).

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1Includes our flood loss exposure relates to our participation in the NFIP's WYO program, to which we cede 100% of our flood losses.

2Includes general liability (97% of net reserves) and commercial auto liability coverages (3% of net reserves).

3Includes commercial property (93% of net reserves) and commercial auto property coverages (7% of net reserves).

The Insurance Subsidiaries' net loss and loss expense reserves duration was approximately 3.0 years at both December 31, 2025 and December 31, 2024.

How the reserve is established

Reserve for loss and loss expense includes case reserves on reported claims and IBNR reserves.  Case reserves are estimated for each individual claim based on facts and circumstances known at the time.  Case reserves may be adjusted up or down as the claim's specific facts and circumstances change. IBNR reserves are established at more aggregated levels and include provisions for (i) claims not yet reported, (ii) future development on reported claims, (iii) closed claims that could reopen in the future, and (iv) anticipated salvage and subrogation recoveries.

We conduct quarterly internal reserve reviews using our own loss experience, considering various internal and external factors. Changes in claim dynamics can inherently alter paid and reported development patterns. Although our reserve analysis selections aim to account for these impacts, estimated reserves involve greater risk of variability.

In addition to our internal reserve reviews, an external consulting actuary performs an independent semiannual reserve review. We do not rely on the external consulting actuary's report to determine our recorded reserves, but we review and discuss our observations on trends, key assumptions, and actuarial methodologies with our consulting actuary. Our independent consulting actuary issues the annual statutory Statements of Actuarial Opinion for our Insurance Subsidiaries.

For additional information on our accounting policy for reserve for loss and loss expense, refer to Note. 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

Range of Reasonable Reserve Estimates

We have estimated a range of reasonable reserve estimates for net loss and loss expense of $5,694 million to $6,960 million at December 31, 2025. This range reflects low and high reasonable reserve estimates determined after using judgment to adjust the methods, factors, and assumptions selected within the internal reserve review. This approach produces a range of reasonable reserve estimates but does not represent a distribution of all possible outcomes. Consequently, final outcomes may be greater or less than the estimates.

The range of reasonable reserve estimates increased as of December 31, 2025, relative to December 31, 2024. This increase was primar

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