Financial Performance and Outlook
Achieving strong and consistent returns on equity, along with growing book value per share, is essential to creating long-term shareholder value. In 2025, we delivered a double-digit operating ROE of 14.2%, exceeding our ten-year average operating ROE of 12.1%. Our performance drove an 18% increase in book value per share in 2025, and we returned $182 million to common stockholders through regular dividends and opportunistic share repurchases. Selective celebrates its 100th anniversary in 2026, and we are proud of our history, the work our employees do, and the value we deliver our policyholders, distribution partners, and shareholders. To ensure our continued success, we remain focused on a set of key priorities across the company to drive future success, including:
- Relentlessly improving on the fundamentals across risk selection, individual policy pricing, and claims outcomes to enable sustainable growth and scaling;
- Diversifying revenue and income streams within and across our three insurance segments by driving growth within our existing product set, expanding into new products, and adding new states to our geographic footprint;
- Further leveraging our use of data analytics and technology, including AI, to drive operational efficiency and improved underwriting and claim outcomes; and
- Building a connected, accountable, and empowered organization by developing talent and aligning on prioritized goals.
We remain committed to making strategic investments that fuel continued growth, innovation, and performance excellence. As we position ourselves for the future, we have several strategies to grow market share profitably:
- In our existing footprint, we are focused on growing with existing partners and strategically appointing new agency locations. During 2025, we had a net increase of approximately 100 agency locations, and we had a net increase of 200 agency locations in 2024.
- Careful and deliberate geographic expansion. Since 2017, we have added fourteen states to our Standard Commercial Lines footprint, including Kansas in 2025. In 2025, these expansion states produced $430 million in premium, representing approximately 9% of total net premiums written and approximately 1% marginal total premium growth. We expect to write new business in Montana and Wyoming by the end of 2026.
History of Financial Strength
Selective has maintained a financial strength rating of “A” or better by A.M. Best Rating Services for more than 90 years. This rating demonstrates the financial stability of the organization that is valued by our customers, distribution partners, and shareholders. We have a strong capital base with $3.6 billion of equity and a prudent debt-to-capital ratio of 20.0% as of year-end 2025.
As of year-end 2025, Selective maintained a $11.3 billion investment portfolio with a conservative fixed income securities and short-term investments average rating of “A+”. We also protect our balance sheet with a conservative reinsurance program and maintain prudent reserving practices.