What Happened?
Shares of property and casualty insurer Selective Insurance Group (NASDAQ: SIGI) fell 5.2% in the afternoon session after the company reported third-quarter 2025 results that missed analyst expectations on key profitability metrics.
The property and casualty insurer posted adjusted earnings of $1.75 per share, falling short of the $1.99 consensus estimate. While revenue of $1.36 billion significantly surpassed expectations, the profit miss weighed on investor sentiment. A key factor was the company's combined ratio of 98.6%, which was higher than the 96.7% anticipated by analysts. The combined ratio is a critical measure of underwriting profitability for an insurer, with a lower figure being better. The higher-than-expected ratio indicated that the company's core insurance operations were less profitable than hoped. In addition, the company's book value per share also came in below Wall Street’s estimates.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Selective Insurance Group? Access our full analysis report here.
What Is The Market Telling Us
Selective Insurance Group’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 19% on the news that the company reported second-quarter financial results that missed Wall Street's profit expectations. The property and casualty insurer posted earnings of $1.31 per share, falling short of analyst consensus estimates. A key factor behind the earnings miss was the company's combined ratio, which came in at 100.2%. A combined ratio above 100% indicates that an insurer paid out more in claims and expenses than it collected in premiums, resulting in an underwriting loss. Management attributed the unfavorable ratio to the effects of 'social inflation'—a term for rising insurance claim costs that outpace general inflation—which negatively impacted its casualty reserves from prior years. The disappointing quarterly performance led the stock to trade down to a new 52-week low.
Selective Insurance Group is down 17.1% since the beginning of the year, and at $76.40 per share, it is trading 25.2% below its 52-week high of $102.09 from November 2024. Investors who bought $1,000 worth of Selective Insurance Group’s shares 5 years ago would now be looking at an investment worth $1,356.
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