Slide 1: 1st Quarter 2024 Investor Presentation
1ST QUARTER 2024 INVESTOR PRESENTATION Copyright © 2024 by Selective Insurance. All rights reserved. 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement We make certain statements and reference other information in this presentation that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The PSLRA provides a forward-looking statement safe harbor under the Securities Ac
Slide 3: Introduction
INTRODUCTION 3
Slide 4: Our interactions with customers and distribution partners reinforce our role
Every day, our interactions with our customers and distribution partners reinforce the importance of our role in rebuilding lives and businesses, making communities safer, and supporting economic expansion. 4
Slide 5: A Leader in U.S. Property & Casualty Insurance
A Leader in U.S. Property & Casualty Insurance Superior track record driven by disciplined execution 10 consecutive years of double-digit Operating Return on Equity A+ (Superior) rating by A.M. Best $4.1 billion of net premiums written in 2023 37th largest P&C carrier in the United Stated States* Cl
Slide 6: Sustainable Competitive Advantages
Sustainable Competitive Advantages Our unique Our ability to Our franchise Our commitment Our highly field model, develop and value to delivering engaged and placing integrate distribution a superior aligned team empowered sophisticated model, defined omni-channel of skilled and underwriting tools f
Slide 7: Differentiated Operating Model
Differentiated Operating Model 2023 Net Premiums Written • Locally based underwriting, claims, and Unique, locally based field model safety management specialists 11% • Proven ability to develop and integrate Excess and actionable tools Surplus Lines • Enables effective portfolio management in an un
Slide 8: Ten Consecutive Years of Double-Digit Non-GAAP Operating ROEs
Ten Consecutive Years of Double-Digit Non-GAAP Operating ROEs* Non-GAAP Operating ROE* 14.4% SIGI 15% Peer Avg. 10% 5% 12.2% average from 2014 0% to 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Note: Peer Average includes CINF, CNA, HIG, THG, TRV, and UFCS; 2023 data as of 9/30/23 Operatin
Slide 9: Excellent Operating Results with Low Historical Volatility
Excellent Operating Results with Low Historical Volatility NPW CAGR vs. Average Combined Ratio Combined Ratio (Average & Volatility) 9% 105% SIGI 8% 10-Year Average Combined Ratio 7% 10-Year NPW CAGR Industry 6% 100% 5% 4% Industry 3% 95% 2% SIGI 1% 0% 90% 104% 102% 100% 98% 96% 94% 92% 0 2 4 6 8 10
Slide 10: Track Record of Disciplined, Profitable Growth
Track Record of Disciplined, Profitable Growth Net Premiums Written Operating Earnings per Share $4.1 $7.00 $5.89 12% CAGR* 9% CAGR* $6.00 $4 $5.00 $3 $4.00 NPW ($ in billions) $3.00 $2 $2.00 $1 $1.00 $- $- 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 202
Slide 11: Path for Profitable Growth
Path for Profitable Growth Standard Commercial Lines Excess and Surplus Lines • Targeting 3% market share in existing footprint over the long-term • Opportunistic, profitable growth • 12% share of wallet target with existing distribution partners strategy • 25% agent market share target in existing
Slide 12: 2024 Guidance
2024 Guidance 95.5% GAAP • 5.0 points of catastrophe losses combined ratio • No prior accident year reserve development After-tax net investment income of $360 • Including $32 million of after-tax income from alternative investments million Overall effective • 20.5% effective tax rate on investments
Slide 13: Segment Performance
4 = — ’ x | SELECTIVE | a INSURANCE®
Slide 14: Standard Commercial Lines
Standard Commercial Lines 79% of Net Premiums Written (“NPW”) • Account-based approach with granular data and sophisticated tools to support underwriting decisions • Focus on maintaining underwriting discipline and price adequacy • Targeting renewal pure price increases in line with expected loss tr
Slide 15: Portfolio Approach Drives Business Mix Improvements
Portfolio Approach Drives Business Mix Improvements Standard Commercial Lines Pricing by Retention Group • Portfolio management approach yields Renewal Pure Price Point of Renewal Retention higher retention and rate • Account-specific pricing, including: Point of Renewal Retention 14% 95% • Predicti
Slide 16: Excess & Surplus Lines
Excess & Surplus Lines 11% of Net Premiums Written • Profitable and growing portfolio of commercial risks • Small and middle market focus with $4,600 average premium per policyholder • Modernized technology platform • Approximately 2/3 casualty and 1/3 property • ~90 wholesale general agents with li
Slide 17: Standard Personal Lines
Standard Personal Lines 10% of Net Premiums Written • Strategic shift to mass affluent target market underway • Strong existing product set and servicing capabilities • Aggressive profit improvement plan driven by accelerated pricing and tighter terms and conditions • Expect pressure on policy count
Slide 18: Conservative Investment Portfolio
Conservative Investment Portfolio Investment Long-term investment philosophy and focus on managing risk Portfolio at Fixed Income • Maximize risk-adjusted after-tax income and generate long-term growth in book value 12/31/23 88% • Objectives balanced against prevailing market conditions and enterpri
Slide 19: Financial Overview
FINANCIAL OVERVIEW SELECTIVE INSURANCE®
Slide 20: Enterprise Risk Management
Enterprise Risk Management 1-in-250 Probable Maximum Average premium per Loss* as a % of GAAP Equity policyholder: • Predominantly write low to medium hazard risks • Strong balance sheet and underwriting controls with prudent reserving practices 10% 7% Standard Commercial $17K • Catastrophe loss mit
Slide 21: Prudent Reinsurance Structure
Prudent Reinsurance Structure 2024 Property Catastrophe Program • 2024 property catastrophe treaty highlights: $500M in excess of $700M 100% • $1.1B in excess of $100M retention 65.0% covered through Catastrophe Bond Placed (3-year risk period) • $417.5M in collateralized limit, all in the top layer
Slide 22: Disciplined Financial Planning and Reserving Practices
Quarterly Reserve Review Strong reserve discipline facilitated by in- depth quarterly reserve reviews, semi-annual independent reviews, and independent year- end opinion Detailed Planning Process Detailed ground up premium, expense, and loss planning, with monthly forecasts Disciplined Financial Pla
Slide 23: Consistent Process and Strong Reserving Track Record
Consistent Process and Strong Reserving Track Record Favorable Casualty Reserve Development • In 2023, reported modest net favorable prior year casualty reserve development 0.0% • Favorable prior year casualty development in Workers Combined Ratio Impact Compensation, largely offset by unfavorable p
Slide 24: Strong Capital Position
Strong Capital Position • Generated $759 • NPW-to-Surplus ratio • Target 20-25% dividend • Instituted $100 million of operating of 1.51x at December payout ratio over time million share cash flow in 2023 31, 2023, within target repurchase operating range of ̶ Quarterly dividend authorization in 1.35
Slide 25: Balancing Expense Discipline with Strategic Investments
Balancing Expense Discipline with Strategic Investments 36% • Expect our 2024 expense ratio to be relatively 35% stable compared to 2023 • Recent and current strategic investments 34% include: 33.0% • New platforms for Small Business and 33% E&S 32% • Claim system modernization 31.4% • Geographic ex
Slide 26: Focus on ROE and Growth in Book Value Per Share
Focus on ROE and Growth in Book Value Per Share* Strong Track Record of Book Value per Share Growth $50 $45.42 $40 $30 $22.54 $20 $10 $0 2014 2015 2016 2017 2018 2019 2020 2021 2022* 2023 Generating non-GAAP Expected higher operating ROE** in line Superior growth in total shareholder with our long-t
Slide 27: Long-Term Total Shareholder Return
Long-Term Total Shareholder Return SIGI S&P Prop/Cas S&P 500 30% 26.3% 25% 20% 15.7% 15.7% 15.6% 15% 13.7% 13.5% 11.8% 11.7% 11.8% 12.0% 10.8% 10% 5% 0% -5% -3.2% 4Q 2023 1 Year 5 Years 10 Years Note: Total shareholder return calculations are as of December 31, 2023 27
Slide 28: Progress Through Impact
PROGRESS THROUGH IMPACT SELECTIVE INSURANCE®
Slide 29: Our Approach to Sustainability
Our Approach to Sustainability Our primary objectives are to: Key sustainability accomplishments: • Help our customers put their lives and businesses • Achieved an “AA” rating from MSCI back together after experiencing a covered loss • Completed a solar facility at corporate • Help make our customer
Slide 30: Investor Presentation
1ST QUARTER 2024 INVESTOR PRESENTATION Copyright © 2024 by Selective Insurance. All rights reserved. 30