Selective Insurance Group, Inc.

Good day and welcome to Selective Insurance Group's second quarter 2026 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. Please be advised that today's conference is being recorded. I would now like to turn the call over to Brad Wilson, Senior Vice President. Please go ahead, sir.

Good morning. Thank you for joining Selective's second quarter 2026 earnings conference call. Yesterday, we posted our earnings press release, financial supplement, and investor presentation on the investor section of Selective.com. A replay of today's webcast will be available there shortly after this call. Joining me are John Marchioni, our Chairman of President and Chief Executive Officer, and Patrick Brennan, Executive Vice President and Chief Financial Officer. They will discuss our results and take your questions. During the call, we will reference non-GAAP measures used by insurance and investment professionals to evaluate financial and operating performance, including operating income, operating return on common equity, and adjusted book value per common share. Reconciliations to the most comparable GAAP measures are available in our financial supplements on our investor relations page. We will also make forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements and projections about future performance are subject to risks and uncertainties that we disclose in our SEC filings. We undertake no obligation to update or revise any forward-looking statements. Now, I'll turn the call over to John.

Thanks, Brad, and good morning. This has been an exciting few months for Selective. In May, we celebrated our 100th anniversary and our 50th year as a public company by ringing the NASDAQ closing bell. More recently, we opened our new corporate headquarters in Short Hills, New Jersey. This office broadens our access to talent and positions us near transportation hubs that connect us more easily across our expanding geographic footprint. On July 1st, we opened for business in Montana and Wyoming and are pleased with early traction and agency engagement. These milestones reflect our long-term commitment to discipline growth and operational excellence. This marked our eighth consecutive quarter with double-digit operating ROE. We delivered a 13.7% operating ROE led by excellent investment income, which grew 18% year-over-year. Each insurance segment produced an underwriting profit, and our 98% combined ratio improved 2.2 points from a year ago. E&S performance remains strong, and our personalized combined ratio of 94.1 for the first half of the year is ahead of our 95% combined ratio target. Driving margin improvement in standard commercial lines, our largest segment, remains a key area of focus. Net premiums rate has declined 5% for the quarter. We believe discipline is imperative in the current environment, and we remain fully committed to expanding our market share meaningfully where and when margins warrant it. We believe the composition of that decline is important, as a meaningful portion reflects actions we are taking to improve portfolio economics and long-term returns. Year to date, our E&S and personal line segments outperformed our 95% combined ratio target. In standard commercial lines, our combined ratio was 99.7. As such, we remain focused on improving margins and further diversifying our business mix. Contractors continues to be an important industry vertical where we have proven expertise. However, the casualty-oriented nature of this business has pressured performance in recent years as we and the industry work through elevated commercial casualty loss trends. In 2025, contractors represented 43% of our commercial lines' premiums. Through the first half of 2026, they accounted for 33% of new business. While new business diversification improved, Standard Commercial Line's new business premium declined 22% in the second quarter, consistent with the first quarter decrease. Stronger New Business Pricing, informed by our view of expected loss trends, combined with a competitive market, drove lower conversion rates. We are leveraging our tools, granular insights, and differentiated operating model to drive higher renewal retention on our best performing business and meaningfully lower retention on our underperforming business through appropriate rating actions. While the overall rate increases have moderated, we expect these mix improvement actions will contribute to improved profitability. The execution of this strategy accelerated during the second quarter. Retention in our best performing renewal cohort was 89% for the quarter, consistent with a year ago. At the same time, retention in our worst performing cohorts decreased from 81% to 55%. and renewal rate increased from 11.5% to 18%. This is exactly the portfolio effect we intended, as we believe these actions improve the earnings power of the portfolio over time. These actions are simultaneously supporting our broader organizational priority to further diversify our business. In the quarter, contractors' retention declined approximately two points year-over-year, reflecting its casualty orientation and our view of required rate levels in commercial auto liability and general liability. Of the six percentage point decline in Standard Commercial Line's net premiums written this quarter, lower new business contributed three percentage points of the decrease. Actions on the renewal portfolio, specifically in our worst performing cohorts, drove the remaining three percentage points. We are constraining growth where margins did not meet our targets and focusing new business and retention strategies on the business that continues to enhance the earning power of the book. While these actions take time to earn through the portfolio, we believe they position us for improved underlying margins and more attractive risk-adjusted returns. E&S delivered another strong quarter with a 91.8 combined ratio and a disciplined underwriting across both property and casualty. Renewal pure price increased 3.4% with continued rate momentum in casualty reflecting our view of general liability loss trends. Property pricing was slightly negative, consistent with competitive market conditions and strong margins. Increased competition in the marketplace, along with our disciplined approach, contributed to a 2% premium decline in the quarter. The E&S market has benefited from strong tailwinds over recent years, but historically has exhibited more cyclicality than the admitted market. We are seeing more capacity entering the E&S marketplace, including appetite expansion by admitted market carriers. With our strong margins, 50-state footprint, and expansion of our distribution channel to include our retail agents, we believe E&S continues to present a long-term opportunity to support our profitable growth and diversification objectives. Personalized profitability continues to improve despite expected variability in property losses. The combined ratio is 95.5, up from 91.6 in the second quarter of 2025, driven by higher non-catastrophe property losses. Year-to-date, the combined ratio of 94.1 was 80 basis points better than the first six months of 2025, and compared favorably to the 100.6 combined ratio for the full year of 2025. Results remain stronger outside of New Jersey. Net premium has written declined 8% with target business down 2%. New business decreased 36% in the quarter driven by an increasingly competitive auto market and restrictions we have in place to manage exposure in New Jersey. Homeowner's premium was relatively flat in the quarter as we continue to gain traction in our target market. Average new business home values remained in excess of $1 million for the first half of the year, and target market business now represents approximately 70% of our homeowners premium. We are focused on growth in our target market, where we believe our rates are adequate. Renewal pure price increased 8.9% with continued refinement of our segmentation strategy. For each of our insurance segments, the actions we are taking to strengthen our portfolio reflect the same disciplined approach that has long guided selective success. We remain focused on improving fundamentals across risk selection, individual policy pricing, and claim outcomes. diversifying revenue and income within and across our three insurance segments, and further leveraging data, analytics, and technology, including artificial intelligence, to drive operational efficiency and improve underwriting and claim outcomes. Now, I'll turn the call over to Patrick.