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Selective reports improved GAAP combined ratio, cuts unprofitable lines
Commercial renewal pricing moderated to 6.5% from 8.9% a year earlier, as the insurer intentionally reduced commercial premiums by 5% and tightened retention on weak accounts.
Selective held its second-quarter 2026 earnings call on July 24, reporting net premiums written down 5% year over year. The carrier said its GAAP combined ratio improved to 98% from 100.2%.
Management also pointed to moderating commercial lines renewal pricing, which came in at 6.5% versus 8.9% a year earlier. Selective said the 5% commercial premium decline reflected an intentional strategy to avoid business that does not meet its return thresholds in a competitive market.
Selective’s CEO John Marchioni said commercial general liability and commercial auto remain in underwriting losses across the industry even as pricing weakens. The company said it is using underwriting analytics to separate profitable from unprofitable accounts, keeping retention at 89% on its best-performing business while letting retention on its weakest-performing segment fall from 81% to 55% after aggressive rate actions.
The insurer said construction is still a strength, but it wants less concentration. Contractors represented 43% of commercial premiums in 2025, but fell to 33% of new business in the first half of 2026 as Selective diversified. It also noted excess and surplus capacity is normalizing, contributing to a 2% premium decline despite a 91.8% combined ratio.