SIGI 10-K & 10-Q changes, risk factors and insider trading

Certain risk factors can significantly impact our business, liquidity, capital resources, results of operations, financial condition, and debt ratings. These risk factors might affect, alter, or change actions inwe executingtake to execute our long-term capital strategy. Examples include, without limitation, contributing capital to any or all of our ten property and casualty insurance subsidiaries ("Insurance Subsidiaries"), issuing additional debt and/or equity securities, repurchasing our existing debt and/or equity securities, or increasing or decreasing common stockholders' dividends. We operate in a continually changing business environment, and new risk factors that we cannot predict or assess may emerge at any time. Consequently, we can neithercannot predict suchthese new risk factors noror assess thetheir potential future impact on our business.

Losses from natural and human-made catastrophes can negatively impact our financial results. Examples include hurricanes, tornadoes, windstorms, earthquakes, hail, thunderstorms, severe winter weather, derechos, floods, and fires, some of which are related to climate change, andas well as criminal and terrorist acts, including cyber-attacks, civil unrest, and explosions. The frequency and severity of these catastrophes are inherently unpredictable, and the frequency and severity of catastrophe lossesboth have increased globally in recent years. In many cases, the increase in catastrophe losses relaterelates to small- to- medium-sized events that primary insurers retain andrather do notthan cede to reinsurers. We use sophisticated catastrophe modeling techniques to manage our exposure, but actual exposure and loss experience can materially differ from catastrophe model estimates. For example, catastrophe models did not fully estimate the potential for some recent catastrophe loss activitylosses (such as Winter Storm Elliott freeze losses in December 2022) and the concurrent economic inflation on construction costs.

Our most significant natural and/or human-made catastrophe exposures are (i) hurricanes impacting the Eastern U.S., (ii) severe convective storms, including hailstorms and tornadoes, (iii) winter storms, (iv) wildfires, (v) earthquakes, and (vvi) terrorism events. Single storms could adversely impact our financial results,results; but it is also possible thathowever, we could experience more than one severe catastrophic event in any given calendar year. We track our severe weather and catastrophe losses using definitions and information we obtain from Insurance Services Office, Inc.'s ("ISO") Property Claim Services unit, an internationally recognized authority on insured property losses from catastrophes in the U.S., Puerto Rico, and the U.S. Virgin Islands.

Temperature changes can impactaffect weather patterns and the frequency and/or severity of catastrophes, including hurricanes, severe convective storms, wildfires, and flooding – all of which could causeincrease our catastrophe losses to increase relative to historical levels.

The risk of a wide-scale criminal or terrorist cyber-attack has become more significant and has drawn increased attention from IT and national security experts, U.S. policymakers, the U.S. military, and the insurance industry. There is general recognition that a wide-scale cyber-attack that simultaneously impactsimpacting multiple victims is more likely, and systemic risk in the insurance industry systemic risk has increased. We have identified three primary sources of potential insured exposure to cyber losses: (i) cyber-specific policies designed to cover both first-party and third-party losses; (ii) affirmative cyber coverage grants included in other types of policies, such as commercial property or businessowners' policies; and (iii) "silent cyber" exposures, otherwise known as non-affirmative cyber exposures, which describes cyber risk that is neither expressly covered nor excluded in insurance policies. This exposure may exist if courts, regardless of intent, interpret policy forms without specific related coverage exclusions to provide coverage for a cyber-related incident.

We provideOur cyber-specific policies to ourfor commercial lines and personal lines customers throughare 100% reinsured solutions with highly-rated specialty cyber markets. These solutions allow us to meet our customers' needs for cyber insurance needs while mitigating our underwriting risk as we develop our expertise in the cyber insurance market.

•We offer limited first-party affirmative cyber coverage in our commercial property and businessowners' policy forms. Our base property and businessowners' forms typically include a $2,000$2,500 or $10,000 cyber coverage grant.grant Mostthat of our property policies also contain an affirmative endorsement providingincludes "virus and harmful codecode." coverage subject to a sub-limit. Over 90% of our policies with virus/harmful code coverage on commercial property, businessowners', commercial output policy, or inland marine forms have sub-limits of $25,000 or lower. ForIn policies effective October 1, 2022 and later,addition, we implementedapply cyber incident exclusions that excludeeliminate coverage for malicious cyber except for the sub-limited coverage provided in the base ISO coverage forms and our property and businessowners' property “virus and harmful code” extension endorsements. These exclusions clarify coverage and have no premium impact.

•Most of our general liability and businessowners' policies exclude cyber-related liability losses, except for "bodily injury." Our specific cyber-exclusion and liability forms' lack of affirmative sub-limited cyber coverage,coverage effectively limitlimits most "silent cyber" exposure. For new and renewal policies effective October 1, 2025, and later, we implemented ISO's cyber incident exclusion for general liability, which eliminates coverage for "bodily injury" and "property damage."

•By statute, workers compensation policies docannot not haveinclude cyber exclusions, and a cyber-attack-related workplace injury could trigger coverage.

We are required to participate in TRIPRA, now extended to December 31, 2027, for our Standard Commercial Lines and E&S Lines business. TRIPRA rescinded all previously approved coverage exclusions for terrorism and requires private insurers and the U.S. government to share the risk of loss on future acts of terrorism certified by the U.S. Secretary of the Treasury. Under TRIPRA, each participating insurer must pay a significant deductible of specified losses before federal assistance is available. Our $619$684 million deductible is based on a percentage of our prior year’s applicable Standard Commercial Lines and E&S Lines premiums. In 2025,2026, the federal government will pay 80% of losses above the deductible, with the insurer retaining 20%. Although TRIPRA will mitigate some of our loss exposure to a large-scale terrorist attack, the size of our deductible and 20% co-participation could have a material adverse effect on our results of operations, liquidity, financial condition, financial strength, and debt ratings. If the U.S. Secretary of the Treasury does not certify specific terrorist events, we could be required to pay terrorism-related covered losses without TRIPRA's risk-sharing benefits. We could also could be required to pay terrorism-related losses for customers who declined terrorism coverage.

An increase in natural or man-made catastrophe losses, including a systemic cyber-attack that producesresults in an aggregation of property and/or casualty cyber losses, will reduce our net income and stockholders’ equity and could have a material adverse effect on our liquidity, financial strength, and debt ratings. The closer a catastrophe occurs to the end of a reporting period, the more likely we are to have limited information to estimate loss and loss expense reserves, increasing the uncertainty of our estimates. More comprehensive claims information available after a reporting period may result in reserve changes in subsequent periods.

We maintain reserves for our estimated liability for loss and loss expense associated with reported and unreported insurance claims. Estimating loss and loss expense reserves is inherently uncertain, and there is no method for precisely estimatingdetermining the ultimate liability for theclaims settlement of claims.settlement. We base our loss and loss expense reserve estimates on our internal in-depth reserve review, which uses our loss experience, claims payment and reporting patterns, and our viewassessment of underlying claims frequency and severity trends. We supplement the estimates with other subjective considerations, including projected impacts from economic, political, social, and legal developments or trends, such as inflation, judicial trends and tort decisions, and various state legislative initiatives. We cannot predict the timing or impact of these developments or trends with certainty,certainty; andnor can we cannot be surecertain that the reserves we establish are adequate or will beremain so in the future.

We review our reserve position quarterly and adjust theit reserveas positiondetermined accordingly.appropriate. An increase in reserves (i) reduces net income and stockholders' equity, and (ii) could have a material adverse effect on our liquidity, financial strength, and debt ratings. As we underwrite new business and renew existing business, we estimate future loss cost trends into pricinginform our productsproduct topricing, generateaimed at generating an adequate risk-adjusted return. If our future loss cost trend estimates prove to be understated, our pricing of future new and renewal business could be inadequate to cover actual loss costs, and our future loss and loss expense reserves could be understated.

•If economic inflation, including medical inflation, is higher than our assumptions, our loss and loss expense reserves for our longer tail lines of business could be insufficient. For example, 2022 inflation rates reflected in the overall consumer price index ("CPI"), the Core CPI, and the Producer Price Index, were higher than in 2021. While inflation moderated in 2023subsequent and 2024,years, it remains elevated relative to the Federal Reserve’s long-term 2% target. The workers compensation line of business is particularly susceptible to inflation becausedue ofto its extended payment pattern and exposure to medical care services and commodities. While medical inflation has been low for several years, ourit has risen recently and, in combination with rising utilization, is driving increases in workers compensation medical severity trend has risen recently.severities. If this trend continues and medical care costs increase significantly or persist at a higher level for an extended period, our overall loss and loss expense reserves could be materially impacted. Our short-tail property lines of business are also susceptible to inflation becausedue ofto their exposure to increased labor and material costs.

•Social inflation refers to the phenomenon where societal factors, such as attitudes, perceptions, and cultural changes, contribute to increased insurance claims costs and litigation. It often leadsresults toin higher payouts in legal settlements and jury awards, and impactsaffects insurance premiums for businesses and individuals. This inflation is driven by various factors, including changing jury attitudes, increased litigation funding, larger awards in court cases, legal system abuse, insurance coverage gaps, increased willingness to undergo surgery, and novel interpretations of liability. Social inflation can affect all lines of business. However, the automobile liability, general liability, and corresponding umbrella lines of business involving bodily injury to third-party claimants tend to be more susceptible to social inflationary impacts. Our reserve for loss and loss expense could be insufficient if impacts from social inflation exceed our assumptions.

•Various states have expanded or could expand the statute of limitations for civil actions alleging sexual abuse. By retroactively permitting previously time-barred claims, these "reviver" laws may result in insurance claims that could significantly increase loss costs and require re-evaluating previously establishednew reserves or creatingre-evaluation newof previously established reserves. Since reviver statutes have been enacted, we have received some notices of claims or potential claims for acts alleged toacts, some that may have occurred,occurred someseveral datingdecades as far back as the 1950s.ago. Without prior experience, we cannot estimate howthe manynumber of "reviver" claims notices we may receive. Most notices (i) are blanket notices sent by attorneys representing claimants unsure of the alleged assailant or supervising entity's insurer or policy (if any) and (ii) may not implicate any of our or a predecessor's insurance policies. For those we determine implicate one of our or a predecessor's policy, we (i) have investigated or are investigating facts, (ii) have evaluated policy terms, (iii) believe we have appropriate coverage defenses to most of these claims and/or sufficient reinsurance protections, and (iv) have considered these factors in establishing our reserves, which we believe provide a reasonable estimate of the aggregate ultimate net exposure for these claims. We face related litigation risks because policyholders and claimants may challenge our coverage positions. We discuss these risks further below in the Risk Factor entitled, "We are engaged in ordinary routine legal proceedings incidental to our insurance operations that are inherently unpredictable and could impact our reputation and/or have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods."

We transfer a significant portion of our underwriting risk to third parties through reinsurance, whichprimarily arein primarilythe form of annual contracts that reimburse us for losses exceeding specified thresholds on a per-loss or an aggregate basis. Typically, our reinsurance coverages align with the coverages in our primary insurance policies, including coverages for catastrophes. Historically, commercial property and homeowners losses have accounted for most of our catastrophe-related reinsurance claims. We determine the amount of reinsurance we purchase by analyzing historical losses and usingoutputs from various modeling software programs that analyze our Insurance Subsidiaries' risks, particularly for catastrophes. Insufficient reinsurance could have a material adverse effect on our results of operations, liquidity, financial condition, financial strength, and debt ratings.

Reinsurance availability;availability, retentions;retentions, coverage limits, terms, conditions, and exclusions;exclusions, and cost depend on market conditionsconditions, which are influenced by traditional direct- and broker-placed reinsurance, retrocessional reinsurance, and catastrophe bond market capacity. These market factors can cause fluctuations in reinsurance costs thatto dofluctuate, which may not necessarily correlate towith our loss experience. State insurance regulators generally permit us to consider catastrophe reinsurance expense in our filed rates and rating plans. However, the conditions and timing of regulatory approval may not align with the actual reinsurance expense. Reinsurance expense increases that are not considered or approved in our filed rates and rating plans will reduce our earnings. If we cannot negotiate desired reinsurance amounts or terms, we may experience increased reinsurance expenseexpenses and increased risk retention on individual or aggregate claim losseslosses, thatwhich could limit our ability to write future business.

The reinsurance market became increasingly challenging and expensive since January 1, 2023, as monetary and social inflation-driven demand for increased reinsurance coverages coincided with reduced reinsurance capacity from poor reinsurance loss experience, particularly for general liability and catastrophe and non-catastrophe property losses, increased reinsurer investment losses, and foreign exchange rate impacts. While reinsurance market conditions have since stabilized, as pricing has moderated and capacity has increased, reinsurance purchasers continue to face higher pricing and more restrictive coverage appetite from reinsurers than they did before January 1, 2023. Our Insurance Subsidiaries face increased underwriting risk and loss exposure for specific primary policy perils, like cyber and communicable diseases, which our reinsurance policies now principally exclude. Our reinsurance contracts also restrict our ability to cede certain types of potential terrorism-related losses. Increased underwriting risk from these and other risks could increaselead ourto higher net loss and loss expense and the volatility of our underwriting results.results volatility. Decreased reinsurance availability would also increase our underwriting risk if we cannot fully place our targeted reinsurance treaty coverage on renewal.

We faceencounter credit risk in severalvarious areas of our insurance operations, includingparticularly from third parties:

•Our reinsurers, which arehave obligatedpayment to make us paymentsobligations under our reinsurance agreements. Reinsurance credit risk can fluctuate over time, increasing during periods of high industry catastrophe and liability losses. Reinsurers generally manage their significant loss exposure through their own reinsurance programs, or retrocessions, and we do not have complete details about them. If our reinsurers experiencehave difficultytrouble collecting on their retrocession programs or reinstating retrocession coverage after a large loss, we may not receive timely or full payment of our reinsurance claims. Consequently, we have direct and indirect counterparty credit risk to our reinsurers and the reinsurance industry, which is a global butyet concentrated market.

•Some of our independent distribution partners,partners who collect our premiums for us from policyholders.

•Some policyholders, who are directly obligated to us for premium and/or deductible payments, themay have their payment timing of which may be impactedaltered by mandatedregulator-granted payment moratoriums.

We market and sell our insurance products through independent, non-employee distribution partners. Independent distribution partners have – and we expect they will continue to have – a significant role in the overall production of insurance industry premium production.premium. While our customers find advantages in using independent distribution partners, our reliance on independent distribution partners presents risks and challenges, including:

•Competition inwithin our distribution channel, as we must market our products and services to independent distribution partners who can access multiple carriers and markets.

•Our market share growth is tied to our distribution partners' market share. Consequently, growth in our Standard Personal Lines could be more limited than in our Standard Commercial Lines. Competitors have focused on lower-cost "direct-to-customer" distribution models emphasizing digital ease and efficiencies to grow market share in standard personal lines business market share.lines. Continued advancements in "direct-to-customer" distribution models may impact our independent distribution partners' overall market share, make it more difficult for us to grow, or require us to establish relationships with more distribution partners.

•Aggregation and consolidation of our independent distribution partners and their market share. Some publicly traded and private equity-backed independent distribution partners have deployed consolidation strategies to acquire other independent distribution partners and increase their market share ("Aggregators") over the last decade. If more of our independent distribution partners become Aggregators or Aggregators acquire them, Aggregatorthe demands and influence of Aggregators on our business could increase. For example, Aggregatorscertain couldaggregators developare and implementpursuing strategies to consolidate their business with fewer insurers and demanddemanding highercustomized basecompensation and supplemental commissions.agreements. Aggregators accounted for approximately 46%51% of our DPW at December 31, 2024,2025, up from 36%46% threein yearsthe ago.prior year. No onesingle distribution partner is responsible for 10% or more of our combined insurance operations' premium.

Our financial condition and results of operations are impacted by the success of our independent distribution partners' successpartners in marketing and selling our products and services.

Unfavorable economic developments, such as a decline in economic growth or increasedan increase in inflation levels, could adversely affect our earnings if our policyholders needrequire less insurance coverage, cancel existing insurance policies, modify coverage, or choose not to renew with us. Inflation could significantly impactaffect our claims severity across multiple lines of business andpotentially couldleading result into adverse reserve development. An economic downturn could also lead to increased credit and premium receivable risk, failure of reinsurance counterparties and other financial institutions, limitslimitations on our ability to issue new debt, reduced liquidity, and declines in our investments'the fair value and financial strength ratings.ratings of our investments. These potential events and other economic factors could adversely and materially affect our business, results of operations, financial condition, and growth. During 2024,2025, 25%24% of DPW in our Standard Commercial Lines business was based on payroll or sales of our underlying policyholders. An economic downturn in which our policyholders have declining revenue or employee count could adversely affect our total written premium, including audit and endorsement premium.premiums.

We write business domestically in the United States, and our insurance operations do not have direct exposure to businesses or individualsinsureds in Russia, Ukraine, andor the Middle East. We do not have material exposure to investments subject to embargoes or Russian reinsurance counterparties. However, ongoing wars and conflicts continue to impact global economic, banking, commodity, and financial markets by exacerbating ongoing economic challenges, including inflation and supply chain disruption,disruptions, which influence insurance loss costs, premiums, and investment valuation.valuations.

A significant downgrade in our financial strength rating downgrade,rating, particularly from AM Best Company ("AM Best"), would affectimpact our ability to write new or renewal business. Most policyholders are required by various third-party agreements, primarily with lenders, to maintain insurance policies from a carrier with a minimum rating from AM Best or Standard & Poor's Global Ratings. Credit rating downgrades could also make it more expensive to access capital markets. We cannot predict rating actions issued by nationally recognized statistical rating organizations that might adversely affect our business or potential responses. Any significant downgrade in our financial strength and credit ratings below an "A-" could have a material adverse effect on our results of operations, liquidity, financial condition, financial strength, and debt ratings. For additional information on our current financial strength and credit ratings, refer to "Overview" in Item 1. "Business." of this Form 10-K.

Markets for insurance products and services are highly competitive and subject to rapid technological change,advancement, and we may be unablestruggle to compete effectively.

We offer our insurance products and services in a highly competitive market characterized by (i) consumer and business price sensitivity and (ii) aggressive price competition and improvements based on performance characteristicscharacteristics, andinsights largegained through larger data sets. These factors can compact underwriting margins, new products and services, evolving industry standards,sets, and rapid adoption of technological advancements. These factors can compress underwriting margins, impact new products and services, and evolve industry standards. Our ability to compete depends heavily on our timely and consistent introduction of innovative new products and services.

The Internet has emerged asis a significant competitive digital marketplace for existing and new competitors. Established insurance competitors are beginning to exploreexploring broader digital Internet offerings and implement artificial intelligence ("AI"). tools. New competitors with variations on traditional business models have emerged. Because the Internet makes it easier and less expensive to bundle products and services, it is also possible that non-insurance companies conducting business on the Internetonline could enter the insurance business or form strategic alliances with insurers. Changes in competitors and competition,the competitive landscape, particularly on the Internet, could cause changes inshift the supply or demand for insurance and adversely affect our business.

The increasing importance of the Internet, technology, AI, and digital strategies in our industry also demands that we attract and retain employees in difficult-to-fill data science, advanced analytics, and information technology ("IT") roles. If we cannot attract and retain such employees, our results of operations and financial condition could be adversely affected.

Insurers depend on access to reliable data about their policyholders and loss experience to build complex analytics and predictive models that assess riskloss costs, expected profitability, reserve adequacy, adverse claim development potential, recovery opportunities, fraudulent activities, and customer buying habits. Because we use and depend on the aggregated industry loss data assembled by rating bureaus under the antitrust exemptions of the McCarran-Ferguson Act, we likely would be at a competitive disadvantage to larger insurers if Congress repealed the McCarran-Ferguson Act.

We expect the importance of data science and analytics to increase, becoming more complex and accurate withas larger sets of more relevant data.data become available. Some larger competitors have significantly more data about the performance of their underwritten risks. In comparison, we may not have sufficient volumes of loss experience data to accurately and granularly analyze and project our future costs. We supplement our data with industry loss experience from Verisk, AmericanAAIS, Association of Insurance Services, Inc., the National Council on Compensation Insurance, Inc.,NCCI, and other publicly available sources. While relevant, industry data may not correlate specifically to the performance of our underwritten risks or be as predictive as data on a larger book of our own business. Because we use and depend on the aggregated industry loss data assembled by rating bureaus under the antitrust exemptions of the McCarran-Ferguson Act, we likely would be at a competitive disadvantage to larger insurers if Congress repealed the McCarran-Ferguson Act.

We rely on complex financial and other statistical models, developed internally and by third parties, to predict (i) underwriting results on individual risks and our overall portfolio, (ii) claims fraud and other claims impacts, such as escalation, (iii) impacts from catastrophes, (iv) enterprise risk management capital scenarios, and (v) investment portfolio changes. We rely on these financial and other statistical models to analyze historical loss costs and pricing, claims severity and frequency trends, catastrophe losses, reinsurance attachment and exhaustion points, investment performance, portfolio risk, and our economic capital position. Flaws or limitations in financial and statistical modelsmodels, andas well as their embedded assumptions could increaseunderstate estimated losses. For example, a significant component of climate change risk is that the frequency and severity of extreme weather events may evolve differently relative to historical levels – leading to greater model uncertainty. In addition, increasing insurance regulatory interest in data and model use, combined with any potential restrictions on traditional rating factors or model use, could have a material adverse impact on our financial condition and operating results. OurIn statisticalrecognition modelsof are extremely useful in monitoring and controllingthis risk, but are no substitute for senior management's experience orand judgment.sound business judgment must be used to interpret and apply model results.

We depend on income from our investment portfolio for a significant portion of our revenue and earnings. Our investments can be negatively affected by (i) liquidity, (ii) credit deterioration, (iii) financial results, (iv) public equityand and/or debtprivate market changes,volatility, (v) economic conditions, including heightened levels of economic inflation, (vi) political risk, (vii) sovereign risk, (viii) interest rate fluctuations, (ix) international trade policies and tariffs, or (ixx) other factors, including civil unrest and other catastrophic events, some of which may be impacted by climate change risk.

Our investment portfolio's value is subject to credit risk from our held securities'the issuers, guarantors, financial guarantee insurers, and other counterparties into certainthe transactions.securities we hold or transactions we enter. Defaults on any of our investments by any of these parties could reduce our net investment income and increase net realized investment losses. We are also subject to the risk that the issuers or guarantors of our fixed income securities may default on principal and interest payment obligations.

Additionally, we are exposed to interest rate risk, primarily related to the market price and cash flow variability associated with changes in interest rates.rate changes. Consequently, the amount of our cash and cash equivalents and the value and liquidity of our marketable and non-marketable securities may fluctuate substantially. Future fluctuations in the value of our cash, cash equivalents, and marketable and non-marketable securities could result in significant losses that have a material adverse impact on our financial condition and operating results.

•Physical investment risks include the risk of investment losses on our commercial and residential mortgage-backed securities exposed to climate-related catastrophic losses that can cause business disruption, destroy capital, increase costs to recover from disasters, reduce revenue, and cause population displacement and migration. These, in turn, can lower residential and commercial property values, household wealth, and corporate profitability, potentially creating financial and credit market losses impacting insurer asset values. As of December 31, 2024,2025, about 69%76% of our residential mortgage-backed securities were backed by government agencies. We generally invest in the top tranches of commercial mortgage-backed securities, which limit potential losses from declines in property value declines.value. As of December 31, 2024,2025, about 68%71% of our commercial mortgage-backed securities had "AAA" credit ratings.

Significant future declines in investment value declinesvalues could require further losses recorded on securities we sell and credit losses. For more information regarding market interest rate, credit, and equity price risk, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk." of this Form 10-K.

The determination of the amount of credit losses taken on our investments is based on our quarterly evaluation and assessment of our investmentsinvestments, andas well as the known and inherent risks associated with the various asset classes. Our allowance for credit losses is subject to significant judgments and assumptions about changes in economic conditions, estimated future cash flows, and the accuracy of third-party information used in internal assessments. We revise our evaluations and assessments as conditions change and new information becomes available. There can be no assurance that management has accurately assessed the level of credit losses recorded in our Financial Statements. For further details on our evaluation and considerations for determining whether a security has a credit loss, please refer to "Critical Accounting Policies and Estimates" in Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations." of this Form 10-K.

Changes to laws and regulations can adversely affect our business by increasing our costs, limiting our ability to offer a productproducts or serviceservices to customers, requiring changes to our business practices, or otherwise making our products and services less attractive.

We have designed and implemented policies and procedures to ensure compliance with applicable laws and regulations. However, we cannot provide assurance that our employees, contractors, or independent distribution partners will not violate such lawslaws, and regulationsregulations, or our policies and procedures. To some degree, we have multiple regulators whose authority may overlap and may have differentwhose interpretations and/or regulations related to the same legal issues.issues may differ. Consequently, wethere haveis thea risk that one regulator's position or interpretation may conflict with another regulator on the same point. For example, (i) if Congress passed legislation regulating insurer solvency oversight and state regulators remained responsible for rate approval, we could be subject to aan conflictinginconsistent regulatory framework that could impact our profitability and capital adequacy.adequacy or (ii) the difference between California's more expansive view of required climate disclosures as compared to those of the SEC. The cost of complying with various laws and regulations, potentially conflicting laws and regulations, and changes in those laws and regulations, could have a material adverse effect on our results of operations, liquidity, financial condition, financial strength, and debt ratings. Insurers are subject to regulatory, political, and media scrutiny. We are subject to government market conduct reviews and investigations, legal actions, and penalties. There can be no assurance that our business will not be materially adversely affected by the outcomes of such activity in the future. If we are found to have violated laws and regulations, it could materially adversely affect our reputation, financial condition, and operating results.

We are subject to federal and state laws relatinggoverning tothe collecting,collection, using,use, retaining,retention, securing,security, and transferringtransfer of personally identifiable information ("PII"). Federal laws include the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act, the Drivers Privacy Protection Act, the Health Insurance Portability and Accountability Act, and Unfair and Deceptive Acts and Practices laws. Several states, like New York, Nevada, Colorado, Virginia, and California, have passed similar laws, and others are considering imposing additional restrictions or creating new rights concerning PII. These laws continue to develop and may differ by jurisdiction. Complying with emerging and changing requirements may causeresult us to incurin substantial costs or requirenecessitate us to change our business practices. Noncompliance could result in significant reputational harm, penalties, and legal liability.

General Data Protection Regulation ("GDPR") regulates data protection and privacy in the EUEU, andincluding personal data transfers outside the EU. GDPR’s maincentral tenet is to give individuals primary control over their personal data. Because we do not write coverages in the EU, GDPR does not directly impact us. Some U.S. states have subsequently incorporated individual-control mechanisms into state privacy laws. Future EU data privacy actions likely will influence U.S. regulators over time.

We make statements about our use and disclosure of PII in our privacy notice, published on our website, and in other public venues. We couldmay be subject to litigation or governmental actions if we fail to comply with these public statements or federal and state privacy-related and data protection laws and regulations. Such proceedings could impact our reputation and result in penalties, including ongoing audit requirements and significant legal liability.

We are engaged in ordinaryordinary, routine legal proceedings incidental to our insurance operations that are inherently unpredictable and could impact our reputation and/or have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods.

Some of our legal proceedings may receive media attention becausedue ofto their perceived newsworthiness and/or their relationship to various broad economic, political, social, and legal developments or trends. Such media stories could negatively impact our reputation.

Restrictions on our Insurance Subsidiaries' ability to pay dividends, make loans or advances to the Parent, or enter into transactions with affiliates may materially affect our ability to pay dividends on our preferred and common stock or repay our indebtedness. Based on these restrictions, there is a maximum ordinary annual dividend amount the Insurance Subsidiaries can provide to the Parent. Our Insurance Subsidiaries' ability to pay dividends or make loans or advances is subject to the approval or review ofby our domiciliary state insurance regulators. For additional details regarding dividend restrictions, see Note 22. "Statutory Financial Information, Capital Requirements, and Restrictions on Dividends and Transfers of Funds" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

The Parent’s ability to pay dividends to its stockholders is also impacted by covenants in its credit agreement (the "Line of Credit") among the Parent, the named lenders (the "Lenders"), and Wells Fargo Bank, National Association, as Administrative Agent. These covenants obligate the Parent to, among other things, maintain a minimum consolidated net worth and a maximum ratiodebt-to-capitalization of debt to capitalization.ratio. Our preferred stock's terms limit the Parent's ability to declare or pay dividends on, or purchase, redeem, or otherwise acquire shares of its common stock or any shares of the Parent that rank junior to, or on parity with, the preferred stock if the Parent does not declare and pay (or set aside) dividends on the preferred stock for the last preceding dividend period. For additional details about the Line of Credit's financial covenants, see Note 11. "Indebtedness" in Item 8. "Financial Statements and Supplementary Data" of this Form 10-K. For additional details about conditions related to our preferred stock, see Note 17. "Equity" in Item 8. "Financial Statements and Supplementary Data" of this Form 10-K.

Because we are a New Jersey corporation and an insurance holding company, we may be less attractive to potential acquirersacquirers, and our common stock's value could be adversely affected.

We andWe, our distribution partnerspartners, and vendors are subject to attempted cyber-attacks and other cybersecurity and system availability risks.

Our business heavily relies on IT and application systems connected to or accessed through a connection to the Internet. Consequently, a malicious cyber-attack could affect us. Our systems also house proprietary and confidential informationinformation, including PII, about our operations, employees, agents, and customers and their employees and property, including PII.property. A malicious cyber-attack on (i) our systems, (ii) our distribution partners or their key operating systems, and (iii) any other of our third-party partners or vendors and their key operating systems may interrupt our operations, damage our reputationreputation, and result in monetary damages that are difficult to quantify. These potential impacts from a malicious cyber-attack could have a material adverse effect on our results of operations, liquidity, financial condition, financial strength, and debt ratings.

Through encryption and authentication technologies, we have implemented system- and process-based risk mitigations intended to secure our IT systems and prevent unauthorized access to or loss of sensitive data. Cyber-attack sophistication evolves daily, so our security measures may not sufficiently address all eventualities. We may be vulnerable to hacking, employee error, malfeasance, system error, faulty password management, or other irregularities. We implement new technologies, including artificial intelligence,AI, to increase operational efficiencies. These new technologies may increase the risk of cyber-attacks.cyber attacks. We also rely on third-party technology providers whose cyber-attack risks may be higher or lower than oursours, depending on their profile and the maturity of their security program's maturity.programs. To the extent possible and practical, we review third-party control environments,environments aligningand thealign their risk exposure with our business requirements and risk tolerances. Any disruption or breach of our systems or data security could damage our reputation, result in monetary damages that are difficult to estimate, and have a material adverse effect on our results of operations, liquidity, financial condition, financial strength, and debt ratings. To mitigate this risk, we have and expect to continue to (i) conduct disaster recovery exercises, employee education programsprograms, and tabletop exercisesexercises, and (ii) develop and invest in a variety of controls to prevent, detect, and appropriately react to cyber-attacks, including frequently testing our systems' security and access controls. We have insurance coverage for certain cybersecurity risks, including privacy breach incidents, which may be insufficient to indemnify against all arising losses or types of claims.

We discuss the factors that could cause our actual results to differ materially from our projections, forecasts, or estimates in forward-looking statements in Item 1A. "Risk Factors." of this formForm 10-K. These risk factors may not be exhaustive. We operate in a constantly changing business environment, and new risk factors may emerge anytime.at any time. We cannot predict these new risk factors, their impact on our businesses, or the extent to which one or any combination of factors may cause actual results to differ materially from any forward-looking statements. Given these risks, uncertainties, and assumptions, the forward-looking events we discuss might not occur.

The Insurance Subsidiaries' net loss and loss expense reserves duration was approximately 3.0 years at December 31, 2024 and 3.1 years atboth December 31, 2023.2025 and December 31, 2024.

Reserve for loss and loss expense includeincludes case reserves on reported claims and IBNR reserves. Case reserves are estimated for each individual claim based on facts and circumstances known at the time. Case reserves may be adjusted up or down as the claim's specific facts and circumstances change. IBNR reserves are established at more aggregated levels and include provisions for (i) claims not yet reported, (ii) future development on reported claims, (iii) closed claims that could reopen in the future, and (iv) anticipated salvage and subrogation recoveries.

We perform quarterly internal reserve reviews using our own loss experience, considering various internal and external factors. Changes in claim dynamics may inherently alter paid and reported development patterns. While the selections in our reserve analyses aim to account for these impacts, estimated reserves involve greater risk of variability. In addition to our internal reserve reviews, an external consulting actuary performs an independent semiannual reserve review. We do not rely on the external consulting actuary's report to determine our recorded reservesreserves, but we review and discuss our observations on trends, key assumptions, and actuarial methodologies with our consulting actuary. While not required, ourOur independent consulting actuary issues the annual statutory Statements of Actuarial Opinion for our Insurance Subsidiaries. For additional information on our accounting policy for reserve for loss and loss expense, refer to Note. 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

The range of reasonable reserve estimates increased as of December 31, 2024,2025, relative to December 31, 2023.2024. This increase was primarily related to reserve growth commensurate with (i) our net premiums earned ("NPE") growth and (ii) increased uncertainty in severity due to the impact of social inflation.growth.

Our quarterly reserving process may lead to changes in the recorded reserves for prior accident years, referred to as favorable or unfavorable prior year loss and loss expense development. In 2024,2025, we experienced net unfavorable prior year loss development of $285.3$77.5 million, compared to net unfavorable development of $285.3 million in 2024 and net unfavorable development of $10.0 million in 2023 and net favorable development of $78.9 million in 2022.2023. The following table summarizes prior year development by line of business:

At December 31, 2024,2025, our general liability line of business had recorded reserves, net of reinsurance, of $2.5$2.9 billion, representing 45%46% of our total net reserves. In 2024,2025, this line experienced unfavorable reserve development of $316.0$40.0 million, primarily due to the impact of social inflation that increased loss severities in accident years 2020 and subsequent, with most of the actions for accident years 2022 and 2023. We attribute the increased severities to elevated social inflation, which we view as an industry dynamic characterized by higher claimant propensity for attorney representation and litigation, longer settlement times, and higher settlement values. Similarly, this line experienced unfavorable development in 20232024 of $55.0$316.0 million, attributable to the impact of social inflation driving increased loss severities in accident years 20152020 through 2020.2023.

The general liability line of business presents a diverse set of exposures. Various factors influence losses and loss trends, including legislative enactments, judicial decisions, and economic and social inflation. Economic inflation directly impacts our claims severities by increasing the costs of raw materials, medical procedures, and labor. Social inflation may impact both claim frequency and severity by affecting (i) claimant propensity to file a claim, (ii) the percentage of claimants who engage lawyers, and (iii) broader liability interpretations and the nature and amounts of judicial verdicts and associated awards, all influencing future settlement values. We monitor claim litigation rates regularly. We have observed the percentage of general liability claims with plaintiff attorney involvement increasing in recent periods. Other social inflationary factors, including the increased prevalence of third-party litigation funding, claimantclaimants' willingness to undergo surgery, evolving plaintiff attorney strategies and tactics, and broadening liability definitions and interpretationsinterpretations, are also impacting claims severities. These trends and post-pandemic court case scheduling continue to affect claim settlement times.

We have exposure to abuse or molestation claims, mainly through policies that we (i) underwrite through our Community and Public Services ("CAPS") strategic business unit and (ii) issue to schools, religious institutions, day-carechild-care facilities, and other social services. These CAPS business unit customers represented approximately 10% of our total Standard Commercial Lines net premiums written ("NPW") in 20242025 and 2023.2024. We continue to actively manage policy limits and monitor each jurisdiction's statute of limitations to ensure our rate level reflects increased exposure wherever regulations allow. We also engage our risk management specialists, many of whom are Certified Praesidium Guardians, to theunderstand extentour regulatorilyinsureds' possible.screening, training, and monitoring policies and collaborate with them to improve their risk prevention in these areas. These underwriting and pricing actions have positioned the portfolio for future profitability but limited our CAPS growth in recent years.

Certain states have enacted state laws that extend the statute of limitations or permit windows for abuse or molestation claims and lawsuits that statutes of limitations previously barred. Consequently, we mayhave receivereceived claims decades after the alleged acts involving complex claims coverage determinations, potential litigation, higher defense costs, and the need to collect from reinsurers under older reinsurance agreements. Our claims and actuarial departments actively monitor these claims to identify changes in frequency or severity and any emerging or shifting trends.

Our active monitoring of claim patterns and emerging or shifting trends should helphelps us better understand this rapidly evolving exposure. However, the ultimate impact of social, political, and legal trends remains highly uncertain and could substantially impact the ultimate settlement values for these claims.

In addition, over the last several years, we have implementedcontinued to implement underwriting changes withinin this line of business that we believe will lead to improved profitability. These changes may impact portfolio composition and may affect paid and reported development patterns. While our reserve analyses incorporate methods that adjust for these changes, our estimated reserves have a greater risk of fluctuation.

At December 31, 2024,2025, our workers compensation line of business had recorded reserves, net of reinsurance, of $797$741 million, representing 14%12% of our total net reserves. During 2024,2025, this line experienced favorable reserve development of $45.0$90.0 million, primarily due to improved loss severities in accident years 2022 and prior. Similarly, this line experienced favorable reserve development during 20232024 of $74.5$45.0 million, primarily due to improved loss severities in accident years 20212022 and prior. During both 20242025 and 2023,2024, the lower-than-expected loss emergence was partly due to (i) lower than initially anticipated medical inflation and (ii) our various implemented claims initiatives. Because of the length of time injured workers can receive related medical treatment,treatment for an extended time, decreases in medical inflation can cause favorable loss development over an extended number of accident years.

•Unexpected changes in medical cost inflation – The industry has experienced an extended period of lower medical claim cost inflation. Changes to our historical workers compensation medical costs and potential changes in future medical inflation could increase reserve variability;

•Changes in statutory workers compensation benefits – Statutory benefit changes may affect all outstanding claims, including past and not-yet-settled claims. Depending on the social and political climate, these changes may either increase or decrease associated claim costs; and Changes in utilization of the workers compensation system – These changes may be driven by economic, legislative, or other changes, like increased use of prescriptions for pharmaceuticals, more complex medical procedures, changes in permanently injured workers' life expectancy, and health insurance availability.

At December 31, 2024,2025, our personal automobile line of business had recorded reserves, net of reinsurance, of $158$177 million, representing 3% of our total net reserves. This line experienced unfavorable prior year reserve development of $13.0 million in 2025, primarily due to increased loss severities in accident year 2024 concentrated in New Jersey. This line experienced unfavorable prior year reserve development of $11.1 million in 2024, primarily due to increased loss severities in accident years 2022 through 2023. This line experienced unfavorable prior year reserve development of $15.3 million in 2023, primarily due to increased loss severities in accident year 2022.

At December 31, 2024,2025, our E&S casualty lines of business had recorded reserves, net of reinsurance, of $617$755 million, representing 11%12% of our total net reserves. In 2024,2025, this line experienced unfavorable prior year reserve development of $10.0 million, primarily due to increased loss severities in accident years 2020 through 2023. In 2024, this line experienced unfavorable prior-year reserve development of $20.0 million, primarily due to increased loss severities in accident years 2023 and prior. In 2023, this line experienced favorable prior year reserve development of $5.0 million, primarily due to improved loss severities in accident years 2021 and prior.

Some of the risk factors for the general liability line also affect the E&S casualty lines. These include (i) economic inflation, such as materials and labor costs and (ii) social inflationary trends, such as increased attorney involvement, broader liability findings, and more generous settlement awards. In response to these social inflationary trends, we have been embedding higher severity assumptions in our initial loss ratio estimates, which materialized in 2024.estimates.

WhileThe weE&S believemarketplace thesenaturally claimsleads operationalto shifts in portfolio mix over time. These changes are improving our results and customer experience, they have inherent risks. Changes in claimsbusiness processesmix may affect paid and reported development patterns. Our reserve analyses incorporate methods that adjust for these changes, but our estimated reserves have a greater risk of fluctuation.

United States ("U.S.") fiscal and monetary policy and global economic conditions bring additional inflationary trend uncertainty. Changes in inflation affect the ultimate settlement costs for many of our lines of business, with the greatestmost significant reserve impact on the longer-tailed lines, such as general liability and workers compensation. Uncertainty about future inflation or deflation creates the potential for additional reserve variability in these lines of business.

The importance of any single assumption depends on several considerations, such as line of business and accident year. If the actual experience emerges differently than the assumptions underlying the reserve process, possible changes in our reserve estimates could be material to the results of operations in future periods. We conduct sensitivity tests highlightingthat highlight potential impacts to loss and loss expense reserves for the major casualty lines of business under different scenarios. These tests consider each assumption and line of business individuallyindividually, without considering the correlation between lines of business and accident years. The results (i) do not constitute an actuarial range, (ii) show possible impacts from variations in certain key assumptions, and (iii) offer no assurance that future loss and loss expense emergence will be consistent with our current or alternative assumptions.

Changes in internal and external trends and operational changes may manifest as changes in loss and loss expense development patterns. These patterns are a key assumption in the reserving process, as are the current accident year expected loss and loss expense ratios. These ratios are developed through a rigorous process of projecting recent accident years' experience to an ultimate settlement basis. They are then are adjusted to the current accident year's pricing and loss cost levels. The impact of changes to underwriting portfolio and claims handling practice changespractices is also quantifiedestimated and reflected where appropriate. Nonetheless, the ultimate loss and loss expense ratios may differ from current estimates.

Environmental claims have arisen primarily from Standard Commercial Lines policies issued to municipal governments and small non-manufacturing commercial customers for landfill exposures, and Standard Personal Lines homeowners policies related to leaking underground storage tanks. Asbestos claims have generally arisen primarily from Standard Commercial Lines policies issued to (i) various distributors of asbestos-containing products, such as electrical and plumbing materials and (ii) contractors exposed to or handling asbestos-containing products, such as heating, ventilation, and air conditioning contractors. These claims are handled inby a centralized and specialized asbestos and environmental claim unit that establishes case reserves based on each claim's then-known facts and circumstances, which IBNR reserves supplement.

We have other latent and continuous trigger exposures in our ongoing portfolio. Examples include claims for construction defect and abuse or molestation, including in states that have increased and expanded the statute of limitations. We manage our exposure to these liabilities through our underwriting and claims practices, which includes ainclude dedicated claimsclaim unit,units, like we do for asbestos and environmental claims. The impact of social, political, and legal trends on these claims remains highly uncertain, so the development and adequacy of our related loss and loss expense reserves remain highly uncertain. Some of these exposures remain in our ongoing portfolio and are reserved in aggregate, with other exposures within the line of business reserves. We remove other unusual and highly uncertain exposures, like toxic product claims involving diacetyl, lead paint, and silica, from our traditional reserve analysis and undertake a separate review for them.

TheApproximately fair value of approximately 91%88% of our investments measured at fair value are classified as either Level 1 or Level 2 in the fair value hierarchy and are priced using observable inputs for identical or similar assets. About 9%12% are classified as either (i) Level 3 and are based on unobservable market inputs because the related securities are not traded on a public market,market or (ii) not leveled because the related securities are measured at fair value using net asset value per share (or its practical expedient). For additional information, refer to the following sections within Item 8. "Financial Statements and Supplementary Data." of this Form 10-K: (i) item (d) of Note 2. "Summary of Significant Accounting Policies" for descriptions of the levels within the fair value hierarchy and the valuation techniques used for our Level 3 securities,securities and (ii) Note 7. "Fair Value Measurements" for quantitative information on the unobservable inputs in our securities measured using Level 3 inputs.

When fixed income securities are in an unrealized loss position and we do not intend to sell them,fixed income securities in an unrealized loss position, we record an allowance for credit losses for the portion of the unrealized loss related to an expected credit loss. We estimate expected credit losses on these securities by performing a risk-adjusted discounted cash flow ("DCF"). The allowance for credit losses is the excess of amortized cost over the greater of (i) our estimate of the present value of expected future cash flows or (ii) fair value. The allowance for credit losses cannot exceed the unrealized loss, and therefore it may fluctuate with changes in the security's fair value. We also consider the need to record losses on securities in an unrealized loss position for which we have the intent to sell. If we determine that we have the intent or likely requirement to sell the security, we write down its amortized cost to its fair value.

We analyze unrealized losses for credit loss in accordance with our existing accounting policy, which includes performing DCF analyses on securities at the lot level and analyzing thesethe resulting DCFs using various economic scenarios. In performing these DCF analyses, we calculate the present value of future cash flows using various models specific to the major security types in our portfolio. These models use security-specific information and forecasted macroeconomic data to determine possible expected credit loss scenarios based on projected economic changes. The forecasted economic data incorporated into the models is based on the Federal Reserve Board’s annual supervisory stress test review onof certain large banks and financial institutions.

We also can incorporate internally-developed forecast information into the models as we deem appropriate. In developing our best estimate of the allowance for credit losses, we consider our outlook onfor the probability of the various scenarios occurring.scenarios.

Based on these analyses, we recorded an allowance for credit losses on our AFS fixed income securities portfolio of $31.3 million at December 31, 2025, and $31.9 million at December 31, 2024, and $28.2 million at December 31, 2023.2024. If the security-specific and macroeconomic assumptions in our DCF analyses or our outlook on the occurrence probability of our DCF model scenarios were to change, our allowance for credit losses and the resulting credit loss expense or benefit willwould negatively or positively impact our results of operations. Factors considered in determining the allowance for credit losses require significant judgment, including our evaluation of the security's projected cash flow stream.

Reinsurance recoverables on paid and unpaid loss and loss expense represent our estimates of the amounts we will recover from reinsurers. Each reinsurance contract is analyzed to ensure sufficient risk is transferred to record the transactions appropriately as reinsurance in the Financial Statements. Amounts recovered from reinsurers are recognized as assets contemporaneously and in a manner consistent with the paid and unpaid losses associated with the underlying policies. An allowance for credit losses on our reinsurance recoverable balance is recorded based on an evaluation of balances due from reinsurers and other available information, including collateral we hold under the terms and conditions of the underlying agreements. Reinsurers often purchase and rely on their retrocessional reinsurance programs to manage their capital positionpositions and improve their financial strength ratings. Details about retrocessional reinsurance programs are not always transparent, making it difficult to assess our reinsurers' exposure to counterparty credit risk. Other factors impact our reinsurer's credit quality, such as their reserve adequacy, investment portfolio, regulatory capital position, catastrophe aggregations, and risk management practices. In addition, contractual language interpretations and willingness to pay valid claims can impact our allowance for estimated uncollectible reinsurance. Our allowance for estimated uncollectible reinsurance was $2.0 million at December 31, 2024, and $1.7 million atboth December 31, 2023.2025 and December 31, 2024. We continually monitor developments that may impact recoverability from our reinsurers, for which we have contractual remedies, if necessary. For further information regarding reinsurance, see the "Reinsurance" section below in "Results of Operations and Related Information by Segment" and Note 9. "Reinsurance" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

2Non-GAAP operating income (loss), non-GAAP operating income (loss) per diluted common share, and non-GAAP operating ROE are comparable to net income (loss) available to common stockholders, net income (loss) available to common stockholders per diluted common share, and ROE, respectively, but exclude after tax net realized and unrealized gains and losses on investments included in net income (loss). Adjusted book value per common share is comparable to book value per common share, but excludes total after-tax unrealized gains and losses on investments included in accumulated other comprehensive income (loss). These non-GAAP measures are important financial measures used by us, analysts, and investors because the timing of realized and unrealized investment gains and losses on securities in any given period is largely discretionary. In addition, net realized and unrealized investment gains and losses on investments could distort the analysis of trends.

For moreadditional detailsinformation about these segments, refer to Note 9. "Segment Information" in Item 1. "Financial Statements." of this Form 10-Q and Note 12. "Segment Information" in Item 8. "Financial Statements and Supplementary Data." of our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report").

In the MD&A, we will discuss and analyze the following:

•Financial Highlights of Results for the firstsecond quarters ended MarchJune 31,30, 2026 ("FirstSecond Quarter 2026") and MarchJune 31,30, 2025 ("FirstSecond Quarter 2025"); and the six-month periods ended June 30, 2026 ("Six Months 2026") and June 30, 2025 ("Six Months 2025")

Our unaudited interim consolidated financial statements include amounts for which we have made informed estimates and judgments for transactions not yet completed. SuchThese estimates and judgments affect the reported amounts in theour consolidated financial statements. As outlined in ourOur 2025 Annual Report,Report thoseoutlines the estimates and judgments most critical to the preparation of the consolidated financial statements involved the following: (i) reserve for loss and loss expense; (ii) investment valuation and the allowance for credit losses on available-for-sale ("AFS") fixed income securities; and (iii) reinsurance. These estimates and judgments require our use of assumptions about highly uncertain matters that make them subject tocould change as facts and circumstances develop. If we applied differentDifferent estimates andor judgments,judgments thecould financialresult statements might have reportedin materially different reported amounts. For additional information regarding our critical accounting policies and estimates, refer to pages 38 through 45 of our 2025 Annual Report.

Financial Highlights of Results for FirstSecond Quarter and Six Months 2026 and Second Quarter and Six Months 20251

In FirstSecond Quarter 2026, we deliveredmarked aour eighth consecutive quarter of double-digit operating returns with an operating ROE of 12.0%13.7% and returned $56$58 million to common stockholders through regular dividends and opportunistic share repurchases, reinforcing our commitment to delivering long-term value. As Selective celebratescelebrated its 100th anniversary inthis 2026,year, 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, weWe remain focused on a set of key priorities across the company to drive future success, including:

•Further leveraging the use of data analytics and technology, including general-purpose, industry-trained, and agentic artificial intelligence ("AI") solutions, to drive operational efficiency and improved underwriting and claim outcomes. Early AI successes in claims, underwriting, and risk management are delivering measurable outcomes in accuracy, speed, and productivity, positioning us to responsibly scale AI across the organization. We have also made considerable progress in modernizing our policy acquisition and claims systems. For example, system enhancements in our E&S Lines segment have created significant operational efficiency, withpositioning theus segment’sfor premium productiongrowth increasing significantly despitewith limited headcount growth.additions.

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 over time:

•In our existing footprint, we are focused on growing with existing partners and strategically appointing new agency locations. InDuring FirstSix QuarterMonths 2026, we hadadded a net increase of approximately thirty100 agency locations,locations and we had a net increase of 100 agency locations in 2025.

•Careful and deliberate geographic expansion. Since 2017, we have added fourteen states to our Standard Commercial Lines footprint, including Kansas in 2025. In FirstSix QuarterMonths 2026, these expansion states produced $125$242 million in premium, representing approximately 9% of total direct premiums written and 1% marginal total premium growth.written. We expectbegan to write newwriting business in Montana and Wyoming by the endas of July 1, 2026.

•After-tax net investment income of $480 million, up from our initial guidance of $465 million;

•Weighted average shares of 60.560.2 million on a fully diluted basis, downreflecting fromthe 61shares millionrepurchased in ourSix initialMonths guidance.2026 Thisand reflectsassuming shareno repurchases in First Quarter 2026, but does not make assumptions about future shareadditional repurchases under our existingshare repurchase authorization.

Lower NPW decreased modestly in FirstSecond Quarter 2026 and Six Months 2026 compared to Firstthe Quartersame 2025,prior-year reflectingperiods lowerreflect reduced new business in a competitive environment and deliberate actions to enhance underwriting profitability. Retention in our Standard Commercial Lines segment was down two points in both Second Quarter 2026 and Six Months 2026, reflecting our granular pricing actions to drive lower retention on underperforming business. While thisenhancing underwriting profitability is a primary focus of ours,focus, we are also executing on strategies to support future growth opportunities, including expanding our geographic footprint and broadening our E&S distribution capabilities with retail access.

Current year casualty loss costs were higher in FirstSecond Quarter 2026 and Six Months 2026 compared to the same prior-year period,periods, asdriven by elevated commercial automobile claim frequencies in the first half of the year and the increased loss trend assumptions that we recognized over the course of 2025 that are included in our expectations for 2026.

TheIn Six Months 2026, the loss and loss expense ratio increased 4.20.3 points in First Quarter 2026 compared to FirstSix QuarterMonths 2025, drivenwith higher current year loss costs and catastrophe losses, predominantly offset by higherimprovements netin prior year casualty reserve development and non-catastrophe losses. The increase in catastrophe losses and current year casualty loss costs. Net catastrophe property losses increased the loss and loss expense ratio by 3.7 points in First Quarter 2026 compared to the same prior-year period,was driven by a higher frequency and severity of winter storms and thunderstorm events that impacted our footprint this year compared to last.last, mainly in the first quarter of 2026.

CurrentHigher current year casualty loss costs were higher in FirstSecond Quarter 2026 comparedand toSix theMonths same2026 prior-year period asreflected the increased loss trend assumptions that we recognized over the course ofthroughout 2025 areand included in our expectations for 2026. Elevated severity trend assumptions attributable to social inflation on our general liability and commercial automobile liability lines of businessbusiness, as well as elevated commercial automobile claim frequencies in the first half of 2026, drove the increasedincrease in current year casualty loss trend assumptions.costs. Lower workers compensation loss trends provided a partial offset due tofrom decreasing claim frequencies in our 2026 expectations.

NPW growth was flatdown in FirstSecond Quarter 2026 and Six Months 2026 compared to the same prior-year period,periods, reflecting deliberate actions to enhance underwriting profitability. In sectors and markets where pricing does not align with our view of rate need, we are taking targeted underwriting actions, including (i) revising underwriting guidelines, (ii) tightening coverage offerings, and (iii) reducing writings.

The combined ratio increaseddecreased 2.24.0 points in FirstSecond Quarter 2026 and 1.0 in Six Months 2026 compared to Firstthe Quartersame 2025,prior-year periods, primarily driven by the following:

These dynamics have impacted our view of current year loss costs. WeThe embeddedincreased loss trend assumptions that we recognized over the course of 2025 that are included in our expectations for 2026, drove a 2.1-point2.6-point increase in current year casualty loss costs in FirstSecond Quarter 2026 and a 2.3-point increase in Six Months 2026 compared to Firstthe Quartersame 2025,prior-year driven by higher social inflation-related severity assumptions.periods.

NPW decreased 4%7% in FirstSecond Quarter 2026 and 5% in Six Months 2026 compared to the same prior-year period,periods, driven by underwriting actions to improve profitability, such as achieving renewal pure price increases and tightening underwriting guidelines for fleet exposures. Lower renewal pure price increases this year compared to last were driven by a reduction in rates for physical damage that were partially offset by higher commercial automobile liability rates.

The combined ratio increaseddecreased 0.81.1 points in FirstSecond Quarter 2026 and 0.1 points in Six Months 2026 compared to the same prior-year period,periods, and included the following:

We did not record any prior year casualty reserve development in FirstSecond Quarter 2026 orand FirstSix Months 2026, compared to $25.0 million recorded in Second Quarter 2025 and Six Months 2025. Current year casualty loss costs were higher in FirstSecond Quarter 2026 and Six Months 2026 compared to the same prior-year period,periods, asdriven by elevated claim frequencies in the first half of the year and the increased loss trend assumptions we recognized over the course ofthroughout 2025 that are included in our expectations for 2026.

Non-catastropheIn the aggregate, net catastrophe and non-catastrophe property losses were 2.11.5-points lower in Second Quarter 2026 and 1.9- points lower in FirstSix QuarterMonths 2026 compared Firstto Quarterthe 2025same prior-year periods, and provided a partial offset to the increase in current year loss costs. This reduction was driven by (i) the earned impact of higher renewal pure price increases and (ii) period-to-period variability of catastrophe and non-catastrophe property losses.

NPW grewdecreased a modest 1%4% in FirstSecond Quarter 2026 and 2% Six Months 2026 compared to the same prior-year period,periods, benefitingreflecting from directlower new business, renewal pure price increases,business and exposuredeliberate growthactions onto renewalstrengthen policies.underwriting profitability.

The combined ratio increaseddecreased 12.66.3 points in FirstSecond Quarter 2026 compared to FirstSecond Quarter 20252025, and increased 3.1 points in Six Months 2026 compared to Six Months 2025, and included the following:

NetIn the aggregate, net catastrophe and non-catastrophe property losses increasedwere the loss and loss expense ratio by an aggregate 13.0 pointslower in FirstSecond Quarter 2026 compared to FirstSecond Quarter 2025, but were higher in Six Months 2026 compared to Six Months 2025. The increase in net catastrophe losses was driven by higher frequency and severity of winter storms and thunderstorm events that impacted our footprint this year compared to last.last, mainly in the first quarter of 2026.

The combined ratio decreased 4.57.0 points in FirstSecond Quarter 2026 and 5.8 points in Six Months 2026 compared to the same prior-year periodperiods and included the following:

The combined ratio was favorably impacted by a decrease inLower current year casualty loss costs of 2.6 points in FirstSecond Quarter 2026 and Six Months 2026 compared to Firstthe Quartersame 2025,prior-year periods were primarily driven by decreasingdecreased claim frequencies leading to improved loss trends. In addition, the combined ratio benefited from a 1.6-point2.1-point reduction in underwriting expenses in FirstSecond Quarter 2026 and a 1.8-point reduction in Six Months 2026 compared to Firstthe Quartersame 2025,prior-year periods, which was primarily driven by lower commissions on this line of business.

Lower NPW decreasedand 6%NPE in FirstSecond Quarter 2026 comparedand toSix First Quarter 2025, primarily due to lower direct new business. New business decreased 15% in First QuarterMonths 2026 compared to the same prior-year period,periods was driven by reductions in direct new business and lower renewal pure price increases. New business decreased 36% in Second Quarter 2026 and 27% in Six Months 2026 compared to the same prior-year periods, driven by (i) market conditions, including an increasingly competitive market for auto insurance,insurance and (ii) restrictions we have in place to manage overall growth in the State of New Jersey, and (iii) competition in other states due to our recent rate activity.Jersey. We have received regulatory approvals for increased rate levels in most of our footprint states and are focused on growth in our target market segment where we believe our rates are adequate. In Second Quarter 2026 and Six Months 2026 we achieved renewal pure price increases of 8.9% and 9.6%, respectively. Additionally, we continue to focus our efforts on our target mass affluent market, with 98% of new business through Six Months 2026 being in our target market.

The following table depicts direct new business, retention,andretention, and renewal pure price increases for the FirstSecond Quarter 2026 and Six Months 2026: