What Happened?
Shares of property and casualty insurer Selective Insurance Group (NASDAQ:SIGI) fell 19% in the afternoon session after the company reported second-quarter financial results that missed Wall Street's profit expectations. The property and casualty insurer posted earnings of $1.31 per share, falling short of analyst consensus estimates. A key factor behind the earnings miss was the company's combined ratio, which came in at 100.2%. A combined ratio above 100% indicates that an insurer paid out more in claims and expenses than it collected in premiums, resulting in an underwriting loss. Management attributed the unfavorable ratio to the effects of 'social inflation'—a term for rising insurance claim costs that outpace general inflation—which negatively impacted its casualty reserves from prior years. The disappointing quarterly performance led the stock to trade down to a new 52-week low.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Selective Insurance Group? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Selective Insurance Group’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Selective Insurance Group and indicate this news significantly impacted the market’s perception of the business.
Selective Insurance Group is down 20.6% since the beginning of the year, and at $72.99 per share, it is trading 28.5% below its 52-week high of $102.09 from November 2024. Investors who bought $1,000 worth of Selective Insurance Group’s shares 5 years ago would now be looking at an investment worth $1,266.
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