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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

The terms "Company," "we," "us," and "our" refer to Selective Insurance Group, Inc. (the "Parent") and its subsidiaries, except as expressly indicated or the context otherwise requires. Certain statements in this Annual Report on Form 10-K, including information incorporated by reference, are “forward-looking statements” defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a forward-looking statement safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements discuss our intentions, beliefs, projections, estimations, or forecasts of future events and financial performance. They involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, activity levels, or performance to materially differ from those in or implied by the forward-looking statements. In some cases, forward-looking statements include the words "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "attribute," "confident," "strong," "target," "project," "intend," "believe," "estimate," "predict," "potential," "pro forma," "seek," "likely," "continue," or comparable terms. Our forward-looking statements are only predictions; we cannot guarantee or assure that such expectations will prove correct. We undertake no obligation to publicly update or revise any forward-looking statements for any reason except as required by law.

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 form 10-K. These risk factors may not be exhaustive. We operate in a constantly changing business environment, and new risk factors may emerge anytime. 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.

Introduction

We classify our business into four reportable segments:

•Standard Commercial Lines;

•Standard Personal Lines;

•Excess and Surplus Lines ("E&S Lines"); and

•Investments.

For more details about these segments, refer to Note 1. "Organization" and Note 12. "Segment Information" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

We write our Standard Commercial and Standard Personal Lines products and services through nine of our insurance subsidiaries, some of which participate in the federal government's National Flood Insurance Program's ("NFIP") Write Your Own Program ("WYO"). We write our E&S products through another subsidiary, Mesa Underwriters Specialty Insurance Company ("MUSIC"), a nationally-authorized non-admitted platform for customers who generally cannot obtain coverage in the standard marketplace. Collectively, we refer to our ten insurance subsidiaries as the "Insurance Subsidiaries."

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The following is Management's Discussion and Analysis ("MD&A") of our financial condition and consolidated results of operations, including an evaluation of the amounts and certainty of cash flows from operations and outside sources, trends, and uncertainties that may have a material impact in future periods. The MD&A discusses and analyzes our 2024 results compared to 2023. Investors should read the MD&A in conjunction with Item 8. "Financial Statements and Supplementary Data." of this Form 10-K. For discussion and analysis of our 2023 results compared to 2022, refer to Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations." of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

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

•Critical Accounting Policies and Estimates;

•Financial Highlights of Results for Years Ended December 31, 2024, 2023, and 2022;

•Results of Operations and Related Information by Segment;

•Federal Income Taxes; and

•Liquidity and Capital Resources.

Critical Accounting Policies and Estimates

We have identified the policies and estimates critical to our business operations and understanding of our results of operations. We consider the policies and estimates most critical to the preparation of the Financial Statements to be (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.

Reserve for Loss and Loss Expense

Significant time can elapse between the occurrence of an insured loss, the reporting of a claim to us, and the final claim settlement and payment. Insurers establish reserves as balance sheet liabilities to recognize liabilities for unpaid loss and loss expenses. The following tables provide case and incurred but not reported ("IBNR") reserves for loss and loss expenses and reinsurance recoverable on unpaid loss and loss expense as of December 31, 2024 and 2023:

December 31, 2024 Loss and Loss Expense Reserves

1Includes our flood loss exposure related to our participation in the NFIP's WYO program, to which we cede 100% of our WYO flood losses.

2Includes general liability (97% of net reserves) and commercial auto liability coverages (3% of net reserves).

3Includes commercial property (93% of net reserves) and commercial auto property coverages (7% of net reserves).

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December 31, 2023 Loss and Loss Expense Reserves

1Includes our flood loss exposure relates to our participation in the NFIP's WYO program, to which we cede 100% of our flood losses.

2Includes general liability (97% of net reserves) and commercial auto liability coverages (3% of net reserves).

3Includes commercial property (90% of net reserves) and commercial auto property coverages (10% of net reserves).

The Insurance Subsidiaries' net loss and loss expense reserves duration was approximately 3.0 years at December 31, 2024 and 3.1 years at December 31, 2023.

How the reserve is established

Reserve for loss and loss expense include 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 reserves but we review and discuss our observations on trends, key assumptions, and actuarial methodologies with our consulting actuary. While not required, our 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.

Range of Reasonable Reserve Estimates

We have estimated a range of reasonable reserve estimates for net loss and loss expense of $5,003 million to $6,114 million at December 31, 2024. This range reflects low and high reasonable reserve estimates determined after using judgment to adjust the methods, factors, and assumptions selected within the internal reserve review. This approach produces a range of reasonable reserve estimates but does not represent a distribution of all possible outcomes. Consequently, final outcomes may be greater or less than the estimates.

The range of reasonable reserve estimates increased as of December 31, 2024, relative to December 31, 2023. 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.

Changes in Reserve Estimates (Loss Development)

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, we experienced net unfavorable prior year loss

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development of $285.3 million, compared to net unfavorable development of $10.0 million in 2023 and net favorable development of $78.9 million in 2022. The following table summarizes prior year development by line of business:

(Favorable)/Unfavorable Prior Year Loss and Loss Expense Development

Businessowners' policies (1.7) 7.6 (7.3)

Commercial property (23.4) 0.7 (1.6)

E&S property lines (4.9) (1.6) (2.5)

A detailed discussion of recent reserve development by line of business follows.

Standard Market General Liability Line of Business

At December 31, 2024, our general liability line of business had recorded reserves, net of reinsurance, of $2.5 billion, representing 45% of our total net reserves. In 2024, this line experienced unfavorable reserve development of $316.0 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 2023 of $55.0 million, attributable to the impact of social inflation driving increased loss severities in accident years 2015 through 2020.

This general liability line of business has experienced a long-term historical trend of meaningful claim severity increases that have been partially offset by claim frequency decreases. In recent years, we have been embedding higher severity assumptions in our initial loss ratio estimates to address social inflation's increasing impacts. Although we planned for higher expected loss trends, 2024's claim emergence exceeded our expectations. If the favorable frequency trend moderates or severities continue to emerge higher than expected, this line's ultimate loss estimates could be adversely impacted.

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, claimant willingness to undergo surgery, evolving plaintiff attorney strategies and tactics, and broadening liability definitions and interpretations 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-care facilities, and other social services. These CAPS business unit customers represented approximately 10% of our total Standard Commercial Lines NPW in 2024 and 2023. We continue to actively manage policy limits and monitor each jurisdiction's statute of limitations to ensure our rate level reflects increased exposure to the extent regulatorily possible. 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 may receive 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.

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Our active monitoring of claim patterns and emerging or shifting trends should help 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 implemented underwriting changes within 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.

Standard Market Workers Compensation Line of Business

At December 31, 2024, our workers compensation line of business had recorded reserves, net of reinsurance, of $797 million, representing 14% of our total net reserves. During 2024, this line experienced favorable reserve development of $45.0 million, primarily due to improved loss severities in accident years 2022 and prior. Similarly, this line experienced favorable reserve development during 2023 of $74.5 million, primarily due to improved loss severities in accident years 2021 and prior. During both 2024 and 2023, 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, decreases in medical inflation can cause favorable loss development over an extended number of accident years.

A variety of issues can impact the workers compensation line of business, including:

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.

Standard Market Commercial Automobile Line of Business

At December 31, 2024, our commercial automobile line of business had recorded reserves, net of reinsurance, of $1.1 billion, representing 20% of our total net reserves. In 2024, this line experienced unfavorable prior year reserve development of $19.5 million, primarily due to increased severities in accident year 2023. In 2023, this line experienced unfavorable prior year reserve development of $8.0 million, driven by increased loss expenses in accident years 2022 and prior.

The commercial automobile line has experienced unfavorable trends in recent years that have negatively affected the industry's results and ours. During the pandemic, reduced frequencies were accompanied by significant severity increases, resulting from increased risky driving behaviors, such as speeding, distracted driving, and driving under the influence. Risky driving behaviors and the impacts of social inflation continue to pressure this line's claim severities. As of year-end 2024, frequencies remained somewhat below pre-pandemic levels due to changes in commuting patterns.

Increased property damage and physical damage severities relate to (i) elevated repair costs for increasingly complex vehicles that incorporate more technology, (ii) extended periods of rental reimbursement costs for claims, and (iii) inflationary impacts and disruptions to the supply chain, although these have moderated since their peak in 2022.

Over the last several years, we have implemented underwriting changes within 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.

Standard Market Personal Automobile Line of Business

At December 31, 2024, our personal automobile line of business had recorded reserves, net of reinsurance, of $158 million, representing 3% of our total net reserves. 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.

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Some of the same issues affecting the commercial automobile line also impact this line. The COVID-19-related frequency reduction was even more pronounced for the personal automobile line. Frequencies rebounded after the pandemic and now are at pre-pandemic levels. In addition to the COVID-19-related temporary impacts, the underlying trends of increased vehicle repair costs are likely causes of rising severities, exacerbated by riskier driving behaviors, including distracted driving. We continue recalibrating our predictive models and refining our underwriting and pricing approaches, including prioritizing additional rate filings by state and further refining our pricing factors. These filed rate increases began to take effect early in 2023 and increased in volume and magnitude throughout 2023 and 2024. We expect them to remain above loss trends in 2025 but lower than the rate increases in 2023 and 2024. While we believe these underwriting and pricing changes will ultimately lead to improved profitability and greater stability, the resulting changes to our exposure profile may impact paid and reported development patterns, increasing reserve uncertainty in the near term.

E&S Casualty Lines of Business

At December 31, 2024, our E&S casualty lines of business had recorded reserves, net of reinsurance, of $617 million, representing 11% of our total net reserves. 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.

Over the past several years, we have made operational changes to improve E&S casualty claims processes:

•We created a dedicated E&S claims team, bringing greater expertise and consistency to E&S claims handling.

•We created separate specialized claims teams for "litigated," "non-litigated," and "high exposure" claims.

•We implemented legal operational and expense improvement initiatives, including (i) increasing the use of employed staff counsel lawyers to defend covered claims litigation and (ii) consistent with our duty to defend and manage litigation against our policyholders per the terms and conditions of our policies, we enhanced processes for legal budgeting, expense management, and selection and evaluation of outside policyholder defense counsel.

While we believe these claims operational changes are improving our results and customer experience, they have inherent risks. Changes in claims processes 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.

Other impacts that create additional loss and loss expense reserve uncertainty

Claims Initiative Impacts

Our Claims Department continually identifies areas for improvement and efficiency to increase our policyholder value proposition. These improvements may lead to changes in claims practice that affect average case reserve levels and claims settlement rates, which directly impact the data we use to project ultimate loss and loss expense. While these changes may increase uncertainty in our estimates in the short term, we expect refined claims process management to create longer-term benefits.

Our internal reserve analyses incorporate actuarial projection methods that make adjustments for changes in case reserve adequacy and claims settlement rates. These methods adjust our historical loss experience to the current case adequacy or settlement rate level, providing a more consistent basis for projecting future development patterns. Because these projection methods have their own assumptions and judgments, no single method can be considered definitive.

Unanticipated Changes in Economic Inflation

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 greatest 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.

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Sensitivity analysis: Potential impact on reserve estimates due to changes in key assumptions

Our process to establish reserves includes a variety of key assumptions, such as:

•The selection of loss and loss expense development factors;

•The weight applied to each individual actuarial projection method;

•Projected future loss trends; and

•Expected claim frequencies, severities, and ultimate loss and loss expense ratios for the current accident year.

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 highlighting 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 individually without considering 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 then are adjusted to the current accident year's pricing and loss cost levels. The impact of underwriting portfolio and claims handling practice changes is also quantified and reflected where appropriate. Nonetheless, the ultimate loss and loss expense ratios may differ from current estimates.

The two tables below illustrate the sensitivities of loss and loss expense reserves to these key assumptions for the major casualty lines. The first table displays estimated impacts from changes in expected reported loss and loss expense development patterns for our major casualty lines of business. It shows line of business reserve impacts if the actual calendar year incurred amounts are greater or less than current expectations by the selected percentages. While judgmental, the selected percentages by line are based on the reserve range analysis and the actual historical reserve development for the line of business. The second table displays the estimated impacts of changes to the expected loss and loss expense ratios for the current accident year. It shows reserve impacts by line of business if the expected loss and loss expense ratios for the current accident year are greater or less than current expectations by the selected percentages.

Reserve Impacts of Changes to Expected Loss and Loss Expense Reporting Patterns

Workers compensation 15 (85) 85

Commercial automobile liability 10 (110) 110

Personal automobile liability 15 (20) 20

Workers compensation 10 (35) 35

Commercial automobile liability 10 (75) 75

Personal automobile liability 15 (20) 20

There is some overlap between the impacts shown in the tables. For example, increases in the calendar year development would ultimately impact our view of the current accident year's loss and loss expense ratios. However, these tables provide perspective on the sensitivity of each key assumption. While the changes represent outcomes based on reasonably likely changes to our underlying reserving assumptions, they do not represent a range of possible outcomes and our reserves could increase or decrease significantly differently.

Asbestos and Environmental Reserves

Our general liability, businessowners' policies, and homeowners reserves include exposure to asbestos and environmental claims. The emergence of these claims occurs over an extended period and can be unpredictable. The total recorded net loss

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and loss expense reserves for these claims were $27.4 million as of December 31, 2024, and $19.1 million as of December 31, 2023, with asbestos claims constituting approximately 44% of these reserves in 2024 and 18% in 2023.

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 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 in 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.

Estimating IBNR reserves for asbestos and environmental claims is difficult because these claims have delayed and inconsistent reporting patterns. Significant uncertainties are associated with estimating critical reserve assumptions, such as average clean-up costs, third-party costs, potentially responsible party shares, allocation of damages, litigation and coverage costs, and potential state and federal legislative changes.

Other Latent Exposures

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 a dedicated claims unit, 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.

Investment Valuation and the Allowance for Credit Losses on AFS Fixed Income Securities

Investment Valuation

Accounting guidance defines the fair value of our investment portfolio as the exit price or amount that would be (i) received to sell an asset or (ii) paid to transfer a liability in an orderly transaction between market participants. When determining an exit price, we must rely on observable market data, if available. Most securities in our equity portfolio have readily determinable fair values and are recorded at fair value with changes in unrealized gains or losses recognized through income. Our AFS fixed income securities portfolio is recorded at fair value, and the related unrealized gains or losses are reflected in stockholders' equity, net of tax. For our AFS fixed income securities portfolios, fair value is a key factor in the measurement of (i) losses on securities for which we have the intent to sell and (ii) changes in the allowance for credit losses.

The fair value of approximately 91% 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% 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, 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, and (ii) Note 7. "Fair Value Measurements" for quantitative information on the unobservable inputs in our securities measured using Level 3 inputs.

Allowance for Credit Losses on AFS Fixed Income Securities

When fixed income securities are in an unrealized loss position and we do not intend to sell them, 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 these 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

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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 on 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 on the probability of the various scenarios occurring.

Based on these analyses, we recorded an allowance for credit losses on our AFS fixed income securities portfolio of $31.9 million at December 31, 2024, and $28.2 million at December 31, 2023. 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 will 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.

For additional information regarding our allowance for credit losses on AFS fixed income securities, see item (c) of Note 2. "Summary of Significant Accounting Policies" and item (i) of Note 5. "Investments" within Item 8. "Financial Statements and Supplementary Data." of this Form 10-K, respectively.

Reinsurance

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 position 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 at December 31, 2023. 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.

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Financial Highlights of Results for Years Ended December 31, 2024, 2023, and 20221

Financial Data:

Key Metrics:

Net premiums written to statutory surplus ratio $ 1.60 1.51 6 % $ 1.44 5 %

Per Common Share Amounts:

Diluted net income (loss) per share $ 3.23 5.84 (45) % $ 3.54 65 %

Dividends declared per share to common stockholders 1.43 1.25 14 1.14 10

Non-GAAP Information2:

Non-GAAP operating income (loss) per diluted common share 3.27 5.89 (44) 5.03 17

1Refer to the Glossary of Terms attached to this Form 10-K as Exhibit 99.1 for definitions of terms used in this financial review.

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.

Reconciliations of our GAAP to non-GAAP measures are provided in the tables below:

Non-GAAP operating income (loss) per diluted common share $ 3.27 5.89 5.03

Reconciliation of ROE to non-GAAP operating ROE 2024 2023 2022

Tax on reconciling items — — (1.1)

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The components of our ROE and non-GAAP operating ROE are as follows:

Standard Commercial Lines segment (4.0) % 5.0 (9.0) pts 4.6 0.4 pts

Standard Personal Lines segment (1.1) (2.5) 1.4 (0.2) (2.3)

Total insurance operations (3.7) 4.2 (7.9) 5.4 (1.2)

Net realized and unrealized investment gains (losses) (0.1) (0.1) — (3.6) 3.5

In 2024, we generated an ROE of 7.0% compared to 14.3% in 2023. Our non-GAAP operating ROE of 7.1% in 2024 was below our target non-GAAP operating ROE of 12% and below our 2023 non-GAAP operating ROE of 14.4%. Investment performance was strong in 2024 and contributed 12.8 points to ROE; however, an after-tax underwriting loss reduced our ROE by 3.7 points in 2024, a reduction of 7.9 points when compared to 2023.

The after-tax underwriting loss in 2024 compared to income in 2023 was primarily attributable to unfavorable prior year casualty reserve development in 2024. We recorded $311.0 million of unfavorable prior year casualty reserve development in 2024, compared to $6.5 million of favorable prior year casualty reserve development in 2023. Development in 2024 included $316.0 million in the general liability line of business in our Standard Commercial Lines segment for accident years 2020 and subsequent, with most of the actions for accident years 2022 and 2023. We believe that current market conditions and environmental factors, most notably social inflation, are impacting us more than historically. As a commercial lines-focused underwriter with a higher mix of casualty business, we recognize this social inflationary environment has increased loss severities. Reflecting these trends, current year casualty loss costs were 1.4 combined ratio points higher in 2024 compared to 2023.

For additional qualitative discussion on prior year casualty reserve development, refer to the insurance segment sections below.

Outlook

Although our 2024 ROE was below our target, we ended the year with a strong capital position and the financial flexibility to execute our strategy of disciplined, profitable growth. In recent years, we made strategic investments to expand our runway for profitable growth. These included adding eight states to our Standard Commercial Lines footprint, organically growing within our existing footprint, and investing in technology. These investments better position us to scale our business effectively with a focus on operational efficiency. Our reserving actions, pricing response, and progress on our strategic priorities in 2024 have us well-positioned to quickly return to delivering operating ROEs at or better than our 12% target.

Our granular approach to managing renewal pure price and retention coupled with our unique field model, the strength of our distribution partner relationships, and focus on customer experience continue to differentiate us in the market. In this uncertain environment, we are focused on rate and non-rate actions to drive underwriting profitability while prudently growing the business, including:

•Standard Commercial Lines

◦Achieving overall Standard Commercial Lines renewal pure price increases that reflect forward loss trend expectations;

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◦Implementing underwriting refinements in our general liability line of business, including managing limits and coverage grants in challenging jurisdictions, driving improved terms and conditions, and focusing production on better-performing classes of business;

◦Continuing to expand our Standard Commercial Lines market share by (i) increasing our share towards a 12% target of our agents' premiums and (ii) strategically appointing new agents; and

◦Expanding our geographic footprint. In 2024, we entered Maine, Nevada, Oregon, Washington, and West Virginia, now covering 35 states and the District of Columbia. We expect to write new business in Kansas, Montana, and Wyoming over the next two years. After that, our pace of geographic expansion should moderate as we move closer to our goal of operating our Standard Commercial Lines business with a near national footprint.

•Standard Personal Lines

◦Continuing to refine our underwriting approach and pricing factors and achieving overall Standard Personal Lines renewal pure price increases that exceed loss trends;

◦Continuing to grow our mass affluent customer base in states where we have filed and obtained approvals of adequate rates; and

◦Continuing to seek improved homeowners line of business profitability by expanding the use of new policy terms and conditions, including (i) coverage for older roofs based on depreciation schedules rather than replacement cost and (ii) implementing mandatory wind/hail deductibles in states exposed to severe convective storms, where law permits.

•E&S Lines

◦Achieving E&S Lines renewal pure price increases that reflect forward loss trend expectations; and

◦Continuing to invest in product expansion, risk evaluation, and operational efficiency for small and middle market E&S lines accounts.

For 2025, our full-year expectations are as follows:

•A GAAP combined ratio of 96% to 97%, including net catastrophe losses of 6 points. Our combined ratio estimate assumes no prior year casualty reserve development;

•After-tax net investment income of $405 million;

•An overall effective tax rate of 21.5%; and

•Weighted average shares of 61.5 million on a fully diluted basis.

Results of Operations and Related Information by Segment

Insurance Operations

The following table provides quantitative information for analyzing the combined ratio:

Insurance Operations Results:

Less:

Combined Ratios:

Dividends to policyholders ratio 0.1 0.2 (0.1) 0.1 0.1

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The NPW growth of 12% in 2024 compared to 2023 included:

Renewal pure price increases 9.5 % 6.8 5.1

Our NPW growth in 2024 also benefited from (i) exposure growth on renewal policies and (ii) stable retention in our Standard Commercial Lines and E&S Lines.

The increase in NPE in 2024 compared to 2023 resulted from the same impacts to NPW described above.

Loss and Loss Expenses

The following table provides quantitative information for analyzing loss and loss expense incurred:

Loss and Loss Expense Incurred:

Impact on Loss and Loss Expense Ratio:

Non-catastrophe property loss and loss expenses 15.6 17.0 (1.4) 18.3 (1.3)

Prior Year Casualty Reserve Development and Current Year Casualty Loss Costs

The loss and loss expense ratio increased 7.4 points in 2024 compared to 2023, primarily driven by:

•An increase of 7.3 points in unfavorable prior year casualty reserve development in 2024 compared to 2023. In 2024, we recorded $311 million of unfavorable prior year casualty reserve development compared to $6.5 million, or 0.2 points, of favorable prior year casualty reserve development in 2023. Our 2024 calendar year actions were predominantly in the general liability line for accident years 2020 and subsequent, with most of the actions for accident years 2022 and 2023; and

•An increase of 1.4 points in current year casualty loss costs in 2024 compared to 2023, primarily due to increased loss trend expectations and higher prior-year severity assumptions related to the impacts of social inflation on our general liability and E&S casualty lines of business.

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Details of the prior year casualty reserve development by reportable segment and line of business were as follows:

(Favorable)/Unfavorable Prior Year Casualty Reserve Development

Businessowners' policies — — (11.0)

Total Standard Commercial Lines 286.0 (15.5) (81.0)

Homeowners (5.0) — —

Personal automobile 10.0 14.0 —

Total Standard Personal Lines 5.0 14.0 —

The 2024 unfavorable prior year casualty reserve development by line of business was driven by the following:

•General liability - increased severities in accident years 2020 and subsequent, with most of the actions for accident years 2022 and 2023, due to impacts from social inflation;

•Commercial automobile - increased severities in accident year 2023;

•Personal automobile - increased severities in accident years 2022 through 2023; and

•E&S casualty - increased severities in accident years 2023 and prior.

Favorable prior year casualty reserve development on our workers' compensation, bonds, and homeowners lines of business provided a partial offset to the items above. The favorable prior year casualty reserve development on the workers compensation line was primarily driven by improved severities in accident years 2022 and prior.

The 2023 favorable prior year casualty reserve development was primarily driven by favorable development on our workers compensation line of business, due to improved loss severities driven by continued favorable medical cost trends in accident years 2021 and prior. Partially offsetting this favorable development was unfavorable development on our general liability and personal automobile lines of business. The unfavorable prior year development on (i) general liability was primarily driven by increased loss severities in accident years 2015 through 2020 attributable to social inflation and (ii) personal automobile was primarily driven by increased loss severities in accident year 2022.

For additional qualitative discussion on prior year casualty reserve development and current year casualty loss costs, refer to the insurance segment sections below.

Property Losses

Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by 1.3 points in the aggregate in 2024 compared to 2023. The non-catastrophe property loss and loss expense ratio was 1.4 points lower in 2024 compared to 2023, reflecting (i) the earned impact of higher renewal pure price increases in 2024, (ii) lower claim frequencies, and (iii) variability from period to period of non-catastrophe weather. Net catastrophe losses were in line with last year, with the single largest event being Hurricane Helene for $85.0 million, or 1.9 points. Hurricane Helene occurred in late September 2024 and primarily impacted states in our Southeastern footprint.

For additional qualitative discussion on non-catastrophe property loss and loss expenses, refer to the insurance segment sections below.

Underwriting Expenses

The underwriting expense ratio was 0.8 points lower in 2024 compared to 2023, primarily due to lower expected profit-based employee compensation and growth in premium outpacing growth in underwriting expenses.

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Standard Commercial Lines Segment

Insurance Segments Results:

Less:

Combined Ratios:

Dividends to policyholders ratio 0.2 0.2 — 0.2 —

NPW growth of 11% in 2024 compared to 2023 included:

For the Year Ended December 31,

Direct new business premiums $ 619.1 $ 597.5

Renewal pure price increases on NPW 8.3 7.0

In addition, NPW growth in 2024 benefited from strong exposure growth on renewal policies.

The increase in NPE in 2024 compared to 2023 resulted from the same impacts to NPW described above.

Loss and Loss Expenses

The following table provides quantitative information for analyzing loss and loss expense incurred:

Loss and Loss Expense Incurred:

Non-catastrophe property loss and loss expenses 459,537 461,593 —

Impact on Loss and Loss Expense Ratio:

Current year casualty loss costs 45.6 43.1 2.5

Net catastrophe losses 5.3 4.9 0.4

Non-catastrophe property loss and loss expenses 13.3 15.0 (1.7)

Total loss and loss expense incurred 72.5 62.5 10.0

Prior Year Casualty Reserve Development and Current Year Casualty Loss Costs

The loss and loss expense ratio increased 10.0 points in 2024 compared to 2023, primarily driven by:

•An increase of 8.8 points in unfavorable prior year casualty reserve development in 2024 compared to 2023. In 2024, we recorded $286.0 million of unfavorable prior year casualty reserve development compared to $15.5 million, or 0.5 points, of favorable prior year casualty reserve development in 2023. Our 2024 calendar year actions were predominantly in the general liability line for accident years 2020 and subsequent, with most of the actions for accident years 2022 and 2023; and

•An increase of 2.5 points in current year casualty loss costs in 2024 compared to 2023, primarily due to increased loss trend expectations and higher prior-year severity assumptions related to the impacts of social inflation on our general liability line.

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Details of the prior year casualty reserve development by line of business were as follows:

(Favorable)/Unfavorable Prior Year Casualty Reserve Development

Businessowners' policies — — (11.0)

Total Standard Commercial Lines 286.0 (15.5) (81.0)

Refer to the line of business sections below for qualitative discussion on the significant drivers of unfavorable prior year casualty reserve development and current year casualty loss costs.

Property Losses

Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by 1.3 points in the aggregate in 2024 compared to 2023. The non-catastrophe property loss and loss expense ratio was 1.7 points lower in 2024 compared to 2023, reflecting (i) the earned impact of higher renewal pure price increases in 2024, (ii) lower claim frequencies, and (iii) variability from period to period of non-catastrophe weather. Net catastrophe losses were 0.4 points higher than last year, driven by Hurricane Helene, our single largest event in 2024, resulting in $65.5 million, or 1.9 points.

Refer to the line of business sections below for qualitative discussion on the significant drivers of non-catastrophe property loss and loss expenses.

Underwriting Expenses

The underwriting expense ratio was 0.7 points lower in 2024 compared to 2023, primarily due to lower expected profit-based employee compensation and growth in premium outpacing growth in underwriting expenses.

The following is a discussion of our most significant Standard Commercial Lines of business:

General Liability

Renewal pure price increases 8.6 5.4 n/a 4.5 n/a

% of total Standard Commercial Lines NPW 33 33 33

1n/a: not applicable.

NPW grew 9% in 2024 compared to 2023, benefiting from renewal pure price increases, exposure growth on renewal policies, and strong retention.

The combined ratio was 33.2 points higher in 2024 compared to 2023, primarily driven by the following:

Loss and Loss Expense Incurred:

Impact on Loss and Loss Expense Ratio:

Current year casualty loss costs 67.0 56.0 11.0

Total loss and loss expense incurred 95.1 61.4 33.7

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The general liability line of business has experienced a long-term historical trend of meaningful severity increases that have been partially offset by claim frequency decreases. Prior-year severities have developed adversely. Although we saw these trends primarily impact the pre-pandemic period in 2023, we have seen elevated severity escalation extend into the more recent accident years during 2024. 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. We are closely monitoring specific jurisdictions with expanded liability definitions and interpretations and higher damage awards for loss trend impact and broader industry trends.

Although we planned for higher expected loss trends, claim emergence in 2024 exceeded our expectations. In response to these unfavorable trends due to the impact of social inflation, we recorded unfavorable prior year casualty reserve development of $316.0 million in 2024 for accident years 2020 and subsequent, with most actions for accident years 2022 and 2023. Additionally, current year casualty loss costs were 11.0 points higher in 2024 compared to 2023, primarily due to increased loss trend expectations and higher prior-year severity assumptions. If severities continue to emerge higher than expected, this line's ultimate loss estimates could be adversely impacted.

We believe that social inflation and elevated loss trends are an industry dynamic, which may lead to an acceleration of rate increases in this line of business for the industry and us. Given the consistency in our underwriting appetite and risk profile over time, we have focused our actions primarily on prudent underwriting and achieving additional rate. Our renewal pure price increase in this line of business accelerated to 8.6% in 2024, up from 5.4% in 2023.

Despite the adverse emergence in general liability, we remain comfortable with the composition and quality of our underwriting portfolio. While rate increases will continue to be the primary focus for profitability improvement, we are also making underwriting refinements, including managing limits and coverage grants in challenging jurisdictions, driving improved terms and conditions, and focusing production on better-performing classes of business.

Commercial Automobile

Renewal pure price increases 10.7 9.8 n/a 8.1 n/a

% of total Standard Commercial Lines NPW 31 30 30

1n/a: not applicable.

NPW grew 15% in 2024 compared to 2023, benefiting from renewal pure price increases, strong retention, and higher direct new business. This strong retention and higher direct new business contributed to a 5% growth of in-force vehicle counts as of December 31, 2024, compared to December 31, 2023.

The combined ratio was 3.9 points lower in 2024 compared to 2023, primarily driven by the following:

Loss and Loss Expense Incurred:

Non-catastrophe property loss and loss expenses 172,094 177,803 (3)

Impact on Loss and Loss Expense Ratio:

Current year casualty loss costs 51.5 53.5 (2.0)

Net catastrophe losses 0.8 0.5 0.3

Non-catastrophe property loss and loss expenses 16.3 19.4 (3.1)

Total loss and loss expense incurred 70.5 73.8 (3.3)

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Non-catastrophe property loss and loss expenses in 2024 were lower compared to 2023, primarily due to (i) the earned impact of higher renewal pure price increases in 2024 and (ii) lower claim frequencies. In addition, the current year casualty loss costs ratio was 2.0 points lower in 2024 compared to 2023, primarily driven by the earned impact of higher renewal pure price increases in 2024.

Partially offsetting the favorable combined ratio drivers mentioned above, was unfavorable prior year casualty reserve development in 2024, primarily due to increased severities in accident year 2023. The 2023 unfavorable prior year casualty reserve development was primarily due to increased loss expenses in accident years 2022 and prior.

Commercial Property1

Renewal pure price increases 10.0 9.8 n/a 6.2 n/a

% of total Standard Commercial Lines NPW 20 20 18

1includes Inland Marine.

2n/a: not applicable.

NPW grew 14% in 2024 compared to 2023 benefiting from renewal pure price increases, strong retention, and exposure growth on renewal policies.

The combined ratio was 6.0 points lower in 2024 compared to 2023, primarily driven by the following:

Non-catastrophe property loss and loss expense ratios were lower in 2024 compared to 2023, reflecting (i) the earned impact of higher renewal pure price increases in 2024 and (ii) the continued variability from period to period normally associated with the commercial property line of business. We continue to manage our long-term profitability through (i) price increases and (ii) targeted underwriting actions, including an ongoing focus on appropriate policy terms and conditions and achieving accurate insurance-to-value ratios, in part, by using automated aerial imagery solutions.

In addition, the underwriting expense ratio was 1.4 points lower in 2024 compared to 2023, as discussed in the "Standard Commercial Lines Segment" section above.

Workers Compensation

Renewal pure price increases (decreases) (2.8) (1.5) n/a (0.5) n/a

% of total Standard Commercial Lines NPW 9 12 12

1n/a: not applicable.

NPW decreased 5% in 2024 compared to 2023, primarily due to renewal pure price decreases and a reduction in direct new business.

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The combined ratio was 11.0 points higher in 2024 compared to 2023, primarily due to the following:

The favorable prior year casualty reserve development in 2024 was primarily due to improved loss severities in accident years 2022 and prior. The favorable prior year casualty reserve development in 2023 was primarily due to improved loss severities driven by continued favorable medical cost trends in accident years 2021 and prior.

In addition, the combined ratio was adversely impacted by an increase in current year casualty loss costs of 3.2 points in 2024, primarily driven by loss trend outpacing rate level reductions associated with workers compensation rating bureau loss cost reductions.

Standard Personal Lines Segment

Insurance Segments Results:

Less:

Combined Ratios:

NPW increased 4% in 2024 compared to 2023, primarily due to renewal pure price increases, exposure growth on renewal policies, and higher average policy sizes from our mass affluent market strategy, partially offset by reductions in direct new business and retention. The reduction in direct new business premiums was primarily due to a decrease in new policy counts, which were down 51% in 2024 compared to 2023. These reductions, and the reduction in retention illustrated in the table below, resulted from the rate increases we are implementing as part of our overall profit improvement plan.

Direct new business premiums1 $ 72.6 $ 116.5

Renewal pure price increases on NPW 20.6 5.2

1Excludes our flood direct premiums written, which is 100% ceded to the NFIP and therefore, has no impact on our NPW.

In recent years, we've been taking aggressive actions to improve the profitability of this business by prioritizing additional rate filings to attain premiums in line with current loss costs, and further refining our pricing factors. These filed rate increases began to take effect early in 2023 and increased in number and magnitude throughout 2023 and 2024. In 2025, we expect rate changes to remain above loss trends but will moderate compared to the filed rate increases in 2023 and 2024. Renewal pure prices increased 20.6% in 2024, a direct outcome of these actions. In addition, we are continuing to seek improved profitability within our homeowners line of business by expanding the use of new policy terms and conditions, including (i) coverage for older roofs based on a schedule of factors rather than replacement cost and (ii) implementing mandatory wind/hail deductibles in states exposed to severe convective storms, where allowed by law.

The increase in NPE in 2024 compared to 2023 resulted from the same impacts on NPW discussed above.

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Loss and Loss Expenses

The following table provides quantitative information for analyzing loss and loss expense incurred:

Loss and Loss Expense Incurred:

Impact on Loss and Loss Expense Ratio:

Current year casualty loss costs 27.2 30.9 (3.7)

Non-catastrophe property loss and loss expenses 38.6 43.0 (4.4)

Total loss and loss expense incurred 85.8 96.7 (10.9)

Prior Year Casualty Reserve Development and Current Year Casualty Loss Costs

The loss and loss expense ratio decreased 10.9 points in 2024 compared to 2023, primarily driven by (i) a decrease of 2.6 points in unfavorable prior year casualty reserve development in 2024 compared to 2023 and (ii) a decrease of 3.7 points in current year casualty loss costs in 2024 compared to 2023. The decrease in current year casualty loss costs in 2024 compared to 2023 was primarily due to (i) significant rate increases, and (ii) a 1.0-point increase in flood claims handling fees related to Hurricane Helene from our participation in the NFIP.

Details of the prior year casualty reserve development by line of business were as follows:

(Favorable)/Unfavorable Prior Year Casualty Reserve Development

Homeowners $ (5.0) —

Total Standard Personal Lines 5.0 14.0

Prior year casualty reserve development in 2024 included $10.0 million of unfavorable development in personal automobile, primarily driven by increased loss severities in accident years 2022 through 2023. This was partially offset by $5.0 million of favorable development in homeowners, primarily due to lower loss severities in accident years 2021 and prior.

The unfavorable prior year casualty reserve development in 2023 was primarily attributable to increased loss severities in accident year 2022 on our personal automobile line of business.

Property Losses

Net catastrophe and non-catastrophe property losses reduced the loss and loss expense ratio by 4.6 points in the aggregate in 2024 compared to 2023. Non-catastrophe property loss and loss expense ratios were lower in 2024 compared to 2023 due to (i) the earned impact of higher renewal pure price increases in 2024 and (ii) variability from period to period of non-catastrophe weather. Net catastrophe losses were in line with last year and included $17.4 million, or 4.1 points, related to Hurricane Helene.

Underwriting Expenses

The underwriting expense ratio was 1.5 points lower in 2024 compared to 2023, primarily due to lower profit-based employee compensation and growth in premiums earned outpacing growth in underwriting expenses.

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E&S Lines Segment

Insurance Segments Results:

Less:

Combined Ratios:

NPW growth of 29% in 2024 compared to 2023 included:

Direct new business premiums $ 302.6 209.5

Renewal pure price increases on NPW 7.2 % 6.9

In addition, NPW growth in 2024 benefited from both property and casualty exposure growth on renewal policies and higher rates per exposure.

The increase in NPE in 2024 compared to 2023 resulted from the same impacts to NPW discussed above.

Loss and Loss Expenses

The following table provides quantitative information for analyzing loss and loss expense incurred:

Loss and Loss Expense Incurred:

Non-catastrophe property loss and loss expenses 58,025 31,901 82

Impact on Loss and Loss Expense Ratio:

Current year casualty loss costs 39.1 41.1 (2.0)

Net catastrophe losses 4.6 6.3 (1.7)

Non-catastrophe property loss and loss expenses 11.5 8.2 3.3

Total loss and loss expense incurred 59.2 54.3 4.9

The loss and loss expense ratio increased 4.9 points in 2024 compared to 2023, primarily driven by an increase of 5.3 points in unfavorable prior year casualty reserve development in 2024 compared to 2023. The unfavorable prior year casualty reserve development in 2024 was primarily due to increased loss severities in accident years 2023 and prior, driven by the broad-reaching impacts of social inflation. While we have been embedding higher severity assumptions in our initial loss ratio estimates in response to these inflationary trends, emergence exceeded those levels during the year. The favorable prior year casualty reserve development in 2023 was primarily due to improved loss severities in accident years 2021 and prior.

The loss and loss expense ratio was also unfavorably impacted by property losses as net catastrophe and non-catastrophe property losses increased the ratio by 1.6 points in the aggregate for 2024 compared to 2023. We experienced higher non-catastrophe property loss and loss expense in 2024 compared to 2023 of 3.3 points, primarily due to the impact of large fire losses, reflecting the continued period to period variability normally associated with our E&S property line of business. Partially offsetting the increase in non-catastrophe property losses was a decrease in net catastrophe losses in 2024 compared to 2023 of 1.7 points. While our footprint was impacted by a greater number of Property Claim Services-named events in 2024, we experienced lower claim severities compared to 2023.

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Partially offsetting these items was a decrease of 2.0 points in current year casualty loss cost in 2024 compared to 2023, primarily due to the mix of business between our property and casualty lines of business. Our E&S property line of business historically has a lower loss ratio compared to our E&S casualty line of business and represented a more significant portion of this segment in 2024 compared to 2023.

Underwriting Expenses

The underwriting expense ratio was 1.2 points lower in 2024 compared to 2023, primarily due to premium growth outpacing underwriting expense.

Reinsurance

We use reinsurance to protect our capital resources and insure against losses on property and casualty risks that we underwrite above the amount of losses we are willing to accept. We use two main reinsurance vehicles: (i) a reinsurance pooling agreement among our Insurance Subsidiaries through which each company agrees to share in premiums and losses based on certain specified percentages; and (ii) reinsurance treaties and arrangements with third parties that cover various policies that we issue to our customers.

Reinsurance Pooling Agreement

The primary purposes of the Insurance Subsidiaries' reinsurance pooling agreement are to:

•Pool or share proportionately the underwriting profit and loss results of property and casualty insurance underwriting operations through reinsurance;

•Reduce administration expenses; and

•Permit all the Insurance Subsidiaries to obtain a uniform rating from AM Best Company ("AM Best").

The following illustrates the pooling percentages by Insurance Subsidiary as of December 31, 2024:

Insurance Subsidiary Pooling Percentage

Selective Insurance Company of America ("SICA") 32.0%

Selective Way Insurance Company ("SWIC") 21.0%

Selective Insurance Company of South Carolina ("SICSC") 9.0%

Selective Insurance Company of the Southeast ("SICSE") 7.0%

Selective Insurance Company of New York ("SICNY") 7.0%

Selective Casualty Insurance Company ("SCIC") 7.0%

Selective Auto Insurance Company of New Jersey ("SAICNJ") 6.0%

Mesa Underwriters Specialty Insurance Company ("MUSIC") 5.0%

Selective Insurance Company of New England ("SICNE") 3.0%

Selective Fire and Casualty Insurance Company ("SFCIC") 3.0%

Reinsurance Treaties and Arrangements

By entering into reinsurance treaties and arrangements, we can increase our underwriting capacity, accepting larger individual risks and aggregations of risks without directly increasing our capital or statutory surplus. Under our reinsurance treaties, we cede to our reinsurers a portion of our incurred losses from an individual policy or group of policies in exchange for a portion of the premium on those policies. Amounts not reinsured below a specified dollar threshold are known as retention. Reinsurance does not legally discharge us from liability under the terms and limits of our policies, but it does make our reinsurers liable to us for the amount of liability we cede to them. Our reinsurers often rely on their own reinsurance programs, or retrocessions, to manage their large loss exposures. The size of the global reinsurance community is relatively small. If our reinsurers cannot collect on their retrocessional programs, it may impair their ability to pay us for the amounts we cede to them.

Consequently, our reinsurers present us with direct, indirect, and contingent counterparty credit risk. We attempt to mitigate this credit risk by (i) pursuing relationships with reinsurers rated "A-" or higher by AM Best and/or (ii) obtaining collateral to secure reinsurance obligations. Some of our reinsurance treaties permit us to terminate or commute them – or require the reinsurer to post collateral if the reinsurer's financial condition or rating deteriorates. We monitor our reinsurers' financial condition and review the quality of reinsurance recoverables and reserves for uncollectible reinsurance. For additional information regarding our reinsurance counterparty credit risk, see Note 9. "Reinsurance" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

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Our reinsurance program has contracts that separately cover our property and casualty insurance business and can be categorized as follows:

•Property Reinsurance, which includes our (i) property per risk excess of loss treaties purchased for protection against large individual property losses and (ii) property catastrophe treaties and a property catastrophe bond transaction to provide protection for the overall property portfolio against severe catastrophic events. We also purchase a limited amount of facultative reinsurance, primarily for large individual property risks greater than our property per risk excess of loss treaty capacity.

•Casualty Reinsurance, which provides protection for both individual large casualty losses and catastrophic casualty losses involving multiple claimants or insureds. We also may use (i) facultative reinsurance, primarily for large individual casualty risks in excess of our treaty capacity and (ii) quota share capacity for certain new or higher severity casualty lines of business.

•Terrorism Reinsurance, which provides a federal reinsurance backstop, behind the protection built into our property and casualty reinsurance treaties, for terrorism losses covered under the Terrorism Risk Insurance Program Reauthorization Act ("TRIPRA"). For further information about TRIPRA, see Item 1A. “Risk Factors.” of this Form 10-K.

•Flood Reinsurance, for which all of the premiums and losses related to our participation in the WYO (for which we also receive a servicing fee) are 100% ceded to the federal government.

Property Reinsurance

The following table summarizes our property reinsurance program:

PROPERTY REINSURANCE ON INSURANCE PRODUCTS

Treaty Name Reinsurance Coverage Terrorism Coverage

- 100% of losses in excess of $100 million up to $200 million;

- 100% of losses in excess of $200 million up to $400 million;

- 100% of losses in excess of $400 million up to $800 million; and

Flood 100% reinsurance by the federal government’s WYO. None.

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Property Catastrophe Reinsurance Program

Our 2025 property catastrophe reinsurance program includes a main excess of loss treaty and an indemnity reinsurance agreement with a special purpose insurer that issued a catastrophe bond. This program covers our standard market and E&S business. In addition, we purchased a Personal Lines-only treaty of $20 million in excess of $20 million retention to mitigate Personal Lines-specific catastrophe losses. Effective January 1, 2025, we renewed our main property catastrophe treaty, with additional limit, stable retention and improved terms. Our program now provides coverage of $1.3 billion in excess of a $100 million retention, compared to $1.1 billion in 2024, thereby, extending the exhaustion point by $200 million to respond to our growing property portfolio. The highest layer of the treaty provides coverage for 41% of losses in the $600 million in excess of $800 million layer. The property catastrophe treaty excludes coverage for communicable disease but retains (i) coverage for strike, riot, civil unrest, severe convective storms, and other traditionally-covered property perils, (ii) coverage for conventional terrorism losses, and (iii) limited coverage for cybersecurity risks.

To provide additional, fully collateralized coverage at the top end of our property catastrophe reinsurance program, we secured property catastrophe protection through a per occurrence excess of loss indemnity reinsurance agreement effective December 9, 2023, with High Point Re Ltd. ("High Point Re"), an independent Bermuda special purpose insurer. The reinsurance agreement meets the accounting guidance requirements to be accounted for as reinsurance. In connection with the reinsurance agreement, High Point Re issued Series 2023-1, Class A Principal-at-Risk Variable Rates Notes to unrelated investors totaling $325 million, consistent with the coverage provided under the reinsurance agreement. The proceeds were deposited in a reinsurance trust account. The reinsurance agreement provides us with coverage of up to $325 million for the three-year period from December 9, 2023, through December 31, 2026, for property catastrophe losses from named storms, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impacts, and volcanic eruptions in all states except California, Florida, Texas, and Louisiana. The reinsurance agreement's attachment point and exhaustion limit may be reset annually to adjust the expected loss of the layer within a predetermined range. For the 2025 treaty year, this reinsurance agreement provides us with coverage for 54% of losses in the $600 million in excess of $800 million layer. The reinsurance agreement is collateralized, which is provided by High Point Re using proceeds from the issuance of the Series 2023-1 Notes.

Reinsurance agreements have credit risk associated with collecting amounts due from reinsurers. With High Point Re, that risk is reduced because the collateralized reinsurance trust account is funded with money market funds domiciled in the U.S. The money market funds invest solely in cash or high-quality direct obligations of the U.S. government, such as U.S. Treasury bills and other short-term securities backed by the U.S. government.

In addition to the fully collateralized catastrophe bond, we seek to minimize reinsurance credit risk by transacting with highly-rated reinsurance partners and purchasing collateralized reinsurance products, particularly for high-severity, low-probability events, if feasible. Our current reinsurance program includes $450 million in collateralized limit of the total $570 million limit in place for the highest layer of the catastrophe program, including the $325 million secured through High Point Re, compared to $417.5 million in collateralized limit under the 2024 reinsurance program.

Overall, ceded premium for our property catastrophe reinsurance program will increase in 2025 due to: (i) increases in underlying property exposures in line with our growing property insurance portfolio; and (ii) the addition of $189.8 million of net limit coverage, which improved our net risk profile. These increases will be partially offset by risk-adjusted price decreases from more favorable reinsurance market conditions.

Catastrophe Models

We model various catastrophic perils, and hurricane risk remains our portfolio's most significant natural catastrophe peril because of the geographic location of the risks we insure. The table below illustrates the impact of the five largest hurricane losses we have experienced in the last 35 years:

Hurricane Name

1This amount represents reported and unreported gross losses estimated as of December 31, 2024.

2Net loss does not include reinstatement premiums, taxes, or flood claims handling fees.

We review our exposure to hurricane risk by examining third-party vendor models and conducting a proprietary analysis. The third-party vendor models provide both long-term and near-term views with the near-term view conditioned to adjust for

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elevated sea surface temperatures. We adjust these models to reflect certain non-modeled cost assumptions, such as the impact of loss expenses, residual market assessments, and automobile-related losses. We believe that modeled estimates provide a range of potential outcomes, and we review multiple estimates to understand our catastrophic risk.

Our established catastrophic risk tolerance requires that no more than 10% of stockholders’ equity is exposed to a loss from a hurricane event at a 99.6% confidence level (1-in-250-year event or 0.4% probability) on a net of reinsurance and after-tax basis. Our property catastrophe reinsurance program limits our net after-tax impact of a 1-in-250-year event to about 4% of our GAAP equity. In addition to the 1-in-250-year modeled event, we evaluate the impact of a number of other scenarios on stockholders’ equity.

The table below shows the gross and net losses modeled results for (i) hurricane peril in our underwriting property portfolio and (ii) the gross and net of reinsurance hurricane losses from the following scenarios:

•Recasts of two large hurricanes that impacted our geographic footprint:

◦1938 New England Hurricane, one of the largest hurricanes to impact the Northeast U.S.; and

◦Hurricane Hazel, a Category 4 storm that made landfall near the border between North Carolina and South Carolina in 1954; and

•Realistic disaster scenarios ("RDS") for significant potential storms in the Northeast and the Carolinas based on Lloyds of London ("Lloyds") methodology.

Occurrence Exceedance Probability Hurricane

($ in thousands) GrossLosses1 Net Losses2 Net Losses % of Equity3

1Gross losses include uncertainty associated with damage/loss estimation, demand and storm surge, and assumptions for certain un-modeled costs, such as the impact of loss expenses, residual market assessments, and automobile-related losses, which collectively increase our gross losses by approximately 13%.

2Net losses are after-tax losses net of catastrophe reinsurance including reinstatement premiums and applicable property per risk and facultative reinsurance based on reinsurance structure effective January 1, 2025.

3GAAP stockholders' equity as of December 31, 2024.

As the table above reflects, we are within our established tolerance for catastrophic risk. Based on a multi-model view of hurricane risk, our current catastrophe reinsurance program exhausts at an approximately 1-in-230-year return period, or events with 0.4% probability. Our modeled losses incorporate expected reinsurance recoveries from our per-risk reinsurance treaty and facultative reinsurance in addition to the recoveries from our property catastrophe treaties. Our actual gross and net losses incurred from hurricanes making U.S. landfall will vary, perhaps materially, from our estimated modeled losses.

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In addition to hurricane peril, the table below shows gross and net losses modeled by other wind and earthquake perils in our underwriting property portfolio. Other wind perils include the sub-perils of hail, straight-line wind, and tornado.

Occurrence Exceedance Probability Other Wind Earthquake

1Gross losses include uncertainty associated with damage/loss estimation, demand and storm surge, and assumptions for certain un-modeled costs, such as the impact of loss expenses, residual market assessments, and automobile-related losses, which collectively increase our gross losses by approximately 13%.

2Net losses are after-tax losses net of catastrophe reinsurance including reinstatement premiums as well as applicable property per risk and facultative reinsurance based on the reinsurance structure effective January 1, 2025.

3GAAP stockholders' equity as of December 31, 2024.

We do not write crop insurance, have minimal exposure to private flood, and have a limited percentage of our insured properties in the Western U.S., all limiting our exposures to certain weather-related perils, such as droughts, wildfires, and flooding. However, as our geographic expansion progresses, we continually evaluate how we consider physical risks from these perils and others in our strategic decision making.

While we regularly experience property losses from winter storms and use third-party vendor models to help us model and manage our exposure to this peril, we also evaluate our winter storm exposure based on our own historical experience, as winter storm third-party vendor models are currently less mature than models for other perils such as hurricane wind or severe convective storms.

Property Per Risk Excess of Loss Treaty

We renewed the property per risk excess of loss treaty, which covers our standard market and E&S business, on July 1, 2024, with substantially the same structure as the treaty that expired on June 30, 2024, providing coverage of $65 million in excess of a $5 million retention, with an additional reinstatement on the second layer of the program. The treaty year deposit premium increased, reflecting higher projected subject earned premium due to growth of our book of business.

Casualty Reinsurance

The following table summarizes our casualty reinsurance program:

CASUALTY REINSURANCE ON INSURANCE PRODUCTS

Treaty Name Reinsurance Coverage Terrorism Coverage

We renewed the casualty excess of loss treaty, which covers our standard market and E&S Lines business, on July 1, 2024, on substantially the same terms as the treaty expiring June 30, 2024 with a co-participation of 17.5% on the first $3 million in excess of $2 million layer, but with the benefit of additional reinstatements on several of the layers. The treaty year 2024 deposit premium increased, reflecting (i) higher projected subject earned premium due to growth of our book of business, including pure renewal rate increases; and (ii) higher anticipated losses in the excess layers, partially offset by (iii) the

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introduction of the first layer co-participation.

To complement our key reinsurance programs and provide reinsurance protection on specific coverages or programs, we have other reinsurance treaties, such as our (i) Surety and Fidelity Excess of Loss Reinsurance Treaty, (ii) National Workers Compensation Reinsurance Pool Quota Share, which covers business assumed from the involuntary workers compensation pool, (iii) Endurance Specialty Quota share and Loss Development Cover, which protects against losses on policies written before the acquisition and any development on reserves established by MUSIC as of the date of acquisition, (iv) Equipment Breakdown Coverage Reinsurance Treaty, (v) Multi-line Quota Share, which covers additional personal lines coverages, such as personal cyber and home systems protection, (vi) Cyber Liability Quota Share, and (vii) Excess Liability Quota Share, which covers MUSIC's excess liability business.

We continually evaluate our overall reinsurance program and try to develop effective ways to manage the transfer of risk. We base our analysis on a comprehensive process that includes periodic analysis of modeling results, our own loss experience, aggregation of exposures, exposure growth, diversification of risks, limits written, projected reinsurance costs, reinsurer financial strength, and projected impact on earnings, equity, and statutory surplus. We strive to balance reinsurer credit quality, price, terms, and our appetite to retain a certain level of risk.

Investments Segment

Our Investments Segment's objectives are to maximize the economic value of our investment portfolio by achieving stable, risk-adjusted after-tax net investment income and generate long-term growth in book value per share, considering prevailing market conditions, our enterprise risk tolerances, and other risk implications. We aim to accomplish this by:

•Maximizing the portfolio's overall total return by investing (i) the premiums from our insurance operations and (ii) amounts generated through our capital management strategies, including debt and equity security issuances, and

•Maintaining (i) a well-diversified portfolio across issuers, sectors, and asset classes, and (ii) a high credit quality fixed income securities portfolio with a duration and maturity profile at an acceptable risk level that provides ample liquidity.

The effective duration of our fixed income and short-term investments was 4.0 years as of December 31, 2024. We monitor and manage the effective duration to maximize yield while managing interest rate risk at an acceptable level. We buy and sell investments with the intent of maximizing investment returns in the current market environment, while balancing capital preservation.

Our fixed income and short-term investments represented 92% of our invested assets at both December 31, 2024 and December 31, 2023. These investments had (i) a weighted average credit rating of "A+" as of December 31, 2024 and "AA-" at December 31, 2023, and (ii) investment grade holdings representing 97% of the total fixed income and short-term investment portfolio at December 31, 2024, and 96% at December 31, 2023.

For further details on the composition, credit quality, and various risks to which our portfolio is subject, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk." of this Form 10-K.

Total Invested Assets

Invested assets per dollar of common stockholders' equity 3.31 3.16 5

Components of unrealized gains (losses) – before tax:

Components of unrealized gains (losses) – after tax:

Invested assets increased by $957.6 million at December 31, 2024, compared to December 31, 2023, reflecting our active investment of operating and investing cash flows. Operating cash flows during 2024 were 24% of NPW.

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Net Investment Income

The components of net investment income earned were as follows:

Annual after-tax yield on fixed income investments 4.0 3.9 0.1 3.1 0.8

Annual after-tax yield on investment portfolio 4.0 3.7 0.3 2.9 0.8

After-tax net investment income earned increased 17% in 2024, compared to 2023, primarily driven by higher interest rates, active portfolio management, and operating cash flow deployment. In addition, income earned on our alternative investments portfolio increased in 2024 compared to 2023 as a result of strong capital market performance in 2024.

Realized and Unrealized Investment Gains and Losses

When evaluating securities for sale, our general philosophy is to reduce our exposure to securities and sectors based on economic evaluations of whether (i) the fundamentals for that security or sector have deteriorated or (ii) the timing is appropriate to trade opportunistically for other securities with better economic-return characteristics. Net realized and unrealized gains and losses for the indicated periods were as follows:

Other realized gains (losses) (602) — — — —

For additional information regarding our losses on securities we intend to sell and our methodology for estimating the allowance for credit losses, see Note 2. "Summary of Significant Accounting Policies" and Note 5. "Investments" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

Federal Income Taxes

The following table provides information regarding federal income taxes.

1The effective tax rate is calculated by taking "Total federal income tax expense" divided by "Income before federal income tax" less "Preferred stock dividends" on our Consolidated Statements of Income.

Federal income tax expense decreased $42.2 million in 2024 compared to 2023, primarily due to an underwriting loss from our Insurance Operations this year compared to underwriting income last year. Higher net investment income earned provided a partial offset to the impact of the underwriting loss, driven by increased income from our fixed income securities portfolio. Refer to "Insurance Operations" and "Investments Segment" above for more information.

See Note 14. "Federal Income Taxes" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K for (i) a

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reconciliation of our effective tax rate to the statutory rate of 21% and (ii) details regarding our net deferred tax asset and liability.

Liquidity and Capital Resources

Capital resources and liquidity reflect our ability to generate cash flows from business operations, borrow funds at competitive rates, and raise new capital to meet our operating and growth needs.

Liquidity

We manage liquidity by generating sufficient cash flows to meet our business operations' short-term and long-term cash requirements. As discussed further below, we adjust our liquidity requirements based on economic conditions, market conditions, and future cash flow commitments.

Sources of Liquidity

The Parent's sources of cash historically have consisted of dividends from the Insurance Subsidiaries, the Parent's investment portfolio, borrowings under third-party lines of credit, intercompany revolving demand loan agreements with certain Insurance Subsidiaries, and the issuance of equity (common or preferred) and debt securities. We continue to monitor these sources, considering our short-term and long-term liquidity and capital preservation strategies.

The Parent's cash and components of its investment portfolio were as follows:

Short-term investments have historically been maintained in "AAA" rated money market funds, and fixed income securities are comprised of high-quality, liquid government and corporate securities.

The amount and composition of the Parent's investment portfolio may change over time based on various factors, including the amount and availability of dividends from our Insurance Subsidiaries, investment income, expenses, other Parent cash needs, such as dividends payable to stockholders, asset allocation investment decisions, inorganic growth opportunities, debt retirement, and share repurchases. We have an established target for the Parent to maintain liquid investments of at least twice its expected annual net cash outflow needs, which was met as of December 31, 2024.

Insurance Subsidiary Dividends

The Insurance Subsidiaries generate liquidity through insurance float, created by collecting premiums and earning investment income before paying claims. The period of float can extend over many years. Our investment portfolio consists of securities with maturity dates that continually provide a source of cash flow for claims payments in the ordinary course of business. To protect our Insurance Subsidiaries' capital, we purchase reinsurance coverage for significantly large claims or catastrophes that may occur.

The Insurance Subsidiaries paid $44 million in total dividends to the Parent in 2024. As of December 31, 2024, our allowable ordinary maximum dividend is $290 million for 2025. All Insurance Subsidiary dividends to the Parent are (i) subject to the approval and/or review of its domiciliary state insurance regulator, and (ii) generally payable only from earned statutory surplus reported in its annual statements as of the preceding December 31. Although domiciliary state insurance regulators have historically approved dividends, there is no assurance they will approve future Insurance Subsidiary dividends.

New Jersey corporate law also limits the maximum amount of dividends the Parent can pay our stockholders if either (i) the Parent would be unable to pay its debts as they become due in the usual course of business, or (ii) the Parent’s total assets would be less than its total liabilities. The Parent’s ability to pay dividends to stockholders is also impacted by (i) covenants in its credit agreement that obligate it, among other things, to maintain a minimum consolidated net worth and a maximum ratio of consolidated debt to total capitalization, and (ii) the terms of our preferred stock that prohibit dividends from being declared or paid on our common stock if dividends are not declared and paid, or made payable, on all outstanding preferred stock for the latest completed dividend period.

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For additional information regarding dividend restrictions and financial covenants, where applicable, see Note 11. "Indebtedness," Note 17. "Equity," and 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.

Line of Credit

On November 7, 2022, the Parent entered into a Credit Agreement with the lenders named therein (the "Lenders") and Wells Fargo Bank, National Association, as Administrative Agent ("Line of Credit"). Under the Line of Credit, the Lenders have agreed to provide the Parent with a $50 million revolving credit facility that can be increased to $125 million with the Lenders' consent. The Line of Credit will mature on November 7, 2025, and has a variable interest rate based on the Parent’s debt ratings. We expect to continue to maintain a credit facility for liquidity purposes. For additional information regarding the Line of Credit and corresponding representations, warranties, and covenants, refer to Note 11. "Indebtedness" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

Four Insurance Subsidiaries are members of Federal Home Loan Bank ("FHLB") branches, as shown in the following table. Membership requires the ownership of branch stock and includes the right to access liquidity. All Federal Home Loan Bank of Indianapolis ("FHLBI") and Federal Home Loan Bank of New York ("FHLBNY") borrowings are required to be secured by investments pledged as collateral. For additional information regarding collateral outstanding, refer to Note 5. "Investments" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

Branch Insurance Subsidiary Member

FHLBI SICSC1SICSE1

FHLBNY SICASICNY

1These subsidiaries are jointly referred to as the "Indiana Subsidiaries" because they are domiciled in Indiana.

The Line of Credit permits aggregate borrowings from the FHLBI and the FHLBNY up to 10% of the respective member company’s admitted assets for the previous year. SICNY is domiciled in New York, which limits its FHLBNY borrowings to the lesser of 5% of admitted assets for the most recently completed fiscal quarter or 10% of the previous year-end's admitted assets.

The following table provides information on the remaining capacity for FHLB borrowings based on these restrictions, as well as the additional FHLB stock purchase requirement to allow these member companies to borrow their remaining capacity amounts:

Short-term Borrowings

We made no short-term borrowings from FHLB branches during 2024.

Intercompany Loan Agreements

The Parent has lending agreements with the Indiana Subsidiaries, approved by the Indiana Department of Insurance, that provide the Parent with additional intercompany liquidity. Like the Line of Credit, these lending agreements limit the Parent's borrowings from the Indiana Subsidiaries to 10% of the admitted assets of the respective Indiana Subsidiary. The following table provides information on the Parent’s borrowings and remaining borrowing capacity from the two Indiana Subsidiaries:

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Additionally, we have other insurance regulator-approved intercompany agreements that facilitate liquidity management between the Parent and the Insurance Subsidiaries to enhance flexibility.

Capital Market Activities

The Parent had no private or public stock issuances during 2024. During 2024, we repurchased 103,000 shares of our common stock under our existing share repurchase program for $8.7 million, an $84.34 average price per share, excluding commissions paid. We had $75.5 million of remaining capacity under our share repurchase program as of December 31, 2024. For additional information on the share repurchase program, refer to Note 17. "Equity" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

Uses of Liquidity

The Parent uses the liquidity generated from the sources discussed above to pay dividends to our stockholders, among other things. Dividends on shares of the Parent's common and preferred stock are declared and paid at the discretion of the Board based on our operating results, financial condition, capital requirements, contractual restrictions, and other relevant factors. In October 2024, our Board approved a 9% increase in the quarterly cash dividend on common stock, to $0.38 from $0.35 per share. In addition, our Board declared:

•A quarterly cash dividend on common stock of $0.38 per common share, that is payable March 3, 2025, to holders of record on February 14, 2025; and

•A quarterly cash dividend of $287.50 per share on our 4.60% Non-Cumulative Preferred Stock, Series B (equivalent to $0.28750 per depositary share) payable on March 17, 2025, to holders of record as of February 28, 2025.

Our ability to meet our interest and principal repayment obligations on our debt and our ability to continue to pay dividends to our stockholders is dependent on (i) liquidity at the Parent, (ii) the ability of the Insurance Subsidiaries to pay dividends, if necessary, and/or (iii) the availability of other sources of liquidity to the Parent. Our next borrowing principal repayment is $60 million to FHLBI due on December 16, 2026.

Restrictions on the ability of the Insurance Subsidiaries to declare and pay dividends, without alternative liquidity options, could materially affect our ability to service debt and pay dividends on common and preferred stock.

Capital Resources

Capital resources ensure we can pay policyholder claims, furnish the financial strength to support the business of underwriting insurance risks, and facilitate continued business growth. At December 31, 2024, we had GAAP stockholders’ equity of $3.1 billion and statutory surplus of $2.9 billion. With total debt of $508 million at December 31, 2024, our debt-to-capital ratio was 14.0%. For additional information on our statutory surplus, 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 following table summarizes current and long-term material cash requirements as of December 31, 2024, which we expect to fund primarily with operating cash flows.

Payment Due by Period

Less than1 year 1-3years 3-5years More than5 years

($ in millions) Total

Our loss and loss expense payments in the table above represent estimated paid amounts by period on our loss and loss expense reserves. These estimates are based on past experience, adjusted for the effects of current developments and anticipated trends, and include considerable judgment. There is no precise method for evaluating the impact of any specific factor on the projected timing of loss and loss expense reserve payments, so the timing and amounts of the actual payments will be affected by many

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factors. Therefore, the projected settlement of the reserves for net loss and loss expense may differ, perhaps significantly, from actual future payments. The Insurance Subsidiaries' net loss and loss expense reserves duration was 3.0 years at December 31, 2024.

For more information on our case reserves and estimates of reserve for loss and loss expense IBNR, refer to the "Reserve for Loss and Loss Expense" section in the "Critical Accounting Policies and Estimates" section of this MD&A and Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K.

For additional information regarding cross-default provisions associated with our notes payable in the table above or our Line of Credit, see Note 11. "Indebtedness" in Item 8. "Financial Statements and Supplementary Data." in this Form 10-K.

In addition to the above, the following table summarizes certain contractual obligations we had at December 31, 2024 that may require us to invest additional amounts into our investment portfolio, which we would fund primarily with operating cash flows.

($ in millions) Amount of Obligation

Alternative investments $ 320.5

Non-publicly traded common stock within our equity portfolio 22.1

Privately-placed corporate securities 57.0

There is no certainty (i) that any such additional investments will be required and (ii) about the timing of funding. We expect to have the capacity to fund these commitments through our normal operating and investing activities as they come due.

Our other cash requirements include, without limitation, dividends to stockholders, capital expenditures, and other operating expenses, including commissions to our distribution partners, labor costs, premium taxes, general and administrative expenses, and income taxes.

As of December 31, 2024 and 2023, we had no (i) material guarantees on behalf of others and trading activities involving non-exchange traded contracts accounted for at fair value, (ii) material transactions with related parties other than those disclosed in Note 18. "Related Party Transactions" included in Item 8. "Financial Statements and Supplementary Data." of this Form 10-K, and (iii) material relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes. Consequently, we are not exposed to any material financing, liquidity, market, or credit risk related to off-balance sheet arrangements.

We continually monitor our cash requirements and the capital resources we maintain at the holding company and Insurance Subsidiary levels. As part of our long-term capital strategy, we strive to maintain capital metrics that support our targeted financial strength relative to the macroeconomic environment. Based on our analysis and market conditions, we may take a variety of actions, including, without limitation, contributing capital to the Insurance Subsidiaries, issuing additional debt and/or equity securities, repurchasing existing debt, repurchasing shares of the Parent’s common stock, and adjusting common stockholders’ dividends.

Our capital management strategy is intended to protect the interests of the policyholders of the Insurance Subsidiaries and our stockholders and enhance our financial strength and underwriting capacity. We have a strong capital base and high-quality underwriting portfolio, positioning us well to take advantage of potential market opportunities.

Book value per common share increased 6% to $47.99 as of December 31, 2024, from $45.42 as of December 31, 2023, driven by $3.23 in net income available to common stockholders per diluted common share and a $0.47 reduction in after-tax net unrealized losses on our fixed income securities portfolio, partially offset by $1.43 in dividends to our common stockholders. The decrease in net unrealized losses on our fixed income securities was primarily driven by a tightening of credit spreads, partially offset by an increase in benchmark U.S. Treasury rates. Our adjusted book value per share, which is book value per share excluding total after-tax unrealized gains or losses on investments included in accumulated other comprehensive income (loss), increased to $52.10 as of December 31, 2024, from $50.03 as of December 31, 2023.

Cash Flows

Net cash provided by operating activities increased to $1.1 billion in 2024, compared to $759 million in 2023, primarily driven by higher levels of cash received for premiums in 2024 compared to 2023, partially offset by higher claim payments made in

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2024 compared to 2023. Operating cash flows were 24% of NPW in 2024 compared to 18% of NPW in 2023. For more information on our underwriting results, refer to "Insurance Operations" above in this MD&A.

Net cash used in investing activities increased to $947 million in 2024, compared to $686 million in 2023, as a result of investing more cash from operating activities.

Net cash used in financing activities increased to $103 million in 2024, compared to $84 million in 2023, primarily due to (i) an increase in dividends paid to our common shareholders in 2024 and (ii) greater activity in our share repurchase program in 2024.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

The fair value of our assets and liabilities are subject to market risks — primarily interest rate risk, credit risk, equity price risk, and liquidity risk related to our investment portfolio. Our portfolio allocation was 85% fixed income securities, 2% commercial mortgage loans ("CML"), 2% equity securities, 5% short-term investments, 5% alternative investments, and 1% other investments as of December 31, 2024. Alternative investments are limited partnership investments in private equity, private credit, and real estate strategies. We do not directly hold derivatives, commodities, or other investments denominated in foreign currency. We have minimal foreign currency fluctuation risk within our alternative investment portfolio. For a discussion of our investment objective and philosophy, see the "Investments Segment" section of Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations." of this Form 10-K.

We manage our investment portfolio to mitigate risks associated with various financial market scenarios. We assume prudent risk to enhance our overall long-term results while managing a conservative, well-diversified investment portfolio to support our underwriting activities.

Interest Rate Risk

Investment Portfolio

We invest in interest rate-sensitive securities, mainly fixed income securities. Our fixed income securities portfolio is comprised of primarily investment grade (investments receiving Standard & Poor's Global Ratings or an equivalent rating of BBB- or above) corporate securities, U.S. government and agency securities, municipal obligations, collateralized loan obligations ("CLO") and other asset-backed securities ("ABS"), and mortgage-backed securities ("MBS"). As of December 31, 2024, approximately 7% of our fixed income securities portfolio was floating rate securities, primarily tied to the 90-day U.S. dollar-denominated Secured Overnight Financing Rate. Our strategy to manage interest rate risk is to purchase intermediate-term fixed income investments that are priced attractively in relation to perceived credit risks.

Our exposure to interest rate risk relates primarily to the market price and cash flow variability associated with changes in interest rates. Our fixed income securities portfolio contains interest rate-sensitive instruments, and its performance could be adversely affected by changes in interest rates resulting from governmental monetary policies, domestic and international economic and political conditions, and other factors beyond our control. All else being equal, a rise in interest rates will decrease the fair value of our existing fixed income investments, and a decline in interest rates will increase the fair value of our existing fixed income investments. However, new and reinvested money used to purchase fixed income securities would benefit from rising interest rates and be negatively impacted by falling interest rates.

We seek to manage our interest rate risk associated with holding fixed income investments by maintaining an effective duration of our portfolio that balances maximizing yield and total return with our overall enterprise risk tolerance for potential interest rate changes. The effective duration of the fixed income securities portfolio, including short-term investments, at December 31, 2024, was 4.0 years, which is within our historical range.

We use an interest rate sensitivity analysis to measure the potential loss or gain in future earnings, fair values, or cash flows of market-sensitive fixed income securities. The sensitivity analysis hypothetically assumes an instant parallel 200 basis point shift in interest rates up and down, in 100 basis point increments from the date of the Financial Statements. We use fair values to measure the potential loss. This analysis is not intended to provide a precise forecast or range of the effect of changes in market interest rates and equity prices on our income or stockholders’ equity. However, it provides insight into the portfolio's sensitivity. These calculations do not consider (i) any actions we may take in response to market fluctuations and (ii) changes to credit spreads, liquidity spreads, and other risk factors that may also impact the value of the fixed income securities portfolio.

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The following table presents the sensitivity analysis of interest rate risk as of December 31, 2024:

2024 Interest Rate Shift in Basis Points

Fixed income securities

Fair value change from base (%) 7.8 % 3.9 % (3.9) % (7.8) %

Credit Risk

Our most significant credit risk is within our fixed income securities portfolio, which had an overall credit quality of "A+" as of December 31, 2024 and "AA-" as of December 31, 2023. Non-investment grade exposure represented approximately 3% of the total fixed income and short-term investments at December 31, 2024 and 4% at December 31, 2023.

Details on the credit quality of our invested assets at December 31, 2024 are provided below:

December 31, 2024 Credit Rating

Fixed income securities:

MBS:

Residential mortgage-backed securities ("RMBS"):

CLO and other ABS:

Total fixed income and short-term investments by credit rating percentage

Equity securities:

Preferred stock 2 2 — — — — — — — 2 — —

Alternative investments:

Private credit 52 52 0.5 — — — — — — — — 52

Total alternative investments 441 441 4.6 — — — — — — — — 441

1Includes investments in exchange traded funds, mutual funds, business development corporations, and real estate investment trusts.

Amounts may not foot due to rounding.

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Every quarter, we review our invested assets for concentrations of credit risk. The reporting categories representing 10% or more of our invested assets at December 31, 2024 were (i) corporate securities (32%) (ii) MBS (25%), and (ii) CLO's and Other ABS (21%). We discuss each of these categories in more detail below.