Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Selective- SelectiveInsurance GroupInsuranceInc. (SIGI.O) Group Inc. (SIGI.O)

Lingering adverse reserve development concerns due to social inflation headwinds

PRICE TARGET $80.00 UNDERWEIGHT THESIS

Valuation is based on a sum-of-the-parts analysis where we apply a 12.6x 2027E P/E multiple Selective's SMID underwriting risk appetite

to Core Commercial, and 15.5x to E&S segments (derived from comparable peer multiples and unique field model placing underwriting

across the P&C subsectors). Our PT implies an overall 9.1x 2027E Base EPS valuation, a staff near their distribution partners should

discount to regional carriers peer multiple averages. help the company achieve their long-term

growth & profitability targets. That said,

$100.71 lingering reserve issues in Commercial Auto

Consensus Price Target Distribution $80.00 $115.00 and General Liability remain top of mind in a

MS PT challenging underwriting environment along

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates with slowing growth headwinds due to

overall pricing softening and intensifying

competition.

RISK REWARD CHART

Consensus Rating Distribution

USD $110.00$110.00(+18.56%)$110.00(+18.56%)(+18.56%)

33% Overweight

56% Equal-weight

100 11% Underweight

$92.78$92.78$92.78 MS Rating

$80.00$80.00(-13.77%)$80.00(-13.77%)(-13.77%) Source: Refinitiv, Morgan Stanley Research 75

50 $60.00$60.00(-35.33%)$60.00(-35.33%)(-35.33%)

JUL '25 JAN '26 JUL '26 JUL '27

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research

BULL CASE $110.00 BASE CASE $80.00 BEAR CASE $60.00

10.0x 2027e Bull EPS; 1.4x 2027e Bull BV 9.1x 2027e Base EPS; 1.1x 2027e Base BV 8.1x 2027e Bear EPS; 0.9x 2027e Bear BV