Selective Insurance Group (SIGI) risk factors, FY2024 10-K

Risks Related to our Insurance Operations

1. 01We are subject to losses from catastrophic events
2. 02Temperature changes can impact weather patterns and the frequency and/or severity of catastrophes, including hurricanes, severe convective storms, wildfires, and flooding – all of which could cause our catastrophe losses to increase relative to historical levels
3. 03Cyber Attacks and Incidents
4. 04Our loss and loss expense reserves may not adequately cover actual losses and expenses
5. 05Our ability to reduce our risk exposure depends on the availability and cost of reinsurance
6. 06We are exposed to credit risk
7. 07We depend on distribution partners
8. 08National and global economic conditions could adversely and materially affect our business, results of operations, financial condition, and growth
9. 09A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and have a material adverse effect on our financial condition and results of operations
10. 10Markets for insurance products and services are highly competitive and subject to rapid technological change, and we may be unable to compete effectively
11. 11We have less loss experience data than our larger competitors
12. 12We are subject to various modeling risks that could have a material adverse impact on our business results

Risks Related to Our Investments Segment

1. 13Our investments are exposed to credit risk, interest rate fluctuation, and changes in value
2. 14Our investment portfolio is exposed to climate change-related transition and physical investment risks
3. 15We are subject to the risks inherent in investing in private limited partnerships
4. 16Determining the amount of credit losses taken on our investments is highly subjective and could materially impact our results of operations or our financial position

Risks Related to Evolving Laws, Regulations, and Public Policy Debates

1. 17We are subject to complex and changing laws, regulations, and public policy debates that expose us to regulatory scrutiny, potential liabilities, increased costs, reputational harm, and other adverse effects on our business
2. 18While we underwrite risks only in the U.S., international regulatory developments, primarily capital adequacy and risk management requirements in the European Union ("EU"), may influence U.S. regulators as they develop or revise domestic regulatory standards
3. 19Our business is subject to various state, federal, and other laws, rules, policies, and other data use and protection obligations
4. 20We are engaged in ordinary routine legal proceedings incidental to our insurance operations that are inherently unpredictable and could impact our reputation and/or have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods
5. 21Some of our legal proceedings may receive media attention because of their perceived newsworthiness and/or relationship to various broad economic, political, social, and legal developments or trends. Such media stories could negatively impact our reputation

Risks Related to Our Corporate Structure and Governance

1. 22Restrictions on our Insurance Subsidiaries' ability to pay dividends, make loans or advances to the Parent, or enter into
2. 23Because we are a New Jersey corporation and an insurance holding company, we may be less attractive to potential acquirers and our common stock's value could be adversely affected
3. 24These provisions of our Amended and Restated Certificate of Incorporation and New Jersey law could (i) deprive our common shareholders of an opportunity to receive a premium over the prevailing market price in a hostile takeover and (ii) adversely affect the value of our common stock

Risks Related to Our General Operations

1. 25We and our distribution partners and vendors are subject to attempted cyber-attacks and other cybersecurity and system availability risks
2. 26Operational leverage necessitates the success of our risk management strategies, and their failure could have a material adverse effect on our financial condition or results of operations