SELECTIVE INSURANCE GROUP INCSIGI

SELECTIVE INSURANCE GROUP INC Income Taxes Disclosure

10-KFiled Feb 9, 20263 min read
Income Taxes
(a) Income tax expense (or benefit) from continuing operations disaggregated between federal and state is as follows:

($ in thousands)2025
Federal Income Taxes - Current
$134,875 
Federal Income Taxes - Deferred
(13,390)
State Income Taxes, net of Federal Income Tax Effect
1,701 
123,186 

(b) A reconciliation of federal income tax on income at the corporate rate (21.0%) to the effective tax rate is as follows:

($ in thousands)2025
Amount
%
U.S. Federal Statutory Tax Rate
$123,815 21.0 %
State Income Taxes, net of Federal Income Tax Effect1
1,701 0.3 
Federal Tax Credits - Low Income Housing Tax Credits
(627)(0.1)
Nontaxable & Nondeductible items
(900)(0.2)
Other
(803)(0.1)
Total income tax expense / effective tax rate
123,186 20.9 
Income before federal income tax, less preferred stock dividends
580,397 21.2 
1State taxes in Illinois comprise more than 50% of the tax effect in this category.

($ in thousands)20242023
Tax at statutory rate 54,187 96,267 
Tax-advantaged interest(1,332)(2,229)
Dividends received deduction(214)(273)
Executive compensation2,452 1,989 
Stock-based compensation(1,482)(1,804)
Other(2,589)(776)
Federal income tax expense
51,022 93,174 
Income before federal income tax, less preferred stock dividends248,834 449,212 
Effective tax rate20.5 %20.7 %

(c) Income taxes paid, net of refunds, were as follows:

($ in thousands)2025
Federal Income Taxes, net of refunds
$130,269 
State Income Taxes, net of refunds
2,243 
Total Income Taxes Paid, net of refunds
132,512 

($ in thousands)20242023
Federal Income Taxes, net of refunds
$49,000 $79,702 
(d) The tax effects of the significant temporary differences that gave rise to deferred tax assets and liabilities were as follows:

($ in thousands)20252024
Deferred tax assets:  
Net loss reserve discounting$109,166 89,653 
Net unearned premiums104,185 100,053 
Employee benefits15,269 13,226 
Long-term incentive compensation7,080 7,106 
Unrealized losses on fixed income securities18,563 66,525 
Temporary investment write-downs7,710 7,987 
Other5,794 5,751 
Total deferred tax assets267,767 290,301 
Deferred tax liabilities:  
Deferred policy acquisition costs103,377 100,654 
Other investment-related items, net39,855 34,951 
Accelerated depreciation and amortization13,630 7,908 
Total deferred tax liabilities156,862 143,513 
Net deferred federal income tax assets (liabilities)$110,905 146,788 
 
After considering all evidence, both positive and negative, with respect to our federal tax loss carryback availability, expected levels of pre-tax financial statement income, federal taxable income, liquidity, and prudent and reasonable tax planning strategies, we believe it is more likely than not that the existing deductible temporary differences will reverse during periods in which we generate net federal taxable income or have adequate federal carryback availability. As a result, we had no valuation allowance recognized for federal deferred tax assets at December 31, 2025 or 2024. We did not have unrecognized tax expense or benefit as of December 31, 2025.
We have analyzed our tax positions in all open tax years, which as of December 31, 2025 were 2022 through 2025. During 2025, the Internal Revenue Service commenced its audit of our 2023 U.S. Federal tax return, which was ongoing as of December 31, 2025. We believe our tax positions will more likely than not be sustained upon examination, including related appeals or litigation. In the event we had a tax position that did not meet the more likely than not criteria, any tax, interest, and penalties incurred related to such a position would be reflected in "Total federal income tax expense" on our Consolidated Statements of Income.

Historical Timeline

Fiscal YearFiled
2025Feb 9, 2026Showing above
2024Feb 10, 2025
2023Feb 9, 2024
2022Feb 10, 2023
2021Feb 11, 2022
2020Feb 12, 2021
2019Feb 12, 2020
2018Feb 15, 2019
2017Feb 20, 2018
2016Feb 22, 2017
2015Feb 24, 2016

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

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