管理層發言
Good day, and welcome to Selective Insurance Group Fourth Quarter 2025 Earnings Call. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Brad Wilson, Senior Vice President, Investor Relations and Treasurer. Please go ahead.
Good morning. Thank you for joining Selective's Fourth Quarter and Full Year 2025 Earnings Conference Call. Yesterday, we posted our earnings press release, financial supplement and investor presentation on selective.com's Investors section. A replay of the webcast will be available there shortly after this call. John Marchioni, our Chairman of the Board, President and Chief Executive Officer; and Patrick Brennan, Executive Vice President and Chief Financial Officer, will discuss results and take your questions. We will reference non-GAAP measures that insurance and investment professionals use to evaluate operational and financial performance. These non-GAAP measures include operating income, operating return on common equity and adjusted book value per common share. The financial supplements on our website include GAAP reconciliations to any referenced non-GAAP financial measures. We will also make statements and projections about our future performance. These are forward-looking statements under the Private Securities Litigation Reform Act of 1995, not guarantees of future performance. These statements are subject to risks and uncertainties that we disclose in our annual, quarterly and current reports filed with the SEC. We undertake no obligation to update or revise any forward-looking statements. Now I'll turn the call over to John.
Thanks, Brad, and good morning. We are well positioned to build on recent momentum. In 2025, we delivered an ROE of 14.4% and an operating ROE of 14.2%. This exceeds our 10-year average operating ROE of 12.1% and our 5-year average of 12.5%. We are proud of our long-term track record and are taking clear steps to drive future margin improvement. In 2025, we grew book value per share by 18% and returned $182 million to shareholders through our common dividends and share repurchases at attractive valuations. With our strong capital position, we can deploy capital in several ways that are accretive to long-term value, including continued investments to grow and diversify our business, along with opportunistic share repurchases. We have a strong foundation with opportunities to drive improvement across our organization. We delivered a 93.8% combined ratio in the quarter, reducing our full-year combined ratio to 97.2%, just outside the 96% to 97% guidance we provided at the beginning of the year and at the low end of the 97% to 98% guidance provided last quarter.
Net premiums written growth was 5% for the year as we executed deliberate actions to improve underwriting profitability. This remains our primary focus. However, we are also executing strategies to support future growth opportunities, including expanding our geographic footprint and broadening E&S distribution capabilities with retail access. We believe we have the capabilities and strategy to further diversify our premium and outpace industry growth in coming years. In the fourth quarter, favorable workers' compensation development offset unfavorable prior year emergence in the commercial and personal auto lines and E&S casualty. There are also several smaller adjustments across multiple lines of business, including umbrella, which was driven by auto. In 2024 and 2025, we took meaningful actions to strengthen reserves. Our picks for older accident years have held up well, and our actions have been increasingly weighted to more recent accident years.
We are comfortable with our overall carried reserve position. We firmly believe our disciplined approach responds promptly and appropriately to emerging trends and ensures pricing targets keep pace with an evolving external environment, even though it can create short-term volatility. We will stick to our process, continuing to assess emerging information, considering risk factors and booking our best reserve estimates each quarter. We expected 2025 accident year margins to improve for commercial automobile as we have earned double-digit rate increases over multiple years that exceeded our assumed loss trend of roughly 8%. As 2025 progressed, we ultimately increased commercial auto casualty loss cost by nearly 6 points. We also increased our expected severity trend for commercial auto liability to approximately 10%. This assumption is reflected in our book results and incorporated into our 2026 guidance.
In total, we strengthened commercial auto reserves by approximately $190 million in 2025. The majority is attributable to the 2024 and 2025 accident years with 2025 representing the largest share. We are addressing commercial auto with both underwriting and claims actions. For example, we have implemented tighter underwriting guidelines for fleet exposures, supported by state-specific tactics and focused our commercial auto telematics rollout in specific segments and states. In general liability, we've discussed our actions to manage limits in challenging jurisdictions and trim underperforming classes. We are also prioritizing new business in better performing segments and have strengthened new business pricing. Standard Commercial Lines is our largest segment and our earnings engine. We have the sophisticated pricing and risk selection tools in the hands of our talented underwriters that are necessary for taking granular action across the portfolio.
We are improving mix by achieving stronger rate and retention differentiation based on expected profitability while continuing to focus on overall rate adequacy. This is not new, but we expect the amount of differentiation to increase. We are leveraging our tools, granular insights and differentiated operating model to drive higher renewal retention on our best-performing business and meaningfully lower retention on our poorer performing business through appropriate rating actions. While overall rate increases could moderate in the short term, we expect these mix improvement actions will deliver improved profitability. Our guidance reflects the benefits we expect in 2026 from the various actions we have taken and our multiyear plan points to continued margin improvement in 2027. Now I'll turn the call over to Patrick.
Thanks, John, and good morning, everyone. For the quarter, fully diluted EPS was $2.52, up 66% from a year ago. Non-GAAP operating EPS was $2.57, up 59%. Our return on equity was 18.3%, and our non-GAAP operating return on equity was 18.7%, reflecting continued strong investment performance. The GAAP combined ratio was 93.8%, a 4.7 point improvement from fourth quarter 2024, mainly because this quarter had no net prior year reserve development. For the quarter, the overall underlying combined ratio was 92.1%, 1.5 points higher than the 90.6% a year ago. The increase is attributable to the reserving actions we took to address the 2025 accident year, primarily in commercial auto. This quarter's Standard Commercial Lines combined ratio was 92.9%, which included 1.6 points of favorable prior year casualty development and 3.2 points of higher current year casualty loss costs. As John noted, the current environment demands strong underwriting and pricing discipline.
Standard Commercial Lines premium growth in the quarter was 5%, driven by renewal pure price increase of 7.5% or 8.5% excluding workers' compensation. General liability pricing increased by 9.8% and commercial auto pricing increased by 8.6%. While there was some deceleration in commercial auto pricing for physical damage, liability price increases continue to exceed 10%. For property, renewal premium change was 12.2%, including 4 points of exposure growth. Retention for the quarter was 82%, stable with recent periods, but down 3 points from a year ago. Excess and surplus lines premium grew 4% this quarter with average renewal pure price increases of 7.8%. We continue to push higher rate levels in E&S casualty based on our view of general liability loss trends. The E&S combined ratio for the quarter was 93.1% and a very strong 87.8% for the year. Turning to Personal Lines. The combined ratio for the quarter was 103%, up from 91.7% in the fourth quarter 2024.
There were 2 reasons for the deterioration. Catastrophe losses, which were 6.2 points higher this quarter and current year casualty loss costs, which increased by 8.1 points. Current year adjustments were driven by New Jersey Personal Auto. For the year, the Personal Lines combined ratio was 100.6%, improved from 109.3% in 2024. Results are even more favorable for the portfolio outside of New Jersey, and we are positioned for profitable growth in those states. For the quarter, personal lines net premiums written declined 8%, with target business up 5%. Nearly all our new business was in our target mass affluent market. Renewal pure price for the quarter was 15.1%. Across all our segments, the combined ratio was 97.2% in 2025, a significant improvement from 2024's 103%, primarily because of lower prior year casualty reserve development and catastrophe losses. Last quarter, we discussed our third-party claims review, which was ongoing at that time.
The review is now complete, and the findings were consistent with what we had previously discussed. Turning to investments. Fourth quarter after-tax net investment income was $114 million, up 17% from a year ago and generated 13.6 points of return on equity. Our investment portfolio remains conservatively positioned, and our investment strategy is consistent with average credit quality of A+ and a duration of 4.1 years. We expect the portfolio's strong embedded book yield to continue to provide a durable source of future investment income even if interest rates decline. We successfully renewed our property catastrophe reinsurance program effective January 1. Our retention remains $100 million, and we increased our coverage exhaustion point to $1.5 billion from $1.4 billion. Property market conditions are attractive, and we completed the renewal with meaningful risk-adjusted pricing decreases and improved terms and conditions.
We continue to supplement our main tower with a personal lines-only buydown layer. Our peak peril U.S. hurricane is well within our risk tolerance at 5% of GAAP equity for a 1-in-250-year net probable maximum loss. Our capital management strategies continue to prioritize profitable growth within our insurance business and aim to return 20% to 25% of our earnings to shareholders through dividends. We also expect to opportunistically repurchase shares. These actions reflect our commitment to delivering long-term value to shareholders. During the quarter, we repurchased $30 million of common stock, bringing our total repurchases for the year to $86 million. We believe these repurchases are completed at attractive valuations. At year-end, $170 million remained on our authorization. Book value per share increased 18%, and we reported $3.6 billion of both GAAP equity and statutory surplus. We ended the year with a strong capital position, and we are proud that A.M. Best recently affirmed our A+ financial strength rating.
For 2026, we expect a GAAP combined ratio between 96.5% and 97.5%. Our guidance assumes 6 points of catastrophe losses. We do not make assumptions about future reserve development as we book our best estimate each quarter. We expect after-tax net investment income to be $465 million. This is up 10% from 2025, reflecting growth in our invested assets. Our guidance includes an overall effective tax rate of approximately 21.5%. Weighted average shares are estimated to be approximately 61 million on a fully diluted basis without assumptions about share repurchases under our existing authorization. As a reminder, our first quarter underlying combined ratios tend to be higher than the rest of the year due to normal seasonality. For financial modeling purposes, this has historically been most relevant to non-catastrophe property losses. Corporate expenses also tend to be higher in the first quarter due to holding company expenses related to stock compensation.
Thanks, Patrick. Our 2026 guidance implies an underlying combined ratio in the 90.5% to 91.5% range compared to the 91.8% we reported in 2025. Our guidance does not provide segment level combined ratios. However, directionally, we expect underlying combined ratio improvement in Personal Lines and Commercial Lines and continuing strong performance in E&S. Our 2026 guidance considers reserving actions for recent accident years and embeds an overall expected loss trend of approximately 7.5%, up from the 7% we assumed a year ago. Our loss trend assumptions are 3.5% for property and 9% for casualty. The casualty trend would be closer to 10%, excluding workers' compensation. We expect our 2026 expense ratio to increase by about 0.5 point as we make strategic technology investments to support scale, enhance decision-making and improve operational efficiency. With expected strong investment income, our 2026 guidance implies an operating ROE in the 14% range.
Before turning to your questions, I want to remind everyone that Selective is celebrating its 100th anniversary in 2026. We are proud of our history, the work of our employees and the value we deliver to our policyholders, distribution partners and shareholders. We are excited to build on our legacy of success. To drive this, we remain focused on a set of key priorities across the company, including relentlessly improving on the fundamentals across risk selection, individual policy pricing and claim outcomes, diversifying revenue and income within and across our 3 insurance segments and further leveraging our use of data, analytics and technology, including artificial intelligence to drive operational efficiency and improved underwriting and claim outcomes.
分析師問答
Our first question comes from Michael Phillips with Oppenheimer.
John, my first question is around your last comments around the guidance. As you said, the core underlying combined, it kind of implies a bit of improvement from last year in 2025. And you said you kind of expect commercial to improve personal to improve and some strong from E&S. I guess if we focus on commercial for a second, there you're seeing price deceleration, it seems like in line with peers, elevated casualty loss picks that kind of start to pick up in 3Q and 4Q. And then you still got some noise on PYD and commercial auto and GL. I guess given all that, can you just talk about the confidence you have in maintaining or maybe even improving the commercial line margins from here?
Thank you, Mike. As I mentioned, we provide comprehensive guidance, but we do not offer individual combined ratio guidance by segment. However, we have given some directional guidance, which seems to be the focus of your question. We are definitely continuing to increase rates on the casualty lines of business. The most notable deceleration has been on the property side, though not as severe as what has been reported for larger accounts. We expect pricing to remain strong in the casualty areas, including commercial auto liability and general liability. Additionally, we have significant opportunities to enhance our pricing tools and risk selection processes, which will improve the mix of business for both renewals and new selections. This improvement will also contribute to the benefits we are discussing. As for your question about confidence, we are confident in the guidance provided, based on our processes. Regarding the underlying combined ratio improvement of 80 basis points, focusing on the midpoint of our underlying combined ratio seems reasonable. It's also important to note that there's a 50 basis point increase in the expense ratio, meaning the underlying loss ratio improvement is a bit higher than that.
I appreciate your input. I have a follow-up question that we have discussed briefly before. Many of your comments regarding reserves have stemmed from increased severities in recent accident years within your casualty business. I’m curious about the implications for general liability and commercial auto, particularly concerning case reserves for those recent accident years. It seems that some companies experience a gap between paid activity and their initial case reserve settings, as much of this is set automatically, leading to potential discrepancies when higher payments occur. I don't believe this applies to you, but could you share your perspective? We will certainly be examining your case reserves for those two lines in detail in a few months. Could you explain any changes in your initial case reserve settings in light of the higher payment activity?
Yes, I would say that we've observed a shift from an incurred basis similar to what we've seen on the paid side, which reflects your point regarding case reserves and their movement. I want to reiterate what we discussed last quarter about the external studies we conducted on both the actuarial reserving and planning process, as well as the claims process. This was intended to assess any changes in the adequacy of underlying case reserves, whether positive or negative. We were pleased with the results of those assessments on both sides, indicating that while there are opportunities for us to enhance our claims organization, we see strong performance there. We utilize multiple methods, examining both paid and incurred approaches, and project those to the ultimate. This remains our process as we believe it provides the best insight into the status of more recent prior accident years and, more crucially, our current profitability.
Our next question comes from Paul Newsome with Piper Sandler.
Hoping you could give us just a little bit more detail on the reserve development of the personalized business and how it might sort of fundamentally differ from what you've had in the commercial lines business, size, geography, anything that would suggest other than just sort of differences in similarity and a delay in the overall liability claim trend?
Yes. I guess, Paul, thank you for the question. We've mentioned this both in prior quarters and this quarter. In personal auto, the prior year development is driven entirely by the state of New Jersey. In personal auto, New Jersey represents about 30% of our portfolio. So all of that is New Jersey and pretty much all of it is the 2024 accident year. That was the case in the Q4 and also the prior quarter. For the full year number, when you look at that and the impact on Personal Lines overall combined ratio, that prior development was about 3.7 points in total. All of that is New Jersey. I think that's important, and I know Patrick referenced this in his prepared comments as well. I think when you look at the improvement that we see in personal lines and look at that 100.6% combined ratio, recognize that almost a 4-point impact of PYD is entirely from New Jersey, and it really masks the improvement we've seen and the strong run rate performance we're seeing in the personal lines book outside of New Jersey.
We are also taking significant actions to continue to manage that New Jersey portfolio, so it becomes less of an impact going forward. That's an important point to make, and it's a very different environment there. We have made comments in prior calls, and I'll reinforce them here. Some of the New Jersey dynamics that we see in personal lines also apply to commercial lines. New Jersey has always been a higher litigation rate state for both personal and commercial. We've seen over the last few years through legislative change a number of what I'll call pro plaintiffs bar legislative enactments that have made it more fertile ground for litigation abuse and social inflation. Legal changes that require presuit disclosure of policy limits, increasing private passenger auto minimum limits, increasing mandatory commercial auto limits to 1.5 million for autos over 26,000 pounds which is a small portion of our book, but it attracts more attorney involvement.
And a couple of years ago, a lowering of the bad faith standard for uninsured motorists and underinsured motorist claims. All of those things have driven up the interest of the plaintiffs bar in that state and have driven up a more aggressive litigation environment. Loss trends have reflected that. Unfortunately, on the personal lines side, the regulatory environment hasn't been as conducive to rate adjustments to make up for those costs. That's an ongoing challenge. I think you see it in fast-track data on an industry basis for personal lines. Many of those same dynamics impact the commercial auto line for that state as well.
Okay. Yes, it sounds like all the lawyers are moving back to New Jersey from Florida. My second question is I want to ask about sort of operating leverage from a capital perspective. Historically, because of your firm's underwriting consistency, it has been able to run with a little bit higher premiums to surplus ratios than some of its peers. I wanted to know if there was anything that we should think about in terms of that change given capital buybacks and such today and where the stock is. I think that was the question. But if you could talk to that, that would be interesting to you.
Yes, sure. So there's no change in how we think about our target operating leverage. You've heard us talk about operating in a range of 1.35x to 1.55x. Over the last several years, we've been in that range where a couple of years we're at the upper end of the range, a couple of years at the bottom range. If you look back historically, that operating leverage did tend to be a little bit higher than the peer group. If you look over the last decade or so, the peer group has generally moved a lot closer to where we operate from an operating leverage perspective. It's not that much of a differentiating factor at this point. But in terms of how we think about target operating leverage, that range continues to serve us well.
I would just add that operating leverage is one of many capital metrics that we use to evaluate where we are relative to what we think we need to run the business, and we continue to regularly look at our internal models and calibrate those against external models to ensure that we have sufficient capital to absorb any unforeseen consequences while still operating with an efficient balance sheet.
Our next question comes from Jing Li with KBW.
I'll stay on reserves for a second. Just curious about E&S casualty reserves. Can you kind of unpack some drivers behind the reserve charge? Is it concentrated in specific accident year geography coverage types similar to the commercial lines that's mostly from commercial auto? And how does this impact your appetite for growing the E&S platform going forward?
Yes. Thank you for the question. Just let me make sure we're talking about this in the proper context, which is our full year E&S combined ratio was an 87.8%, so strong profitability. The reserve action we took in E&S in the quarter, and we hadn't taken any on a year-to-date basis, was $10 million, so de minimis in total, but spread across the 2020 through 2023 accident years. So 4 accident years and $10 million are very de minimis movements on an annual basis for each of those accident years. So there's nothing noteworthy there. We disclose a great deal of detail with regard to reserve adjustments. We true up lines at the end of the year, and there's nothing there that's noteworthy from an accident year or a geography or a segment perspective. Again, this is all in the context of extremely strong operating margins in E&S over the last few years, and we expect that to continue going forward.
Got it. That's very helpful. My second question is on kind of your geographic expansion. You've been investing a lot in geographic expansion, new state build-outs for several years. Are these newer territories, as they mature, what contribution are they making to the top line growth versus the margin profile?
Yes. The top line growth, if you just look at it on average over the last several years. Remember, we started geo expansion again in earnest in the 2017 to 2018 time frame. I would say over that time, as states have come on and some of those states have matured while new states are coming on, it's contributed between 1 and 2 points of growth overall on average over that time period. I would expect that to continue to temper going forward. With regard to profitability, as we've talked about in the past, for the first few years in a new state, we plan and incorporate into our planning guidance and expected loss ratios that newer states run at worse profitability than our legacy book runs. However, our experience over the last 8 or so years has been that those states have consistently performed within our expectations and have improved as they've matured. There is nothing we're seeing there that is a different profitability profile than what we discuss in terms of the overall portfolio we have.
And our next question comes from Rowland Mayor with RBC Capital Markets.
I guess congrats on 100 years, even though I know you all weren't there the whole time. I wanted to ask just on the workers' comp releases and what accident years those pertain to?
Yes, certainly. There are two main factors I'd like to address as they are important. First, we conduct our annual tail study for workers' compensation in the fourth quarter each year. Without delving too deeply into the details, this study essentially evaluates the development to ultimate for accident years and maturities that go beyond our standard reserving triangles, which encompass 20 years. This analysis is crucial for obtaining an accurate reserving picture for long-term chronic and permanent injuries that might be open for decades. We then apply the development assumption to all accident years to form our long-term view of medical inflation. This accounted for about half of the favorable emergence we recognized in the latest quarter. It's important to put this into perspective; considering we’re dealing with decades of accident years, the impact from any specific accident year is minimal, roughly 0.5 points per year throughout this extended period.
The remainder of the favorable booking in the quarter came from accident years 2022 and earlier. As we've mentioned throughout the year, we've consistently observed better-than-expected frequency emergence in the workers' compensation line, which persisted through the entire year. However, as is our standard approach, we do not make swift decisions regarding long-term frequency lines; therefore, the actions taken were for the years 2022 and prior, along with the findings from the workers' compensation tail study.
That's helpful. And then I wanted to ask on the GL charge. I know this year, I think it's all been umbrella, but in '24 I think a lot of it was primary GL. Was there any movement on the 2024 charges this year?
On the 2024 charge, no. To reinforce the point you started with, the GL adjustments we made and booked were mainly related to umbrella policies, which are primarily driven by the auto lines of business. The core GL lines and our booked levels for those lines have remained stable throughout the year.
That's great. And then I wanted to see if I could sneak one more in. You talked about the 14% ROE for next year in the guidance. This year, the NII was about 13%. Given all the movement, do you have an idea of what the long-term target should be at this interest rate level in your portfolio?
We have set our return on equity target to be achievable consistently over time, based on our expectations of long-term returns from the investment portfolio. Currently, we are seeing approximately a 4% after-tax book yield on the portfolio, which is slightly above the long-term expectation. Historically, a more reasonable assumption for the long-term would be closer to a 3% after-tax yield. With our invested asset leverage at just over 3 times, we anticipate an after-tax ROE impact from investments in the range of 9% to 9.5%. This is why we maintain our target of a 95% combined ratio, as it positions us to meet or surpass a 12% ROE target over time. We understand that while these returns demonstrate durability, which I want to emphasize, as noted in Patrick's guidance, we have confidence in these book yields based on our duration, and we expect this to hold for the next few years. We are also aware that this expectation will remain valid in the long run.
I would say the 12% target is intended to provide a spread over what we estimate to be our cost of capital. We want to make sure that we're earning our economic freight. So that's how we ground ourselves in that bogey.
Our next question comes from Michael Zaremski with BMO Capital Markets.
Thank you for the information on workers' compensation. It was clearly a strong result this quarter. In the past, it may have caused some concern, but there were indications that the loss trend could have been worsening. I'm curious about the underlying loss ratio for compensation; it still seems high. How is that line affecting the combined ratio guidance for next year? That's my first question.
Yes. I guess we don't provide individual line guidance. You'll see our reported results, and we give you a lot of detail on the reported results by line. So you'll see that in Q1. As we've talked about in prior years, generally speaking, we've maintained our severity assumptions, our medical severity assumptions and have seen a little bit of upward pressure that we've talked about with regard to utilization, which may cause your average medical severities to be slightly higher than they had been running over the last few years. We've also continued to see improving frequency trends, and that's held up through 2025. You have to put those pieces together alongside of the rate level that continues to be slightly negative, and that will all come through in how we set our planned loss ratios for that line of business. You'll see something similar to what you observed in 2025.
Okay. That is helpful. My follow-up is back on the expense ratio commentary and initiatives there. It's been interesting, I guess, over the last couple of quarters, there have been a few companies that have come out with very large expense ratio improvement guides based on implementing technology and AI, et cetera. On the other hand, there are other companies in your camp that are kind of guiding to upwards expense ratio movement to make further investments. I'm curious, would you say that this is a one-time step-up to broaden Selective's capabilities having to do with newer technologies? Or is this more about all the work you've been doing on improving the reserving and claims processes, et cetera?
Yes. No, it's a great question. We've seen and heard a lot of the same commentary. Clearly, we're in the camp that the investment in technology and our investment in technology has continued to ramp up as a percentage of premium over the last several years, and we expect that to continue. When you look at it at the highest level, we expect the investment in technology to continue to rise as a percentage of premium, and the cost of labor as a percentage of premium will decrease over time as a result of gaining the benefit of these technology investments. We're not setting aggressive targets, but we think there are real opportunities to drive operational efficiency, improve decision-making, and improve outcomes across underwriting, pricing, decision-making and claims outcomes. That's what we're pointing to in terms of the increase in our strategic investment dollars. If you look over the last 3 years, the split of strategic investment dollars in technology relative to running our technology infrastructure, 'keeping the lights on,' it's about a 50-50 split, which is significant.
So there's more money going into strategic investments. We have doubled that over the last 3 years and have been able to manage the overall impact on the combined ratio or the expense ratio, and that will be our focus going forward. It's not a step-up per se, but we expect technology investment as a percentage of premium to continue to rise, and then we will see offsetting benefits in other cost aspects and loss ratio benefit to be realized.
Understood. That's helpful. One last question, and you might have touched on some of this in prepared remarks, but should we be thinking about the retention ratio staying around current levels based on the indications of kind of making sure that continue to turn out the less profitable business in a decelerating rate environment? Or (is there) anything you can tease out on the retention ratio would be helpful.
Yes, sure. Again, that's not an area we guide to. We don't do growth or retention guidance. Generally speaking, to your point, our focus is on the granularity of our execution of our pricing strategy. We believe that by doing that, we should be able to deliver relatively stable retentions, but there's an assumption around market behavior that I think is a little bit tougher to forecast. Depending on market behavior with regard to pricing discipline in the casualty lines, that will ultimately influence where that retention settles. Our focus, to your point, is on that granularity of execution, which we think allows us to maintain more stable retentions.
Our next question comes from Daniel Lee with Morgan Stanley.
I want to switch gears and ask about my first question regarding the E&S segment. I know there has been strong growth for E&S in previous years, but I'm beginning to see it slow down. I would like to hear your thoughts on what you expect for E&S overall and your growth aspirations for the E&S segment.
Sure. That's a business we really like. It's a business that we expect to continue to become a bigger part of our overall premium in the coming years, but it's also important to maintain consistent discipline from a pricing and underwriting perspective over time. There's been a fair amount of industry commentary around some more aggressive pricing behavior there, not just on the property side, but I think leading into the casualty side as well. We're going to maintain our discipline there, and that might create some downward pressure on growth in the near term. In the long term, I would put that segment in the category of business that we like and expect to continue growing as a percentage of our overall premium. We have meaningful potential to expand our capabilities there from a product and underwriting perspective, but we've also recently opened a retail access channel for our strong retail partnerships on the standard line side. We think that's a real growth avenue for us in the coming years.
Awesome. Yes. So for my follow-up, I wanted to ask about E&S Casualty and the overall loss cost trends. I'm curious about the differences between commercial and standard commercial loss cost trends compared to E&S Casualty. What nuances should we consider for E&S Casualty regarding loss cost trends?
Yes. I would say probably the biggest difference is the E&S and you see it in lower retention ratios, it does tend to be a more transient business, which allows you to turn over the portfolio more quickly and make more significant mix improvements. We've pointed to over the last couple of years, as a result of those actions, we've seen a much more meaningful frequency decline in E&S than we've achieved in standard GL. While we've seen frequency benefits in our standard lines, I think it's been a bigger frequency benefit that we've been able to realize in E&S. Regarding severity trends and social inflation, I would say the general dynamics are consistent. We see them consistent across both admitted and non-admitted business. The bigger difference we've seen has been more so on the frequency side. We had also pointed to this in prior comments; we've embedded higher severity increase assumptions into our expected loss ratios in part because of the more transient nature of E&S casualty portfolios.
There are no further questions at this time. I'd like to turn the call back over to John for closing remarks.
Great. Thank you all for joining us. We always appreciate the engagement. If you have any additional questions, please feel free to follow up with Brad.
Thank you for your participation. You may now disconnect. Everyone, have a great day.