SELECTIVE INSURANCE GROUP INC - FORM 8-K - EX-99 - EXHIBIT 99.2

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8-K - FORM 8-K - SELECTIVE INSURANCE GROUP INC	f8k_072711.htm
EX-99 - EXHIBIT 99.1 - SELECTIVE INSURANCE GROUP INC	exh_991.htm

EXHIBIT 99.2

Supplemental Investor Package

_______________________________________________

Second Quarter 2011

Investor Contact:

Jennifer DiBerardino

Senior Vice President, Investor Relations and Treasurer

Tel: 973-948-1364

jennifer.diberardino@selective.com

Selective Insurance Group, Inc.
Selected Balance Sheet Data (unaudited)
($ in thousands, except per share amounts)

	June 30,								June 30,								December 31,
	2011								2010								2010
						Unrecognized/								Unrecognized/								Unrecognized/
	Balance			Market		Unrealized			Balance			Market		Unrealized			Balance			Market		Unrealized
	Sheet			Value		Gain/(Loss)			Sheet			Value		Gain/(Loss)			Sheet			Value		Gain/(Loss)
Invested Assets:
Corporate bonds1,3	$	1,833,490			1,852,486		52,861		$	1,286,319			1,307,263		42,693		$	1,683,336			1,704,600		35,334
Gov't\ Municipal bonds3		1,762,325			1,793,729		91,461			2,045,946			2,073,991		94,726			1,873,730			1,894,436		77,913
Total bonds		3,595,815			3,646,215		144,322			3,332,265			3,381,254		137,419			3,557,066			3,599,036		113,247

Equities		136,577			136,577		8,390			60,988			60,988		1,129			69,636			69,636		11,597
Short-term investments		142,809			142,809		-			343,900			343,900		-			161,155			161,155		-
Other investments		132,137			132,137		(4,255	)		153,475			153,475		(20,949	)		137,865			137,865		(4,982	)
Total invested assets		4,007,338			4,057,738		148,457			3,890,628			3,939,617		117,599			3,925,722			3,967,692		119,862


Invested assets per $ of stockholders' equity		3.64								3.71								3.67

Total assets		5,369,648								5,226,934								5,231,772

Liabilities:
Reserve for losses and loss expenses		2,898,592								2,805,841								2,830,058
Unearned premium reserve		858,627								856,931								823,596

Total liabilities		4,268,614								4,177,430								4,160,663

Stockholders' equity		1,101,034								1,049,504								1,071,109

Total debt to capitalization ratio		19.2	%							20.0	%							19.7	%
Adjusted total debt to capitalization ratio 2		12.6	%							13.1	%							12.9	%

Book value per share		20.33								19.65								19.95

Book value per share excluding
unrealized gain or loss on bond portfolio		19.20								18.57								19.09

NPW per insurance segment employee		760								754								761

Statutory premiums to surplus ratio		1.3	x							1.4	x							1.3	x

Statutory surplus		1,070,297								1,008,534								1,073,025

1 Includes mortgage-backed and asset-backed securities.

2 The adjusted debt to capitalization ratio reflects an estimated equity treatment of 90% applied to our $100 million Junior Subordinated Notes issued September 25, 2006 as applied by A.M. Best.

3 Certain prior year amounts were reclassified to conform with current year presentation.

Selective Insurance Group, Inc.
Selected Income Statement Data (unaudited)
June 2011		Three Months Ended June 30,												Six Months Ended June 30,
($ in thousands, except per share amounts)		2011						2010						2011						2010
					Per diluted share						Per diluted share						Per diluted share						Per diluted share
Consolidated
Revenue		$	399,570					$	387,718					$	803,026					$	780,830
Operating income			930			0.01			22,212			0.41			18,735			0.34			28,847			0.53
Net realized gains (losses), after tax			1,395			0.03			(2,121	)		(0.04	)		5,139			0.09			(2,163	)		(0.04	)
Income from continuing operations			2,325			0.04			20,091			0.37			23,874			0.43			26,684			0.49
Loss on discontinued operations, after tax			-			-			(1,325	)		(0.02	)		-			-			(2,115	)		(0.04	)
Net income			2,325			0.04			18,766			0.35			23,874			0.43			24,569			0.45
Operating return on equity			0.3	%					8.6	%					3.5	%					5.6	%

Insurance Operations
Gross premiums written			449,132						415,860						878,127						848,938
Net premiums written			374,503						353,524						736,338						721,615
Net premiums earned			355,580						352,190						706,923						708,392
Underwriting loss	- before tax		(32,682	)					(3,161	)					(43,766	)					(17,766	)
	- after tax		(21,243	)		(0.39	)		(2,055	)		(0.04	)		(28,448	)		(0.52	)		(11,548	)		(0.21	)
GAAP combined ratio			109.2	%					100.9	%					106.2	%					102.5	%

Commercial lines
Net premiums earned			290,295						293,001						577,058						590,909
GAAP combined ratio			107.7	%					98.9	%					104.7	%					101.3	%
Personal lines
Net premiums earned			65,285						59,189						129,865						117,483
GAAP combined ratio			115.9	%					110.9	%					112.8	%					108.6	%

Investments
Net investment income	- before tax		39,345						36,545						82,818						71,251
	- after tax		29,420			0.53			27,928			0.51			61,545			1.12			54,753			1.01
Effective tax rate			25.2	%					23.6	%					25.7	%					23.2	%
Annual after-tax yield on investment portfolio															3.1	%					2.9	%
Annual after-tax, after-interest expense yield															2.8	%					2.5	%
Invested assets per $ of stockholders' equity															3.64						3.71

Other expenses (net of other income)
Interest expense	- before tax		(4,559	)					(4,655	)					(9,116	)					(9,497	)
	- after tax		(2,963	)		(0.05	)		(3,026	)		(0.06	)		(5,925	)		(0.11	)		(6,173	)		(0.11	)

Other - after tax		$	(4,284	)		(0.08	)	$	(635	)		-		$	(8,437	)		(0.15	)	$	(8,185	)		(0.16	)

Diluted weighted avg shares outstanding			55,135						54,361						55,092						54,289

Selective Insurance Group, Inc. and Consolidated Subsidiaries
GAAP Investment Income
(unaudited)
($ in thousands)


	For the three months ended						%			Year to Date						%
	June			June			Increase			June			June			Increase
	2011			2010			(Decrease)			2011			2010			(Decrease)
Investment Income:
Interest:
Fixed Maturity Securities	$	32,752			32,977			(1	)		65,875			66,173			(0	)
Short-term		33			133			(75	)		95			233			(59	)
Alternative Investments		7,900			4,868			62			19,541			8,763			123
Dividends		785			480			64			1,102			932			18
Miscellaneous		22			16			38			47			53			(11	)
		41,492			38,474			8			86,660			76,154			14

Investment Expense		2,147			1,929			11			3,842			4,903			(22	)

Net Investment Income Before Tax		39,345			36,545			8			82,818			71,251			16

Tax		9,925			8,617			15			21,273			16,498			29

Net Investment Income After Tax		29,420			27,928			5		$	61,545			54,753			12

Net Investment Income per Share	$	0.53			0.51			4		$	1.12			1.01			11


Effective Tax Rate		25.2	%		23.6	%					25.7	%		23.2	%



Average Yields :

Fixed Maturity Securities:
Pre Tax											3.52	%		3.71	%
After Tax											2.71	%		2.91	%

Portfolio:
Pre Tax											4.18	%		3.72	%
After Tax											3.10	%		2.85	%



	For the three months ended									Year to date:
	June			June						June			June
Net Realized Gains (Losses)	2011			2010						2011			2010
Fixed Maturities		1,678			(12,586	)					1,235			(16,597	)
Equity Securities		468			9,322						6,671			13,269
Total		2,146			(3,264	)					7,906			(3,328	)
Net of Tax		1,395			(2,121	)					5,139			(2,163	)



As of June 30, 2011 new money rates for taxable fixed maturity securities were 2.51% on a pre-tax basis and 1.63% on an after-tax basis.

Selective Insurance Group, Inc.
2011 Statutory Results by Line of Business
2nd Qtr 2011 (unaudited)
($ in thousands)

	Net					Net											Underwriting			Dividends to
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Combined Ratio			Combined Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2011			2010			Gain/(Loss)
Personal Lines:

Homeowners	$	28,713		14.3	%	$	25,060		18.6	%		87.8	%		9.7	%		29.5	%		0.0	%		127.0	%		108.3	%	$	(7,851	)
Auto		39,222		1.9	%		37,189		5.5	%		73.8	%		10.9	%		30.1	%		0.0	%		114.8	%		112.5	%		(6,116	)
Other (including flood)		3,263		7.4	%		3,036		7.7	%		93.9	%		(17.8	)%		(52.9	)%		0.0	%		23.2	%		39.0	%		2,452
Total	$	71,198		6.8	%	$	65,285		10.3	%		80.1	%		9.1	%		26.1	%		0.0	%		115.3	%		107.6	%	$	(11,514	)

Commercial Lines:

Commercial property	$	49,050		(0.9	)%	$	47,877		(4.8	)%		87.5	%		5.7	%		37.7	%		0.0	%		130.9	%		90.3	%	$	(15,222	)
Workers compensation		66,705		16.3	%		63,855		2.9	%		71.4	%		16.0	%		26.6	%		2.3	%		116.3	%		127.4	%		(11,163	)
General liability		90,463		8.3	%		85,672		2.0	%		52.6	%		16.7	%		33.7	%		0.0	%		103.0	%		93.5	%		(4,183	)
Auto		72,740		(0.0	)%		69,199		(5.4	)%		53.4	%		7.4	%		31.7	%		0.0	%		92.5	%		87.9	%		4,084
Business owners policies		16,675		3.5	%		16,407		1.6	%		67.5	%		13.2	%		39.6	%		0.0	%		120.3	%		125.0	%		(3,438	)
Bonds		5,114		(0.6	)%		4,725		(2.1	)%		19.2	%		8.3	%		61.4	%		0.0	%		88.9	%		76.0	%		286
Other		2,558		3.1	%		2,561		1.8	%		0.0	%		0.2	%		43.9	%		0.0	%		44.1	%		45.8	%		1,433
Total	$	303,305		5.7	%	$	290,295		(0.9	)%		62.5	%		12.0	%		33.2	%		0.5	%		108.2	%		99.9	%	$	(28,202	)

Grand Total	$	374,503		5.9	%	$	355,580		1.0	%		65.7	%		11.5	%		31.9	%		0.4	%		109.5	%		101.0	%	$	(39,716	)

Note: Some amounts may not foot due to rounding.


				2011			2010
	Losses Paid		$	208,085		$	187,347
	LAE Paid			39,894			38,508
	Total Paid		$	247,979		$	225,855

Selective Insurance Group, Inc.
2011 Statutory Results by Line of Business
June 2011 YTD (unaudited)
($ in thousands)

	Net					Net											Underwriting			Dividends to
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Combined Ratio			Combined Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2011			2010			Gain/(Loss)
Personal Lines:

Homeowners	$	50,908		17.3	%	$	49,615		19.2	%		78.9	%		8.8	%		31.6	%		0.0	%		119.3	%		111.2	%	$	(9,989	)
Auto		75,617		2.4	%		74,151		6.6	%		74.8	%		11.1	%		30.9	%		0.0	%		116.8	%		114.0	%		(12,902	)
Other (including flood)		6,173		10.3	%		6,099		(3.2	)%		84.7	%		(16.8	)%		(47.0	)%		0.0	%		20.9	%		(0.3	)%		4,857
Total	$	132,699		8.0	%	$	129,865		10.5	%		76.8	%		8.9	%		27.6	%		0.0	%		113.3	%		107.3	%	$	(18,034	)

Commercial Lines:

Commerical property	$	97,380		(2.3	)%	$	96,070		(4.5	)%		65.6	%		5.6	%		37.5	%		0.1	%		108.8	%		99.3	%	$	(8,915	)
Workers compensation		134,473		3.8	%		126,381		(0.3	)%		76.0	%		16.0	%		25.4	%		2.1	%		119.5	%		121.7	%		(26,708	)
General liability		179,235		3.6	%		168,238		(0.6	)%		51.4	%		17.1	%		33.2	%		0.0	%		101.7	%		93.2	%		(6,459	)
Auto		144,469		(2.6	)%		138,869		(5.8	)%		54.9	%		6.4	%		31.0	%		0.1	%		92.4	%		89.4	%		8,858
Business owners policies		33,143		(0.3	)%		32,892		1.4	%		63.7	%		13.4	%		39.0	%		0.0	%		116.1	%		129.5	%		(5,409	)
Bonds		9,635		(2.1	)%		9,492		0.6	%		12.9	%		6.9	%		61.2	%		0.0	%		81.0	%		84.0	%		1,713
Other		5,303		1.8	%		5,117		1.9	%		2.2	%		0.2	%		43.2	%		0.0	%		45.6	%		46.6	%		2,704
Total	$	603,639		0.8	%	$	577,058		(2.3	)%		59.6	%		11.9	%		32.4	%		0.5	%		104.4	%		100.8	%	$	(34,215	)

Grand Total	$	736,338		2.0	%	$	706,923		(0.2	)%		62.8	%		11.3	%		31.6	%		0.4	%		106.1	%		101.9	%	$	(52,249	)

Note: Some amounts may not foot due to rounding.



				2011			2010
	Losses Paid		$	396,926		$	369,570
	LAE Paid			77,908			74,602
	Total Paid		$	474,834		$	444,172


SELECTIVE INSURANCE GROUP, INC.	Unaudited
CONSOLIDATED BALANCE SHEETS	June 30,			December 31,
($ in thousands, except share amounts)	2011			2010
ASSETS
Investments:
Fixed maturity securities, held-to-maturity – at carrying value
(fair value: $1,120,977 – 2011; $1,256,294 – 2010)	$	1,070,578			1,214,324
Fixed maturity securities, available-for-sale – at fair value
(amortized cost: $2,442,579 – 2011; $2,285,988 – 2010)		2,525,237			2,342,742
Equity securities, available-for-sale – at fair value
(cost of: $128,187 – 2011; $58,039 – 2010)		136,577			69,636
Short-term investments (at cost which approximates fair value)		142,809			161,155
Other investments		132,137			137,865
Total investments		4,007,338			3,925,722
Cash		185			645
Interest and dividends due or accrued		36,596			37,007
Premiums receivable, net of allowance for uncollectible
accounts of: $4,054 – 2011; $4,691 – 2010		467,122			414,105
Reinsurance recoverables, net		338,122			318,752
Prepaid reinsurance premiums		115,943			110,327
Current federal income tax		7,304			11,200
Deferred federal income tax		87,899			93,234
Property and equipment – at cost, net of accumulated
depreciation and amortization of: $156,209 – 2011; $151,704 – 2010		39,998			41,775
Deferred policy acquisition costs		216,185			209,627
Goodwill		7,849			7,849
Other assets		45,107			61,529
Total assets	$	5,369,648			5,231,772

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for losses and loss expenses	$	2,898,592			2,830,058
Unearned premiums		858,627			823,596
Notes payable		262,346			262,333
Accrued salaries and benefits		100,378			100,933
Other liabilities		148,671			143,743
Total liabilities	$	4,268,614			4,160,663

Stockholders’ Equity:
Preferred stock of $0 par value per share:
Authorized shares: 5,000,000; no shares issued or outstanding	$	-			-
Common stock of $2 par value per share
Authorized shares: 360,000,000
Issued: 96,987,900 – 2011; 96,362,667 – 2010		193,976			192,725
Additional paid-in capital		252,189			244,613
Retained earnings		1,185,659			1,176,155
Accumulated other comprehensive income		21,144			7,024
Treasury stock – at cost (shares: 42,823,108 – 2011; 42,686,204 – 2010)		(551,934	)		(549,408	)
Total stockholders’ equity		1,101,034			1,071,109
Commitments and contingencies
Total liabilities and stockholders’ equity	$	5,369,648			5,231,772

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME	Quarter ended						Six Months ended
	June 30,						June 30,
($ in thousands, except per share amounts)	2011			2010			2011			2010
Revenues:
Net premiums earned	$	355,580			352,190			706,923			708,392
Net investment income earned		39,345			36,545			82,818			71,251
Net realized gains (losses):
Net realized investment gains		2,315			2,920			8,705			11,096
Other-than-temporary impairments		163			(6,162	)		(369	)		(12,235	)
Other-than-temporary impairments on fixed maturity securities
recognized in other comprehensive income		(332	)		(22	)		(430	)		(2,189	)
Total net realized gains (losses)		2,146			(3,264	)		7,906			(3,328	)
Other income		2,499			2,247			5,379			4,515
Total revenues		399,570			387,718			803,026			780,830

Expenses:
Losses and loss expenses incurred		274,555			239,980			523,761			494,123
Policy acquisition costs		113,843			116,099			227,273			232,101
Interest expense		4,559			4,655			9,116			9,497
Other expenses		5,392			4,136			13,883			14,614
Total expenses		398,349			364,870			774,033			750,335

Income from continuing operations, before federal income tax		1,221			22,848			28,993			30,495

Federal income tax (benefit) expense:
Current		3,111			1,322			7,387			10,166
Deferred		(4,215	)		1,435			(2,268	)		(6,355	)
Total federal income tax (benefit) expense		(1,104	)		2,757			5,119			3,811

Net income from continuing operations		2,325			20,091			23,874			26,684

Loss on disposal of discontinued operations, net of tax of $(713)
for Second Quarter 2010 and $(1,139) for Six Months 2010		-			(1,325	)		-			(2,115	)

Net income	$	2,325			18,766			23,874			24,569

Earnings per share:
Basic net income from continuing operations	$	0.04			0.37			0.44			0.50
Basic net loss from disposal of discontinued operations		-			(0.02	)		-			(0.04	)
Basic net income	$	0.04			0.35			0.44			0.46

Diluted net income from continuing operations	$	0.04			0.37			0.43			0.49
Diluted net loss from disposal of discontinued operations		-			(0.02	)		-			(0.04	)
Diluted net income	$	0.04			0.35			0.43			0.45

Dividends to stockholders	$	0.13			0.13			0.26			0.26

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY
	Six Months ended June 30,
($ in thousands, except per share amounts)	2011				2010
Common stock:
Beginning of year	$	192,725				191,646
Dividend reinvestment plan
(shares: 47,488 – 2011; 53,272 – 2010)		95				107
Stock purchase and compensation plans
(shares: 577,745 – 2011; 218,525 – 2010)		1,156				437
End of period		193,976				192,190

Additional paid-in capital:
Beginning of year		244,613				231,933
Dividend reinvestment plan		716				733
Stock purchase and compensation plans		6,860				6,675
End of period		252,189				239,341

Retained earnings:
Beginning of year		1,176,155				1,138,978
Net income		23,874		23,874		24,569		24,569
Dividends to stockholders ($0.26 per share – 2011 and 2010)		(14,370	)			(14,160	)
End of period		1,185,659				1,149,387

Accumulated other comprehensive income (loss):
Beginning of year		7,024				(12,460	)
Other comprehensive income, increase in:
Unrealized gains on investment securities:
Non-credit portion of other-than-temporary impairment losses
recognized in other comprehensive income, net of deferred income tax		389				3,830
Other net unrealized gains on investment securities, net of
deferred income tax		12,246				25,044
Total unrealized gains on investment securities		12,635		12,635		28,874		28,874
Defined benefit pension plans, net of deferred income tax		1,485		1,485		1,412		1,412
End of period		21,144				17,826
Comprehensive income				37,994				54,855

Treasury stock:
Beginning of year		(549,408	)			(547,722	)
Acquisition of treasury stock
(shares: 136,904 – 2011; 97,816 – 2010)		(2,526	)			(1,518	)
End of period		(551,934	)			(549,240	)
Total stockholders’ equity	$	1,101,034				1,049,504

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW	Six Months ended
	June 30,
($ in thousands)	2011			2010
Operating Activities
Net income	$	23,874			24,569

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		16,261			14,805
Loss on disposal of discontinued operations		-			2,115
Stock-based compensation expense		5,286			5,762
Undistributed income of equity method investments		(726	)		(4,841	)
Net realized (gains) losses		(7,906	)		3,328

Changes in assets and liabilities:
Increase in reserves for losses and loss expenses, net of reinsurance recoverables		49,164			48,870
Increase in unearned premiums, net of prepaid reinsurance and advance premiums		30,183			13,252
Decrease (increase) in net federal income tax recoverable		1,628			(9,380	)
Increase in premiums receivable		(53,017	)		(22,519	)
(Increase) decrease in deferred policy acquisition costs		(6,558	)		401
Decrease (increase) in interest and dividends due or accrued		514			(206	)
Decrease in accrued salaries and benefits		(555	)		(80	)
Decrease in accrued insurance expenses		(7,045	)		(10,003	)
Other-net		8,694			(7,862	)
Net adjustments		35,923			33,642
Net cash provided by operating activities		59,797			58,211

Investing Activities
Purchase of fixed maturity securities, available-for-sale		(252,529	)		(396,076	)
Purchase of equity securities, available-for-sale		(123,141	)		(30,974	)
Purchase of other investments		(7,715	)		(11,150	)
Purchase of short-term investments		(694,764	)		(956,904	)
Sale of subsidiary		670			788
Sale of fixed maturity securities, available-for-sale		64,104			128,110
Sale of short-term investments		713,111			826,853
Redemption and maturities of fixed maturity securities, held-to-maturity		99,560			171,900
Redemption and maturities of fixed maturity securities, available-for-sale		66,805			165,513
Sale of equity securities, available-for-sale		59,663			56,247
Distributions from other investments		14,046			15,152
Sale of other investments		16,357			-
Purchase of property and equipment		(2,843	)		(2,570	)
Net cash used in investing activities		(46,676	)		(33,111	)

Financing Activities
Dividends to stockholders		(13,225	)		(12,999	)
Acquisition of treasury stock		(2,526	)		(1,518	)
Principal payment of notes payable		-			(12,300	)
Net proceeds from stock purchase and compensation plans		2,355			2,310
Excess tax benefits from share-based payment arrangements		(185	)		(813	)
Net cash used in financing activities		(13,581	)		(25,320	)
Net decrease in cash		(460	)		(220	)
Cash, beginning of year		645			811
Cash, end of period	$	185			591

Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
Unaudited Statutory Balance Sheets
($ in thousands)


	Jun-30			Jun-30			Dec-31
	2011			2010			2010

ASSETS
Bonds	$	3,488,872			3,236,928			3,482,204
Common stocks		136,577			60,988			69,636
Affiliated mortgage loan		38,462			39,100			38,785
Other investments		162,290			189,732			174,067
Short-term investments		102,166			298,333			111,021
Total investments		3,928,367			3,825,081			3,875,713

Cash on hand and in banks		(38,996	)		(26,759	)		(30,343	)
Interest and dividends due and accrued		36,703			35,023			37,172
Premiums receivable		465,437			465,844			410,809
Reinsurance recoverable on paid losses and expenses		5,204			5,617			5,013
Federal income tax recoverable		-			12,297			-
Deferred tax recoverable		131,197			125,759			133,100
EDP equipment		1,097			1,418			1,409
Equities and deposits in pools and associations		5,814			7,195			6,681
Receivable for sold securities		14			226			16,738
Other assets		29,475			28,796			30,164
Total assets	$	4,564,312			4,480,497			4,486,456

LIABILITIES
Reserve for losses	$	2,158,586			2,117,435			2,111,557
Reinsurance payable on paid loss and loss expense		886			1,000			1,030
Reserve for loss expenses		403,575			404,130			401,508
Unearned premiums		742,684			752,547			713,268
Reserve for commissions payable		40,309			38,555			43,590
Ceded balances payable		11,885			11,064			12,835
Federal income tax payable		4,884			-			1,645
Premium and other taxes payable		19,696			22,968			23,466
Borrowed money		13,017			13,017			13,018
Reserve for dividends to policyholders		3,197			3,307			2,390
Reserves for unauthorized reinsurance		1,811			1,013			1,811
Payable for securities		9,026			21,774			5,028
Funds withheld on account of others		5,156			4,433			7,015
Accrued salaries and benefits		63,729			65,003			61,353
Other liabilities		15,574			15,717			13,917
Total liabilities		3,494,015			3,471,963			3,413,431


POLICYHOLDERS' SURPLUS
Capital		28,325			28,325			28,325
Aggregate write-ins for special surplus funds		38,940			36,418			40,521
Paid in surplus		255,792			255,792			255,792
Unassigned surplus		747,240			687,999			748,387
Total policyholders' surplus		1,070,297			1,008,534			1,073,025
Total liabilities and policyholders' surplus	$	4,564,312			4,480,497			4,486,456

Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
Unaudited Statutory Statements Of Income
($ in thousands)


	Three Months Ended										Six Months Ended
	June										June

UNDERWRITING	2011					2010					2011					2010


Net premiums written	$	374,503					353,524					736,338					721,615

Net premiums earned		355,580					352,190					706,923					708,392


Net losses paid		208,085					187,347					396,926					369,570
Change in reserve for losses		25,695					12,012					47,029					45,059
Net losses incurred		233,780		65.7	%		199,359		56.6	%		443,955		62.8	%		414,629		58.5	%
Net loss expenses paid		39,894					38,508					77,908					74,602
Change in reserve for loss expenses		975					2,090					2,067					4,673
Net loss expenses incurred		40,869		11.5	%		40,598		11.5	%		79,975		11.3	%		79,275		11.2	%
Net underwriting expenses incurred		120,322		32.2	%		116,681		33.0	%		235,131		32.0	%		231,832		32.1	%
Total deductions		394,971					356,638					759,061					725,736
Statutory underwriting loss		(39,391	)				(4,448	)				(52,138	)				(17,344	)



Net loss from premium balances charged off		(1,345	)				(1,325	)				(2,703	)				(2,846	)
Finance charges and other income		2,481					2,319					5,339					4,678
Total other income		1,136		-0.3	%		994		-0.3	%		2,636		-0.4	%		1,832		-0.2	%
Policyholders' dividends incurred		(1,461	)	0.4	%		(644	)	0.2	%		(2,747	)	0.4	%		(2,139	)	0.3	%
Total underwriting loss		(39,716	)	109.5	%		(4,098	)	101.0	%		(52,249	)	106.1	%		(17,651	)	101.9	%


INVESTMENT
Net investment income earned		41,321					33,708					82,579					66,909
Net realized gain / (loss)		2,117					(3,217	)				7,877					(3,265	)
Total income before income tax		3,722					26,393					38,207					45,993
Federal income tax expense		3,014					4,816					12,284					16,314


Net income	$	708					21,577					25,923					29,679


Policyholders' Surplus
Surplus, beginning of period	$	1,083,848					993,981					1,073,025					981,955


Net income		708					21,577					25,923					29,679
Change in deferred tax		473					(124	)				920					8,059
Change in unrealized gains		(1,211	)				(197	)				(1,160	)				6,921
Dividends to stockholders		(14,506	)				(12,002	)				(29,012	)				(24,005	)
Change in non-admitted assets		(602	)				3,822					2,182					3,835
Change in additional admitted deferred tax		1,587					1,853					(1,581	)				2,466
Surplus adjustments		-					(376	)				-					(376	)


Net change in surplus for period		(13,551	)				14,553					(2,728	)				26,579


Surplus, end of period	$	1,070,297					1,008,534					1,070,297					1,008,534


Statutory underwriting loss	$	(39,716	)				(4,098	)				(52,249	)				(17,651	)

Adjustments under GAAP:
Deferred policy acquisition costs		5,940					623					6,558					(401	)
Pension costs		902					140					1,805					536
Other, net		192					174					120					(250	)
GAAP underwriting loss	$	(32,682	)				(3,161	)				(43,766	)				(17,766	)


Note: Some amounts or ratios may not foot due to rounding.

Certain amounts have been reclassified to conform to the current year's presentation.

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Alternative Investments
as of June 30, 2011
(unaudited)

	Inception	Original		Remaining		Current		YTD			DPI(1)		TVPI(2)
Fund	Year	Commitment		Commitment		Market Value		Income			Ratio		Ratio
Real Estate
Silverpeak RE II	2005		20,000,000		2,542,543		12,235,492		1,478,082			0.37		0.97
Silverpeak RE III	2008		15,000,000		8,127,743		3,406,108		(27,975	)		0.01		0.51
Total - Real Estate			35,000,000		10,670,286		15,641,600		1,450,107			0.28		0.85
Mezzanine Financing
Neovara Euro Mezz	2004		9,000,000		-		1,558,850		(350,060	)		0.95		1.07
GS Mezz V	2007		25,000,000		15,864,537		8,567,266		1,410,620			0.57		1.23
Total - Mezz. Financing			34,000,000		15,864,537		10,126,116		1,060,560			0.76		1.15
Distressed Debt
Varde VIII	2006		10,000,000		-		9,756,384		446,869			0.22		1.20
GS Distressed Opp III	2007		15,000,000		3,389,313		10,112,036		946,815			0.18		0.99
Total - Distressed Debt			25,000,000		3,389,313		19,868,420		1,393,684			0.20		1.08
Private Equity
Prospector	1997		5,000,000		-		411,473		29			2.79		2.88
Trilantic Capital Partners III	2004		10,000,000		1,187,138		4,084,002		1,505,734			1.27		1.71
NB Co-Invest	2006		15,000,000		2,448,083		9,347,284		1,624,309			0.53		1.22
Trilantic Capital Partners IV	2007		11,098,351		4,330,269		4,942,835		627,664			0.47		1.17
Total - Private Equity			41,098,351		7,965,491		18,785,594		3,757,736			1.04		1.58
Private Equity, Secondary Market
NB SOF	2005		12,000,000		899,494		6,910,380		865,658			0.60		1.22
GS Vintage IV	2007		20,000,000		5,377,943		14,812,462		2,755,341			0.35		1.17
NB SOF II	2008		12,000,000		6,056,974		5,878,294		1,095,308			0.40		1.37
Total - Pvt. Eq. Sec. Mkt.			44,000,000		12,334,412		27,601,136		4,716,307			0.44		1.22
Energy/Power Generation
ArcLight I	2002		15,000,000		1,655,505		349,192		1,176,763			1.80		1.82
ArcLight II	2003		15,000,000		2,295,492		3,896,640		1,229,973			1.15		1.36
ArcLight III	2006		15,000,000		2,037,794		10,564,716		1,683,187			0.58		1.25
Quintana Energy	2006		10,000,000		1,902,067		8,412,228		1,119,876			0.09		1.12
ArcLight IV	2007		10,000,000		2,404,868		6,639,256		629,672			0.52		1.20
Total - Energy/Power Generation			65,000,000		10,295,726		29,862,032		5,839,471			0.96		1.39
Venture Capital
Venture V	2001		10,000,000		1,100,000		7,666,292		1,323,084			0.27		1.13
Total - Venture Capital			10,000,000		1,100,000		7,666,292		1,323,084			0.27		1.13
TOTAL - ALTERNATIVE INVESTMENTS		$	254,098,351		61,619,764		129,551,190		19,540,949			0.68		1.26
(1) Distributed to paid in ratio
(2) Total value to paid in ratio
Note: Some amounts may not foot due to rounding

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Municipal Bond Portfolio

State and Repayment Source Composition

June 30, 2011

($s in thousands)

(unaudited)

Exposure = 60% Held-to-Maturity; 40% Available-for-Sale

Repayment Source Composition by State
Market Values
State	Revenue	% of State	General Obligation (GO)-Local	% of State	General Obligation (GO)-State	% of State	TX - Permanent School Fund (PSF)	% of State	Total	% of Total
TX	59,425	57%	44,113	42%	1,056	1%	-	0%	104,594	8%
TX-PSF	-	0%	-	0%	-	0%	41,637	100%	41,637	3%
WA	45,122	50%	45,866	50%	-	0%	-	0%	90,988	7%
AZ	68,695	91%	6,837	9%	-	0%	-	0%	75,532	6%
FL	69,155	100%	-	0%	-	0%	-	0%	69,155	5%
NC	23,385	34%	23,474	34%	22,266	32%	-	0%	69,125	5%
NY	67,348	100%	-	0%	-	0%	-	0%	67,348	5%
OH	33,343	61%	13,687	25%	7,345	14%	-	0%	54,375	4%
MN	6,797	13%	5,156	10%	41,240	77%	-	0%	53,193	4%
IL	28,388	59%	19,856	41%	-	0%	-	0%	48,244	3%
CO	16,885	36%	28,535	60%	1,847	4%	-	0%	47,267	3%
Pre-refunded	36,457	58%	16,818	27%	5,389	8%	4,664	7%	63,328	5%
Other	379,770	66%	123,111	21%	76,479	13%	-	0%	579,360	42%
Grand Total	834,770	61%	327,453	24%	155,622	12%	46,301	3%	1,364,146	100%

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Available-for-Sale Fixed Maturity Securities
June 30, 2011
($ in millions)
(unaudited)


	Fair Value		Unrealized Gain (Loss)			Average Credit Quality

AFS Fixed Maturity Portfolio:
U.S. government obligations1	$	296.9		8.2		AAA
Foreign government obligations		30.1		0.3		AA
State and municipal obligations		542.6		29.7		AA+
Corporate securities		1,078.5		31.4		A
Mortgage-backed securities ("MBS")		498.9		12.5		AA+
Asset-backed securities ("ABS")		78.2		0.6		AAA
Total AFS fixed maturity portfolio	$	2,525.2		82.7		AA

State and Municipal Obligations:
Government obligations	$	294.9		16.6		AA+
Special revenue obligations		247.7		13.1		AA
Total state and municipal obligations	$	542.6		29.7		AA+

Corporate Securities:
Financial	$	344.4		8.7		A+
Industrials		81.2		4.4		A
Utilities		68.5		1.1		A-
Consumer discretion		85.0		2.0		A-
Consumer staples		118.0		3.5		A
Healthcare		141.9		5.2		AA-
Materials		52.9		1.3		A-
Energy		56.6		2.1		A
Information technology		70.7		1.1		A+
Telecommunications services		44.1		0.8		BBB+
Other		15.2		1.2		AA+
Total corporate securities	$	1,078.5		31.4		A

MBS:
Government guaranteed agency commercial mortgage-backed securities ("CMBS")	$	72.3		3.6		AAA
Non-agency CMBS		36.8		(0.2	)	A-
Government guaranteed agency residential mortgage-backed securities ("RMBS")		94.7		3.9		AAA
Other agency RMBS		250.6		5.5		AAA
Non-agency RMBS		36.1		(0.3	)	BBB-
Alternative-A ("Alt-A") RMBS		8.4		-		AA+
Total MBS	$	498.9		12.5		AA+

ABS:
ABS	$	77.4		0.7		AAA
Sub-prime ABS2,3		0.8		(0.1	)	D
Total ABS	$	78.2		0.6		AAA

1 U.S. Government includes coporate securities fully guaranteed by the FDIC.
2 We define sub-prime exposure as exposure to direct and indirect investments in non-agency residential mortgages with average FICO® scores below 650.
3 Sub-prime ABS consists of one security that is currently expected by rating agencies to default on its obligations.

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Held-to-Maturity Securities
June 30, 2011
($ in millions)
(unaudited)

	Fair Value		Carry Value		Unrecognized Holding Gain (Loss)			Unrealized Gain (Loss) in Accumulated Other Comprehensive Income			Total Unrealized Unrecognized Gain (Loss)			Average Credit Quality

HTM Fixed Maturity Portfolio:
U.S. government obligations1	$	97.1		90.8		6.3			4.3			10.6		AAA
Foreign government obligations		5.5		5.6		(0.1	)		0.3			0.2		AA+
State and municipal obligations		821.5		796.3		25.2			17.3			42.5		AA
Corporate securities		77.7		69.7		8.0			(3.0	)		5.0		A
Mortgage-backed securities		109.9		100.2		9.7			(5.3	)		4.4		AA+
Asset-backed securities		9.3		8.0		1.3			(2.3	)		(1.0	)	A-
Total HTM fixed maturity portfolio	$	1,121.0		1,070.6		50.4			11.3			61.7		AA

State and Municipal Obligations:
Government obligations	$	234.5		227.2		7.3			8.1			15.4		AA
Special revenue obligations		587.0		569.1		17.9			9.2			27.1		AA
Total state and municipal obligations	$	821.5		796.3		25.2			17.3			42.5		AA

Corporate Securities:
Financial	$	21.7		18.5		3.2			(2.0	)		1.2		A-
Industrials		20.7		18.0		2.7			(0.8	)		1.9		A
Utilities		17.0		16.0		1.0			(0.1	)		0.9		A
Consumer discretion		7.3		7.0		0.3			0.1			0.4		AA-
Consumer staples		5.3		5.0		0.3			-			0.3		A
Materials		2.1		1.9		0.2			(0.1	)		0.1		BBB
Energy		3.6		3.3		0.3			(0.1	)		0.2		BBB-
Total corporate securities	$	77.7		69.7		8.0			(3.0	)		5.0		A

MBS:
Government guaranteed agency CMBS	$	5.2		5.0		0.2			-			0.2		AAA
Non-agency CMBS		38.7		31.6		7.1			(6.2	)		0.9		AA
Government guaranteed agency RMBS		7.5		6.9		0.6			(0.1	)		0.5		AAA
Other agency RMBS		58.4		56.6		1.8			1.0			2.8		AAA
Non-agency RMBS		0.1		0.1		-			-			-		BBB
Total MBS	$	109.9		100.2		9.7			(5.3	)		4.4		AA+

ABS:
ABS	$	6.4		5.5		0.9			(0.7	)		0.2		BBB+
Alt-A ABS		2.9		2.5		0.4			(1.6	)		(1.2	)	AA-
Total ABS	$	9.3		8.0		1.3			(2.3	)		(1.0	)	A-


1 U.S. Government includes coporate securities fully guaranteed by the FDIC.

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SELECTIVE INSURANCE GROUP INC Reports