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

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - SELECTIVE INSURANCE GROUP INC	exh_991.htm
8-K - FORM 8-K - SELECTIVE INSURANCE GROUP INC	f8k_013113.htm

EXHIBIT 99.2

Supplemental Investor Package

___________________________________________________

Fourth Quarter and

Full Year 2012

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)

	December 31,								December 31,
	2012								2011
						Unrecognized/								Unrecognized/
	Balance			Market		Unrealized			Balance			Market		Unrealized
	Sheet			Value		Gain/(Loss)			Sheet			Value		Gain/(Loss)
Invested Assets:
Corporate bonds1	$	2,239,284			2,250,536		110,822		$	1,967,498			1,981,909		73,085
Gov't and Municipal bonds		1,610,798			1,640,138		99,026			1,642,223			1,673,508		108,694
Total bonds		3,850,082			3,890,674		209,848			3,609,721			3,655,417		181,779
Equities		151,382			151,382		18,941			157,355			157,355		13,529
Short-term investments		214,479			214,479		-			217,044			217,044		-
Other investments		114,076			114,076		(4,805	)		128,301			128,301		(4,520	)
Total invested assets		4,330,019			4,370,611		223,984			4,112,421			4,158,117		190,788


Invested assets per $ of stockholders' equity2		3.97								3.89

Total assets2		6,794,216								5,685,469

Liabilities:
Reserve for losses and loss expenses		4,068,941								3,144,924
Unearned premium reserve		974,706								906,991

Total liabilities		5,703,624								4,627,141

Stockholders' equity2		1,090,592								1,058,328

Total debt to capitalization ratio2		22.0	%							22.5	%
Adjusted total debt to capitalization ratio 2, 3		15.6	%							15.9	%

Book value per share		19.77								19.45

Book value per share excluding
unrealized gain or loss on bond portfolio 2		17.78								17.82

NPW per insurance segment employee (excludes E&S)		822								791

Statutory premiums to surplus ratio		1.6	x							1.4	x

Statutory surplus		1,050,107								1,062,707

1	Includes mortgage-backed and asset-backed securities.

2	Prior year results have been restated to reflect the adoption of ASU 2010-26, "Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts."

3	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.

Selective Insurance Group, Inc.
Selected Income Statement Data (unaudited)

December 2012		THREE MONTHS ENDED December 31,												TWELVE MONTHS ENDED December 31,
($ in thousands, except per share amounts)		2012						2011						2012						2011
					Per diluted share						Per diluted share						Per diluted share						Per diluted share
Consolidated
Revenue		$	448,975					$	400,380					$	1,734,102					$	1,597,475
Operating (loss) income1			(2,293	)		(0.04	)		20,388			0.37			32,121			0.58			21,227			0.38
Net realized gains (losses), after tax			3,601			0.06			(2,354	)		(0.04	)		5,842			0.10			1,456			0.03
Income from continuing operations			1,308			0.02			18,034			0.33			37,963			0.68			22,683			0.41
Loss on discontinued operations, after tax			-			-			-			-			-			-			(650	)		(0.01	)
Net income1			1,308			0.02			18,034			0.33			37,963			0.68			22,033			0.40
Operating return on equity1			-0.8	%					7.8	%					3.0	%					2.0	%

Total Insurance Operations
Gross premiums written			457,464						422,438						2,006,605						1,776,908
Net premiums written			370,630						352,179						1,666,883						1,485,349
Net premiums earned			406,853						373,427						1,584,119						1,439,313
Underwriting (loss) income1	- before tax		(36,543	)					7,895						(64,007	)					(103,584	)
	- after tax		(23,753	)		(0.42	)		5,131			0.09			(41,605	)		(0.74	)		(67,330	)		(1.22	)
GAAP combined ratio1			109.0	%					97.9	%					104.0	%					107.2	%

Total Standard lines
Net premiums earned			378,041						370,042						1,504,890						1,435,399
GAAP combined ratio1			108.6	%					97.0	%					103.0	%					106.8	%
Standard Commercial lines
Net premiums earned			308,856						302,055						1,225,335						1,170,947
GAAP combined ratio1			108.5	%					95.8	%					103.3	%					104.3	%
Standard Personal lines
Net premiums earned			69,185						67,987						279,555						264,452
GAAP combined ratio1			109.3	%					102.4	%					101.3	%					117.8	%
Excess and Surplus lines
Net premiums earned			28,812						3,385						79,229						3,914
GAAP combined ratio			113.4	%					197.3	%					124.7	%					270.2	%

Investments
Net investment income	- before tax		34,593						28,839						131,877						147,443
	- after tax		26,286			0.47			22,567			0.41			100,265			1.79			111,088			2.01
Effective tax rate			24.0	%					21.7	%					24.0	%					24.7	%
Annual after-tax yield on investment portfolio															2.4	%					2.8	%
Annual after-tax, after-interest expense yield															2.1	%					2.5	%
Invested assets per $ of stockholders' equity															3.97						3.89

Other expenses (net of other income)
Interest expense	- before tax		(4,724	)					(4,584	)					(18,872	)					(18,259	)
	- after tax		(3,071	)		(0.05	)		(2,980	)		(0.05	)		(12,267	)		(0.22	)		(11,868	)		(0.21	)

Other Expense - after tax		$	(1,755	)		(0.04	)	$	(4,330	)		(0.08	)	$	(14,272	)		(0.25	)	$	(10,663	)		(0.20	)

Diluted weighted avg shares outstanding			56,128						55,437						55,933						55,221

1	Prior year results have been restated to reflect the adoption of ASU 2010-26, "Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts."

Selective Insurance Group, Inc. and Consolidated Subsidiaries

GAAP Investment Income

(unaudited)

($ in thousands)

	For the three months ended						%			Year to Date						%
	December			December			Increase			December			December			Increase
	2012			2011			(Decrease)			2012			2011			(Decrease)
Investment Income:
Interest:
Fixed Maturity Securities		30,739			31,875			(3.6	)		124,687			129,710			(3.9	)
Short-term		48			37			29.7			151			160			(5.6	)
Other Investments:
Alternative Investments		3,995			(3,316	)		220.5			10,391			20,678			(49.7	)
Other		(459	)		(139	)		(230.2	)		(1,395	)		(139	)		(903.6	)
Dividends		2,430			2,236			8.7			6,215			4,535			37.0
Miscellaneous		(105	)		45			(333.3	)		-			133			(100.0	)
		36,648			30,738			19.2			140,049			155,077			(9.7	)

Investment Expense		2,055			1,899			8.2			8,172			7,634			7.0

Net Investment Income Before Tax		34,593			28,839			20.0			131,877			147,443			(10.6	)

Tax		8,307			6,272			32.4			31,612			36,355			(13.0	)

Net Investment Income After Tax	$	26,286			22,567			16.5		$	100,265			111,088			(9.7	)

Net Investment Income per Share	$	0.47			0.41			14.6		$	1.79			2.01			(10.9	)


Effective Tax Rate		24.0	%		21.7	%					24.0	%		24.7	%

Average Yields :

Fixed Maturity Securities:
Pre Tax											3.34	%		3.62	%
After Tax											2.53	%		2.75	%

Portfolio:
Pre Tax											3.12	%		3.67	%
After Tax											2.38	%		2.76	%



	For the three months ended									Year to date:
	December			December						December			December
Net Realized Gains(Losses)	2012			2011						2012			2011
Fixed Maturities		1,204			5,436						2,867			6,933
Equity Securities		4,736			(9,057	)					6,522			(4,693	)
Short Term		-			-						(2	)		-
Other Investments		(400	)		-						(399	)		-

Total		5,540			(3,621	)					8,988			2,240
Net of Tax		3,601			(2,354	)					5,842			1,456

As of December 31, 2012 new money rates for fixed maturity securities were 2.21% on a pre-tax basis and 1.64% on an after tax-basis.

Selective Insurance Group, Inc.

2012 Statutory Results by Line of Business

4th Qtr 2012 (unaudited)

($ in thousands)


	Net					Net											Underwriting			Dividends to			Combined			Combined
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Ratio			Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2012			2011			Gain/(Loss)
Standard Personal Lines:

Homeowners	$	27,744		(1.1	)%	$	27,165		(0.2	)%		105.1	%		18.9	%		35.8	%		0.0	%		159.8	%		95.4	%	$	(16,439	)
Auto		36,648		2.5	%		38,495		3.2	%		78.9	%		9.0	%		31.0	%		0.0	%		118.9	%		115.5	%		(6,701	)
Other (including flood)		3,669		2.1	%		3,524		1.9	%		56.3	%		(439.7	)%		(30.1	)%		0.0	%		(413.5	)%		3.4	%		18,142
Total	$	68,061		1.0	%	$	69,184		1.8	%		88.0	%		(9.9	)%		29.6	%		0.0	%		107.7	%		101.5	%	$	(4,998	)

Standard Commercial Lines:

Commercial property	$	44,840		4.7	%	$	50,394		3.1	%		68.1	%		6.9	%		41.5	%		(0.1	)%		116.4	%		75.0	%	$	(5,955	)
Workers compensation		57,495		(8.2	)%		64,043		(7.8	)%		96.3	%		(6.9	)%		28.9	%		0.9	%		119.2	%		111.9	%		(10,394	)
General liability		82,017		6.3	%		96,843		8.9	%		54.3	%		17.9	%		36.0	%		0.1	%		108.3	%		104.1	%		(2,688	)
Auto		64,175		3.0	%		73,228		3.8	%		61.3	%		5.5	%		33.5	%		(0.1	)%		100.2	%		96.3	%		2,867
Business owners policies		18,125		1.1	%		16,591		(0.5	)%		78.4	%		25.9	%		40.9	%		0.0	%		145.2	%		80.7	%		(8,136	)
Bonds		3,838		(4.0	)%		4,815		2.6	%		(13.9	)%		9.9	%		68.1	%		0.0	%		64.1	%		93.8	%		2,393
Other		2,681		18.8	%		2,942		4.5	%		0.8	%		0.6	%		47.4	%		0.0	%		48.8	%		47.2	%		1,629
Total	$	273,171		1.5	%	$	308,856		2.3	%		66.6	%		8.2	%		35.7	%		0.2	%		110.7	%		97.3	%	$	(20,283	)

Total Standard Operations	$	341,231		1.4	%	$	378,041		2.2	%		70.5	%		4.9	%		34.4	%		0.2	%		110.0	%		98.0	%	$	(25,281	)

E&S		29,149		85.3	%		28,562		743.8	%		59.6	%		19.6	%		35.6	%		0.0	%		114.8	%		124.6	%		(4,437	)

Total Insurance Operations	$	370,380		5.2	%	$	406,602		8.9	%		69.8	%		5.8	%		34.6	%		0.2	%		110.4	%		98.7	%	$	(29,717	)

Note: Some amounts may not foot due to rounding.



				2012			2011
	Losses Paid		$	248,663		$	245,778
	LAE Paid			29,828			39,804
	Total Paid		$	278,491		$	285,582

Selective Insurance Group, Inc.

2012 Statutory Results by Line of Business

December 2012 YTD (unaudited)

($ in thousands)

	Net					Net											Underwriting			Dividends to			Combined			Combined
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Ratio			Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2012			2011			Gain/(Loss)
Standard Personal Lines:

Homeowners	$	121,474		10.4	%	$	113,850		10.8	%		64.9	%		11.7	%		32.7	%		0.0	%		109.3	%		135.2	%	$	(13,090	)
Auto		153,945		2.8	%		152,142		2.2	%		71.5	%		11.3	%		30.2	%		0.0	%		113.0	%		116.4	%		(20,350	)
Other (including flood)		14,429		7.3	%		13,562		5.4	%		57.2	%		(121.6	)%		(44.2	)%		0.0	%		(108.6	)%		(13.4	)%		28,677
Total	$	289,848		6.1	%	$	279,555		5.7	%		68.1	%		5.0	%		27.6	%		0.0	%		100.7	%		117.3	%	$	(4,763	)

Standard Commercial Lines:

Commerical property	$	213,321		8.9	%	$	202,340		4.8	%		55.6	%		6.2	%		37.4	%		(0.1	)%		99.1	%		109.9	%	$	(2,363	)
Workers compensation		263,767		0.9	%		262,108		1.1	%		77.4	%		9.1	%		26.5	%		1.5	%		114.5	%		116.2	%		(38,529	)
General liability		387,888		10.3	%		373,381		8.3	%		52.7	%		16.9	%		33.1	%		0.0	%		102.7	%		100.7	%		(14,793	)
Auto		295,651		4.5	%		288,010		3.0	%		58.0	%		7.6	%		31.6	%		(0.1	)%		97.1	%		94.2	%		6,070
Business owners policies		72,511		7.3	%		68,462		3.4	%		54.3	%		17.0	%		40.7	%		0.0	%		112.0	%		109.8	%		(9,834	)
Bonds		18,638		(0.1	)%		18,891		(0.1	)%		9.4	%		8.7	%		62.4	%		0.0	%		80.5	%		85.7	%		3,845
Other		11,963		18.3	%		12,143		32.3	%		0.6	%		0.5	%		45.0	%		0.0	%		46.1	%		47.4	%		6,623
Total	$	1,263,738		6.4	%	$	1,225,335		4.6	%		58.6	%		11.0	%		33.1	%		0.3	%		103.0	%		103.9	%	$	(48,982	)

Total Standard Operations	$	1,553,586		6.3	%	$	1,504,890		4.8	%		60.4	%		9.9	%		32.0	%		0.2	%		102.5	%		106.4	%	$	(53,745	)

E&S		113,047		368.4	%		78,979		1917.8	%		56.9	%		22.4	%		39.5	%		0.0	%		118.8	%		131.3	%		(28,355	)

Total Insurance Operations	$	1,666,633		12.2	%	$	1,583,869		10.0	%		60.2	%		10.5	%		32.6	%		0.2	%		103.5	%		106.7	%	$	(82,100	)

Note: Some amounts may not foot due to rounding.


				2012			2011
	Losses Paid		$	899,619		$	857,844
	LAE Paid			157,717			152,955
	Total Paid		$	1,057,336		$	1,010,799

Hurricane Sandy Impact

Total Insurance Operations

December 31, 2012 (unaudited)

						Hurricane Sandy																Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims						Proforma without					Catastrophe			Hurricane Sandy and
Fourth Quarter 2012	Actual					Premium		Loss/LAE			Handling Fees			Total			Hurricane Sandy					Losses			Other Catastrophe Losses
Net Premiums Written		370,380					8,577								8,577			378,957								378,957
Net Premiums Earned		406,602					8,577								8,577			415,179								415,179

Net Losses Incurred		283,682		69.8	%				(43,516	)					(43,516	)		240,166		57.8	%		(5,345	)		234,821	56.6	%
Loss Adjustment Expenses		23,886		5.8	%				(3,084	)		15,587			12,503			36,389		8.8	%					36,389	8.8	%
Underwriting Expenses		128,132		34.6	%													128,132		33.8	%					128,132	33.8	%
Dividends to Policyholders		619		0.2	%													619		0.1	%					619	0.1	%

Statutory Underwriting Results		(29,717	)	110.4	%		8,577		46,600			(15,587	)		39,590			9,872		100.6	%		5,345			15,217	99.3	%
GAAP Combined Ratio				109.0	%															99.3	%						98.0	%






						Hurricane Sandy																Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims						Proforma without					Catastrophe			Hurricane Sandy and
Full Year 2012	Actual					Premium		Loss/LAE			Handling Fees			Total			Hurricane Sandy					Losses			Other Catastrophe Losses
Net Premiums Written		1,666,633					8,577								8,577			1,675,210								1,675,210
Net Premiums Earned		1,583,869					8,577								8,577			1,592,446								1,592,446

Net Losses Incurred		953,449		60.2	%				(43,516	)					(43,516	)		909,933		57.1	%		(52,008	)		857,925	53.9	%
Loss Adjustment Expenses		166,736		10.5	%				(3,084	)		15,587			12,503			179,239		11.3	%					179,239	11.3	%
Underwriting Expenses		542,336		32.6	%													542,336		32.4	%					542,336	32.4	%
Dividends to Policyholders		3,448		0.2	%													3,448		0.2	%					3,448	0.2	%

Statutory Underwriting Results		(82,100	)	103.5	%		8,577		46,600			(15,587	)		39,590			(42,510	)	101.0	%		52,008			9,498	97.7	%
GAAP Combined Ratio				104.0	%															101.5	%						98.3	%

Note: Some items may not foot due to rounding.

Hurricane Sandy Impact

Total Standard Commercial Lines Insurance Operations

December 31, 2012 (unaudited)

						Hurricane Sandy															Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims					Proforma without					Catastrophe			Hurricane Sandy and
Fourth Quarter 2012	Actual					Premium		Loss/LAE			Handling Fees		Total			Hurricane Sandy					Losses			Other Catastrophe Losses
Net Premiums Written		273,171					4,591							4,591			277,762								277,762
Net Premiums Earned		308,856					4,591							4,591			313,447								313,447

Net Losses Incurred		205,771		66.6	%				(23,438	)				(23,438	)		182,333		58.2	%		(2,631	)		179,702	57.3	%
Loss Adjustment Expenses		25,169		8.2	%				(1,243	)		-		(1,243	)		23,926		7.6	%					23,926	7.6	%
Underwriting Expenses		97,581		35.7	%												97,581		35.1	%					97,581	35.1	%
Dividends to Policyholders		619		0.2	%												619		0.2	%					619	0.2	%

Statutory Underwriting Results		(20,283	)	110.7	%		4,591		24,681			-		29,272			8,989		101.1	%		2,631			11,620	100.3	%
GAAP Combined Ratio				108.5	%														99.0	%						98.2	%






						Hurricane Sandy															Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims					Proforma without					Catastrophe			Hurricane Sandy and
Full Year 2012	Actual					Premium		Loss/LAE			Handling Fees		Total			Hurricane Sandy					Losses			Other Catastrophe Losses
Net Premiums Written		1,263,738					4,591							4,591			1,268,329								1,268,329
Net Premiums Earned		1,225,335					4,591							4,591			1,229,926								1,229,926

Net Losses Incurred		718,096		58.6	%				(23,438	)				(23,438	)		694,658		56.5	%		(31,739	)		662,919	53.9	%
Loss Adjustment Expenses		135,097		11.0	%				(1,243	)		-		(1,243	)		133,854		10.9	%					133,854	10.9	%
Underwriting Expenses		417,675		33.1	%												417,675		32.9	%					417,675	32.9	%
Dividends to Policyholders		3,448		0.3	%												3,448		0.3	%					3,448	0.3	%

Statutory Underwriting Results		(48,982	)	103.0	%		4,591		24,681			-		29,272			(19,710	)	100.6	%		31,739			12,029	98.0	%
GAAP Combined Ratio				103.3	%														100.9	%						98.4	%

Note: Some items may not foot due to rounding.

Hurricane Sandy Impact

Total Standard Personal Lines Insurance Operations

December 31, 2012 (unaudited)

						Hurricane Sandy															Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims						Proforma without				Catastrophe			Hurricane Sandy and
Fourth Quarter 2012	Actual					Premium		Loss/LAE			Handling Fees			Total			Hurricane Sandy				Losses			Other Catastrophe Losses
Net Premiums Written		68,061					3,928								3,928			71,989							71,989
Net Premiums Earned		69,184					3,928								3,928			73,112							73,112

Net Losses Incurred		60,899		88.0	%				(19,582	)					(19,582	)		41,317	56.5	%		(2,674	)		38,643	52.9	%
Loss Adjustment Expenses		(6,884	)	(9.9	)%				(1,823	)		15,587			13,764			6,880	9.4	%					6,880	9.4	%
Underwriting Expenses		20,167		29.6	%													20,167	28.0	%					20,167	28.0	%
Dividends to Policyholders		-		0.0	%													-	0.0	%					-	0.0	%

Statutory Underwriting Results		(4,998	)	107.7	%		3,928		21,405			(15,587	)		9,746			4,748	93.9	%		2,674			7,422	90.3	%
GAAP Combined Ratio				109.3	%														95.4	%						91.8	%






						Hurricane Sandy															Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims						Proforma without				Catastrophe			Hurricane Sandy and
Full Year 2012	Actual					Premium		Loss/LAE			Handling Fees			Total			Hurricane Sandy				Losses			Other Catastrophe Losses
Net Premiums Written		289,848					3,928								3,928			293,776							293,776
Net Premiums Earned		279,555					3,928								3,928			283,483							283,483

Net Losses Incurred		190,418		68.1	%				(19,582	)					(19,582	)		170,836	60.3	%		(19,086	)		151,750	53.5	%
Loss Adjustment Expenses		13,969		5.0	%				(1,823	)		15,587			13,764			27,733	9.8	%					27,733	9.8	%
Underwriting Expenses		79,930		27.6	%													79,930	27.2	%					79,930	27.2	%
Dividends to Policyholders		-		0.0	%													-	0.0	%					-	0.0	%

Statutory Underwriting Results		(4,763	)	100.7	%		3,928		21,405			(15,587	)		9,746			4,983	97.3	%		19,086			24,069	90.5	%
GAAP Combined Ratio				101.3	%														97.8	%						91.1	%

Note: Some items may not foot due to rounding.

Hurricane Sandy Impact

Total E&S Insurance Operations

December 31, 2012 (unaudited)

						Hurricane Sandy															Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims					Proforma without					Catastrophe			Hurricane Sandy and
Fourth Quarter 2012	Actual					Premium		Loss/LAE			Handling Fees		Total			Hurricane Sandy					Losses			Other Catastrophe Losses
Net Premiums Written		29,149					58							58			29,207								29,207
Net Premiums Earned		28,562					58							58			28,620								28,620

Net Losses Incurred		17,013		59.6	%				(497	)				(497	)		16,516		57.7	%		(40	)		16,476		57.6	%
Loss Adjustment Expenses		5,601		19.6	%				(17	)		-		(17	)		5,584		19.5	%					5,584		19.5	%
Underwriting Expenses		10,385		35.6	%												10,385		35.6	%					10,385		35.6	%
Dividends to Policyholders		-		0.0	%												-		0.0	%					-		0.0	%

Statutory Underwriting Results		(4,437	)	114.8	%		58		514			-		572			(3,865	)	112.8	%		40			(3,825	)	112.6	%
GAAP Combined Ratio				113.4	%														111.4	%							111.2	%






						Hurricane Sandy															Other			Proforma without
						Reinstatement		Catastrophe			Flood Claims					Proforma without					Catastrophe			Hurricane Sandy and
Full Year 2012	Actual					Premium		Loss/LAE			Handling Fees		Total			Hurricane Sandy					Losses			Other Catastrophe Losses
Net Premiums Written		113,047					58							58			113,105								113,105
Net Premiums Earned		78,979					58							58			79,037								79,037

Net Losses Incurred		44,935		56.9	%				(497	)				(497	)		44,438		56.2	%		(1,184	)		43,254		54.7	%
Loss Adjustment Expenses		17,669		22.4	%				(17	)		-		(17	)		17,652		22.3	%					17,652		22.3	%
Underwriting Expenses		44,730		39.5	%												44,730		39.5	%					44,730		39.5	%
Dividends to Policyholders		-		0.0	%												-		0.0	%					-		0.0	%

Statutory Underwriting Results		(28,355	)	118.8	%		58		514			-		572			(27,783	)	118.1	%		1,184			(26,599	)	116.6	%
GAAP Combined Ratio				124.7	%														123.9	%							122.5	%

Note: Some items may not foot due to rounding.

Hurricane Sandy Impact by Line of Business

Statutory Underwriting Results

Quarter Ending December 31, 2012 (unaudited)

	Fourth Quarter 2012 Actual Results						Hurricane Sandy										Quarter 4 2012 Proforma Results
	Statutory			Underwriting					Net								Underwriting			Statutory
	Combined			Profit			Reinstatement		Catastrophe		Flood Claims						Profit			Combined
Line of Business	Ratio			(Loss)			Premium		Loss/LAE		Handling Fees			Total			(Loss)			Ratio
Homeowners		159.8	%	$	(16,439	)		3,622		17,347		-			20,969			4,530			84.7	%
Auto		118.9	%		(6,701	)		143		3,445		-			3,588			(3,113	)		109.5	%
Other (including Flood)		(413.5	)%		18,142			163		613		(15,587	)		(14,811	)		3,331			10.8	%
Total Standard Personal Lines		107.7	%		(4,998	)		3,928		21,405		(15,587	)		9,746			4,748			93.9	%

Commercial Property		116.4	%		(5,955	)		2,818		13,958		-			16,776			10,821			83.7	%
Workers' Compensation		119.2	%		(10,394	)		-		-		-			-			(10,394	)		119.2	%
General Liability		108.3	%		(2,688	)		-		-		-			-			(2,688	)		108.3	%
Auto		100.2	%		2,867			118		3,247		-			3,365			6,232			95.6	%
Business owners Policies		145.2	%		(8,136	)		1,655		7,476		-			9,131			995			91.4	%
Bonds		64.1	%		2,393			-		-		-			-			2,393			64.1	%
Other		48.8	%		1,629			-		-		-			-			1,629			48.8	%
Total Standard Commercial Lines		110.7	%		(20,283	)		4,591		24,681		-			29,272			8,989			101.1	%

E&S		114.8	%		(4,437	)		58		514		-			572			(3,865	)		112.8	%

Total Insurance Operations		110.4	%	$	(29,717	)		8,577		46,600		(15,587	)		39,590			9,872			100.6	%

Note: Some items may not foot due to rounding.

Hurricane Sandy Impact by Line of Business

Statutory Underwriting Results

December 31, 2012 (unaudited)

	Full Year 2012 Actual Results						Hurricane Sandy										Full Year 2012 Proforma Results
	Statutory			Underwriting					Net								Underwriting			Statutory
	Combined			Profit			Reinstatement		Catastrophe		Flood Claims						Profit			Combined
Line of Business	Ratio			(Loss)			Premium		Loss/LAE		Handling Fees			Total			(Loss)			Ratio
Homeowners		109.3	%	$	(13,090	)		3,622		17,347		-			20,969			7,879			91.2	%
Auto		113.0	%		(20,350	)		143		3,445		-			3,588			(16,762	)		110.6	%
Other (including Flood)		(108.6	)%		28,677			163		613		(15,587	)		(14,811	)		13,866			1.7	%
Total Standard Personal Lines		100.7	%		(4,763	)		3,928		21,405		(15,587	)		9,746			4,983			97.3	%

Commercial Property		99.1	%		(2,363	)		2,818		13,958		-			16,776			14,413			91.0	%
Workers' Compensation		114.5	%		(38,529	)		-		-		-			-			(38,529	)		114.5	%
General Liability		102.7	%		(14,793	)		-		-		-			-			(14,793	)		102.7	%
Auto		97.1	%		6,070			118		3,247		-			3,365			9,435			95.9	%
Business owners Policies		112.0	%		(9,834	)		1,655		7,476		-			9,131			(703	)		98.7	%
Bonds		80.5	%		3,845			-		-		-			-			3,845			80.5	%
Other		46.1	%		6,623			-		-		-			-			6,623			46.1	%
Total Standard Commercial Lines		103.0	%		(48,982	)		4,591		24,681		-			29,272			(19,710	)		100.6	%

E&S		118.8	%		(28,355	)		58		514		-			572			(27,783	)		118.1	%

Total Insurance Operations		103.5	%	$	(82,100	)		8,577		46,600		(15,587	)		39,590			(42,510	)		101.0	%

Note: Some items may not foot due to rounding.

Consolidated Balance Sheets
December 31,	Unaudited
($ in thousands, except share amounts)	2012			2011
ASSETS
Investments:
Fixed maturity securities, held-to-maturity – at carrying value (fair value: $594,661 – 2012; $758,043 – 2011)	$	554,069			712,348
Fixed maturity securities, available-for-sale – at fair value (amortized cost: $3,130,683 – 2012; $2,766,856 – 2011)		3,296,013			2,897,373
Equity securities, available-for-sale – at fair value (cost of: $132,441 – 2012; $143,826 – 2011)		151,382			157,355
Short-term investments (at cost which approximates fair value)		214,479			217,044
Other investments		114,076			128,301
Total investments		4,330,019			4,112,421
Cash		210			762
Interest and dividends due or accrued		35,984			35,842
Premiums receivable, net of allowance for uncollectible accounts of: $3,906– 2012; $3,768 – 2011		484,388			466,294
Reinsurance recoverable, net		1,421,109			561,855
Prepaid reinsurance premiums		132,637			147,686
Current federal income tax		2,569			731
Deferred federal income tax		119,136			119,486
Property and equipment – at cost, net of accumulated depreciation and amortization of: $169,428 – 2012; $160,294 – 2011		47,131			43,947
Deferred policy acquisition costs		155,523			135,761
Goodwill		7,849			7,849
Other assets		57,661			52,835
Total assets	$	6,794,216			5,685,469

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for losses and loss expenses	$	4,068,941			3,144,924
Unearned premiums		974,706			906,991
Notes payable		307,387			307,360
Accrued salaries and benefits		152,396			119,297
Other liabilities		200,194			148,569
Total liabilities	$	5,703,624			4,627,141

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: 98,194,224 – 2012; 97,246,711 – 2011		196,388			194,494
Additional paid-in capital		270,654			257,370
Retained earnings		1,125,154			1,116,319
Accumulated other comprehensive income		54,040			42,294
Treasury stock – at cost (shares: 43,030,776 – 2012; 42,836,201 – 2011)		(555,644	)		(552,149	)
Total stockholders’ equity		1,090,592			1,058,328
Commitments and contingencies
Total liabilities and stockholders’ equity	$	6,794,216			5,685,469

Consolidated Statements of Income	Unaudited Quarter ended						Year ended
	December 31,						December 31,
							Unaudited
($ in thousands, except per share amounts)	2012			2011			2012			2011
Revenues:
Net premiums earned	$	406,853			373,427			1,584,119			1,439,313
Net investment income earned		34,593			28,839			131,877			147,443
Net realized gains (losses):
Net realized investment gains		6,345			6,223			13,252			15,426
Other-than-temporary impairments		(493	)		(8,936	)		(1,711	)		(11,998	)
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income		(312	)		(908	)		(2,553	)		(1,188	)
Total net realized gains (losses)		5,540			(3,621	)		8,988			2,240
Other income		1,989			1,735			9,118			8,479
Total revenues		448,975			400,380			1,734,102			1,597,475

Expenses:
Losses and loss expenses incurred		307,930			245,268			1,120,990			1,074,987
Policy acquisition costs		135,117			120,086			526,143			466,404
Interest expense		4,724			4,584			18,872			18,259
Other expenses		6,382			7,618			30,462			26,425
Total expenses		454,153			377,556			1,696,467			1,586,075

(Losses) income from continuing operations, before federal income tax		(5,178	)		22,824			37,635			11,400

Federal income tax (benefit) expense:
Current		4,057			12,386			5,647			(228	)
Deferred		(10,543	)		(7,596	)		(5,975	)		(11,055	)
Total federal income tax (benefit) expense		(6,486	)		4,790			(328	)		(11,283	)

Net income from continuing operations		1,308			18,034			37,963			22,683

Loss on disposal of discontinued operations, net of tax of $(350) for twelve months 2011		-			-			-			(650	)

Net income	$	1,308			18,034			37,963			22,033

Earnings per share:
Basic net income from continuing operations	$	0.02			0.33			0.69			0.42
Basic net loss from discontinued operations		-			-			-			(0.01	)
Basic net income	$	0.02			0.33			0.69			0.41

Diluted net income from continuing operations	$	0.02			0.33			0.68			0.41
Diluted net loss from discontinued operations		-			-			-			(0.01	)
Diluted net income	$	0.02			0.33			0.68			0.40

Dividends to stockholders	$	0.13			0.13			0.52			0.52

Consolidated Statements of Comprehensive Income
December 31,	Unaudited
($ in thousands)	2012			2011			2010
Net income	$	37,963			22,033			66,966

Other comprehensive income, net of tax:
Unrealized gains on investment securities:
Unrealized holding gains arising during period		30,937			45,592			29,018
Non-credit portion of other-than-temporary impairment losses recognized in other comprehensive income		1,842			1,093			3,416
Amortization of net unrealized gains on held-to-maturity securities		(847	)		(2,013	)		(7,610	)
Less: reclassification adjustment for gains included in net income		(6,852	)		(1,292	)		(295	)
Total unrealized gains on investment securities		25,080			43,380			24,529

Defined benefit pension and post-retirement plans:
Net actuarial loss		(17,268	)		(10,919	)		(7,829	)
Amortization of net actuarial loss included in net income		3,837			2,712			2,687
Amortization of prior service cost included in net income		97			97			97
Total defined benefit pension and post-retirement plans		(13,334	)		(8,110	)		(5,045	)
Other comprehensive income		11,746			35,270			19,484
Comprehensive income		49,709			57,303			86,450

Consolidated Statements of Stockholders’ Equity
December 31,	Unaudited
($ in thousands, except share amounts)	2012			2011			2010
Common stock:
Beginning of year	$	194,494			192,725			191,646
Dividend reinvestment plan (shares: 90,110 – 2012; 100,383 – 2011; 106,437 – 2010)		180			201			213
Stock purchase and compensation plans (shares: 857,403 – 2012; 783,661 – 2011; 433,271 – 2010)		1,714			1,568			866
End of year		196,388			194,494			192,725

Additional paid-in capital:
Beginning of year		257,370			244,613			231,933
Dividend reinvestment plan		1,419			1,417			1,465
Stock purchase and compensation plans		11,865			11,340			11,215
End of year		270,654			257,370			244,613

Retained earnings:
Beginning of year		1,116,319			1,123,087			1,138,978
Add: Adjustment for the cumulative effect on prior years of applying retroactively the new method of accounting for deferred policy acquisition costs		—			—			(54,493	)
Balance at beginning of year, as adjusted		1,116,319			1,123,087			1,084,485
Net income		37,963			22,033			66,966
Dividends to stockholders ($0.52 per share – 2012, 2011, and 2010)		(29,128	)		(28,801	)		(28,364	)
End of year		1,125,154			1,116,319			1,123,087

Accumulated other comprehensive income (loss):
Beginning of year		42,294			7,024			(12,460	)
Other comprehensive income		11,746			35,270			19,484
End of year		54,040			42,294			7,024

Treasury stock:
Beginning of year		(552,149	)		(549,408	)		(547,722	)
Acquisition of treasury stock (shares: 194,575 – 2012; 149,997 – 2011; 107,425 – 2010)		(3,495	)		(2,741	)		(1,686	)
End of year		(555,644	)		(552,149	)		(549,408	)
Total stockholders’ equity	$	1,090,592			1,058,328			1,018,041

Consolidated Statements of Cash Flow
December 31,	Unaudited
($ in thousands)	2012			2011			2010
Operating Activities
Net Income	$	37,963			22,033			66,966

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		38,693			34,645			31,770
Loss on disposal of discontinued operations		—			650			3,780
Stock-based compensation expense		6,939			7,422			8,017
Undistributed (income) losses of equity method investments		1,651			(323	)		(8,712	)
Net realized (gains) losses		(8,988	)		(2,240	)		7,083

Changes in assets and liabilities:
Increase in reserves for losses and loss expenses, net of reinsurance recoverables		64,763			56,905			41,526
Increase (decrease) in unearned premiums, net of prepaid reinsurance and advance premiums		82,777			46,334			(26,661	)
(Increase) decrease in net federal income taxes		(7,812	)		372			16,577
(Increase) decrease in premiums receivable		(18,094	)		(45,116	)		32,472
(Increase) decrease in deferred policy acquisition costs		(19,762	)		(7,777	)		6,781
Decrease (increase) in interest and dividends due or accrued		468			633			(2,361	)
Increase (decrease) in accrued salaries and benefits		6,533			1,521			(14,913	)
Increase (decrease) in accrued insurance expenses		8,831			(636	)		(4,470	)
Other-net		32,737			8,534			1,330
Net adjustments		188,736			100,924			92,219
Net cash provided by operating activities		226,699			122,957			159,185

Investing Activities
Purchase of fixed maturity securities, available-for-sale		(884,911	)		(487,813	)		(1,007,679	)
Purchase of equity securities, available-for-sale		(83,833	)		(150,551	)		(71,192	)
Purchase of other investments		(12,990	)		(16,033	)		(20,673	)
Purchase of short-term investments		(1,735,691	)		(1,448,782	)		(1,741,738	)
Purchase of subsidiary, net of cash acquired		255			(51,728	)		—
Sale of subsidiary		751			1,152			978
Sale of fixed maturity securities, available-for-sale		103,572			146,435			190,438
Sale of short-term investments		1,738,255			1,433,441			1,794,434
Redemption and maturities of fixed maturity securities, held-to-maturity		118,260			177,350			319,835
Redemption and maturities of fixed maturity securities, available-for-sale		439,957			162,796			298,171
Sale of equity securities, available-for-sale		101,740			60,071			98,015
Distributions from other investments		24,801			25,622			22,406
Sale of other investments		1			16,357			—
Purchase of property, equipment, and other assets		(12,879	)		(11,824	)		(6,522	)
Net cash used in investing activities		(202,712	)		(143,507	)		(123,527	)

Financing Activities
Dividends to stockholders		(26,944	)		(26,513	)		(26,056	)
Acquisition of treasury stock		(3,495	)		(2,741	)		(1,686	)
Principal payment of notes payable		—			—			(12,300	)
Proceeds from borrowings		—			45,000			—
Net proceeds from stock purchase and compensation plans		4,840			5,011			4,962
Excess tax benefits (expense) from share-based payment arrangements		1,060			(90	)		(744	)
Net cash (used in) provided by financing activities		(24,539	)		20,667			(35,824	)
Net (decrease) increase in cash		(552	)		117			(166	)
Cash, beginning of year		762			645			811
Cash, end of year	$	210			762			645

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Unaudited Statutory Balance Sheets

($ in thousands)

	Dec-31			Dec-31 *
	2012			2011

ASSETS
Bonds	$	3,617,371			3,452,204
Common stocks		151,382			157,355
Affiliated mortgage loan		37,443			38,131
Other investments		180,110			197,409
Short-term investments		208,845			183,070
Total investments		4,195,151			4,028,169

Cash on hand and in banks		(76,957	)		(20,701	)
Interest and dividends due and accrued		35,979			35,880
Premiums receivable		482,227			461,482
Reinsurance recoverable on paid losses and expenses		11,354			12,365
Deferred tax recoverable		147,495			137,659
EDP equipment		1,372			1,804
Equities and deposits in pools and associations		12,734			4,837
Receivable for sold securities		257			644
Other assets		28,541			27,964
Total assets	$	4,838,153			4,690,103

LIABILITIES
Reserve for losses	$	2,226,858			2,173,028
Reinsurance payable on paid loss and loss expense		2,298			1,285
Reserve for loss expenses		427,560			418,542
Unearned premiums		842,068			759,304
Reserve for commissions payable		52,304			44,488
Ceded balances payable		271			21,871
Federal income tax payable		5,346			12,176
Premium and other taxes payable		24,604			23,588
Borrowed money		58,044			58,043
Reserve for dividends to policyholders		2,665			3,470
Reserves for unauthorized reinsurance		7,498			1,785
Payable for securities		7,682			-
Funds withheld on account of others		11,231			6,538
Accrued salaries and benefits		102,070			80,601
Other liabilities		17,547			22,677
Total liabilities		3,788,046			3,627,396


POLICYHOLDERS' SURPLUS
Capital		42,725			32,325
Aggregate write-ins for special surplus funds		-			44,296
Paid in surplus		435,744			307,022
Unassigned surplus		571,638			679,064
Total policyholders' surplus		1,050,107			1,062,707
Total liabilities and policyholders' surplus	$	4,838,153			4,690,103

*	Includes the December 31, 2011 acquisition of Montpelier U.S. Insurance Company (now known as Mesa Underwriters Specialty Insurance Company). Combined statutory filings for 2011 do not reflect the acquisition as this Company was not included in our intercompany pooling until January 1, 2012.

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Unaudited Statutory Statements Of Income

($ in thousands)

	Three Months Ended December										Twelve Months Ended December

UNDERWRITING	2012					2011					2012					2011


Net premiums written	$	370,380					352,179					1,666,633					1,485,349

Net premiums earned		406,603					373,427					1,583,869					1,439,313


Net losses paid		248,663					245,778					899,619					857,844
Change in reserve for losses		35,020		8.6	%		(45,368	)	-12.1	%		53,830		3.4	%		52,252		3.6	%
Net losses incurred		283,683		69.8	%		200,410		53.7	%		953,449		60.2	%		910,096		63.2	%
Net loss expenses paid		29,828					39,804					157,717					152,955
Change in reserve for loss expenses		(5,941	)				4,879					9,019					11,395
Net loss expenses incurred		23,887		5.8	%		44,683		12.0	%		166,736		10.5	%		164,350		11.4	%
Net underwriting expenses incurred		129,545		35.0	%		115,692		32.8	%		548,631		32.9	%		474,139		31.9	%
Total deductions		437,115					360,785					1,668,816					1,548,585
Statutory underwriting (loss) / gain		(30,512	)				12,642					(84,947	)				(109,272	)



Net loss from premium balances charged off		(727	)				(1,210	)				(3,398	)				(5,213	)
Finance charges and other income		2,141					1,772					9,694					8,460
Total other income		1,414		-0.4	%		562		-0.2	%		6,296		-0.3	%		3,247		-0.2	%
Policyholders' dividends incurred		(620	)	0.2	%		(1,481	)	0.4	%		(3,449	)	0.2	%		(5,284	)	0.4	%
Total underwriting (loss) / gain		(29,718	)	110.4	%		11,723		98.7	%		(82,100	)	103.5	%		(111,309	)	106.7	%


INVESTMENT
Net investment income earned		35,202					30,459					133,756					148,005
Net realized gain / (loss)		5,457					(3,621	)				8,766					2,195
Total income before income tax		10,941					38,561					60,422					38,891
Federal income tax expense / (benefit)		(3,204	)				14,674					10,026					12,433


Net income	$	14,145					23,887					50,396					26,458


Policyholders' Surplus
Surplus, beginning of period	$	1,088,494					1,010,144					1,062,707					1,073,025


Net income		14,145					23,887					50,396					26,458
Change in deferred taxes		3,008					11,749					7,732					17,220
Change in unrealized gains		(6,020	)				15,801					2,599					2,355
Dividends to stockholders		(16,378	)				(17,007	)				(196,091	)				(63,025	)
Change in cum. effect of acctg principle		-					-					44,296					-
Paid in common stock *		100					4,000					10,400					4,000
Paid in surplus *		-					51,230					130,722					51,230
Surplus - transferred to capital		(100	)				-					(2,000	)				-
Change in reserve for unauthorized		(5,713	)				26					(5,713	)				26
Change in non-admitted assets		(9,593	)				(12,666	)				7,165					(21,378	)
Change in additional admitted deferred taxes		-					5,241					(44,296	)				3,775
Change in minimum pension liability		(17,836	)				(15,090	)				(17,836	)				(15,090	)
Surplus adjustments		-					(14,608	)				26					(15,889	)


Net change in surplus for period		(38,387	)				52,563					(12,600	)				(10,318	)


Surplus, end of period	$	1,050,107					1,062,707					1,050,107					1,062,707


Statutory underwriting (loss) / gain	$	(29,718	)				11,723					(82,100	)				(111,309	)

Adjustments under GAAP:
Deferred policy acquisition costs1		(5,982	)				(3,051	)				19,762					7,777
Pension costs		49					(1,618	)				259					250
Other, net		(892	)				841					(1,928	)				(302	)
GAAP underwriting (loss) / gain	$	(36,543	)				7,895					(64,007	)				(103,584	)

*	Includes the December 31, 2011 acquisition of Montpelier U.S. Insurance Company (now known as Mesa Underwriters Specialty Insurance Company). Combined statutory filings for 2011 do not reflect the acquisition as this Company was not included in our intercompany pooling until January 1, 2012.

1	Prior year results have been restated to reflect the adoption of ASU 2010-26, "Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts."

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

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Alternative Investments
as of December 31, 2012
(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		2,348,552		8,844,524		(100,220	)		0.53		0.95
Silverpeak RE III	2008		15,000,000		8,032,676		2,906,618		(470,764	)		0.03		0.44
Total - Real Estate			35,000,000		10,381,228		11,751,142		(570,984	)		0.40		0.82
Mezzanine Financing
Neovara Euro Mezz	2004		9,000,000		-		460,748		(176,625	)		0.98		1.02
GS Mezz V	2007		25,000,000		14,768,207		8,969,785		1,705,991			0.65		1.28
New Canaan V	2012		7,000,000		4,488,194		2,405,720		(106,086	)		-		0.96
Centerfield Capital	2012		3,000,000		2,077,118		856,002		(66,880	)		-		0.93
Total - Mezz. Financing			44,000,000		21,333,519		12,692,255		1,356,400			1.63		1.13
Distressed Debt
Varde VIII	2006		10,000,000		-		4,953,195		564,194			0.68		1.18
GS Distressed Opp III	2007		15,000,000		2,915,692		7,774,554		640,673			0.45		1.04
Total - Distressed Debt			25,000,000		2,915,692		12,727,749		1,204,867			0.55		1.10
Private Equity
Prospector	1997		5,000,000		-		410,216		(905	)		2.79		2.88
Trilantic Capital Partners III	2004		10,000,000		1,339,121		2,496,891		671,464			1.51		1.78
NB Co-Invest	2006		15,000,000		1,648,664		8,293,273		1,532,449			0.75		1.32
Trilantic Capital Partners IV	2007		11,098,351		1,605,898		7,143,910		2,562,022			0.78		1.45
Total - Private Equity			41,098,351		4,593,683		18,344,290		4,765,030			1.20		1.66
Private Equity, Secondary Market
NB SOF	2005		12,000,000		899,494		5,846,395		516,161			0.76		1.28
GS Vintage IV	2007		20,000,000		4,075,764		13,855,234		934,180			0.53		1.24
NB SOF II	2008		12,000,000		2,617,207		8,330,423		1,034,864			0.55		1.37
Total - Pvt. Eq. Sec. Mkt.			44,000,000		7,592,465		28,032,052		2,485,205			0.60		1.29
Energy/Power Generation
ArcLight I	2002		15,000,000		-		99,103		(88,096	)		1.80		1.81
ArcLight II	2003		15,000,000		2,295,492		1,689,209		(457,659	)		1.27		1.36
ArcLight III	2006		15,000,000		2,037,794		7,159,856		(437,697	)		0.77		1.22
Quintana Energy	2006		10,000,000		1,641,106		7,250,762		1,566,370			0.39		1.25
ArcLight IV	2007		10,000,000		2,717,373		2,440,841		(355,546	)		1.03		1.28
Total - Energy/Power Generation			65,000,000		8,691,765		18,639,771		227,372			1.14		1.41
Venture Capital
Venture V	2001		9,600,000		400,000		7,477,156		923,177			0.38		1.20
Total - Venture Capital			9,600,000		400,000		7,477,156		923,177			0.38		1.20
TOTAL - ALTERNATIVE INVESTMENTS		$	263,698,351		55,908,352		109,664,415		10,391,067			0.83		1.29
(1) Distributed to paid in ratio
(2) Total value to paid in ratio
Exhibit may not foot due to rounding

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Municipal Bond Portfolio

State and Repayment Source Composition

December 31, 2012

($ in thousands)

(unaudited)

Exposure = 39% Held-to-Maturity; 61% 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		46,893		50	%		45,728		49	%		1,119		1	%		-		0	%		93,740		7	%
TX-PSF		-		0	%		-		0	%		-		0	%		31,611		100	%		31,611		2	%
WA		51,858		51	%		43,581		42	%		7,248		7	%		-		0	%		102,687		8	%
NY		77,009		91	%		7,368		9	%		-		0	%		-		0	%		84,377		6	%
AZ		62,013		96	%		2,460		4	%		-		0	%		-		0	%		64,473		5	%
FL		53,161		90	%		-		0	%		6,167		10	%		-		0	%		59,328		5	%
CO		21,822		42	%		30,723		58	%		-		0	%		-		0	%		52,545		4	%
IL		25,589		56	%		20,071		44	%		-		0	%		-		0	%		45,660		3	%
NC		24,179		58	%		13,768		33	%		3,725		9	%		-		0	%		41,672		3	%
OH		20,770		51	%		13,173		32	%		6,982		17	%		-		0	%		40,925		3	%
MO		20,972		56	%		16,808		44	%		-		0	%		-		0	%		37,780		3	%
Pre-refunded		62,127		51	%		42,899		36	%		11,911		10	%		3,555		3	%		120,492		9	%
Other		351,863		62	%		112,387		20	%		105,406		18	%		-		0	%		569,656		42	%
Grand Total		818,256		61	%		348,966		26	%		142,558		11	%		35,166		2	%		1,344,946		100	%

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Available-for-Sale Fixed Maturity Securities
December 31, 2012
($ in millions)
(unaudited)


	Fair Value		Unrealized Gain (Loss)		Weighted Average Credit Quality
AFS Fixed Maturity Portfolio:
U.S. government obligations	$	259.1		17.2	AA+
Foreign government obligations		30.2		1.4	AA-
State and municipal obligations		818.0		44.1	AA
Corporate securities		1,450.3		81.3	A
Mortgage-backed securities ("MBS")		609.8		19.0	AA
Asset-backed securities ("ABS")		128.6		2.3	AAA
Total AFS fixed maturity portfolio	$	3,296.0		165.3	AA-

State and Municipal Obligations:
Government obligations	$	352.3		20.5	AA+
Special revenue obligations		465.7		23.6	AA
Total state and municipal obligations	$	818.0		44.1	AA

Corporate Securities:
Financial	$	438.0		23.2	A
Industrials		104.2		7.4	A-
Utilities		124.2		6.6	BBB+
Consumer discretionary		134.7		8.3	BBB+
Consumer staples		163.6		8.6	A
Healthcare		178.2		11.0	A+
Materials		71.9		4.6	A-
Energy		77.4		4.3	A-
Information technology		100.1		3.2	A
Telecommunications services		46.7		2.8	BBB+
Other		11.3		1.3	AA+
Total corporate securities	$	1,450.3		81.3	A

MBS:
Government guaranteed agency commercial MBS ("CMBS")	$	48.9		2.3	AA+
Other-agency CMBS		1.2		—	AA+
Non-agency CMBS		87.1		1.1	AA-
Government guaranteed agency residential MBS ("RMBS")		91.0		3.3	AA+
Non-agency RMBS		44.3		0.9	A-
Other Agency RMBS		331.3		11.3	AA+
Alternative-A ("Alt-A") RMBS		6.0		0.1	AA-
Total MBS	$	609.8		19.0	AA

ABS:
ABS	$	127.2		2.0	AAA
Alt-A ABS2		0.8		0.2	D
Sub-prime ABS1,2		0.6		0.1	D
Total ABS	$	128.6		2.3	AAA

1 We define sub-prime exposure as exposure to direct and indirect investments in non-agency residential mortgages with average FICO® scores below 650.

2 Alt-A ABS and sub-prime ABS each consist of one security whose issuer 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
December 31, 2012
($ in millions)
(unaudited)

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

HTM Fixed Maturity Portfolio:
Foreign government obligations	$	5.9		5.5		0.4		0.2			0.6		AA+
State and municipal obligations		526.9		497.9		29.0		6.8			35.8		AA
Corporate securities		42.1		37.5		4.6		(0.8	)		3.8		A
MBS		12.6		7.2		5.4		(1.2	)		4.2		AA-
ABS		7.1		5.9		1.2		(1.1	)		0.1		A
Total HTM portfolio	$	594.6		554.0		40.6		3.9			44.5		AA

State and Municipal Obligations:
Government obligations	$	174.4		165.9		8.5		3.8			12.3		AA
Special revenue obligations		352.5		332.0		20.5		3.0			23.5		AA
Total state and municipal obligations	$	526.9		497.9		29.0		6.8			35.8		AA

Corporate Securities:
Financial	$	9.6		8.3		1.3		(0.7	)		0.6		BBB+
Industrials		11.9		10.4		1.5		(0.2	)		1.3		A+
Utilities		15.1		13.4		1.7		-			1.7		A+
Consumer discretionary		3.5		3.4		0.1		0.1			0.2		AA
Materials		2.0		2.0		-		-			-		BBB
Total corporate securities	$	42.1		37.5		4.6		(0.8	)		3.8		A

MBS:
Non-agency CMBS	$	12.6		7.2		5.4		(1.2	)		4.2		AA-
Total MBS	$	12.6		7.2		5.4		(1.2	)		4.2		AA-

ABS:
ABS	$	4.7		4.2		0.5		(0.3	)		0.2		BBB+
Alt-A ABS		2.4		1.7		0.7		(0.8	)		(0.1	)	AAA
Total ABS	$	7.1		5.9		1.2		(1.1	)		0.1		A

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