EXHIBIT 99.2

 

Supplemental Investor Package ________________________________________________   Fourth Quarter and Full Year 2016                     Investor Contact: Rohan Pai Senior Vice President, Investor Relations and Treasurer Tel: 973-948-1364 Rohan.Pai @selective.com

 

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries

Selected Balance Sheet Data

(unaudited)

 

		December 31,												December 31,
($ in thousands, except per share amounts)		2016												2015
										Unrecognized/												Unrecognized/
		Balance				Market				Unrealized				Balance				Market				Unrealized
		Sheet				Value				Gain				Sheet				Value				Gain
Invested Assets:
Corporate bonds 1		$	3,332,522				3,334,044				24,339			$	2,955,001				2,957,427				8,276
Government and Municipal bonds			1,561,574				1,563,707				18,255				1,654,556				1,660,320				55,901
Total fixed income securities			4,894,096				4,897,751				42,594				4,609,557				4,617,747				64,177
Equities			146,753				146,753				25,864				207,051				207,051				13,235
Short-term investments			221,701				221,701				-				194,819				194,819				-
Other investments			102,397				102,397				-				77,842				77,842				-
Total invested assets		$	5,364,947				5,368,602				68,458			$	5,089,269				5,097,459				77,412
Invested assets per $ of stockholders' equity			3.50												3.64
Total assets			7,355,848												6,904,433
Liabilities:
Reserve for losses and loss expenses			3,691,719												3,517,728
Unearned premium reserve			1,262,819												1,169,710
Total liabilities			5,824,478												5,506,392
Stockholders' equity			1,531,370												1,398,041
Total debt to capitalization ratio			22.3	%											21.7	%
Book value per share			26.42												24.37
Book value per share excluding
unrealized gain or loss on bond portfolio			25.98												23.74
NPW per insurance segment employee			1,028												979
Statutory premiums to surplus ratio			1.4	x											1.5	x
Statutory surplus			1,583,781												1,426,320

 

¹ Includes mortgage-backed and asset-backed securities.

 

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries

Selected Income Statement Data

(unaudited)

 

				Quarter Ended December 31,																Year-to-Date December 31,
($ in thousands, except per share amounts)				2016								2015								2016								2015
								Per diluted share								Per diluted share								Per diluted share								Per diluted share
Consolidated
Revenue			$	582,358							$	545,530							$	2,284,270							$	2,131,852
Net income				39,360				0.67				45,389				0.78				158,495				2.70				165,861				2.85
Exclude: Net realized losses (gains)				7,686				0.13				2,600				0.04				4,937				0.08				(13,171	)			(0.23	)
Exclude: Tax on net realized losses (gains)				(2,690	)			(0.05	)			(910	)			(0.01	)			(1,728	)			(0.03	)			4,610				0.08
Operating income				44,356				0.75				47,079				0.81				161,704				2.75				157,300				2.70
Total Insurance Operations
Gross premiums written			$	602,302								558,607								2,606,038								2,427,367
Net premiums written				515,016								474,658								2,237,288								2,069,904
Net premiums earned				552,753								516,087								2,149,572								1,989,909
Underwriting gain	- before tax			35,168								49,053								151,933								149,029
	- after tax			22,859				0.39				31,885				0.55				98,756				1.68				96,869				1.67
GAAP combined ratio				93.6	%							90.5	%							92.9	%							92.5	%
Standard Commercial Lines
Net premiums earned			$	429,731								397,162								1,665,483								1,529,442
GAAP combined ratio				89.5	%							86.1	%							91.2	%							89.2	%
Standard Personal Lines
Net premiums earned			$	70,888								71,496								280,607								288,134
GAAP combined ratio				109.3	%							92.1	%							95.6	%							99.5	%
Excess and Surplus Lines
Net premiums earned			$	52,134								47,429								203,482								172,333
GAAP combined ratio				106.6	%							124.8	%							103.4	%							109.8	%
Investments
Net investment income	- before tax		$	35,428								30,108								130,754								121,316
	- after tax			26,407				0.45				23,294				0.40				98,405				1.68				93,836				1.61
Effective tax rate				25.5	%							22.6	%							24.7	%							22.7	%
Annual after-tax yield on investment portfolio																				1.9	%							1.9	%
Annual after-tax, after-interest expense yield																				1.6	%							1.6	%
Invested assets per $ of stockholders' equity																				3.50								3.64
Other expenses (net of other income)
Interest expense	- before tax		$	(5,831	)							(5,603	)							(22,771	)							(22,428	)
	- after tax			(3,790	)			(0.06	)			(3,641	)			(0.06	)			(14,801	)			(0.25	)			(14,578	)			(0.25	)
Other expense - after tax				(1,120	)			(0.03	)		$	(4,459	)			(0.08	)		$	(20,656	)			(0.36	)		$	(18,827	)			(0.33	)
Diluted weighted avg shares outstanding				58,902								58,387								58,747								58,156

 

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries

GAAP Insurance Operations Results

(unaudited)

 

Fourth Quarter
($ in thousands)		Quarter Ended December 31, 2016																Quarter Ended December 31, 2015
			Standard Commercial Lines				Standard Personal Lines				Excess & Surplus Lines				Grand Total				Standard Commercial Lines				Standard Personal Lines				Excess & Surplus Lines				Grand Total
Net Premiums Written		$	392,167				68,052				54,797				515,016			$	356,855				65,989				51,814				474,658
Net Premiums Earned			429,731				70,888				52,134				552,753				397,162				71,496				47,429				516,087
Losses and Loss Expense Incurred			230,323				54,260				38,333				322,916				199,716				43,747				43,357				286,820
Net Underwriting Expenses Incurred			154,366				23,210				17,257				194,833				141,325				22,118				15,842				179,285
Dividends to Policyholders			(164	)			-				-				(164	)			929				-				-				929
GAAP Underwriting Gain (Loss)		$	45,206				(6,582	)			(3,456	)			35,168			$	55,192				5,631				(11,770	)			49,053
GAAP Ratios
Loss and Loss Expense Ratio			53.6	%			76.5	%			73.5	%			58.4	%			50.3	%			61.2	%			91.4	%			55.6	%
Underwriting Expense Ratio			35.9	%			32.8	%			33.1	%			35.2	%			35.6	%			30.9	%			33.4	%			34.7	%
Dividends to Policyholders Ratio			0.0	%			0.0	%			0.0	%			0.0	%			0.2	%			0.0	%			0.0	%			0.2	%
Combined Ratio			89.5	%			109.3	%			106.6	%			93.6	%			86.1	%			92.1	%			124.8	%			90.5	%
Year-to-Date
($ in thousands)			Year-to-Date December 31, 2016																Year-to-Date December 31, 2015
			Standard Commercial Lines				Standard Personal Lines				Excess & Surplus Lines				Grand Total				Standard Commercial Lines				Standard Personal Lines				Excess & Surplus Lines				Grand Total
Net Premiums Written		$	1,745,782				281,822				209,684				2,237,288			$	1,596,965				283,926				189,013				2,069,904
Net Premiums Earned			1,665,483				280,607				203,482				2,149,572				1,529,442				288,134				172,333				1,989,909
Losses and Loss Expense Incurred			913,506				177,749				143,542				1,234,797				819,573				200,237				128,731				1,148,541
Net Underwriting Expenses Incurred			601,894				90,439				66,861				759,194				539,154				86,561				60,405				686,120
Dividends to Policyholders			3,648				-				-				3,648				6,219				-				-				6,219
GAAP Underwriting Gain (Loss)		$	146,435				12,419				(6,921	)			151,933			$	164,496				1,336				(16,803	)			149,029
GAAP Ratios
Loss and Loss Expense Ratio			54.8	%			63.3	%			70.5	%			57.4	%			53.6	%			69.5	%			74.7	%			57.7	%
Underwriting Expense Ratio			36.2	%			32.3	%			32.9	%			35.3	%			35.2	%			30.0	%			35.1	%			34.5	%
Dividends to Policyholders Ratio			0.2	%			0.0	%			0.0	%			0.2	%			0.4	%			0.0	%			0.0	%			0.3	%
Combined Ratio			91.2	%			95.6	%			103.4	%			92.9	%			89.2	%			99.5	%			109.8	%			92.5	%

 

 

 

Selective Insurance Group, Inc. and Consolidated Subsidiaries

GAAP Investment Income

December 2016 (unaudited)

 

		Quarter Ended								%				Year Ended								%
		December				December				Increase				December				December				Increase
($ in thousands, except per share data)		2016				2015				(Decrease)				2016				2015				(Decrease)
Investment Income:
Interest:
Fixed Income Securities		$	33,456				31,003				8			$	129,306				123,230				5
Short-term			193				40				383				686				112				513
Other Investments			2,989				(1,109	)			370				2,940				(1,890	)			256
Dividends			1,428				2,615				(45	)			7,368				9,161				(20	)
			38,066				32,549				17				140,300				130,613				7
Investment Expense			2,638				2,441				8				9,546				9,297				3
Net Investment Income Before Tax			35,428				30,108				18				130,754				121,316				8
Tax			9,021				6,814				32				32,349				27,480				18
Net Investment Income After Tax		$	26,407				23,294				13			$	98,405				93,836				5
Net Investment Income per Share		$	0.45				0.40				13			$	1.68				1.61				4
Effective Tax Rate			25.5	%			22.6	%							24.7	%			22.7	%
Average Yields :
Fixed Income Securities:
Pre Tax															2.72	%			2.74	%
After Tax															2.03	%			2.07	%
Portfolio:
Pre Tax															2.50	%			2.45	%
After Tax															1.88	%			1.90	%
			Quarter Ended												Year Ended
			December				December								December				December
Net Realized Gains (Losses)			2016				2015								2016				2015
Fixed Income Securities		$	(10,793	)			1,431							$	(8,849	)			2,018
Equity Securities			3,120				(4,193	)							3,926				11,645
Short Term			(13	)			-								(13	)			-
Other Investments			-				162								(1	)			(492	)
Total			(7,686	)			(2,600	)							(4,937	)			13,171
Net of Tax			(4,996	)			(1,690	)							(3,209	)			8,561

 

As of December 31, 2016 year-to-date new money rates for fixed income securities were 3.0% on a pre-tax basis and 2.1% on an after-tax basis.

 

 

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

2016 Statutory Results by Line of Business

Quarter Ended December 2016 (unaudited)

 

		Net								Net																Underwriting				Dividends to
		Premiums				Percent				Premiums				Percent				Loss				LAE				Expense				Policyholders				Combined Ratio				Combined Ratio				Underwriting
($ in thousands)		Written				Change				Earned				Change				Ratio				Ratio				Ratio				Ratio				2016				2015				Gain/(Loss)
Standard Personal Lines:
Homeowners		$	30,816				0.4	%		$	32,631				(1.9	)%			68.3	%			5.7	%			36.9	%			0.0	%			110.8	%			78.6	%		$	(2,868	)
Auto			35,331				5.4	%			36,349				(0.2	)%			74.7	%			7.5	%			35.3	%			0.0	%			117.5	%			116.1	%			(6,003	)
Other (including flood)			1,905				7.2	%			1,907				4.5	%			60.2	%			(47.2	)%			(111.5	)%			0.0	%			(98.5	)%			(31.8	)%			3,783
Total		$	68,052				3.1	%		$	70,888				(0.8	)%			71.3	%			5.2	%			32.0	%			0.0	%			108.5	%			94.7	%		$	(5,088	)
Standard Commercial Lines:
Commercial property		$	70,448				11.1	%		$	75,617				9.1	%			38.3	%			5.6	%			39.0	%			(0.2	)%			82.6	%			70.8	%		$	15,161
Workers compensation			67,776				2.7	%			78,386				3.0	%			22.6	%			20.7	%			31.0	%			0.5	%			74.7	%			90.1	%			23,081
General liability			121,828				10.7	%			136,510				8.5	%			35.0	%			12.2	%			36.7	%			(0.2	)%			83.8	%			88.8	%			27,526
Auto			96,261				13.9	%			104,014				11.7	%			67.2	%			10.1	%			33.8	%			(0.2	)%			110.8	%			103.7	%			(8,614	)
Businessowners' policies			25,442				3.9	%			24,737				3.8	%			66.3	%			10.4	%			36.7	%			0.0	%			113.4	%			86.7	%			(3,565	)
Bonds			6,439				34.5	%			6,303				20.9	%			(11.0	)%			(0.9	)%			61.4	%			0.0	%			49.5	%			97.5	%			3,101
Other			3,972				9.3	%			4,163				11.9	%			0.3	%			0.2	%			57.0	%			0.0	%			57.6	%			61.6	%			1,875
Total		$	392,167				9.9	%		$	429,731				8.2	%			41.9	%			11.7	%			35.9	%			(0.0	)%			89.5	%			89.2	%		$	58,565
E&S			54,797				5.8	%			52,134				9.9	%			71.7	%			1.8	%			32.0	%			0.0	%			105.5	%			125.6	%			(3,738	)
Total Insurance Operations		$	515,016				8.5	%		$	552,753				7.1	%			48.5	%			9.9	%			35.0	%			(0.0	)%			93.4	%			93.2	%		$	49,738
Note: Some amounts may not foot due to rounding.
							2016				2015
			Losses Paid				247,144				234,802
			LAE Paid				51,339				53,288
			Total Paid			$	298,483			$	288,090

 

 

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

2016 Statutory Results by Line of Business

Year Ended December 2016 (unaudited)

 

		Net								Net																Underwriting				Dividends to
		Premiums				Percent				Premiums				Percent				Loss				LAE				Expense				Policyholders				Combined Ratio				Combined Ratio				Underwriting
($ in thousands)		Written				Change				Earned				Change				Ratio				Ratio				Ratio				Ratio				2016				2015				Gain/(Loss)
Standard Personal Lines:
Homeowners		$	129,513				(2.3	)%		$	130,973				(2.5	)%			46.8	%			7.8	%			37.1	%			0.0	%			91.7	%			100.6	%		$	11,384
Auto			145,425				0.5	%			142,876				(2.7	)%			63.6	%			10.2	%			35.4	%			0.0	%			109.3	%			108.1	%			(14,124	)
Other (including flood)			6,885				2.0	%			6,758				(3.0	)%			62.5	%			(49.9	)%			(145.6	)%			0.0	%			(133.0	)%			(88.3	)%			15,931
Total		$	281,822				(0.7	)%		$	280,607				(2.6	)%			55.7	%			7.7	%			31.8	%			0.0	%			95.2	%			99.9	%		$	13,193
Standard Commercial Lines:
Commercial property		$	308,140				9.0	%		$	293,438				9.1	%			40.7	%			5.1	%			38.2	%			0.2	%			84.3	%			82.6	%		$	40,347
Workers compensation			319,807				6.7	%			308,233				6.3	%			35.7	%			15.6	%			28.6	%			0.7	%			80.7	%			88.2	%			56,301
General liability			553,579				9.4	%			527,859				9.2	%			34.6	%			13.4	%			35.7	%			0.1	%			83.8	%			82.1	%			76,347
Auto			422,013				12.2	%			398,942				11.2	%			66.4	%			9.8	%			33.1	%			0.1	%			109.3	%			101.9	%			(44,892	)
Businessowners' policies			99,497				3.4	%			97,754				4.6	%			49.6	%			11.3	%			38.6	%			0.0	%			99.4	%			103.3	%			(87	)
Bonds			25,933				22.4	%			23,227				14.1	%			6.4	%			5.1	%			57.7	%			0.0	%			69.3	%			89.8	%			5,564
Other			16,812				11.0	%			16,030				11.6	%			(0.1	)%			0.2	%			56.8	%			0.0	%			57.1	%			57.4	%			6,433
Total		$	1,745,782				9.3	%		$	1,665,483				8.9	%			43.7	%			11.1	%			34.9	%			0.2	%			89.9	%			89.2	%		$	140,014
E&S			209,684				10.9	%			203,482				18.1	%			55.7	%			14.8	%			31.6	%			0.0	%			102.1	%			108.4	%			(6,199	)
Total Insurance Operations		$	2,237,288				8.1	%			2,149,572				8.0	%			46.4	%			11.0	%			34.2	%			0.2	%			91.8	%			92.4	%		$	147,006
Note: Some amounts may not foot due to rounding.
							2016				2015
			Losses Paid				925,574				891,485
			LAE Paid				196,843				197,433
			Total Paid			$	1,122,417			$	1,088,918

 

 

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

2016 Net Catastrophe Losses and Prior Year Casualty Reserve Development

Statutory Results by Line of Business

(unaudited)

 

		Quarter Ended																Year-to-Date
Net Catastrophe Losses Incurred		December 31, 2016								December 31, 2015								December 31, 2016								December 31, 2015
($ in thousands)		Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio				Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio				Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio				Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio
Standard Personal Lines		$	11,366				16.0	%		$	1,354				1.9	%		$	18,175				6.5	%		$	21,735				7.5	%
Standard Commercial Lines			13,565				3.2	%			1,072				0.3	%			35,041				2.1	%			34,089				2.2	%
E&S			1,625				3.1	%			479				1.0	%			6,519				3.2	%			3,231				1.9	%
Total Insurance Operations		$	26,555				4.8	%		$	2,906				0.6	%		$	59,735				2.8	%		$	59,055				3.0	%
Prior Year Casualty Reserve Development			Quarter Ended																Year-to-Date
(Favorable) / Unfavorable			December 31, 2016								December 31, 2015								December 31, 2016								December 31, 2015
($ in thousands)			Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio				Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio				Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio				Losses and Loss Expenses Incurred				Impact on Losses and Loss Expense Ratio
Standard Personal Lines		$	2,500				3.5	%		$	(2,000	)			(2.8	)%		$	2,500				0.9	%		$	(2,000	)			(0.7	)%
Standard Commercial Lines			(28,500	)			(6.6	)%			(20,000	)			(5.0	)%			(77,500	)			(4.7	)%			(81,000	)			(5.3	)%
E&S			3,000				5.8	%			10,000				21.1	%			6,000				2.9	%			16,000				9.3	%
Total Insurance Operations		$	(23,000	)			(4.2	)%		$	(12,000	)			(2.3	)%		$	(69,000	)			(3.2	)%		$	(67,000	)			(3.4	)%

 

Note: Some amounts may not foot due to rounding.

  

Selective Insurance Group, Inc. & Consolidated Subsidiaries Consolidated Balance Sheets
December 31,		Unaudited
($ in thousands, except share amounts)		2016				2015
ASSETS
Investments:
Fixed income securities, held-to-maturity – at carrying value   (fair value:  $105,211 – 2016; $209,544 – 2015)		$	101,556				201,354
Fixed income securities, available-for-sale – at fair value   (amortized cost: $4,753,759 – 2016; $4,352,514 – 2015)			4,792,540				4,408,203
Equity securities, available-for-sale – at fair value   (cost:  $120,889 – 2016; $193,816 – 2015)			146,753				207,051
Short-term investments (at cost which approximates fair value)			221,701				194,819
Other investments			102,397				77,842
Total investments			5,364,947				5,089,269
Cash			458				898
Interest and dividends due or accrued			40,164				38,501
Premiums receivable, net of allowance for uncollectible   accounts of:  $5,980 – 2016; $4,422 – 2015			681,611				615,164
Reinsurance recoverable, net of allowance for uncollectible   accounts of: $5,500 – 2016; $5,700 – 2015			621,537				561,968
Prepaid reinsurance premiums			146,282				140,889
Current federal income tax			2,486				—
Deferred federal income tax			84,840				92,696
Property and equipment – at cost, net of accumulated   depreciation and amortization of: $198,729 – 2016; $188,548 – 2015			69,576				65,701
Deferred policy acquisition costs			222,564				213,159
Goodwill			7,849				7,849
Other assets			113,534				78,339
Total assets		$	7,355,848				6,904,433
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for losses and loss expenses		$	3,691,719				3,517,728
Unearned premiums			1,262,819				1,169,710
Short-term debt			—				60,000
Long-term debt			438,667				328,192
Current federal income tax			—				7,442
Accrued salaries and benefits			132,880				167,336
Other liabilities			298,393				255,984
Total liabilities		$	5,824,478				5,506,392
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: 101,620,436 – 2016; 100,861,372 – 2015			203,241				201,723
Additional paid-in capital			347,295				326,656
Retained earnings			1,568,881				1,446,192
Accumulated other comprehensive loss			(15,950	)			(9,425	)
Treasury stock – at cost    (shares:  43,653,237 – 2016; 43,500,642 – 2015)			(572,097	)			(567,105	)
Total stockholders’ equity		$	1,531,370				1,398,041
Commitments and contingencies
Total liabilities and stockholders’ equity		$	7,355,848				6,904,433

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries Consolidated Statements of Income		Unaudited Quarter ended December 31,								Year Ended December 31,
($ in thousands, except per share amounts)		2016				2015				Unaudited 2016				2015
Revenues:
Net premiums earned		$	552,753				516,087				2,149,572				1,989,909
Net investment income earned			35,428				30,108				130,754				121,316
Net realized (losses) gains:
Net realized investment (losses) gains			(3,671	)			7,939				3,562				31,537
Other-than-temporary impairments			(4,015	)			(10,539	)			(8,509	)			(18,366	)
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income			—				—				10				—
Total net realized (losses) gains			(7,686	)			(2,600	)			(4,937	)			13,171
Other income			1,863				1,935				8,881				7,456
Total revenues			582,358				545,530				2,284,270				2,131,852
Expenses:
Losses and loss expenses incurred			322,916				286,820				1,234,797				1,148,541
Policy acquisition costs			195,965				180,525				763,758				689,820
Interest expense			5,831				5,603				22,771				22,428
Other expenses			7,320				8,784				42,989				38,371
Total expenses			532,032				481,732				2,064,315				1,899,160
Income before federal income tax			50,326				63,798				219,955				232,692
Federal income tax expense:
Current			10,554				16,219				48,581				45,347
Deferred			412				2,190				12,879				21,484
Total federal income tax expense			10,966				18,409				61,460				66,831
Net income		$	39,360				45,389				158,495				165,861
Earnings per share:
Basic net income		$	0.68				0.79				2.74				2.90
Diluted net income		$	0.67				0.78				2.70				2.85
Dividends to stockholders		$	0.16				0.15				0.61				0.57

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries Consolidated Statements of Comprehensive Income		Unaudited Quarter ended December 31,								Year ended December 31,
($ in thousands)		2016				2015				Unaudited 2016				2015
Net income		$	39,360				45,389				158,495				165,861
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains on investment securities:
Unrealized holding losses arising during period			(76,450	)			(8,011	)			(5,977	)			(26,143	)
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income			—				—				(6	)			—
Amounts reclassified into net income:
Held-to-maturity securities			(24	)			(24	)			(92	)			(377	)
Non-credit other-than-temporary impairments			138				—				138				232
Realized losses (gains) on available-for-sale securities			4,850				1,796				3,064				(9,110	)
Total unrealized losses on investment securities			(71,486	)			(6,239	)			(2,873	)			(35,398	)
Defined benefit pension and post-retirement plans:
Net actuarial (loss) gain			(7,852	)			1,585				(7,852	)			1,585
Amounts reclassified into net income:
Net actuarial loss			1,179				1,268				4,200				4,600
Total defined benefit pension and post-retirement plans			(6,673	)			2,853				(3,652	)			6,185
Other comprehensive loss			(78,159	)			(3,386	)			(6,525	)			(29,213	)
Comprehensive (loss) income		$	(38,799	)			42,003				151,970				136,648

 

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries Consolidated Statements of Stockholders’ Equity
December 31,		Unaudited
($ in thousands, except share amounts)		2016				2015				2014
Common stock:
Beginning of year		$	201,723				199,896				198,240
Dividend reinvestment plan   (shares:  38,741 – 2016; 50,013 – 2015; 58,309 – 2014)			77				100				117
Stock purchase and compensation plans   (shares:  720,323 – 2016; 863,426 – 2015; 769,389 – 2014)			1,441				1,727				1,539
End of year			203,241				201,723				199,896
Additional paid-in capital:
Beginning of year			326,656				305,385				288,182
Dividend reinvestment plan			1,389				1,374				1,306
Stock purchase and compensation plans			19,250				19,897				15,897
End of year			347,295				326,656				305,385
Retained earnings:
Beginning of year			1,446,192				1,313,440				1,202,015
Net income			158,495				165,861				141,827
Dividends to stockholders   ($0.61 per share –  2016; $0.57 per share – 2015; $0.53 per share – 2014)			(35,806	)			(33,109	)			(30,402	)
End of year			1,568,881				1,446,192				1,313,440
Accumulated other comprehensive (loss) income:
Beginning of year			(9,425	)			19,788				24,851
Other comprehensive loss			(6,525	)			(29,213	)			(5,063	)
End of year			(15,950	)			(9,425	)			19,788
Treasury stock:
Beginning of year			(567,105	)			(562,923	)			(559,360	)
Acquisition of treasury stock   (shares:  152,595 – 2016; 147,461 – 2015; 154,559 – 2014)			(4,992	)			(4,182	)			(3,563	)
End of year			(572,097	)			(567,105	)			(562,923	)
Total stockholders’ equity		$	1,531,370				1,398,041				1,275,586

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries Consolidated Statements of Cash Flow
December 31,		Unaudited
($ in thousands)		2016				2015				2014
Operating Activities
Net income		$	158,495				165,861				141,827
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			61,671				59,688				45,346
Sale of renewal rights			—				—				(8,000	)
Stock-based compensation expense			10,449				8,973				8,702
Undistributed (gains) losses of equity method investments			(2,316	)			1,889				(153	)
Net realized losses (gains)			4,937				(13,171	)			(26,599	)
Net gain on disposal of property and equipment			—				—				(104	)
Changes in assets and liabilities:
Increase in reserves for losses and loss expenses, net of reinsurance recoverables			114,422				59,438				97,449
Increase in unearned premiums, net of prepaid reinsurance			87,716				79,995				32,671
Decrease in net federal income taxes			11,150				25,004				31,323
Increase in premiums receivable			(66,447	)			(56,386	)			(33,908	)
Increase in deferred policy acquisition costs			(9,405	)			(27,551	)			(12,627	)
(Increase) decrease in interest and dividends due or accrued			(1,473	)			407				(1,536	)
(Decrease) increase in accrued salaries and benefits			(46,536	)			11,392				(7,182	)
(Increase) decrease in other assets			(30,071	)			(11,523	)			1,186
Increase (decrease) in other liabilities			9,191				77,564				(35,632	)
Net cash provided by operating activities			301,783				381,580				232,763
Investing Activities
Purchase of fixed income securities, held-to-maturity			(4,235	)			(3,316	)			—
Purchase of fixed income securities, available-for-sale			(1,982,023	)			(1,041,916	)			(843,616	)
Purchase of equity securities, available-for-sale			(35,490	)			(195,720	)			(186,019	)
Purchase of other investments			(66,164	)			(12,170	)			(10,617	)
Purchase of short-term investments			(3,499,380	)			(1,602,327	)			(1,410,123	)
Sale of fixed income securities, available-for-sale			926,470				61,571				51,002
Sale of short-term investments			3,470,022				1,539,480				1,452,402
Redemption and maturities of fixed income securities, held-to-maturity			102,868				106,621				73,415
Redemption and maturities of fixed income securities, available-for-sale			641,524				567,445				482,816
Sale of equity securities, available-for-sale			119,617				172,561				208,008
Distributions from other investments			26,837				32,457				20,774
Purchase of property and equipment			(18,147	)			(16,229	)			(15,510	)
Sale of renewal rights			—				—				8,000
Net cash used in investing activities			(318,101	)			(391,543	)			(169,468	)
Financing Activities
Dividends to stockholders			(33,758	)			(31,052	)			(28,428	)
Acquisition of treasury stock			(4,992	)			(4,182	)			(3,563	)
Net proceeds from stock purchase and compensation plans			7,811				10,089				7,283
Proceeds from borrowings			165,000				15,000				—
Repayment of borrowings			(115,000	)			—				(13,000	)
Excess tax benefits from share-based payment arrangements			1,819				1,736				1,020
Repayment of capital lease obligations			(5,002	)			(4,689	)			(2,841	)
Net cash provided by (used in) financing activities			15,878				(13,098	)			(39,529	)
Net (decrease) increase in cash			(440	)			(23,061	)			23,766
Cash, beginning of year			898				23,959				193
Cash, end of year		$	458				898				23,959

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Statutory Balance Sheets

(unaudited)

 

		December 31,				December 31,
($ in thousands)		2016				2015
ASSETS
Bonds		$	4,780,269				4,491,136
Common stocks			130,608				194,789
Preferred stocks			15,871				11,856
Affiliated mortgage loan			34,324				35,163
Other investments			147,364				128,788
Short-term investments			203,924				165,678
Total investments			5,312,360				5,027,410
Cash on hand and in banks			13,911				(34,378	)
Interest and dividends due and accrued			40,038				38,466
Premiums receivable			673,649				609,146
Reinsurance recoverable on paid losses and expenses			10,337				10,949
Deferred tax recoverable			161,165				142,066
EDP equipment			549				390
Equities and deposits in pools and associations			12,683				10,920
Receivable for sold securities			5,176				17
Other assets			29,040				28,300
Total assets		$	6,258,908				5,833,286
LIABILITIES
Reserve for losses		$	2,497,916				2,426,583
Reinsurance payable on paid loss and loss expense			3,163				2,841
Reserve for loss expenses			564,976				525,322
Unearned premiums			1,116,536				1,028,820
Reserve for commissions payable			92,763				89,740
Ceded balances payable			62,939				37,222
Federal income tax payable			17,394				25,644
Premium and other taxes payable			24,149				23,998
Borrowed money			110,212				60,031
Reserve for dividends to policyholders			5,706				5,805
Reserves for unauthorized reinsurance			1,755				2,030
Payable for securities			41,603				6,204
Funds withheld on account of others			7,501				6,806
Accrued salaries and benefits			83,718				77,933
Other liabilities			44,796				87,987
Total liabilities			4,675,127				4,406,966
POLICYHOLDERS' SURPLUS
Capital			42,725				42,725
Paid in surplus			492,869				492,869
Unassigned surplus			1,048,187				890,726
Total policyholders' surplus			1,583,781				1,426,320
Total liabilities and policyholders' surplus		$	6,258,908				5,833,286

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Statutory Statements Of Income

(unaudited)

 

		Quarter Ended																Year Ended
		December																December
($ in thousands)		2016								2015								2016								2015
UNDERWRITING
Net premiums written		$	515,016								474,658								2,237,288								2,069,904
Net premiums earned			552,753								516,087								2,149,572								1,989,909
Net losses paid			247,144								234,802								925,574								891,485
Change in reserve for losses			20,871								(441	)							71,334								28,052
Net losses incurred			268,015				48.5	%			234,361				45.4	%			996,908				46.4	%			919,537				46.2	%
Net loss expenses paid			51,339								53,288								196,843								197,433
Change in reserve for loss expenses			3,455								(931	)							39,653								31,813
Net loss expenses incurred			54,794				9.9	%			52,357				10.2	%			236,496				11.0	%			229,246				11.5	%
Net underwriting expenses incurred			181,624				35.2	%			179,153				37.6	%			771,802				34.5	%			716,172				34.6	%
Total deductions			504,433								465,871								2,005,206								1,864,955
Statutory underwriting gain			48,320								50,216								144,366								124,954
Net loss from premium balances charged off			(653	)							(773	)							(2,711	)							(2,919	)
Finance charges and other income			1,907								1,983								8,999								7,671
Total other income			1,254				-0.2	%			1,210				-0.2	%			6,288				-0.3	%			4,752				-0.2	%
Policyholders' dividends incurred			164				0.0	%			(929	)			0.2	%			(3,648	)			0.2	%			(6,219	)			0.3	%
Total underwriting gain			49,738				93.4	%			50,497				93.2	%			147,006				91.8	%			123,487				92.4	%
INVESTMENT
Net investment income earned			32,159								29,455								126,079								120,558
Net realized (loss) / gain			(7,466	)							(2,600	)							(4,719	)							13,170
Total income before income tax			74,431								77,352								268,366								257,215
Federal income tax expense			18,771								23,648								66,054								61,377
Net income		$	55,660								53,704								202,312								195,838
Policyholders' Surplus
Surplus, beginning of period		$	1,551,227								1,367,343								1,426,320								1,307,842
Net income			55,660								53,704								202,312								195,838
Change in deferred taxes			2,938								(2,236	)							(6,064	)							(13,637	)
Change in net unrealized capital losses			2,223								7,522								9,382								(12,579	)
Dividends to stockholders			(15,253	)							(14,438	)							(61,014	)							(57,752	)
Change in reserve for unauthorized			275								5,631								275								5,631
Change in non-admitted assets			(2,926	)							4,510								18,545								(8,151	)
Change in Overfunded Contra Asset			257								562								(51,851	)							(280	)
Qual Pen Trans Liab			(9,890	)							2,677								46,535								8,211
Excess Plan Trans Liab			(330	)							748								(270	)							878
PRL Plan Trans Liab			(400	)							297								(389	)							319
Net change in surplus for period			32,554								58,977								157,461								118,478
Surplus, end of period		$	1,583,781								1,426,320								1,583,781								1,426,320
Statutory underwriting gain		$	49,738								50,497								147,006								123,487
Adjustments under GAAP:
Deferred policy acquisition costs			(13,370	)							(507	)							9,405								27,551
Other, net			(1,200	)							(937	)							(4,478	)							(2,009	)
GAAP underwriting gain		$	35,168								49,053								151,933								149,029

 

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

 

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Alternative Investments
December 31, 2016
(unaudited)
			Number				Original				Remaining				Current
Strategy			of Funds				Commitment				Commitment				Market Value
Private Equity			20				175,810,557				76,773,613				41,135,099
Private Credit			9				102,000,000				40,613,172				28,192,694
Real Assets			7				100,000,000				22,898,707				14,485,965
TOTAL - ALTERNATIVE INVESTMENTS			36				377,810,557				140,285,492				83,813,758

 

 

 

Exhibit may not foot due to rounding