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8-K

Selective Insurance Group Inc (SIGI)

8-K 2020-01-30 For: 2020-01-30
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Added on April 12, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) January 30, 2020
SELECTIVE INSURANCE GROUP, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 001-33067 22-2168890
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(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

40 Wantage Avenue, Branchville, New Jersey

07890

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (973) 948-3000

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $2 per share SIGI NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company        ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Section 2 – Financial Information

Item 2.02.    Results of Operations and Financial Condition.

On January 30, 2020, Selective Insurance Group, Inc. (the “Company”) issued a press release announcing results for the fourth quarter and year ended December 31, 2019. The press release is attached hereto as Exhibit 99.1.

Section 7 – Regulation FD

Item 7.01.    Regulation FD Disclosure.

Attached as Exhibit 99.2 is supplemental financial information about the Company.

The information contained in this report on Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. The Company makes no admission as to the materiality of any information in this report or the exhibits attached hereto.

Section 9 – Financial Statements and Exhibits

Item 9.01.    Financial Statements and Exhibits.

(d)    Exhibits

99.1     Press Release of Selective Insurance Group, Inc. dated January 30, 2020

99.2     Financial Supplement, Fourth Quarter and Full Year 2019

104    The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

EXHIBIT INDEX

Exhibit No. Description
99.1 Press Release of Selective Insurance Group, Inc. dated January 30, 2020
99.2 Financial Supplement, Fourth Quarter and Full Year 2019
104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SELECTIVE INSURANCE GROUP, INC.
Date: January 30, 2020 By: /s/ Michael H. Lanza
Michael H. Lanza
Executive Vice President and General Counsel 
		Exhibit

Exhibit 99.1

selectiveinsurancergb.jpg

Selective Reports Results for the Fourth Quarter of 2019 - Record Net Income per Diluted Share of $1.36 and Record Non-GAAP Operating Income^1^ per Diluted Share of $1.37; Full Year 2019 Record Net Income per Diluted Share of $4.53 and Record Non-GAAP Operating Income^1^ per Diluted Share of $4.40; a Full Year 2019 Return on Equity ("ROE") of 13.6% and Non-GAAP Operating ROE^1^ of 13.3%

In the fourth quarter of 2019:

• Net premiums written ("NPW") increased 8%
• GAAP combined ratio was 91.8%
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• Overall renewal pure price averaged 3.8%
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• After-tax net investment income was up 6%, to $47 million
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• Annualized ROE was 15.1% and non-GAAP operating ROE^1^ was 15.2%
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Branchville, NJ - January 30, 2020 - Selective Insurance Group, Inc. (NASDAQ: SIGI) today reported record financial results for the fourth quarter ended December 31, 2019, with net income per diluted share and record non-GAAP operating income^1^ per diluted share of $1.36 and $1.37, respectively.

"We are proud of our financial results, including our full-year non-GAAP operating ROE of 13.3%, which marks our sixth consecutive year of double-digit ROEs placing us in an elite group of insurance companies achieving similar results," said Gregory E. Murphy, Chairman and Chief Executive Officer. "Non-GAAP Operating ROE was reduced by 130 basis points in the quarter, and 60 basis points for the full year, due to unrealized gains that increased book value by 9% in 2019. In the fourth quarter, we generated an excellent 91.8% GAAP combined ratio, which benefited from lower catastrophe losses and 3.0 points of favorable prior year casualty reserve development. For the year, the 93.7% GAAP combined ratio included 3.1 points of catastrophe losses, which was below our annual expectations of 3.5 points, and 2.3 points of favorable prior year casualty reserve development. Investment results remained strong, with net investment income, after-tax, up 6% to $47 million in the quarter and up 13%, to $181.2 million for the year. For the year, the change in unrealized after-tax gains on our available-for-sale securities amounted to $169 million."

"Net premiums written increased 8% in the quarter about twice the expected annual industry growth rate, driven by strong retention and new business in our Standard Commercial Lines segment, partially offset by lower Standard Personal Lines and Excess and Surplus Lines premiums," Mr. Murphy added. "Overall renewal pure price increases were 3.8%, in line with expected loss trend, which positions us well for the future. Heading into 2020, our balance sheet remains extremely strong, with a record of $2.2 billion of stockholders' equity and excellent financial liquidity, and we continue to generate strong cash flow from operations of 18% of net premiums written in 2019."

Mr. Murphy continued, "We continue to excel in a competitive insurance marketplace. Successful execution on our strategic objectives has been key to driving our best-in-class operating and financial performance. Late last year we announced our well-developed management transition plan with John Marchioni to assume the role of Chief Executive Officer, effective February 1, 2020. As I step into my new role as Executive Chairman, I have absolute confidence that, under John's leadership, Selective will continue to execute on achieving its objectives in the coming years, while becoming a truly unique company in the marketplace."

1

Operating Highlights

Consolidated Financial Results Quarter ended December 31, Change Year-to-Date December 31, Change
$ and shares in millions, except per share data 2019 2018 2019 2018
Net premiums written $ 628.2 582.8 8 % $ 2,679.4 2,514.3 7 %
Net premiums earned 668.4 625.3 7 2,597.2 2,436.2 7
Net investment income earned 57.6 54.1 6 222.5 195.3 14
Net realized and unrealized (losses) gains, pre-tax (0.9 ) (37.9 ) 98 14.4 (54.9 ) 126
Total revenues 728.9 643.0 13 2,846.5 2,586.1 10
Net underwriting income, after-tax 43.1 35.9 20 129.6 95.7 35
Net investment income, after-tax 46.8 44.2 6 181.2 160.5 13
Net income 81.9 45.8 79 271.6 178.9 52
Non-GAAP operating income^1^ 82.5 72.0 15 264.4 218.6 21
Combined ratio 91.8 % 92.7 (0.9 ) pts 93.7 % 95.0 (1.3 ) pts
Loss and loss expense ratio 57.6 58.7 (1.1 ) 59.7 61.5 (1.8 )
Underwriting expense ratio 34.1 33.7 0.4 33.8 33.2 0.6
Dividends to policyholders ratio 0.1 0.3 (0.2 ) 0.2 0.3 (0.1 )
Catastrophe losses 1.0 pts 2.4 (1.4 ) 3.1 pts 3.6 (0.5 )
Non-catastrophe property losses and loss expenses^2^ 15.1 15.2 (0.1 ) 15.8 16.6 (0.8 )
(Favorable) prior year reserve development on casualty lines (3.0 ) (2.8 ) (0.2 ) (2.3 ) (1.7 ) (0.6 )
Net income per diluted share $ 1.36 0.76 79 % $ 4.53 3.00 51 %
Non-GAAP operating income per diluted share^1^ 1.37 1.20 14 4.40 3.66 20
Weighted average diluted shares 60.1 59.8 — 60.0 59.7 —
Book value per share $ 36.91 30.40 21 36.91 30.40 21

Overall Insurance Operations

For the quarter, overall NPW growth was 8%, driven by Standard Commercial Lines growth of 11%, and the combined ratio was 91.8%, generating 8.0 points of annualized ROE. For the year, overall NPW growth was 7% and the combined ratio was 93.7%, which generated 6.5% of ROE. The expense ratio was 33.8% for the year, up 0.6 points, driven mainly by profit-based expenses for agents and employees due to our excellent underwriting results.

Standard Commercial Lines Segment

Standard Commercial Lines premiums, which represented 80% of total NPW in 2019, were up 11% in the quarter. This growth reflects strong renewal pure price increases of 3.8%, retention of 84%, and an increase in new business of 3%, to $95 million. Our excellent fourth quarter combined ratio of 90.0% reflected a lower level of catastrophe losses, favorable prior year casualty reserve development, as well as the items in the table below. The favorable prior year casualty reserve development was driven by the workers compensation line of business, partially offset by unfavorable development in the general liability and commercial auto lines of business.

For the year, premiums were up 8%, driven by 3.4% of renewal pure price increases and an 8% increase in new business. The combined ratio was 92.9%, compared to 94.3% in 2018. The favorable prior year casualty reserve development was driven by the workers compensation line of business. Standard Commercial Lines Segment Quarter ended December 31, Change Year-to-Date December 31, Change
$ in millions 2019 2018 2019 2018
Net premiums written $ 500.1 449.4 11 % $ 2,137.1 1,975.7 8 %
Net premiums earned 530.6 489.8 8 2,049.6 1,912.2 7
Combined ratio 90.0 % 92.9 (2.9 ) pts 92.9 % 94.3 (1.4 ) pts
Loss and loss expense ratio 55.0 57.8 (2.8 ) 58.0 59.7 (1.7 )
Underwriting expense ratio 34.9 34.8 0.1 34.7 34.2 0.5
Dividends to policyholders ratio 0.1 0.3 (0.2 ) 0.2 0.4 (0.2 )
Catastrophe losses 0.4 pts 2.5 (2.1 ) 2.6 pts 3.4 (0.8 )
Non-catastrophe property losses and loss expenses^2^ 13.2 13.4 (0.2 ) 13.8 14.3 (0.5 )
(Favorable) prior year reserve development on casualty lines (4.9 ) (4.5 ) (0.4 ) (3.4 ) (3.0 ) (0.4 )

2

Standard Personal Lines Segment

Standard Personal Lines premiums, which represented 11% of total NPW in 2019, were down 3% in the quarter, driven by a 9% reduction in new business, reflecting an increasingly competitive marketplace. Renewal pure price increases averaged 4.2%, and retention was 83% in the quarter. The combined ratio in the fourth quarter was 98.5%, up 6.7 points from a year ago, driven principally by catastrophe and non-catastrophe property losses, as well as the items in the table below. The unfavorable prior year casualty reserve development was driven by a modest reserve increase for the personal auto line of business.

For the year, premiums were down 2%, driven by a 21% reduction in new business. Renewal pure price increases were 5.0%, while retention was 83%. The combined ratio was 97.3%, a 1.5-point increase from a year ago, the drivers of which are outlined in the table below.

Standard Personal Lines Segment Quarter ended December 31, Change Year-to-Date December 31, Change
$ in millions 2019 2018 2019 2018
Net premiums written $ 70.9 72.7 (3 ) % $ 304.6 309.3 (2 ) %
Net premiums earned 76.6 77.4 (1 ) 307.7 304.4 1
Combined ratio 98.5 % 91.8 6.7 pts 97.3 % 95.8 1.5 pts
Loss and loss expense ratio 69.0 63.8 5.2 68.6 67.9 0.7
Underwriting expense ratio 29.5 28.0 1.5 28.7 27.9 0.8
Catastrophe losses 3.9 pts (0.8 ) 4.7 6.8 pts 5.7 1.1
Non-catastrophe property losses and loss expenses^2^ 33.9 32.1 1.8 34.0 34.6 (0.6 )
Unfavorable prior year reserve development on casualty lines 5.2 5.8 (0.6 ) 1.9 1.5 0.4

Excess and Surplus Lines Segment

Excess and Surplus Lines premiums, which represented 9% of total NPW in 2019, decreased 6% in the quarter. New business declined 16%, primarily related to the exit of specific classes and the year over year impact of one particularly large relationship we re-established in 2018, partially offset by overall renewal pure price increases of 3.7%. Over the past few years, we have focused on numerous profitability initiatives that included targeted price increases, business mix shifts, modifying certain underwriting standards, and the decision to exit specific underperforming classes of business, while entering into new distribution relationships. The combined ratio for the fourth quarter was 99.5%, a 6.6-point increase, driven by the factors outlined in the table below, coupled with an increase in the current accident year loss ratio of 3.3 points. For the quarter, we incurred a modest amount of unfavorable prior year casualty reserve development that increased the combined ratio 3.3 points.

For the year, premiums were up 4%, driven by overall renewal pure price increases of 4.0%. The combined ratio was a profitable 95.9%, a 4.4-point decrease from a year ago, the drivers of which are outlined in the table below, coupled with an increase in the current accident year loss ratio of 1.6 points.

Excess and Surplus Lines Segment Quarter ended December 31, Change Year-to-Date December 31, Change
$ in millions 2019 2018 2019 2018
Net premiums written $ 57.2 60.7 (6 ) % $ 237.8 229.3 4 %
Net premiums earned 61.2 58.1 5 239.8 219.6 9
Combined ratio 99.5 % 92.9 6.6 pts 95.9 % 100.3 (4.4 ) pts
Loss and loss expense ratio 66.3 61.5 4.8 63.5 68.5 (5.0 )
Underwriting expense ratio 33.2 31.4 1.8 32.4 31.8 0.6
Catastrophe losses 2.3 pts 6.0 (3.7 ) 2.4 pts 2.8 (0.4 )
Non-catastrophe property losses and loss expenses^2^ 8.4 7.3 1.1 9.3 12.0 (2.7 )
Unfavorable prior year reserve development on casualty lines 3.3 — 3.3 0.8 5.5 (4.7 )

3

Investments Segment

Net investment income, after-tax, was up 6% in the quarter to $47 million. For the year, after-tax investment income was $181 million, up 13% from 2018. The strong growth in both periods was driven by: (i) active portfolio management; (ii) excellent operating cash flow that, for the year, was 18% of net premiums written, and (iii) the $106 million of net proceeds from our 5.375% senior notes issuance in the first quarter of 2019. The after-tax earned income yield on the portfolio averaged 2.9% for the year, while invested assets per dollar of stockholders' equity was down $0.28, to $3.05, at December 31, 2019, generating 9.1 points of ROE in 2019. For the year, the change in unrealized after-tax gains on our available-for-sale securities reduced our invested assets to stockholders' equity by approximately $0.15.

Investments Segment Quarter ended December 31, Change Year-to-Date December 31, Change
$ in millions, except per share data 2019 2018 2019 2018
Net investment income earned, after-tax $ 46.8 44.2 6 % $ 181.2 160.5 13 %
Net investment income per share 0.78 0.74 5 3.02 2.69 12
Effective tax rate 18.7 % 18.3 0.4 pts 18.6 % 17.8 0.8 pts
Average yields:
Fixed income securities:
Pre-tax 3.5 % 3.6 (0.1 ) pts 3.6 % 3.4 0.2 pts
After-tax 2.8 2.9 (0.1 ) 2.9 2.8 0.1
Portfolio:
Pre-tax 3.5 3.7 (0.2 ) 3.5 3.4 0.1
After-tax 2.8 3.0 (0.2 ) 2.9 2.8 0.1
Annualized ROE contribution 8.6 10.0 (1.4 ) 9.1 9.2 (0.1 )

Balance Sheet

$ in millions, except per share data December 31, 2019 December 31, 2018 Change
Total assets $ 8,797.2 7,952.7 11 %
Total investments 6,688.7 5,960.7 12
Long-term debt 550.6 439.5 25
Stockholders’ equity 2,194.9 1,791.8 22
Invested assets per dollar of stockholders’ equity 3.05 3.33 (8 )
Net premiums written to policyholders' surplus 1.4x 1.4x -
Book value per share 36.91 30.40 21

Book value per share significantly increased 21% in 2019, driven by $4.53 of net income per diluted share and $2.83 of net unrealized gains on our fixed income securities portfolio per share, partially offset by $0.83 of dividends paid to shareholders. Selective's Board of Directors declared a $0.23 per share quarterly cash dividend on common stock that is payable March 2, 2020, to shareholders of record as of February 14, 2020.

Guidance

For 2020, Selective expects to generate the following results:

• GAAP combined ratio, excluding catastrophe losses, of 91.5%. This assumes no prior-year casualty reserve development;
• Catastrophe losses of 3.5 points;
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• After-tax net investment income of $185 million, which includes $14 million of after-tax net investment income from our alternative investments;
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• An overall effective tax rate of approximately 19.5%, which includes an effective tax rate of 18.5% for net investment income, reflecting a tax rate of 5.25% for tax-advantaged municipal bonds and a tax rate of 21% for all other items; and
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• Weighted average shares outstanding of 60.5 million.
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The supplemental investor package, including financial information that is not part of this press release, is available on the Investors page of Selective’s website at www.Selective.com. Selective’s quarterly analyst conference call will be simulcast at 10:00 a.m. ET, on Friday, January 31, 2020 at www.Selective.com. The webcast will be available for rebroadcast until the close of business on March 2, 2020.

4

About Selective Insurance Group, Inc.

Selective Insurance Group, Inc. is a holding company for 10 property and casualty insurance companies rated "A" (Excellent) by A.M. Best. Through independent agents, the insurance companies offer standard and specialty insurance for commercial and personal risks and flood insurance through the National Flood Insurance Program’s Write Your Own Program. Selective’s unique position as both a leading insurance group and an employer of choice is recognized in a wide variety of awards and honors, including listing in the Fortune 1000 and being named one of "America's Best Mid-Size Employers" by Forbes Magazine. For more information about Selective, visit www.Selective.com.

^1^Reconciliation of Net Income to Non-GAAP Operating Income and Certain Other Non-GAAP Measures

Non-GAAP operating income, non-GAAP operating income per diluted share, and non-GAAP operating return on equity differ from net income, net income per diluted share, and return on equity, respectively, by the exclusion of: (i) after-tax net realized and unrealized gains and losses on investments; and (ii) after-tax debt retirement costs.  They are used as important financial measures by management, analysts, and investors, because the realization of net investment gains and losses on sales of securities in any given period is largely discretionary as to timing.  In addition, these net realized investment gains and losses, other-than-temporary investment impairments that are charged to earnings, unrealized gains and losses on equity securities, and the debt retirement costs could distort the analysis of trends.  These operating measurements are not intended as a substitute for net income, income per share, or return on equity prepared in accordance with U.S. generally accepted accounting principles (GAAP).  Reconciliations of net income, net income per diluted share, and return on equity to non-GAAP operating income, non-GAAP operating income per diluted share, and non-GAAP operating return on equity, respectively, are provided in the tables below.

Note: All amounts included in this release exclude intercompany transactions.

Reconciliation of Net Income to Non-GAAP Operating Income

$ in millions Quarter ended December 31, Year-to-Date December 31,
2019 2018 2019 2018
Net income $ 81.9 45.8 271.6 178.9
Net realized and unrealized losses (gains), before tax 0.9 37.9 (14.4 ) 54.9
Debt retirement costs, before tax — — 4.2 —
Tax on reconciling items (0.2 ) (11.7 ) 3.0 (15.3 )
Non-GAAP operating income $ 82.5 72.0 264.4 218.6

Reconciliation of Net Income per Diluted Share to Non-GAAP Operating Income per Diluted Share

Quarter ended December 31, Year-to-Date December 31,
2019 2018 2019 2018
Net income per diluted share $ 1.36 0.76 4.53 3.00
Net realized and unrealized losses (gains), before tax 0.01 0.63 (0.24 ) 0.92
Debt retirement costs, before tax — — 0.07 —
Tax on reconciling items — (0.20 ) 0.04 (0.26 )
Non-GAAP operating income per diluted share $ 1.37 1.20 4.40 3.66

Reconciliation of Return on Equity to Non-GAAP Operating Return on Equity

Quarter ended December 31, Year-to-Date December 31,
2019 2018 2019 2018
Annualized Return on Equity 15.1 % 10.4 13.6 10.2
Net realized and unrealized losses (gains), before tax 0.2 8.6 (0.7 ) 3.1
Debt retirement costs, before tax — — 0.2 —
Tax on reconciling items (0.1 ) (2.7 ) 0.2 (0.8 )
Annualized Non-GAAP Operating Return on Equity 15.2 % 16.3 13.3 12.5

Note: Amounts in the tables above may not foot due to rounding.

^2^ Non-catastrophe property losses and the non-catastrophe property loss ratios now include loss expenses. All prior periods presented have been updated to reflect this change.

5

Forward-Looking Statements

In this press release, Selective and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections regarding Selective's future operations and performance.

Certain statements in this report, including information incorporated by reference, are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements. These statements relate to our intentions, beliefs, projections, estimations, or forecasts of future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, or performance to be materially different from those expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by use of words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely,” or “continue” or other comparable terminology. These statements are only predictions, and we can give no assurance that such expectations will prove to be correct. We undertake no obligation, other than as may be required under the federal securities laws, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Factors that could cause our actual results to differ materially from those projected, forecasted, or estimated by us in forward-looking statements, include, but are not limited to:

• difficult conditions in global capital markets and the economy;
• deterioration in the public debt and equity markets and private investment marketplace that could lead to investment losses and fluctuations in interest rates;
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• ratings downgrades could affect investment values and, therefore, statutory surplus;
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• the adequacy of our loss reserves and loss expense reserves;
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• the frequency and severity of natural and man-made catastrophic events, including, but not limited to, hurricanes, tornadoes, windstorms, earthquakes, hail, terrorism, including cyber-attacks, explosions, severe winter weather, floods, and fires;
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• adverse market, governmental, regulatory, legal, or judicial conditions or actions;
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• the concentration of our business in the Eastern Region;
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• the cost and availability of reinsurance;
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• our ability to collect on reinsurance and the solvency of our reinsurers;
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• the impact of changes in U.S. trade policies and imposition of tariffs on imports that may lead to higher than anticipated inflationary trends for our loss and loss expenses;
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• uncertainties related to insurance premium rate increases and business retention;
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• changes in insurance regulations that impact our ability to write and/or cease writing insurance policies in one or more states;
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• the effects of data privacy or cyber security laws and regulations on our operations;
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• major defect or failure in our internal controls or information technology and application systems that result in harm to our brand in the marketplace, increased senior executive focus on crisis and reputational management issues and/or increased expenses, particularly if we experience a significant privacy breach;
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• recent federal financial regulatory reform provisions that could pose certain risks to our operations;
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• our ability to maintain favorable ratings from rating agencies, including A.M. Best, Standard & Poor’s, Moody’s, and Fitch;
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• our entry into new markets and businesses; and
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• other risks and uncertainties we identify in filings with the United States Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K and other periodic reports.
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These risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time-to-time. We can neither predict such new risk factors nor can we assess the impact, if any, of such new risk factors on our businesses or the extent to which any factor or combination of factors may cause actual results to differ materially from those expressed or implied in any forward-looking statements in this report. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur.

Selective’s SEC filings can be accessed through the Investors page of Selective’s website, www.Selective.com, or through the SEC’s EDGAR Database at www.sec.gov (Selective EDGAR CIK No. 0000230557).

Investor Contact:<br><br>Rohan Pai<br><br>973-948-1364<br><br>Rohan.Pai@Selective.com Media Contact:<br><br>Jamie M. Beal<br><br>973-948-1234<br><br>Jamie.Beal@Selective.com
Selective Insurance Group, Inc.<br><br>40 Wantage Avenue<br><br>Branchville, New Jersey 07890<br><br>www.Selective.com

6

		Exhibit

Exhibit 99.2

selectiveinsurancergb.jpg

FINANCIAL SUPPLEMENT

FOURTH QUARTER AND FULL YEAR 2019

Forward-Looking Statements

Certain statements in this report, including information incorporated by reference, are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The PSLRA provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements. These statements relate to our intentions, beliefs, projections, estimations, or forecasts of future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, or performance to be materially different from those expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by use of words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely,” or “continue” or other comparable terminology. These statements are only predictions, and we can give no assurance that such expectations will prove to be correct. We undertake no obligation, other than as may be required under the federal securities laws, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Factors that could cause our actual results to differ materially from those projected, forecasted, or estimated by us in forward-looking statements, include, but are not limited to:

▪ difficult conditions in global capital markets and the economy;
▪ deterioration in the public debt and equity markets and private investment marketplace that could lead to investment losses and fluctuations in interest rates;
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▪ ratings downgrades could affect investment values and, therefore, statutory surplus;
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▪ the adequacy of our loss reserves and loss expense reserves;
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▪ the frequency and severity of natural and man-made catastrophic events, including, but not limited to, hurricanes, tornadoes, windstorms, earthquakes, hail, terrorism, including cyber-attacks, explosions, severe winter weather, floods, and fires;
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▪ adverse market, governmental, regulatory, legal, or judicial conditions or actions;
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▪ the concentration of our business in the Eastern Region;
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▪ the cost and availability of reinsurance;
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▪ our ability to collect on reinsurance and the solvency of our reinsurers;
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▪ the impact of changes in U.S. trade policies and imposition of tariffs on imports that may lead to higher than anticipated inflationary trends for our loss and loss expenses;
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▪ uncertainties related to insurance premium rate increases and business retention;
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▪ changes in insurance regulations that impact our ability to write and/or cease writing insurance policies in one or more states;
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▪ the effects of data privacy or cyber security laws and regulations on our operations;
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▪ major defect or failure in our internal controls or information technology and application systems that result in harm to our brand in the marketplace, increased senior executive focus on crisis and reputational management issues and/or increased expenses, particularly if we experience a significant privacy breach;
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• recent federal financial regulatory reform provisions that could pose certain risks to our operations;
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▪ our ability to maintain favorable ratings from rating agencies, including A.M. Best, Standard & Poor’s, Moody’s, and Fitch;
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▪ our entry into new markets and businesses; and
--- ---
▪ other risks and uncertainties we identify in filings with the United States Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K and other periodic reports.
--- ---

These risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time-to-time. We can neither predict such new risk factors nor can we assess the impact, if any, of such new risk factors on our businesses or the extent to which any factor or combination of factors may cause actual results to differ materially from those expressed or implied in any forward-looking statements in this report. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur.

Selective’s SEC filings can be accessed through the Investors page of Selective’s website, www.Selective.com, or through the SEC’s EDGAR Database at www.sec.gov (Selective EDGAR CIK No. 0000230557).

Selective Insurance Group, Inc. & Consolidated Subsidiaries

TABLE OF CONTENTS

Page
Consolidated Financial Highlights 1
Consolidated Statements of Operations 2
Consolidated Balance Sheets 4
Financial Metrics 5
Consolidated Insurance Operations Statement of Operations 6
Standard Commercial Lines Statement of Operations and Supplemental Data 7
Standard Commercial Lines GAAP Line of Business Results 9
Standard Personal Lines Statement of Operations and Supplemental Data 10
Standard Personal Lines GAAP Line of Business Results 11
Excess and Surplus Lines Statement of Operations and Supplemental Data 12
Excess and Surplus Lines GAAP Line of Business Results 13
Consolidated Investment Income 14
Consolidated Composition of Invested Assets 15
Reconciliation of Net Income to Non-GAAP Operating Income and Certain Other Non-GAAP Measures 16
Ratings and Contact Information 17

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( and shares in millions, except per share data) 2019 2019 2019 2019 2018 2019 2018
For Period Ended
$ 730.6 792.6 812.7 772.9 676.6 3,108.8 2,916.9
628.2 676.9 701.4 672.9 582.8 2,679.4 2,514.3
8 % 4 7 8 5 7 6
$ 54.5 31.3 44.6 33.6 45.4 164.0 121.2
57.6 55.8 58.5 50.6 54.1 222.5 195.3
(0.9 ) (2.2 ) 4.0 13.5 (37.9 ) 14.4 (54.9 )
$ 81.9 56.2 72.3 61.3 45.8 271.6 178.9
82.5 58.8 69.1 54.0 72.0 264.4 218.6
At Period End
8,797.2 8,719.4 8,575.6 8,282.8 7,952.7 8,797.2 7,952.7
6,688.7 6,551.7 6,421.3 6,233.7 5,960.7 6,688.7 5,960.7
2,194.9 2,137.4 2,059.5 1,925.2 1,791.8 2,194.9 1,791.8
59.5 59.4 59.3 59.2 58.9 59.5 58.9
Per Share and Share Data
$ 1.36 0.93 1.21 1.02 0.76 4.53 3.00
1.37 0.97 1.16 0.90 1.20 4.40 3.66
60.1 60.1 59.9 59.9 59.8 60.0 59.7
$ 36.91 35.98 34.71 32.51 30.40 36.91 30.40
0.23 0.20 0.20 0.20 0.20 0.83 0.74
Financial Ratios
57.6 % 60.9 59.4 61.1 58.7 59.7 61.5
34.1 34.1 33.5 33.3 33.7 33.8 33.2
0.1 0.2 0.2 0.3 0.3 0.2 0.3
91.8 % 95.2 93.1 94.7 92.7 93.7 95.0
15.1 10.7 14.5 13.2 10.4 13.6 10.2
15.2 11.2 13.9 11.6 16.3 13.3 12.5
20.1 20.5 21.1 22.2 19.7 20.1 19.7
1.4x 1.4x 1.4x 1.4x 1.4x 1.4x 1.4x
$ 3.05 3.07 3.12 3.24 3.33 3.05 3.33
*
**

All values are in US Dollars.

Page 1

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Page 2

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( and shares in millions, except per share data) 2019 2019 2019 2019 2018 2019 2018
Revenues
$ 668.4 653.6 642.6 632.6 625.3 2,597.2 2,436.2
57.6 55.8 58.5 50.6 54.1 222.5 195.3
— 20.4 2.9 3.4 (23.0 ) 26.7 (19.0 )
(0.6 ) (20.3 ) 2.1 10.1 (13.8 ) (8.6 ) (29.4 )
(0.3 ) (2.3 ) (1.0 ) (0.1 ) (1.1 ) (3.6 ) (6.6 )
(0.9 ) (2.2 ) 4.0 13.5 (37.9 ) 14.4 (54.9 )
3.8 3.2 3.1 2.3 1.5 12.4 9.4
728.9 710.4 708.2 699.0 643.0 2,846.5 2,586.1
Expenses
385.3 398.7 381.0 386.6 367.7 1,551.5 1,498.1
136.3 136.6 133.4 129.7 126.8 536.0 495.0
96.1 90.2 86.7 85.1 87.0 358.1 331.3
7.4 7.4 7.4 11.5 6.1 33.7 24.4
2.6 6.4 9.6 12.4 3.4 30.9 25.4
627.6 639.2 618.0 625.3 590.9 2,510.1 2,374.4
Income before federal income tax 101.3 71.2 90.2 73.7 52.1 336.4 211.7
Federal income tax expense 19.4 15.0 18.0 12.3 6.4 64.8 32.8
Net Income $ 81.9 56.2 72.3 61.3 45.8 271.6 178.9
Net realized and unrealized investment losses (gains), after tax* 0.7 2.6 (3.2 ) (10.6 ) 26.2 (10.5 ) 39.6
Debt retirement costs, after tax* — — — 3.3 — 3.3 —
Non-GAAP operating income** $ 82.5 58.8 69.1 54.0 72.0 264.4 218.6
Weighted average shares outstanding (diluted) 60.1 60.1 59.9 59.9 59.8 60.0 59.7
$ 1.36 0.93 1.21 1.02 0.76 4.53 3.00
$ 1.37 0.97 1.16 0.90 1.20 4.40 3.66
*
**

All values are in US Dollars.

Page 3

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)

Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
( in millions, except per share data) 2019 2019 2019 2019 2018
ASSETS
Investments
$ 20.8 26.9 32.4 36.5 37.1
6,095.6 5,930.2 5,757.9 5,567.4 5,273.1
72.9 79.2 157.5 163.0 147.6
282.5 326.1 291.4 290.7 323.9
216.8 189.2 182.1 176.2 178.9
Total investments 6,688.7 6,551.7 6,421.3 6,233.7 5,960.7
Cash 0.3 0.5 0.5 0.5 0.5
Restricted cash 7.7 9.6 7.1 10.0 16.4
Interest and dividends due or accrued 44.8 43.0 43.1 42.1 41.6
Premiums receivable, net of allowance 823.9 860.5 877.7 814.9 770.5
Reinsurance recoverable, net of allowance 573.2 576.0 577.3 553.2 549.2
Prepaid reinsurance premiums 166.7 173.6 163.5 155.7 157.7
Deferred federal income tax 6.8 5.5 14.7 32.1 53.5
Property and equipment, net of accumulated depreciation and amortization 77.4 76.4 73.7 68.7 65.2
Deferred policy acquisition costs 271.2 279.2 273.1 260.8 252.6
Goodwill 7.8 7.8 7.8 7.8 7.8
Other assets 128.6 135.5 115.7 103.1 76.9
Total assets $ 8,797.2 8,719.4 8,575.6 8,282.8 7,952.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Reserve for loss and loss expense $ 4,067.2 4,055.6 4,027.1 3,966.5 3,893.9
Unearned premiums 1,523.2 1,570.2 1,536.9 1,470.3 1,431.9
Long-term debt 550.6 550.7 550.8 550.1 439.5
Current federal income tax 3.0 2.7 3.2 13.6 1.3
Accrued salaries and benefits 126.8 100.4 87.6 78.2 116.7
Other liabilities 331.5 302.4 310.6 278.9 277.6
Total liabilities $ 6,602.2 6,582.0 6,516.1 6,357.5 6,160.9
Stockholders' Equity
Preferred stock of 0 par value per share $ — — — — —
Common stock of 2 par value per share 207.0 206.8 206.7 206.5 205.7
Additional paid-in capital 418.5 412.3 407.4 398.9 390.3
Retained earnings 2,080.5 2,012.5 1,968.4 1,908.1 1,858.4
Accumulated other comprehensive income (loss) 81.8 98.4 68.5 3.0 (78.0 )
Treasury stock, at cost (592.8 ) (592.7 ) (591.4 ) (591.3 ) (584.7 )
Total stockholders' equity $ 2,194.9 2,137.4 2,059.5 1,925.2 1,791.8
Commitments and contingencies
Total liabilities and stockholders' equity $ 8,797.2 8,719.4 8,575.6 8,282.8 7,952.7
Note: Amounts may not foot due to rounding.

All values are in US Dollars.

Page 4

Selective Insurance Group, Inc. & Consolidated Subsidiaries

FINANCIAL METRICS

(Unaudited)

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( and shares in millions, except per share data) 2019 2019 2019 2019 2018 2019 2018
Book value per share
Stockholders' equity $ 2,194.9 2,137.4 2,059.5 1,925.2 1,791.8 2,194.9 1,791.8
Common shares issued and outstanding, at period end 59.5 59.4 59.3 59.2 58.9 59.5 58.9
Book value per share $ 36.91 35.98 34.71 32.51 30.40 36.91 30.40
Book value per share excluding unrealized gain or loss on fixed income securities 34.05 33.01 32.23 31.12 30.36 34.05 30.36
Financial results (after-tax)
Underwriting income 43.1 24.7 35.3 26.5 35.9 129.6 95.7
Net investment income 46.8 45.4 47.6 41.3 44.2 181.2 160.5
Interest expense (5.8 ) (5.8 ) (5.8 ) (5.8 ) (4.8 ) (23.3 ) (19.3 )
Corporate expense (1.5 ) (5.5 ) (8.0 ) (8.0 ) (3.3 ) (23.0 ) (18.4 )
Net realized and unrealized investment (losses) gains* (0.7 ) (2.6 ) 3.2 10.6 (26.2 ) 10.5 (39.6 )
Debt retirement costs — — — (3.3 ) — (3.3 ) —
Total after-tax net income 81.9 56.2 72.3 61.3 45.8 271.6 178.9
Return on average equity
Insurance segments 8.0 % 4.7 7.1 5.7 8.1 6.5 5.5
Net investment income 8.6 8.6 9.6 8.9 10.0 9.1 9.2
Interest expense (1.1 ) (1.1 ) (1.2 ) (1.3 ) (1.1 ) (1.2 ) (1.1 )
Corporate expense (0.3 ) (1.0 ) (1.6 ) (1.7 ) (0.7 ) (1.1 ) (1.1 )
Net realized and unrealized investment (losses) gains (0.1 ) (0.5 ) 0.6 2.3 (5.9 ) 0.5 (2.3 )
Debt retirement costs — — — (0.7 ) — (0.2 ) —
Annualized ROE 15.1 10.7 14.5 13.2 10.4 13.6 10.2
Net realized and unrealized losses (gains)** 0.1 0.5 (0.6 ) (2.3 ) 5.9 (0.5 ) 2.3
Debt retirement costs** — — — 0.7 — 0.2 —
Annualized Non-GAAP Operating ROE*** 15.2 % 11.2 13.9 11.6 16.3 13.3 12.5
Debt and total capitalization
1.61% Borrowings from FHLBNY $ 25.0 25.0 25.0 25.0 25.0 25.0 25.0
1.56% Borrowings from FHLBNY 25.0 25.0 25.0 25.0 25.0 25.0 25.0
3.03% Borrowings from FHLBI 60.0 60.0 60.0 60.0 60.0 60.0 60.0
7.25% Senior Notes 49.7 49.7 49.7 49.7 49.7 49.7 49.7
6.70% Senior Notes 99.1 99.1 99.1 99.1 99.1 99.1 99.1
5.875% Senior Notes — — — — 180.8 — 180.8
5.375% Senior Notes 291.0 290.9 290.9 290.7 — 291.0 —
Finance Lease Obligations 0.7 0.9 1.1 0.6 — 0.7 —
550.6 550.7 550.8 550.1 439.5 550.6 439.5
2,194.9 2,137.4 2,059.5 1,925.2 1,791.8 2,194.9 1,791.8
$ 2,745.5 2,688.1 2,610.3 2,475.3 2,231.3 2,745.5 2,231.3
20.1 % 20.5 21.1 22.2 19.7 20.1 19.7
Policyholders' surplus $ 1,932.4 1,883.1 1,852.0 1,805.6 1,769.0 1,932.4 1,769.0
* Refer to Page 2 for components of realized and unrealized investment losses and gains.
** Amounts are provided to reconcile annualized ROE to annualized non-GAAP operating ROE.
*** Non-GAAP measure. Refer to Page 14 for definition.
Note: Amounts may not foot due to rounding.

All values are in US Dollars.

Page 5

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED INSURANCE OPERATIONS

STATEMENT OF OPERATIONS

(Unaudited)

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( in millions) 2019 2019 2019 2019 2018 2019 2018
Underwriting results
Net premiums written $ 628.2 676.9 701.4 672.9 582.8 2,679.4 2,514.3
Change in net premiums written, from comparable prior year period 8 % 4 7 8 5 7 6
Net premiums earned $ 668.4 653.6 642.6 632.6 625.3 2,597.2 2,436.2
Losses and loss expenses incurred 385.3 398.7 381.0 386.6 367.7 1,551.5 1,498.1
Net underwriting expenses incurred 227.9 222.6 215.4 210.7 210.5 876.6 808.9
Dividends to policyholders 0.7 1.0 1.6 1.8 1.7 5.1 8.0
GAAP underwriting gain $ 54.5 31.3 44.6 33.6 45.4 164.0 121.2
Catastrophe losses $ 6.5 24.2 29.5 20.9 15.2 81.0 88.0
(Favorable) prior year casualty reserve development (20.0 ) (14.0 ) (17.0 ) (10.0 ) (17.5 ) (61.0 ) (41.5 )
Underwriting ratios
Loss and loss expense ratio 57.6 % 60.9 59.4 61.1 58.7 59.7 61.5
Underwriting expense ratio 34.1 34.1 33.5 33.3 33.7 33.8 33.2
Dividends to policyholders ratio 0.1 0.2 0.2 0.3 0.3 0.2 0.3
91.8 % 95.2 93.1 94.7 92.7 93.7 95.0
Catastrophe losses 1.0 pts 3.7 4.6 3.3 2.4 3.1 3.6
(Favorable) prior year casualty reserve development (3.0 ) pts (2.1 ) (2.6 ) (1.6 ) (2.8 ) (2.3 ) (1.7 )
90.8 % 91.5 88.5 91.4 90.3 90.6 91.4
93.8 93.6 91.1 93.0 93.1 92.9 93.1
Other Statistics
Non-catastrophe property loss and loss expenses $ 100.9 108.8 92.8 108.0 94.7 410.5 405.6
Non-catastrophe property loss and loss expenses 15.1 pts 16.7 14.4 17.1 15.2 15.8 16.6
Direct new business $ 127.7 129.8 146.3 145.0 129.8 548.7 530.8
Renewal pure price increases 3.8 % 3.7 3.4 3.7 3.5 3.6 3.6
Non-catastrophe property losses and the non-catastrophe property loss ratios now include loss expenses. All prior periods presented have been updated to reflect this change.
Note: Amounts may not foot due to rounding.

All values are in US Dollars.

Page 6

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD COMMERCIAL LINES

STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA

(Unaudited)

Page 7

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( in millions) 2019 2019 2019 2019 2018 2019 2018
Underwriting results
Net premiums written $ 500.1 532.9 557.4 546.7 449.4 2,137.1 1,975.7
Change in net premiums written, from comparable prior year period 11 % 6 8 7 6 8 6
Net premiums earned $ 530.6 515.2 506.6 497.2 489.8 2,049.6 1,912.2
Losses and loss expenses incurred 291.9 304.0 293.2 298.8 282.5 1,187.9 1,141.0
Net underwriting expenses incurred 185.0 180.1 174.8 170.8 170.6 710.6 654.1
Dividends to policyholders 0.7 1.0 1.6 1.8 1.7 5.1 8.0
GAAP underwriting gain $ 53.0 30.0 37.1 25.8 35.0 146.0 109.1
Catastrophe losses $ 2.1 14.8 21.3 16.0 12.3 54.2 64.3
(Favorable) prior year casualty reserve development (26.0 ) (16.0 ) (17.0 ) (10.0 ) (22.0 ) (69.0 ) (58.0 )
Underwriting ratios
Loss and loss expense ratio 55.0 % 59.0 57.9 60.1 57.8 58.0 59.7
Underwriting expense ratio 34.9 35.0 34.5 34.3 34.8 34.7 34.2
Dividends to policyholders ratio 0.1 0.2 0.3 0.4 0.3 0.2 0.4
90.0 % 94.2 92.7 94.8 92.9 92.9 94.3
Catastrophe losses 0.4 pts 2.9 4.2 3.2 2.5 2.6 3.4
(Favorable) prior year casualty reserve development (4.9 ) (3.1 ) (3.4 ) (2.0 ) (4.5 ) (3.4 ) (3.0 )
89.6 % 91.3 88.5 91.6 90.4 90.3 90.9
94.5 94.4 91.9 93.6 94.9 93.7 93.9
Other Statistics
Non-catastrophe property loss and loss expenses $ 69.8 76.7 62.8 74.4 65.6 283.6 273.9
Non-catastrophe property loss and loss expenses 13.2 pts 14.9 12.4 15.0 13.4 13.8 14.3
Direct new business $ 95.0 96.5 110.7 109.0 91.8 411.2 381.2
Renewal pure price increases 3.8 % 3.5 3.1 3.4 3.4 3.4 3.5
Retention 84 % 84 83 84 83 83 83
Non-catastrophe property losses and the non-catastrophe property loss ratios now include loss expenses. All prior periods presented have been updated to reflect this change.
Note: Amounts may not foot due to rounding.

All values are in US Dollars.

Page 8

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD COMMERCIAL LINES

GAAP LINE OF BUSINESS RESULTS

(Unaudited)

Quarter Ended December 31, 2019 Quarter Ended December 31, 2018
Commercial Workers General Commercial Commercial Workers General Commercial
($ in millions) Property Compensation Liability Auto BOP Bonds Other Total Property Compensation Liability Auto BOP Bonds Other Total
Net premiums written $ 88.9 71.3 162.8 136.8 28.0 7.3 4.9 500.1 78.7 67.9 144.7 119.4 26.9 7.2 4.5 449.4
Net premiums earned 91.4 78.7 174.5 145.6 26.6 8.9 5.0 530.6 84.1 80.0 158.4 127.9 26.0 8.7 4.7 489.8
Loss and loss expense ratio 39.8 % 22.1 60.9 77.8 60.5 27.5 — 55.0 53.0 29.6 54.6 90.8 40.6 13.6 (0.7 ) 57.8
Underwriting expense ratio 39.7 28.6 34.7 32.4 40.1 56.9 57.1 34.9 39.7 27.6 35.2 32.9 40.6 48.9 53.1 34.8
Dividend ratio — 0.9 — — — — — 0.1 0.1 1.8 — 0.1 — — — 0.3
Combined ratio 79.5 % 51.6 95.6 110.2 100.6 84.4 57.1 90.0 92.8 59.0 89.8 123.8 81.2 62.5 52.4 92.9
Underwriting gain (loss) $ 18.8 38.1 7.7 (14.9 ) (0.2 ) 1.4 2.1 53.0 6.1 32.8 16.2 (30.5 ) 4.9 3.3 2.2 35.0
Year-to-Date December 31, 2019 Year-to-Date December 31, 2018
Commercial Workers General Commercial Commercial Workers General Commercial
($ in millions) Property Compensation Liability Auto BOP Bonds Other Total Property Compensation Liability Auto BOP Bonds Other Total
Net premiums written $ 373.8 309.3 699.3 590.0 107.3 37.3 20.0 2,137.1 342.0 316.6 639.7 518.9 104.8 34.9 18.7 1,975.7
Net premiums earned 353.8 311.4 669.9 554.3 105.3 35.7 19.3 2,049.6 329.7 317.6 616.2 493.1 103.4 34.0 18.3 1,912.2
Loss and loss expense ratio 55.1 % 44.6 54.8 75.0 59.0 27.0 0.5 58.0 62.5 41.0 53.6 83.2 57.8 13.5 (0.3 ) 59.7
Underwriting expense ratio 38.8 27.9 34.8 32.9 37.5 57.3 56.5 34.7 38.3 27.4 34.9 32.4 37.2 54.4 51.0 34.2
Dividend ratio — 1.6 — — — — — 0.2 0.2 1.9 0.1 0.1 — — — 0.4
Combined ratio 93.9 % 74.1 89.6 107.9 96.5 84.3 57.0 92.9 101.0 70.3 88.6 115.7 95.0 67.9 50.7 94.3
Underwriting gain (loss) $ 21.6 80.6 69.9 (43.8 ) 3.7 5.6 8.3 146.0 (3.2 ) 94.4 70.3 (77.4 ) 5.2 10.9 9.0 109.1
Note: Amounts may not foot due to rounding.

Page 9

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD PERSONAL LINES

STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA

(Unaudited)

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( in millions) 2019 2019 2019 2019 2018 2019 2018
Underwriting results
Net premiums written $ 70.9 81.6 82.7 69.4 72.7 304.6 309.3
Change in net premiums written, from comparable prior year period (3 ) % (4 ) (1 ) 2 — (2 ) 4
Net premiums earned $ 76.6 76.7 77.1 77.3 77.4 307.7 304.4
Losses and loss expenses incurred 52.8 54.8 50.6 53.1 49.4 211.3 206.8
Net underwriting expenses incurred 22.6 22.5 22.0 21.1 21.6 88.2 84.9
GAAP underwriting (loss) gain $ 1.2 (0.6 ) 4.5 3.2 6.3 8.3 12.8
Catastrophe losses $ 3.0 7.9 6.1 4.1 (0.6 ) 21.1 17.5
Unfavorable prior year casualty reserve development 4.0 2.0 — — 4.5 6.0 4.5
Underwriting ratios
Loss and loss expense ratio 69.0 % 71.4 65.5 68.6 63.8 68.6 67.9
Underwriting expense ratio 29.5 29.4 28.6 27.3 28.0 28.7 27.9
98.5 % 100.8 94.1 95.9 91.8 97.3 95.8
Catastrophe losses 3.9 pts 10.3 7.9 5.3 (0.8 ) 6.8 5.7
Unfavorable prior year casualty reserve development 5.2 2.6 — — 5.8 1.9 1.5
94.6 % 90.5 86.2 90.6 92.6 90.5 90.1
89.4 87.9 86.2 90.6 86.8 88.6 88.6
Other Statistics
Non-catastrophe property loss and loss expenses $ 25.9 25.2 24.5 29.1 24.8 104.7 105.3
Non-catastrophe property loss and loss expenses 33.9 pts 32.8 31.7 37.6 32.1 34.0 34.6
Direct new business $ 9.7 10.2 10.5 10.3 10.7 40.7 51.5
Renewal pure price increases 4.2 % 5.0 5.6 5.2 4.6 5.0 3.8
Retention 83 % 83 84 84 84 83 84
Non-catastrophe property losses and the non-catastrophe property loss ratios now include loss expenses. All prior periods presented have been updated to reflect this change.
Note: Amounts may not foot due to rounding.

All values are in US Dollars.

Page 10

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD PERSONAL LINES

GAAP LINE OF BUSINESS RESULTS

(Unaudited)

Quarter Ended December 31, 2019 Quarter Ended December 31, 2018
Personal Personal
($ in millions) Auto Homeowners Other Total Auto Homeowners Other Total
Net premiums written $ 39.1 30.0 1.8 70.9 40.3 30.6 1.8 72.7
Net premiums earned 42.8 31.9 1.9 76.6 43.2 32.2 1.9 77.4
Loss and loss expense ratio 83.2 % 52.8 21.2 69.0 85.1 40.8 (28.6 ) 63.8
Underwriting expense ratio 33.4 34.9 (153.2 ) 29.5 31.0 33.4 (134.6 ) 28.0
Combined ratio 116.6 % 87.7 (132.0 ) 98.5 116.1 74.2 (163.2 ) 91.8
Underwriting (loss) gain $ (7.1 ) 3.9 4.4 1.2 (7.0 ) 8.3 5.0 6.3
Year-to-Date December 31, 2019 Year-to-Date December 31, 2018
Personal Personal
($ in millions) Auto Homeowners Other Total Auto Homeowners Other Total
Net premiums written $ 170.9 126.0 7.7 304.6 173.3 128.6 7.4 309.3
Net premiums earned 172.6 127.5 7.6 307.7 168.3 129.0 7.2 304.4
Loss and loss expense ratio 74.2 % 63.5 29.8 68.6 74.4 63.2 (1.7 ) 67.9
Underwriting expense ratio 32.2 33.0 (125.6 ) 28.7 31.9 32.3 (142.6 ) 27.9
Combined ratio 106.4 % 96.5 (95.8 ) 97.3 106.3 95.5 (144.3 ) 95.8
Underwriting (loss) gain $ (11.0 ) 4.4 14.9 8.3 (10.7 ) 5.8 17.7 12.8
Note: Amounts may not foot due to rounding.

Page 11

Selective Insurance Group, Inc. & Consolidated Subsidiaries

EXCESS AND SURPLUS LINES

STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA

(Unaudited)

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( in millions) 2019 2019 2019 2019 2018 2019 2018
Underwriting results
Net premiums written $ 57.2 62.4 61.3 56.9 60.7 237.8 229.3
Change in net premiums written, from comparable prior year period (6 ) % (3 ) 9 19 7 4 7
Net premiums earned $ 61.2 61.7 58.9 58.1 58.1 239.8 219.6
Losses and loss expenses incurred 40.6 39.8 37.3 34.7 35.8 152.3 150.3
Net underwriting expenses incurred 20.3 20.0 18.6 18.8 18.2 77.7 69.9
GAAP underwriting gain (loss) $ 0.3 1.9 2.9 4.6 4.2 9.7 (0.7 )
Catastrophe losses $ 1.4 1.5 2.0 0.8 3.5 5.7 6.2
Unfavorable prior year casualty reserve development 2.0 — — — — 2.0 12.0
Underwriting ratios
Loss and loss expense ratio 66.3 % 64.5 63.3 59.7 61.5 63.5 68.5
Underwriting expense ratio 33.2 32.4 31.7 32.4 31.4 32.4 31.8
99.5 % 96.9 95.0 92.1 92.9 95.9 100.3
Catastrophe losses 2.3 pts 2.4 3.4 1.4 6.0 2.4 2.8
Unfavorable prior year casualty reserve development 3.3 — — — — 0.8 5.5
97.2 % 94.5 91.6 90.7 86.9 93.5 97.5
93.9 94.5 91.6 90.7 86.9 92.7 92.0
Other Statistics
Non-catastrophe property loss and loss expenses $ 5.1 7.0 5.5 4.5 4.3 22.2 26.4
Non-catastrophe property loss and loss expenses 8.4 pts 11.4 9.4 7.8 7.3 9.3 12.0
Direct new business $ 23.0 23.1 25.1 25.7 27.3 96.8 98.0
Renewal pure price increases 3.7 % 3.7 2.8 5.6 2.9 4.0 4.7
Non-catastrophe property losses and the non-catastrophe property loss ratios now include loss expenses. All prior periods presented have been updated to reflect this change.
Note: Amounts may not foot due to rounding.

All values are in US Dollars.

Page 12

Selective Insurance Group, Inc. & Consolidated Subsidiaries

EXCESS & SURPLUS LINES

GAAP LINE OF BUSINESS RESULTS

(Unaudited)

Quarter Ended December 31, 2019 Quarter Ended December 31, 2018
($ in millions) Casualty Property Total Casualty Property Total
Net premiums written $ 42.4 14.8 57.2 47.4 13.3 60.7
Net premiums earned 46.4 14.7 61.2 44.2 13.9 58.1
Loss and loss expense ratio 73.3 % 44.2 66.3 63.3 55.5 61.5
Underwriting expense ratio 32.8 34.4 33.2 31.8 30.1 31.4
Combined ratio 106.1 % 78.6 99.5 95.1 85.6 92.9
Underwriting (loss) gain $ (2.8 ) 3.2 0.3 2.1 2.0 4.2
Year-to-Date December 31, 2019 Year-to-Date December 31, 2018
($ in millions) Casualty Property Total Casualty Property Total
Net premiums written $ 178.4 59.3 237.8 174.7 54.6 229.3
Net premiums earned 182.9 57.0 239.8 164.3 55.3 219.6
Loss and loss expense ratio 68.1 % 49.0 63.5 71.7 59.1 68.5
Underwriting expense ratio 32.0 33.7 32.4 31.9 31.6 31.8
Combined ratio 100.1 % 82.7 95.9 103.6 90.7 100.3
Underwriting (loss) gain $ (0.1 ) 9.9 9.7 (5.8 ) 5.1 (0.7 )
Note: Amounts may not foot due to rounding.

Page 13

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED INVESTMENT INCOME

(Unaudited)

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
( in millions) 2019 2019 2019 2019 2018 2019 2018
Net investment income
Fixed income securities
$ 44.7 42.9 43.1 41.0 39.1 171.9 142.9
7.8 7.8 7.8 8.0 8.1 31.4 35.2
Total fixed income securities 52.6 50.7 50.9 49.0 47.2 203.3 178.1
Equity securities 1.7 1.9 1.7 1.6 1.9 7.0 7.8
Other investments 5.4 5.3 7.5 0.7 6.9 18.8 17.8
Short-term investments 1.4 1.4 1.8 2.0 1.5 6.7 3.5
Investment income 61.1 59.3 61.9 53.4 57.5 235.7 207.1
Investment expenses (3.5 ) (3.5 ) (3.4 ) (2.8 ) (3.4 ) (13.1 ) (11.8 )
Investment tax expense (10.8 ) (10.5 ) (10.9 ) (9.3 ) (9.9 ) (41.4 ) (34.9 )
Total net investment income, after-tax $ 46.8 45.4 47.6 41.3 44.2 181.2 160.5
Net realized and unrealized capital (losses) gains
$ (0.2 ) (1.1 ) 2.1 1.1 (21.0 ) 1.9 (35.0 )
0.1 21.6 0.9 2.3 0.7 24.8 18.7
— — — — (2.7 ) — (2.7 )
Realized net gains (losses) on disposals — 20.4 2.9 3.4 (23.0 ) 26.7 (19.0 )
Other-than-temporary impairment losses (0.3 ) (2.3 ) (1.0 ) (0.1 ) (1.1 ) (3.6 ) (6.6 )
Unrealized (losses) gains on equity securities (0.6 ) (20.3 ) 2.1 10.1 (13.8 ) (8.6 ) (29.4 )
Total net realized and unrealized capital (losses) gains recognized in net income, before-tax $ (0.9 ) (2.2 ) 4.0 13.5 (37.9 ) 14.4 (54.9 )
Change in unrealized (losses) gains recognized in other comprehensive income, before-tax $ (8.0 ) 37.2 82.2 101.8 29.2 213.3 (83.4 )
Average investment yields
3.5 % 3.5 3.6 3.6 3.6 3.6 3.4
2.8 2.8 2.9 3.0 2.9 2.9 2.8
3.5 % 3.4 3.7 3.4 3.7 3.5 3.4
2.8 2.8 3.0 2.8 3.0 2.9 2.8
Effective tax rate on net investment income 18.7 % 18.7 18.6 18.4 18.3 18.6 17.8
New money purchase rates for fixed income securities, before-tax 3.1 3.1 3.4 3.9 4.1 3.3 3.7
New money purchase rates for fixed income securities, after-tax 2.4 2.5 2.7 3.1 3.3 2.7 2.9
Effective duration of fixed income portfolio including short-term (in years) 3.6 3.3 3.3 3.5 3.6 3.6 3.6
Note: Amounts may not foot due to rounding.

All values are in US Dollars.

Page 14

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED COMPOSITION OF INVESTED ASSETS

(Unaudited)

Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2019 2019 2019 2019 2018
($ in millions) Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Fixed income securities, at fair value $ 6,117.6 91 % 5,958.6 91 5,791.8 90 5,605.3 90 5,311.4 89
Equity securities, at fair value 72.9 1 79.2 1 157.5 2 163.0 3 147.6 2
Other investments 216.8 3 189.2 3 182.1 3 176.2 3 178.9 3
Short-term investments 282.5 4 326.1 5 291.4 5 290.7 5 323.9 5
Total investments $ 6,689.8 100 % 6,553.2 100 6,422.7 100 6,235.2 100 5,961.9 100
Fixed income portfolio, at carry value
U.S. government obligations $ 116.2 2 % 120.9 2 147.1 3 127.1 2 121.3 2
Foreign government obligations 18.5 — 21.5 — 21.5 — 20.5 — 23.1 —
Obligations of state and political subdivisions 1,234.7 20 1,199.7 20 1,125.1 19 1,167.7 21 1,155.9 22
Corporate securities 1,963.7 32 1,856.8 31 1,811.8 31 1,697.1 30 1,637.0 31
Collateralized loan obligations and other asset-backed securities 793.0 13 768.4 13 767.6 13 722.2 13 717.4 14
Residential mortgage-backed securities 1,452.0 24 1,434.2 24 1,351.5 23 1,301.0 23 1,128.3 21
Commercial mortgage-backed securities 538.3 9 555.7 9 565.6 10 568.2 10 527.1 10
Total fixed income securities $ 6,116.4 100 % 5,957.2 100 5,790.3 100 5,603.9 100 5,310.2 100
Weighted average credit quality
Investment grade credit quality $ 5,899.0 96 % 5,792.6 97 5,638.6 97 5,459.3 97 5,186.2 98
Non-investment grade credit quality 218.6 4 166.0 3 153.1 3 146.0 3 125.2 2
Total fixed income securities, at fair value $ 6,117.6 100 % 5,958.6 100 5,791.8 100 5,605.3 100 5,311.4 100
Weighted average credit quality of fixed income portfolio AA- AA- AA- AA- AA-
Expected maturities of fixed income securities at carry value
Due in one year or less $ 395.2 6 % 315.2 5 289.6 5 251.4 4 201.8 4
Due after one year through five years 3,015.5 49 3,312.5 56 2,254.3 39 2,144.2 38 2,057.7 39
Due after five years through 10 years 2,536.9 41 2,197.5 37 3,071.6 53 3,066.4 55 2,869.8 54
Due after 10 years 168.8 3 132.1 2 174.8 3 141.8 3 180.9 3
Total fixed income securities $ 6,116.4 100 % 5,957.2 100 5,790.3 100 5,603.9 100 5,310.2 100
Alternative investments December 31, 2019
Current
Number of Original Remaining Market
Strategy Funds Commitment Commitment Value
Private equity 32 $ 210.2 93.1 118.4
Private credit 14 184.3 105.3 42.5
Real assets 8 54.0 20.7 23.3
Total 54 $ 448.5 219.2 184.1
Note: Amounts may not foot due to rounding.

Page 15

Selective Insurance Group, Inc. & Consolidated Subsidiaries

RECONCILIATION OF NET INCOME TO NON-GAAP OPERATING INCOME AND CERTAIN OTHER NON-GAAP MEASURES

(Unaudited)

Quarter ended Year-to-date
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
($ in millions, except per share data) 2019 2019 2019 2019 2018 2019 2018
Reconciliation of net income to non-GAAP operating income
Net income $ 81.9 56.2 72.3 61.3 45.8 271.6 178.9
Net realized and unrealized losses (gains), before tax* 0.9 2.2 (4.0 ) (13.5 ) 37.9 (14.4 ) 54.9
Debt retirement costs, before tax — — — 4.2 — 4.2 —
Tax on reconciling items (0.2 ) 0.4 0.8 1.9 (11.7 ) 3.0 (15.3 )
Non-GAAP operating income $ 82.5 58.8 69.1 54.0 72.0 264.4 218.6
Reconciliation of net income per diluted share to non-GAAP operating income per diluted share
Net income per diluted share $ 1.36 0.93 1.21 1.02 0.76 4.53 3.00
Net realized and unrealized losses (gains), before tax* 0.01 0.04 (0.06 ) (0.22 ) 0.63 (0.24 ) 0.92
Debt retirement costs, before tax — — — 0.07 — 0.07 —
Tax on reconciling items — — 0.01 0.03 (0.20 ) 0.04 (0.26 )
Non-GAAP operating income per diluted share $ 1.37 0.97 1.16 0.90 1.20 4.40 3.66
Reconciliation of annualized ROE to annualized non-GAAP operating ROE
Annualized ROE 15.1 % 10.7 14.5 13.2 10.4 13.6 10.2
Net realized and unrealized losses (gains), before tax* 0.2 0.4 (0.8 ) (2.9 ) 8.6 (0.7 ) 3.1
Debt retirement costs, before tax — — — 0.9 — 0.2 —
Tax on reconciling items (0.1 ) 0.1 0.2 0.4 (2.7 ) 0.2 (0.8 )
Annualized non-GAAP operating ROE 15.2 % 11.2 13.9 11.6 16.3 13.3 12.5
Non-GAAP operating income, non-GAAP operating income per diluted share, and non-GAAP operating return on equity differ from net income, income per diluted share, and return on equity, respectively, by the exclusion of: (i) after-tax net realized and unrealized gains and losses on investments; and (ii) after-tax debt retirement costs. They are used as important financial measures by management, analysts, and investors, because the realization of investment gains and losses on sales of securities in any given period is largely discretionary as to timing. In addition, these net realized investment gains and losses, other-than-temporary investment impairments that are charged to earnings, unrealized gains and losses on equity securities, and the debt retirement costs could distort the analysis of trends. These operating measurements are not intended as a substitute for net income, income per share, or return on equity prepared in accordance with U.S. generally accepted accounting principles (GAAP). Reconciliations of net income, net income per diluted share, and return on equity to non-GAAP operating income, non-GAAP operating income per diluted share, and non-GAAP operating return on equity, respectively, are provided in the tables above.
* Refer to Page 2 for components of realized and unrealized investment losses and gains.
Note: Amounts may not foot due to rounding.

Page 16

Selective Insurance Group, Inc. & Consolidated Subsidiaries

RATINGS AND CONTACT INFORMATION

Address: As of December 31, 2019
40 Wantage Avenue A.M. Best Standard & Poor's Moody's Fitch
Branchville, NJ 07890 Financial Strength Ratings: A A A2 A+
Corporate Website: Long-Term Debt Credit Rating: bbb+ BBB Baa2 BBB+
www.Selective.com
Investor Contact: REGISTRAR AND TRANSFER AGENT
Rohan Pai EQ Shareowner Services
Senior Vice President P.O. Box 64854
Investor Relations & Treasurer St. Paul, MN 55164
Phone: 973-948-1364 866-877-6351
Rohan.Pai@Selective.com
Media Contact:
Jamie M. Beal
Vice President
Director of Communications
Phone: 973-948-1234
Jamie.Beal@Selective.com

Page 17

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