EXHIBIT 99.2

 

 

 

Supplemental Investor Package   Fourth Quarter and Full Year 2015                       Investor Contact: Jennifer DiBerardino Senior Vice President, Investor Relations and Treasurer Tel: 973-948-1364 jennifer.diberardino@selective.com

 

 

 

 

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries

 Selected Balance Sheet Data

(unaudited)

 

		December 31,												December 31,
($ in thousands, except per share data)		2015												2014
										Unrecognized/												Unrecognized/
		Balance				Market				Unrealized				Balance				Market				Unrealized
		Sheet				Value				Gain				Sheet				Value				Gain
Invested Assets:
Corporate bonds 1		$	2,955,001				2,957,427				8,276			$	2,693,324				2,697,332				47,437
Government and Municipal bonds			1,654,556				1,660,320				55,901				1,690,935				1,702,751				59,680
Total fixed income securities			4,609,557				4,617,747				64,177				4,384,259				4,400,083				107,117
Equities			207,051				207,051				13,235				191,400				191,400				32,389
Short-term investments			194,819				194,819				-				131,972				131,972				-
Other investments			77,842				77,842				-				99,203				99,203				-
Total invested assets		$	5,089,269				5,097,459				77,412			$	4,806,834				4,822,658				139,506
Invested assets per $ of stockholders' equity			3.64												3.77
Total assets			6,904,433												6,574,942
Liabilities:
Reserve for loss and loss expenses			3,517,728												3,477,870
Unearned premium reserve			1,169,710												1,095,819
Total liabilities			5,506,392												5,299,356
Stockholders' equity			1,398,041												1,275,586
Total debt to capitalization ratio			21.7	%											22.6	%
Book value per share			24.37												22.54
Book value per share excluding
unrealized gain or loss on fixed income portfolio			23.74												21.49
NPW per insurance segment employee			979												908
Statutory premiums to surplus ratio			1.5	x											1.4	x
Statutory surplus			1,426,320												1,307,842

 

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 data)			2015								2014								2015								2014
							Per diluted share								Per diluted share								Per diluted share								Per diluted share
Consolidated
Revenue			$	545,530							$	503,583							$	2,131,852							$	2,034,861
Operating income				47,079				0.81				41,603				0.72				157,300				2.70				124,538				2.17
Net realized (losses) gains, after tax				(1,690	)			(0.03	)			(253	)			(0.00	)			8,561				0.15				17,289				0.30
Net income				45,389				0.78				41,350				0.72				165,861				2.85				141,827				2.47
Operating return on equity				13.7	%							13.1	%							11.8	%							10.3	%
Total Insurance Operations
Gross premiums written				558,607								512,046								2,427,367								2,254,576
Net premiums written				474,658								433,586								2,069,904								1,885,280
Net premiums earned				516,087								469,850								1,989,909								1,852,609
Underwriting gain	- before tax			49,053								38,637								149,029								78,143
	- after tax			31,885				0.55				25,114				0.44				96,869				1.67				50,793				0.89
GAAP combined ratio				90.5	%							91.8	%							92.5	%							95.8	%
Standard Commercial Lines
Net premiums earned				397,162								359,621								1,529,442								1,415,712
GAAP combined ratio				86.1	%							94.1	%							89.2	%							95.7	%
Standard Personal Lines
Net premiums earned				71,496								73,008								288,134								296,747
GAAP combined ratio				92.1	%							77.5	%							99.5	%							94.4	%
Excess and Surplus Lines
Net premiums earned				47,429								37,221								172,333								140,150
GAAP combined ratio				124.8	%							97.8	%							109.8	%							99.7	%
Investments
Net investment income	- before tax			30,108								32,108								121,316								138,708
	- after tax			23,294				0.40				24,535				0.43				93,836				1.61				104,207				1.82
Effective tax rate				22.6	%							23.6	%							22.7	%							24.9	%
Annualized after-tax yield on investment portfolio																				1.9	%							2.2	%
Annualized after-tax, after-interest expense yield																				1.6	%							1.9	%
Invested assets per $ of stockholders' equity																				3.64								3.77
Other expenses (net of other income)
Interest expense	- before tax			(5,603	)							(5,668	)							(22,428	)							(23,063	)
	- after tax			(3,641	)			(0.06	)			(3,684	)			(0.06	)			(14,578	)			(0.25	)			(14,991	)			(0.26	)
Other expense - after tax			$	(4,459	)			(0.08	)		$	(4,362	)			(0.09	)		$	(18,827	)			(0.33	)		$	(15,471	)			(0.28	)
Diluted weighted avg shares outstanding				58,387								57,539								58,156								57,351

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries

GAAP Insurance Operations Results

(unaudited)

 

Fourth Quarter
($ in thousands)		Quarter Ended December 31, 2015																Quarter Ended December 31, 2014
		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			356,855				65,989				51,814				474,658				321,399				67,494				44,693				433,586
Net Premiums Earned			397,162				71,496				47,429				516,087				359,621				73,008				37,221				469,850
Loss and Loss Expense Incurred			199,716				43,747				43,357				286,820				209,495				35,155				23,578				268,228
Net Underwriting Expenses Incurred			141,325				22,118				15,842				179,285				126,510				21,412				12,824				160,746
Dividends to Policyholders			929				-				-				929				2,239				-				-				2,239
GAAP Underwriting Gain (Loss)			55,192				5,631				(11,770	)			49,053				21,377				16,441				819				38,637
GAAP Ratios
Loss and Loss Expense Ratio			50.3	%			61.2	%			91.4	%			55.6%				58.3	%			48.2	%			63.3	%			57.1%
Underwriting Expense Ratio			35.6	%			30.9	%			33.4	%			34.7%				35.2	%			29.3	%			34.5	%			34.2%
Dividends to Policyholders Ratio			0.2	%			0.0	%			0.0	%			0.2%				0.6	%			0.0	%			0.0	%			0.5%
Combined Ratio			86.1	%			92.1	%			124.8	%			90.5%				94.1	%			77.5	%			97.8	%			91.8%
Year-to-Date
($ in thousands)		Year-to-Date December 31, 2015																Year-to-Date December 31, 2014
		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			1,596,965				283,926				189,013				2,069,904				1,441,047				292,061				152,172				1,885,280
Net Premiums Earned			1,529,442				288,134				172,333				1,989,909				1,415,712				296,747				140,150				1,852,609
Loss and Loss Expense Incurred			819,573				200,237				128,731				1,148,541				870,018				197,182				90,301				1,157,501
Net Underwriting Expenses Incurred			539,154				86,561				60,405				686,120				478,291				83,029				49,463				610,783
Dividends to Policyholders			6,219				-				-				6,219				6,182				-				-				6,182
GAAP Underwriting Gain (Loss)			164,496				1,336				(16,803	)			149,029				61,221				16,536				386				78,143
GAAP Ratios
Loss and Loss Expense Ratio			53.6	%			69.5	%			74.7	%			57.7%				61.5	%			66.4	%			64.4	%			62.5%
Underwriting Expense Ratio			35.2	%			30.0	%			35.1	%			34.5%				33.8	%			28.0	%			35.3	%			33.0%
Dividends to Policyholders Ratio			0.4	%			0.0	%			0.0	%			0.3%				0.4	%			0.0	%			0.0	%			0.3%
Combined Ratio			89.2	%			99.5	%			109.8	%			92.5%				95.7	%			94.4	%			99.7	%			95.8%

 

 

Selective Insurance Group, Inc. and Consolidated Subsidiaries

GAAP Investment Income

December 2015 (unaudited)

 

		Quarter Ended								%				Year-to-Date								%
		December				December				Increase				December				December				Increase
($ in thousands, except per share data)		2015				2014				(Decrease)				2015				2014				(Decrease)
Investment Income:
Interest:
Fixed Income Securities		$	31,003				30,974				0			$	123,230				126,489				(3	)
Short-term			40				18				122				112				66				70
Other Investments			(1,109	)			903				(223	)			(1,890	)			13,580				(114	)
Dividends			2,615				2,355				11				9,161				7,449				23
			32,549				34,250				(5	)			130,613				147,584				(11	)
Investment Expense			2,441				2,142				14				9,297				8,876				5
Net Investment Income Before Tax			30,108				32,108				(6	)			121,316				138,708				(13	)
Tax			6,814				7,573				(10	)			27,480				34,501				(20	)
Net Investment Income After Tax		$	23,294				24,535				(5	)		$	93,836				104,207				(10	)
Net Investment Income per Share		$	0.40				0.43				(7	)		$	1.61				1.82				(12	)
Effective Tax Rate			22.6	%			23.6	%							22.7	%			24.9	%
Average Yields :
Fixed Income Securities:
Pre Tax															2.74	%			2.98	%
After Tax															2.07	%			2.24	%
Portfolio:
Pre Tax															2.45	%			2.95	%
After Tax															1.90	%			2.22	%

 

		Quarter Ended								Year-to-Date
		December				December				December				December
Net Realized Gains (Losses)		2015				2014				2015				2014
Fixed Income Securities			1,431				82				2,018				1,528
Equity Securities			(4,193	)			109				11,645				25,650
Other Investments			162				(580	)			(492	)			(579	)
Total			(2,600	)			(389	)			13,171				26,599
Net of Tax			(1,690	)			(253	)			8,561				17,289

 

As of December 31, 2015 year-to-date new money rates for fixed income securities were 2.4% on a pre-tax basis and 1.7% on an after-tax basis.

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

2015 Statutory Results by Line of Business

Quarter Ended December 2015 (unaudited)

 

		Net Premiums				Percent				Net Premiums				Percent				Loss				LAE				Underwriting Expense				Dividends to Policyholders				Combined Ratio				Combined Ratio				Underwriting
($ in thousands)		Written				Change				Earned				Change				Ratio				Ratio				Ratio				Ratio				2015				2014				Gain/(Loss)
Standard Personal Lines:
Homeowners		$	30,696				(3.4	)%		$	33,261				(0.5	)%			32.2	%			7.9	%			38.5	%			0.0	%			78.6	%			55.3	%		$	8,112
Auto			33,516				(2.0	)%			36,410				(2.6	)%			75.0	%			5.2	%			35.9	%			0.0	%			116.1	%			104.8	%			(4,817)
Other (including flood)			1,777				17.7	%			1,826				(16.7	)%			61.5	%			4.9	%			(98.2	)%			0.0	%			(31.8	)%			(65.6	)%			2,359
Total		$	65,989				(2.2	)%		$	71,496				(2.1	)%			54.8	%			6.4	%			33.5	%			0.0	%			94.7	%			78.2	%		$	5,654
Standard Commercial Lines:
Commercial property		$	63,423				14.4	%		$	69,323				11.7	%			23.1	%			5.5	%			42.4	%			(0.2	)%			70.8	%			78.1	%		$	22,740
Workers compensation			65,964				6.0	%			76,084				9.6	%			39.6	%			17.0	%			31.8	%			1.7	%			90.1	%			112.1	%			10,771
General liability			110,051				12.1	%			125,861				10.8	%			41.9	%			7.0	%			40.0	%			(0.1	)%			88.8	%			90.7	%			20,458
Auto			84,517				13.0	%			93,138				10.8	%			55.9	%			11.5	%			36.4	%			(0.1	)%			103.7	%			104.4	%			(309)
Businessowners' policies			24,480				5.3	%			23,825				8.3	%			41.9	%			4.0	%			40.8	%			0.0	%			86.7	%			98.2	%			2,899
Bonds			4,788				9.1	%			5,213				4.1	%			16.3	%			8.6	%			72.6	%			0.0	%			97.5	%			92.8	%			438
Other			3,633				15.4	%			3,718				10.1	%			1.2	%			0.2	%			60.2	%			0.0	%			61.6	%			58.8	%			1,480
Total		$	356,855				11.0	%		$	397,162				10.4	%			40.7	%			9.5	%			38.8	%			0.2	%			89.2	%			96.0	%		$	58,477
E&S		$	51,814				15.9	%		$	47,429				27.4	%			70.4	%			21.2	%			34.0	%			0.0	%			125.6	%			96.6	%		$	(13,635)
Total Insurance Operations		$	474,658				9.5	%		$	516,087				9.8	%			45.4	%			10.2	%			37.4	%			0.2	%			93.2	%			93.2	%		$	50,497
Note: Some amounts may not foot due to rounding.
							2015				2014
			Losses Paid			$	234,802			$	210,724
			LAE Paid				53,288				48,313
			Total Paid			$	288,090			$	259,037

 

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

2015 Statutory Results by Line of Business

Year-to-date December 2015 (unaudited)

 

		Net Premiums				Percent				Net Premiums				Percent				Loss				LAE				Underwriting Expense				Dividends to Policyholders				Combined Ratio				Combined Ratio				Underwriting
($ in thousands)		Written				Change				Earned				Change				Ratio				Ratio				Ratio				Ratio				2015				2014				Gain/(Loss)
Standard Personal Lines:
Homeowners		$	132,533				(2.4	)%		$	134,382				0.1	%			56.9	%			8.1	%			35.6	%			0.0	%			100.6	%			96.9	%		$	(179)
Auto			144,641				(3.0	)%			146,784				(3.0	)%			64.9	%			9.2	%			34.0	%			0.0	%			108.1	%			101.5	%			(11,107)
Other (including flood)			6,752				(5.5	)%			6,968				(37.5	)%			65.2	%			(0.8	)%			(152.7	)%			0.0	%			(88.3	)%			(94.6	)%			12,796
Total		$	283,926				(2.8	)%		$	288,134				(2.9	)%			61.2	%			8.4	%			30.3	%			0.0	%			99.9	%			94.5	%		$	1,510
Standard Commercial Lines:
Commercial property		$	282,731				11.5	%		$	269,022				9.9	%			38.7	%			5.3	%			38.6	%			0.0	%			82.6	%			97.3	%		$	41,608
Workers compensation			299,686				11.4	%			290,075				5.6	%			41.4	%			15.9	%			28.8	%			2.1	%			88.2	%			110.1	%			31,558
General liability			505,891				11.5	%			483,291				8.6	%			32.8	%			13.4	%			35.9	%			0.0	%			82.1	%			83.9	%			78,536
Auto			376,064				10.0	%			358,909				7.7	%			58.9	%			9.8	%			33.2	%			0.0	%			101.9	%			96.2	%			(12,683)
Businessowners' policies			96,257				7.9	%			93,428				8.9	%			53.8	%			10.1	%			39.4	%			0.0	%			103.3	%			108.7	%			(4,172)
Bonds			21,192				6.3	%			20,350				5.5	%			16.4	%			7.4	%			66.0	%			0.0	%			89.8	%			84.9	%			1,513
Other			15,144				11.4	%			14,367				10.4	%			0.4	%			0.2	%			56.8	%			0.0	%			57.4	%			51.9	%			5,684
Total		$	1,596,965				10.8	%		$	1,529,442				8.0	%			42.4	%			11.2	%			35.2	%			0.4	%			89.2	%			95.5	%		$	142,044
E&S		$	189,013				24.2	%		$	172,333				23.0	%			55.3	%			19.4	%			33.7	%			0.0	%			108.4	%			99.2	%		$	(20,066)
Total Insurance Operations		$	2,069,904				9.8	%		$	1,989,909				7.4	%			46.2	%			11.5	%			34.4	%			0.3	%			92.4	%			95.7	%		$	123,487
Note: Some amounts may not foot due to rounding.
							2015				2014
			Losses Paid			$	891,485			$	873,159
			LAE Paid				197,433				187,491
			Total Paid			$	1,088,918			$	1,060,650

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

2015 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, 2015								December 31, 2014								December 31, 2015								December 31, 2014
($ in thousands)		Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio				Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio				Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio				Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio
Standard Personal Lines		$	1,354				1.9	%		$	(3,334	)			(4.6	)%		$	21,735				7.5	%		$	19,284				6.5	%
Standard Commercial Lines		$	1,072				0.3	%		$	(4,065	)			(1.1	)%		$	34,089				2.2	%		$	37,881				2.7	%
E&S		$	479				1.0	%		$	420				1.1	%		$	3,231				1.9	%		$	2,805				2.0	%
Total Insurance Operations		$	2,906				0.6	%		$	(6,979	)			(1.5	)%		$	59,055				3.0	%		$	59,971				3.2	%

 

 

Prior Year Casualty Reserve Development		Quarter Ended																Year-to-Date
(Favorable) / Unfavorable		December 31, 2015								December 31, 2014								December 31, 2015								December 31, 2014
($ in thousands)		Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio				Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio				Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio				Loss and Loss Expense Incurred				Impact on Loss and Loss Expense Ratio
Standard Personal Lines		$	(2,000	)			(2.8	)%		$	(3,000	)			(4.1	)%		$	(2,000	)			(0.7	)%		$	(9,000	)			(3.0	)%
Standard Commercial Lines		$	(20,000	)			(5.0	)%		$	(8,000	)			(2.2	)%		$	(81,000	)			(5.3	)%		$	(45,500	)			(3.2	)%
E&S		$	10,000				21.1	%		$	2,000				5.4	%		$	16,000				9.3	%		$	6,000				4.3	%
Total Insurance Operations		$	(12,000	)			(2.3	)%		$	(9,000	)			(1.9	)%		$	(67,000	)			(3.4	)%		$	(48,500	)			(2.6	)%

 

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)		2015				2014
ASSETS
Investments:
Fixed income securities, held-to-maturity – at carrying value (fair value:  $209,544 – 2015; $333,961 – 2014)		$	201,354			318,137
Fixed income securities, available-for-sale – at fair value (amortized cost:  $4,352,514 – 2015; $3,975,786 – 2014)		4,408,203				4,066,122
Equity securities, available-for-sale – at fair value (cost:  $193,816 – 2015; $159,011 – 2014)		207,051				191,400
Short-term investments (at cost which approximates fair value)		194,819				131,972
Other investments		77,842				99,203
Total investments		5,089,269				4,806,834
Cash		898				23,959
Interest and dividends due or accrued		38,501				38,901
Premiums receivable, net of allowance for uncollectible accounts of:  $4,422 – 2015; $4,137 – 2014		615,164				558,778
Reinsurance recoverable, net		561,968				581,548
Prepaid reinsurance premiums		140,889				146,993
Deferred federal income tax		92,696				98,449
Property and equipment – at cost, net of accumulated depreciation and amortization of:  $188,548 – 2015; $172,183 – 2014		65,701				59,416
Deferred policy acquisition costs		213,159				185,608
Goodwill		7,849				7,849
Other assets		78,339				66,607
Total assets		$	6,904,433			6,574,942
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for losses and loss expenses		$	3,517,728			3,477,870
Unearned premiums		1,169,710				1,095,819
Notes payable		388,192				372,689
Current federal income tax		7,442				3,921
Accrued salaries and benefits		167,336				158,382
Other liabilities		255,984				190,675
Total liabilities		$	5,506,392			5,299,356
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:  100,861,372 – 2015; 99,947,933 – 2014		201,723				199,896
Additional paid-in capital		326,656				305,385
Retained earnings		1,446,192				1,313,440
Accumulated other comprehensive (loss) income		(9,425		)		19,788
Treasury stock – at cost (shares:  43,500,642 – 2015; 43,353,181 – 2014)		(567,105		)		(562,923	)
Total stockholders’ equity		1,398,041				1,275,586
Commitments and contingencies
Total liabilities and stockholders’ equity		$	6,904,433			6,574,942

 

 

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)		2015				2014				Unaudited 2015				2014
Revenues:
Net premiums earned		$	516,087				469,850				1,989,909				1,852,609
Net investment income earned			30,108				32,108				121,316				138,708
Net realized gains:
Net realized investment gains			7,939				9,333				31,537				37,703
Other-than-temporary impairments			(10,539	)			(9,722	)			(18,366	)			(11,104	)
Total net realized (losses) gains			(2,600	)			(389	)			13,171				26,599
Other income			1,935				2,014				7,456				16,945
Total revenues			545,530				503,583				2,131,852				2,034,861
Expenses:
Loss and loss expenses incurred			286,820				268,228				1,148,541				1,157,501
Policy acquisition costs			180,525				161,930				689,820				624,470
Interest expense			5,603				5,668				22,428				23,063
Other expenses			8,784				10,557				38,371				32,696
Total expenses			481,732				446,383				1,899,160				1,837,730
Income from continuing operations, before federal income tax			63,798				57,200				232,692				197,131
Federal income tax expense:
Current			16,219				5,723				45,347				28,415
Deferred			2,190				10,127				21,484				26,889
Total federal income tax expense			18,409				15,850				66,831				55,304
Net income		$	45,389				41,350				165,861				141,827
Earnings per share:
Basic net income		$	0.79				0.73				2.90				2.52
Diluted net income		$	0.78				0.72				2.85				2.47
Dividends to stockholders		$	0.15				0.14				0.57				0.53

 

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries
Consolidated Statements of Comprehensive Income
December 31,		Unaudited
($ in thousands)		2015				2014			2013
Net income		$	165,861			141,827			106,418
Other comprehensive loss, net of tax:
Unrealized (losses) gains on investment securities:
Unrealized holding (losses) gains arising during year		(26,143		)		47,411			(54,557	)
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income		—				—			50
Amount reclassified into net income:
Held-to-maturity securities		(377		)		(844	)		(1,025	)
Non-credit other-than-temporary impairment		232				1,085			9
Realized gains on available-for-sale securities		(9,110		)		(18,762	)		(15,301	)
Total unrealized (losses) gains on investment securities		(35,398		)		28,890			(70,824	)
Defined benefit pension and post-retirement plans:
Net actuarial gain (loss)		1,585				(35,189	)		38,775
Amounts reclassified into net income:
Net actuarial loss		4,600				1,236			2,843
Prior service cost		—				—			6
Curtailment expense		—				—			11
Total defined benefit pension and post-retirement plans		6,185				(33,953	)		41,635
Other comprehensive loss		(29,213		)		(5,063	)		(29,189	)
Comprehensive income		$	136,648			136,764			77,229

 

 

 

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries
Consolidated Statements of Stockholders’ Equity
December 31,		Unaudited
($ in thousands, except share amounts)		2015				2014			2013
Common stock:
Beginning of year		$	199,896			198,240			196,388
Dividend reinvestment plan (shares:  50,013 – 2015; 58,309 – 2014; 63,349 – 2013)		100				117			127
Stock purchase and compensation plans (shares:  863,426 – 2015; 769,389 – 2014; 862,662 – 2013)		1,727				1,539			1,725
End of year		201,723				199,896			198,240
Additional paid-in capital:
Beginning of year		305,385				288,182			270,654
Dividend reinvestment plan		1,374				1,306			1,396
Stock purchase and compensation plans		19,897				15,897			16,132
End of year		326,656				305,385			288,182
Retained earnings:
Beginning of year		1,313,440				1,202,015			1,125,154
Net income		165,861				141,827			106,418
Dividends to stockholders ($0.57 per share –  2015; $0.53 per share – 2014; $0.52 per share - 2013)		(33,109		)		(30,402	)		(29,557	)
End of year		1,446,192				1,313,440			1,202,015
Accumulated other comprehensive (loss) income:
Beginning of year		19,788				24,851			54,040
Other comprehensive loss		(29,213		)		(5,063	)		(29,189	)
End of year		(9,425		)		19,788			24,851
Treasury stock:
Beginning of year		(562,923		)		(559,360	)		(555,644	)
Acquisition of treasury stock (shares:  147,461 – 2015; 154,559 – 2014; 167,846 – 2013)		(4,182		)		(3,563	)		(3,716	)
End of year		(567,105		)		(562,923	)		(559,360	)
Total stockholders’ equity		$	1,398,041			1,275,586			1,153,928

  

 

 

Selective Insurance Group, Inc. & Consolidated Subsidiaries
Consolidated Statements of Cash Flow
December 31,		Unaudited
($ in thousands)		2015				2014			2013
Operating Activities
Net income		$	165,861			141,827			106,418
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		59,688				45,346			43,461
Sale of renewal rights		—				(8,000	)		—
Loss on disposal of discontinued operations		—				—			997
Stock-based compensation expense		8,973				8,702			8,630
Undistributed losses (gains) of equity method investments		1,889				(153	)		202
Net realized gains		(13,171		)		(26,599	)		(20,732	)
Net gain on disposal of property and equipment		—				(104	)		—
Retirement income plan curtailment expense		—				—			16
Changes in assets and liabilities:
Increase in reserves for losses and loss expenses, net of reinsurance recoverables		59,438				97,449			151,037
Increase in unearned premiums, net of prepaid reinsurance		79,995				32,671			74,086
Decrease in net federal income taxes		25,004				31,323			14,834
Increase in premiums receivable		(56,386		)		(33,908	)		(40,482	)
Increase in deferred policy acquisition costs		(27,551		)		(12,627	)		(17,458	)
Decrease (increase) in interest and dividends due or accrued		407				(1,536	)		(1,372	)
Increase (decrease) in accrued salaries and benefits		11,392				(7,182	)		18,685
Increase (decrease) in accrued insurance expenses		23,342				(956	)		14,444
Increase (decrease) in other assets and other liabilities		42,699				(33,490	)		(16,642	)
Net adjustments		215,719				90,936			229,706
Net cash provided by operating activities		381,580				232,763			336,124
Investing Activities
Purchase of fixed income securities, held-to-maturity		(3,316		)		—			—
Purchase of fixed income securities, available-for-sale		(1,041,916		)		(843,616	)		(1,069,387	)
Purchase of equity securities, available-for-sale		(195,720		)		(186,019	)		(118,072	)
Purchase of other investments		(12,170		)		(10,617	)		(9,332	)
Purchase of short-term investments		(1,602,327		)		(1,410,123	)		(2,056,576	)
Sale of subsidiary		—				—			1,225
Sale of fixed income securities, available-for-sale		61,571				51,002			20,126
Sale of short-term investments		1,539,480				1,452,402			2,096,805
Redemption and maturities of fixed income securities, held-to-maturity		106,621				73,415			116,584
Redemption and maturities of fixed income securities, available-for-sale		567,445				482,816			513,804
Sale of equity securities, available-for-sale		172,561				208,008			115,782
Distributions from other investments		32,457				20,774			12,039
Purchase of property and equipment		(16,229		)		(15,510	)		(14,023	)
Sale of renewal rights		—				8,000			—
Net cash used in investing activities		(391,543		)		(169,468	)		(391,025	)
Financing Activities
Dividends to stockholders		(31,052		)		(28,428	)		(27,416	)
Acquisition of treasury stock		(4,182		)		(3,563	)		(3,716	)
Net proceeds from stock purchase and compensation plans		10,089				7,283			7,119
Proceeds from issuance of notes payable, net of debt issuance costs		—				—			178,435
Proceeds from borrowings		15,000				—			—
Repayment of borrowings		—				(13,000	)		—
Repayment of notes payable		—				—			(100,000	)
Excess tax benefits from share-based payment arrangements		1,736				1,020			1,545
Repayment of capital lease obligations		(4,689		)		(2,841	)		(1,083	)
Net (used in) cash provided by financing activities		(13,098		)		(39,529	)		54,884
Net (decrease) increase in cash		(23,061		)		23,766			(17	)
Cash, beginning of year		23,959				193			210
Cash, end of year		$	898			23,959			193

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Statutory Balance Sheets

(unaudited)

 

		December 31,				December 31,
($ in thousands)		2015				2014
ASSETS
Bonds		$	4,491,136				4,241,580
Common stocks			194,789				191,400
Preferred stocks			11,856				-
Affiliated mortgage loan			35,163				35,961
Other investments			128,788				152,154
Short-term investments			165,678				115,342
Total investments			5,027,410				4,736,437
Cash on hand and in banks			(34,378	)			12,381
Interest and dividends due and accrued			38,466				38,908
Premiums receivable			609,146				556,086
Reinsurance recoverable on paid losses and expenses			10,949				9,570
Deferred tax recoverable			142,066				147,610
EDP equipment			390				518
Equities and deposits in pools and associations			10,920				9,915
Receivable for sold securities			17				34
Other assets			28,300				26,629
Total assets		$	5,833,286				5,538,088
LIABILITIES
Reserve for losses		$	2,426,583				2,398,531
Reinsurance payable on paid loss and loss expense			2,841				2,957
Reserve for loss expenses			525,322				493,510
Unearned premiums			1,028,820				948,826
Reserve for commissions payable			89,740				70,259
Ceded balances payable			37,222				29,624
Federal income tax payable			25,644				20,524
Premium and other taxes payable			23,998				20,137
Borrowed money			60,031				45,027
Reserve for dividends to policyholders			5,805				3,895
Reserves for unauthorized reinsurance			2,030				7,661
Payable for securities			6,204				19,950
Funds withheld on account of others			6,806				7,473
Accrued salaries and benefits			77,933				64,207
Other liabilities			87,987				97,665
Total liabilities			4,406,966				4,230,246
POLICYHOLDERS' SURPLUS
Capital			42,725				42,725
Paid in surplus			492,869				492,869
Unassigned surplus			890,726				772,248
Total policyholders' surplus			1,426,320				1,307,842
Total liabilities and policyholders' surplus		$	5,833,286				5,538,088

 

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Statutory Statements Of Income

(unaudited)

 

		Quarter Ended																Year-to-Date
		December 31,																December 31,
($ in thousands)		2015								2014								2015								2014
UNDERWRITING
Net premiums written		$	474,658								433,586								2,069,904								1,885,280
Net premiums earned			516,087								469,850								1,989,909								1,852,609
Net losses paid			234,802								210,724								891,485								873,159
Change in reserve for losses			(441	)							(9,756	)							28,052								57,055
Net losses incurred			234,361				45.4	%			200,968				42.8	%			919,537				46.2	%			930,214				50.2	%
Net loss expenses paid			53,288								48,313								197,433								187,491
Change in reserve for loss expenses			(931	)							17,577								31,813								37,526
Net loss expenses incurred			52,357				10.2	%			65,890				14.0	%			229,246				11.5	%			225,017				12.2	%
Net underwriting expenses incurred			179,153				37.6	%			157,373				36.2	%			716,172				34.6	%			635,760				33.7	%
Total deductions			465,871								424,231								1,864,955								1,790,991
Statutory underwriting gain			50,216								45,619								124,954								61,618
Net loss from premium balances charged off			(773	)							(54	)							(2,919	)							(2,822	)
Finance charges and other income			1,983								1,617								7,671								17,204
Total other income			1,210				-0.2	%			1,563				-0.3	%			4,752				-0.2	%			14,382				-0.7	%
Policyholders' dividends incurred			(929	)			0.2	%			(2,239	)			0.5	%			(6,219	)			0.3	%			(6,182	)			0.3	%
Total underwriting gain			50,497				93.2	%			44,943				93.2	%			123,487				92.4	%			69,818				95.7	%
INVESTMENT
Net investment income earned			29,455								31,745								120,558								137,670
Net realized (loss) gain			(2,600	)							(389	)							13,170								26,594
Total income before income tax			77,352								76,299								257,215								234,082
Federal income tax expense			23,648								11,775								61,377								43,827
Net income		$	53,704								64,524								195,838								190,255
Policyholders' Surplus
Surplus, beginning of period		$	1,367,343								1,323,097								1,307,842								1,256,431
Net income			53,704								64,524								195,838								190,255
Change in deferred taxes			(2,236	)							8,146								(13,637	)							(2,016	)
Change in net unrealized capital gain / (losses)			7,522								693								(12,579	)							(3,721	)
Dividends to stockholders			(14,438	)							(14,378	)							(57,752	)							(57,511	)
Change in reserve for unauthorized			5,631								(4,927	)							5,631								(4,927	)
Change in non-admitted assets			4,510								(15,801	)							(8,151	)							(18,004	)
Change in Overfunded Contra Asset			562								(1,285	)							(280	)							(5,925	)
Qual Pen Trans Liab			2,677								(50,660	)							8,211								(45,214	)
Excess Plan Trans Liab			748								(1,400	)							878								(1,377	)
PRL Plan Trans Liab			297								(167	)							319								(149	)
Net change in surplus for period			58,977								(15,255	)							118,478								51,411
Surplus, end of period		$	1,426,320								1,307,842								1,426,320								1,307,842
Statutory underwriting gain		$	50,497								44,943								123,487								69,818
Adjustments under GAAP:
Deferred policy acquisition costs			(507	)							(4,074	)							27,551								12,626
Other, net			(937	)							(2,232	)							(2,009	)							(4,301	)
GAAP underwriting gain		$	49,053								38,637								149,029								78,143

 

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

 

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Alternative Investments

December 31, 2015

(unaudited)

 

	Number	Original	Remaining	Current
Strategy	of Funds	Commitment	Commitment	Market Value
Private Equity	9	111,498,351	30,204,172	35,087,904
Private Credit	5	60,000,000	15,129,467	13,246,148
Real Assets	7	100,000,000	25,819,631	19,499,570
TOTAL - ALTERNATIVE INVESTMENTS	21	271,498,351	71,153,269	67,833,623

 

 

 

Exhibit may not foot due to rounding