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

Attached files

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EX-99.1 - EX-99.1 - SELECTIVE INSURANCE GROUP INC	q12021pressreleaseexh991ma.htm
8-K - 8-K - SELECTIVE INSURANCE GROUP INC	sigi-20210428.htm

Exhibit 99.2

FINANCIAL SUPPLEMENT

FIRST QUARTER 2021

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 for any reason.

Factors that could cause our actual results to differ materially from what we project, forecast, or estimate in forward-looking statements, include without limitation:

•Related to COVID-19:

◦Governmental directives to contain or delay the spread of the COVID-19 pandemic have disrupted ordinary business commerce and impacted financial markets. These governmental actions, the extent, duration, and possible alteration based on future COVID-19-related developments that we cannot predict, could materially and adversely affect our results of operations, net investment income, financial position, and liquidity.

◦The amount of premium we record may be reduced and our underwriting results may be adversely impacted by (i) voluntary premium credits on in-force commercial and personal automobile policies, (ii) state insurance commissioner or other regulatory directives to implement premium-based credit in lines other than commercial and personal automobile, and we may be required to return more premium than warranted by our filed rating plans and actual loss experience, (iii) the effects of our voluntary efforts or the directives from various state insurance regulators to extend individualized payment flexibility and suspend policy cancellations, late payment notices, and late or reinstatement fees, (iv) return premiums that could be significant because our general liability and workers compensation policies provide for premium audit of revenues and payrolls, and (v) collectability of premiums, which may be impacted by policyholder financial distress and insolvency.

◦Our loss and loss expenses may increase, our related reserves may not be adequate, and our financial condition and liquidity may be materially impacted if litigation or changes in statutory or common law (i) require payment of COVID-19-related business interruption losses despite contrary terms, conditions, and exclusions in our policies or (ii) presume that COVID-19 is a work-related illness compensable under workers compensation policies for employees who contract the virus, regardless of whether they worked in industries defined as essential in various COVID-19-related governmental directives or interacted with the public as part of their job duties.

◦Our net investment income may be impacted by the significant equity and debt financial market volatility resulting from the COVID-19 pandemic and the related governmental orders because (i) financial market volatility is reflected in our alternative investments’ performance, (ii) increased spreads on fixed income securities may create mark-to-market investment valuation losses that reduce unrealized capital gains and impact GAAP equity, and (iii) net realized losses may increase if we intend to sell more securities, particularly in asset classes that are more significantly impacted by COVID-19-related governmental directives and to which the Federal Reserve Board is providing liquidity and structural support.

•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 interest rate fluctuations;

•Ratings downgrades on individual securities we own could affect investment values and, therefore, statutory surplus;

•The adequacy of our loss reserves and loss expense reserves;

•Frequency and severity of natural and man-made catastrophic events, including without limitation hurricanes, tornadoes, windstorms, earthquakes, hail, terrorism, including cyber-attacks, explosions, severe winter weather, floods, and fires;

•Adverse market, governmental, regulatory, legal, or judicial conditions or actions;

•The geographic concentration of our business in the eastern portion of the United States;

•The cost, terms and conditions, and availability of reinsurance;

•Our ability to collect on reinsurance and the solvency of our reinsurers;

•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;

•Uncertainties related to insurance premium rate increases and business retention;

•Changes in insurance regulations that impact our ability to write and/or cease writing insurance policies in one or more states;

•The effects of data privacy or cyber security laws and regulations on our operations;

•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;

•Recent federal financial regulatory reform provisions that could pose certain risks to our operations;

•Our ability to maintain favorable ratings from rating agencies, including AM Best, Standard & Poor’s, Moody’s, and Fitch;

•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 that we cannot predict or assess may emerge from time-to-time.

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			3
Financial Metrics			4

Consolidated Insurance Operations Statement of Operations			5
Standard Commercial Lines Statement of Operations and Supplemental Data			6
Standard Commercial Lines GAAP Line of Business Results			7
Standard Personal Lines Statement of Operations and Supplemental Data			8
Standard Personal Lines GAAP Line of Business Results			9
Excess and Surplus Lines Statement of Operations and Supplemental Data			10
Excess and Surplus Lines GAAP Line of Business Results			11

Consolidated Investment Income			12
Consolidated Composition of Invested Assets			13



Credit Quality of Invested Assets			14

Reconciliation of Net Income Available to Common Stockholders to Non-GAAP Operating Income and Certain Other Non-GAAP Measures			15

Ratings and Contact Information			16

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)


		Quarter ended
		Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ and shares in millions, except per share data)		2021			2020	2020	2020	2020

For Period Ended
	Gross premiums written	$	914.3		790.5	844.7	841.1	752.5
	Net premiums written	798.2			681.5	719.5	724.8	647.3
	Change in net premiums written, from comparable prior year period	23		%	8	6	3	(4)

	Underwriting income, before-tax	$	77.7		84.1	21.0	9.9	21.4
	Net investment income earned, before-tax	69.7			68.5	68.2	34.4	56.0
	Net realized and unrealized investment gains (losses), before-tax	5.1			20.1	7.7	12.6	(44.7)

	Net income	$	109.3		127.1	69.9	34.2	15.2
	Net income available to common stockholders(1)	106.8			127.1	69.9	34.2	15.2
	Non-GAAP operating income(2)	102.8			111.2	63.8	24.2	50.5

At Period End
	Total assets	9,848.6			9,687.9	9,514.9	9,306.0	8,975.1
	Total invested assets	7,559.3			7,505.6	7,277.5	7,130.3	6,842.1
	Stockholders' equity	2,744.0			2,738.9	2,393.6	2,298.7	2,096.5
	Common stockholders' equity(3)	2,544.0			2,538.9	2,393.6	2,298.7	2,096.5
	Common shares outstanding	60.0			59.9	59.8	59.8	59.7

Per Share and Share Data
	Net income available to common stockholders per common share (diluted)	$	1.77		2.10	1.16	0.57	0.25

	Non-GAAP operating income per common share (diluted)(2)	1.70			1.84	1.06	0.40	0.84

	Weighted average common shares outstanding (diluted)	60.5			60.4	60.4	60.2	60.2

	Book value per common share	$	42.38		42.38	40.00	38.43	35.11

	Dividends paid per common share	0.25			0.25	0.23	0.23	0.23

Financial Ratios
	Loss and loss expense ratio	57.0		%	54.4	64.5	64.0	61.4
	Underwriting expense ratio	32.1			33.4	32.4	34.3	35.2
	Dividends to policyholders ratio	0.2			0.3	0.1	0.1	0.1
	GAAP combined ratio	89.3		%	88.1	97.0	98.4	96.7

	Annualized return on common stockholders' equity ("ROE")	16.8			20.6	11.9	6.2	2.8

	Annualized non-GAAP operating ROE(2)	16.2			18.0	10.9	4.4	9.4

	Debt to total capitalization	16.7			16.7	23.1	25.9	28.9

	Long-term debt to total capitalization	16.7			16.7	18.7	19.3	20.8

	Net premiums written to policyholders' surplus	1.33x			1.30x	1.39x	1.39x	1.38x

	Invested assets per dollar of common stockholders' equity	$	2.97		2.96	3.04	3.10	3.26


(1)	Net income available to common stockholders is net income reduced by preferred stock dividends.
(2)	Non-GAAP measure. Refer to Page 15 for definition.
(3)	Excludes equity related to preferred stock.

Page 1

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


		Quarter ended
		Mar. 31,		Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ and shares in millions, except per share data)		2021		2020	2020	2020	2020

Revenues
	Net premiums earned	$	725.0	704.9	694.5	630.7	651.7
	Net investment income earned	69.7		68.5	68.2	34.4	56.0




	Net realized and unrealized gains (losses)	5.1		20.1	7.7	12.6	(44.7)
	Other income	4.1		4.9	6.1	4.7	1.8
	Total revenues	803.9		798.4	776.6	682.4	664.8

Expenses
	Loss and loss expense incurred	413.4		383.7	447.8	403.9	400.3
	Amortization of deferred policy acquisition costs	149.1		144.5	142.3	136.9	136.5
	Other insurance expenses	88.9		97.5	89.5	84.6	95.3
	Interest expense	7.4		7.5	7.8	7.9	7.6
	Corporate expenses	9.6		6.1	3.9	6.3	9.1
	Total expenses	668.3		639.4	691.3	639.8	648.8

Income before federal income tax		135.6		159.0	85.3	42.7	16.0
Federal income tax expense		26.4		32.0	15.4	8.5	0.8

Net Income		109.3		127.1	69.9	34.2	15.2
Preferred stock dividends		2.5		—	—	—	—
Net income available to common stockholders		106.8		127.1	69.9	34.2	15.2

Net realized and unrealized investment (gains) losses, after tax(1)		(4.0)		(15.9)	(6.1)	(10.0)	35.3



Non-GAAP operating income(2)		$	102.8	111.2	63.8	24.2	50.5

Weighted average common shares outstanding (diluted)		60.5		60.4	60.4	60.2	60.2

	Net income available to common stockholders per common share (diluted)	$	1.77	2.10	1.16	0.57	0.25

	Non-GAAP operating income per common share (diluted)(2)	$	1.70	1.84	1.06	0.40	0.84

(1)	Amounts are provided to reconcile net income available to common stockholders to non-GAAP operating income.
(2)	Non-GAAP measure. Refer to Page 15 for definition.
	Note: Amounts may not foot due to rounding.

Page 2

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)


			Mar. 31,		Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ in millions, except per share data)			2021		2020	2020	2020	2020

ASSETS
Investments


	Fixed income securities, held-to-maturity, net of allowance for credit losses		$	24.3	16.8	19.1	19.5	20.4
	Fixed income securities, available-for-sale, at fair value, net of allowance for credit losses		6,521.6		6,455.9	6,437.5	6,358.2	5,945.4


	Commercial mortgage loans, net of allowance for credit losses		61.1		46.3	29.5	17.7	13.9
	Equity securities, at fair value		324.3		310.4	151.8	134.1	100.0
	Short-term investments		337.8		409.9	380.9	370.4	517.6
	Other investments		290.2		266.3	258.6	230.5	244.9
		Total investments	7,559.3		7,505.6	7,277.5	7,130.3	6,842.1
Cash			0.5		0.4	0.8	0.7	9.4
Restricted cash			8.4		14.8	15.1	5.0	5.2
Interest and dividends due or accrued			46.1		45.0	46.4	45.8	43.9


Premiums receivable, net of allowance for credit losses			895.2		836.0	851.1	866.9	797.3


Reinsurance recoverable, net of allowance for credit losses			580.9		587.5	611.5	584.7	563.5
Prepaid reinsurance premiums			168.6		170.5	179.4	169.8	162.5
Current federal income tax			—		—	6.6	—	—
Deferred federal income tax			—		—	—	—	43.1
Property and equipment, net of accumulated depreciation and amortization			76.1		77.7	78.4	78.8	80.1
Deferred policy acquisition costs			302.7		288.6	292.7	285.5	269.6
Goodwill			7.8		7.8	7.8	7.8	7.8
Other assets			203.1		153.9	147.7	130.7	150.6
		Total assets	$	9,848.6	9,687.9	9,514.9	9,306.0	8,975.1

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Reserve for loss and loss expense			$	4,360.2	4,260.4	4,293.3	4,176.9	4,103.6
Unearned premiums			1,689.5		1,618.3	1,650.5	1,615.9	1,514.6
Short-term debt			—		—	167.0	252.0	302.0
Long-term debt			550.9		550.7	550.6	550.6	550.6
Current federal income tax			42.0		14.0	—	10.6	12.4
Deferred federal income tax			2.3		27.1	20.4	13.1	—
Accrued salaries and benefits			83.7		114.9	93.1	82.7	74.0
Other liabilities			376.0		363.7	346.4	305.6	321.4
		Total liabilities	$	7,104.6	6,949.0	7,121.3	7,007.3	6,878.6

Stockholders' Equity
Preferred stock of $0 par value per share			$	200.0	200.0	—	—	—
Common stock of $2 par value per share			208.6		208.1	207.9	207.9	207.7
Additional paid-in capital			446.4		439.0	438.9	435.0	427.3
Retained earnings			2,363.2		2,271.5	2,159.6	2,103.6	2,083.3
Accumulated other comprehensive income (loss)			134.6		220.2	187.1	152.0	(22.1)
Treasury stock, at cost			(608.7)		(599.9)	(599.9)	(599.8)	(599.8)
		Total stockholders' equity	$	2,744.0	2,738.9	2,393.6	2,298.7	2,096.5
Commitments and contingencies

		Total liabilities and stockholders' equity	$	9,848.6	9,687.9	9,514.9	9,306.0	8,975.1




Note: Amounts may not foot due to rounding.

Page 3

Selective Insurance Group, Inc. & Consolidated Subsidiaries

FINANCIAL METRICS

(Unaudited)


			Quarter ended
			Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ and shares in millions, except per share data)			2021			2020	2020	2020	2020
Book value per common share
		Common stockholders' equity	$	2,544.0		2,538.9	2,393.6	2,298.7	2,096.5
		Common shares issued and outstanding, at period end	60.0			59.9	59.8	59.8	59.7
		Book value per common share	$	42.38		42.38	40.00	38.43	35.11
		Book value per common share excluding unrealized gain or loss on fixed income securities	38.73			37.29	35.43	34.43	34.01
Financial results (after-tax)
		Underwriting income	61.4			66.4	16.6	7.8	16.9
		Net investment income	56.3			55.5	55.1	28.5	45.5
		Interest expense and preferred stock dividends	(8.3)			(5.9)	(6.1)	(6.3)	(6.0)
		Corporate expense	(6.7)			(4.7)	(1.8)	(5.9)	(5.8)
		Net realized and unrealized investment gains (losses)	4.0			15.9	6.1	10.0	(35.3)

		Total after-tax net income available to common stockholders	106.8			127.1	69.9	34.2	15.2


Return on average equity
		Insurance segments	9.7		%	10.8	2.8	1.4	3.1
		Net investment income	8.9			9.0	9.4	5.2	8.5
		Interest expense and preferred stock dividends	(1.3)			(1.0)	(1.0)	(1.1)	(1.1)
		Corporate expense	(1.1)			(0.8)	(0.3)	(1.1)	(1.1)
		Net realized and unrealized investment gains (losses)	0.6			2.6	1.0	1.8	(6.6)

		Annualized ROE	16.8			20.6	11.9	6.2	2.8
		Net realized and unrealized (gains) losses(1)	(0.6)			(2.6)	(1.0)	(1.8)	6.6

		Annualized Non-GAAP Operating ROE(2)	16.2		%	18.0	10.9	4.4	9.4
Debt and total capitalization
	Notes payable:
		1.61% Borrowings from FHLBNY	$	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
		3.03% Borrowings from FHLBI	60.0			60.0	60.0	60.0	60.0
		0.78% Borrowings from FHLBNY	—			—	—	100.0	100.0
		0.68% Borrowings from FHLBNY	—			—	—	85.0	85.0
		0.58% Borrowings from FHLBI	—			—	67.0	67.0	67.0
		0.36% Borrowings from FHLBNY	—			—	100.0	—	—
		2.244% Borrowings on Line of Credit	—			—	—	—	50.0
		7.25% Senior Notes	49.8			49.7	49.7	49.7	49.7
		6.70% Senior Notes	99.2			99.2	99.2	99.2	99.1
		5.375% Senior Notes	291.4			291.3	291.2	291.2	291.1
		Finance Lease Obligations	0.6			0.5	0.4	0.5	0.6
	Total debt		550.9			550.7	717.6	802.6	852.6
	Stockholders' equity		2,744.0			2,738.9	2,393.6	2,298.7	2,096.5
	Total capitalization		$	3,294.9		3,289.6	3,111.2	3,101.3	2,949.1
	Ratio of debt to total capitalization		16.7		%	16.7	23.1	25.9	28.9
	Ratio of long-term debt to total capitalization		16.7			16.7	18.7	19.3	20.8
Policyholders' surplus			$	2,204.7		2,124.7	1,962.3	1,922.5	1,924.9

(1)		Amounts are provided to reconcile annualized ROE to annualized non-GAAP operating ROE.
(2)		Non-GAAP measure. Refer to Page 15 for definition.
		Note: Amounts may not foot due to rounding.

Page 4

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED INSURANCE OPERATIONS

STATEMENT OF OPERATIONS

(Unaudited)


		Quarter ended
		Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ in millions)		2021			2020	2020	2020	2020

Underwriting results
Net premiums written		$	798.2		681.5	719.5	724.8	647.3
Change in net premiums written, from comparable prior year period		23		%	8	6	3	(4)

Net premiums earned		$	725.0		704.9	694.5	630.7	651.7
Losses and loss expenses incurred		413.4			383.7	447.8	403.9	400.3
Net underwriting expenses incurred		232.6			235.3	225.1	216.2	229.2
Dividends to policyholders		1.2			1.8	0.6	0.7	0.8
GAAP underwriting gain		$	77.7		84.1	21.0	9.9	21.4


Catastrophe losses		$	29.9		19.5	79.5	83.2	33.2
(Favorable) prior year casualty reserve development		(35.0)			(35.0)	(25.0)	(15.0)	(10.0)

Underwriting ratios
Loss and loss expense ratio		57.0		%	54.4	64.5	64.0	61.4
Underwriting expense ratio		32.1			33.4	32.4	34.3	35.2
Dividends to policyholders ratio		0.2			0.3	0.1	0.1	0.1
	Combined ratio	89.3		%	88.1	97.0	98.4	96.7


Catastrophe losses		4.1		pts	2.8	11.4	13.2	5.1
(Favorable) prior year casualty reserve development		(4.8)		pts	(5.0)	(3.6)	(2.4)	(1.5)
	Combined ratio before catastrophe losses	85.2		%	85.3	85.6	85.2	91.6

	Combined ratio before catastrophe losses and prior year casualty development	90.0			90.3	89.2	87.6	93.1

Other Statistics
Non-catastrophe property loss and loss expenses		$	115.6		114.5	105.6	81.8	108.1
Non-catastrophe property loss and loss expenses		15.9		pts	16.2	15.2	13.0	16.6
Direct new business		$	155.6		136.1	140.8	150.1	152.8
Renewal pure price increases		5.4		%	4.8	4.4	3.9	4.0



Note: Amounts may not foot due to rounding.

Page 5

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD COMMERCIAL LINES

STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA

(Unaudited)


		Quarter ended
		Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ in millions)		2021			2020	2020	2020	2020

Underwriting results
Net premiums written		$	665.6		551.1	577.8	583.3	518.4
Change in net premiums written, from comparable prior year period		28		%	10	8	5	(5)

Net premiums earned		$	589.1		567.5	558.1	501.0	516.6
Losses and loss expenses incurred		324.9			295.4	331.0	307.0	312.2
Net underwriting expenses incurred		193.6			195.2	183.7	176.6	186.5
Dividends to policyholders		1.2			1.8	0.6	0.7	0.8
GAAP underwriting gain		$	69.5		75.2	42.7	16.7	17.1


Catastrophe losses		$	16.1		7.1	39.3	50.7	20.7
(Favorable) prior year casualty reserve development		(30.0)			(35.0)	(25.0)	(15.0)	(10.0)

Underwriting ratios
Loss and loss expense ratio		55.1		%	52.1	59.3	61.4	60.4
Underwriting expense ratio		32.9			34.4	32.9	35.2	36.1
Dividends to policyholders ratio		0.2			0.3	0.1	0.1	0.2
	Combined ratio	88.2		%	86.8	92.3	96.7	96.7


Catastrophe losses		2.7		pts	1.3	7.0	10.1	4.0
(Favorable) prior year casualty reserve development		(5.1)			(6.2)	(4.5)	(3.0)	(1.9)
	Combined ratio before catastrophe losses	85.5		%	85.5	85.3	86.6	92.7

	Combined ratio before catastrophe losses and prior year casualty development	90.6			91.7	89.8	89.6	94.6

Other Statistics
Non-catastrophe property loss and loss expenses		$	83.6		80.5	75.3	60.9	79.6
Non-catastrophe property loss and loss expenses		14.2		pts	14.2	13.5	12.2	15.4
Direct new business		$	114.5		96.8	99.0	109.9	115.4
Renewal pure price increases		5.7		%	5.1	4.6	3.9	4.0
Retention		86		%	86	86	86	85


Note: Amounts may not foot due to rounding.

Page 6

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD COMMERCIAL LINES

GAAP LINE OF BUSINESS RESULTS

(Unaudited)


	Quarter ended March 31, 2021										Quarter ended March 31, 2020
	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	$	113.4		92.3	222.1	190.6	31.4	9.5	6.3	665.6	103.1	51.2	150.8	168.3	29.2	10.2	5.7	518.4
Net premiums earned	102.8			78.2	193.5	171.9	28.6	8.6	5.5	589.1	93.9	66.7	164.6	149.7	27.0	9.6	5.1	516.6

Loss and loss expense ratio	56.7		%	46.2	47.6	68.0	65.4	30.2	0.2	55.1	69.6	52.4	55.4	66.7	64.0	38.4	0.2	60.4
Underwriting expense ratio	36.7			26.3	33.5	30.3	36.6	60.3	51.1	32.9	39.5	30.0	36.7	33.8	38.5	54.3	53.8	36.1
Dividend ratio	—			1.4	—	0.1	—	—	(0.1)	0.2	—	1.1	—	—	—	—	—	0.2
Combined ratio	93.4		%	73.9	81.1	98.4	102.0	90.5	51.2	88.2	109.1	83.5	92.1	100.5	102.5	92.7	54.0	96.7

Underwriting gain (loss)	$	6.8		20.4	36.6	2.8	(0.6)	0.8	2.7	69.5	(8.6)	11.0	13.1	(0.8)	(0.7)	0.7	2.3	17.1

















Note: Amounts may not foot due to rounding.

Page 7

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD PERSONAL LINES

STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA

(Unaudited)


		Quarter ended
		Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ in millions)		2021			2020	2020	2020	2020

Underwriting results
Net premiums written		$	65.1		69.7	79.7	78.2	67.6
Change in net premiums written, from comparable prior year period		(4)		%	(2)	(2)	(5)	(2)

Net premiums earned		$	73.8		75.4	76.0	71.6	76.1
Losses and loss expenses incurred		47.2			51.1	69.7	58.2	54.3
Net underwriting expenses incurred		19.0			19.5	20.7	19.8	21.4
GAAP underwriting gain (loss)		$	7.7		4.8	(14.4)	(6.3)	0.4


Catastrophe losses		$	5.6		11.2	28.4	26.0	12.0
Prior year casualty reserve development		—			—	—	—	—

Underwriting ratios
Loss and loss expense ratio		63.9		%	67.8	91.7	81.1	71.4
Underwriting expense ratio		25.7			25.8	27.3	27.7	28.1
	Combined ratio	89.6		%	93.6	119.0	108.8	99.5


Catastrophe losses		7.6		pts	14.8	37.4	36.2	15.7
Prior year casualty reserve development		—			—	—	—	—
	Combined ratio before catastrophe losses	82.0		%	78.8	81.6	72.6	83.8

	Combined ratio before catastrophe losses and prior year casualty development	82.0			78.8	81.6	72.6	83.8

Other Statistics
Non-catastrophe property loss and loss expenses		$	23.1		25.4	22.4	15.3	22.8
Non-catastrophe property loss and loss expenses		31.3		pts	33.7	29.5	21.4	30.0
Direct new business		$	9.8		10.9	12.1	11.8	9.9
Renewal pure price increases		0.8		%	1.1	1.8	3.1	3.7
Retention		83		%	84	83	84	83



Note: Amounts may not foot due to rounding.

Page 8

Selective Insurance Group, Inc. & Consolidated Subsidiaries

STANDARD PERSONAL LINES

GAAP LINE OF BUSINESS RESULTS

(Unaudited)


	Quarter ended March 31, 2021						Quarter ended March 31, 2020
	Personal						Personal
($ in millions)	Auto			Homeowners	Other	Total	Auto	Homeowners	Other	Total
Net premiums written	$	37.9		25.5	1.6	65.1	40.1	25.6	2.0	67.6
Net premiums earned	41.4			30.6	1.8	73.8	42.5	31.5	2.2	76.1

Loss and loss expense ratio	63.9		%	65.4	38.2	63.9	64.1	78.2	115.2	71.4
Underwriting expense ratio	30.5			29.6	(148.6)	25.7	33.7	31.0	(124.0)	28.1

Combined ratio	94.4		%	95.0	(110.4)	89.6	97.8	109.2	(8.8)	99.5

Underwriting gain (loss)	$	2.3		1.5	3.9	7.7	1.0	(2.9)	2.3	0.4

















Note: Amounts may not foot due to rounding.

Page 9

Selective Insurance Group, Inc. & Consolidated Subsidiaries

EXCESS AND SURPLUS LINES

STATEMENT OF OPERATIONS AND SUPPLEMENTAL DATA

(Unaudited)


		Quarter ended
		Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ in millions)		2021			2020	2020	2020	2020

Underwriting results
Net premiums written		$	67.5		60.7	62.1	63.2	61.3
Change in net premiums written, from comparable prior year period		10		%	6	—	3	8

Net premiums earned		$	62.0		62.0	60.5	58.0	59.0
Losses and loss expenses incurred		41.4			37.3	47.1	38.8	33.8
Net underwriting expenses incurred		20.1			20.6	20.7	19.8	21.3
GAAP underwriting gain (loss)		$	0.5		4.1	(7.3)	(0.5)	3.8


Catastrophe losses		$	8.3		1.2	11.8	6.5	0.5
(Favorable) prior year casualty reserve development		(5.0)			—	—	—	—

Underwriting ratios
Loss and loss expense ratio		66.8		%	60.1	77.8	66.8	57.4
Underwriting expense ratio		32.4			33.3	34.2	34.1	36.1
	Combined ratio	99.2		%	93.4	112.0	100.9	93.5


Catastrophe losses		13.3		pts	1.9	19.5	11.3	0.8
(Favorable) prior year casualty reserve development		(8.1)			—	—	—	—
	Combined ratio before catastrophe losses	85.9		%	91.5	92.5	89.6	92.7

	Combined ratio before catastrophe losses and prior year casualty development	94.0			91.5	92.5	89.6	92.7

Other Statistics
Non-catastrophe property loss and loss expenses		$	8.9		8.6	8.0	5.6	5.7
Non-catastrophe property loss and loss expenses		14.3		pts	13.8	13.2	9.6	9.7
Direct new business		$	31.3		28.4	29.7	28.3	27.5
Renewal pure price increases		7.3		%	7.4	7.0	5.5	3.9



Note: Amounts may not foot due to rounding.

Page 10

Selective Insurance Group, Inc. & Consolidated Subsidiaries

EXCESS & SURPLUS LINES

GAAP LINE OF BUSINESS RESULTS

(Unaudited)


	Quarter ended March 31, 2021					Quarter ended March 31, 2020
($ in millions)	Casualty			Property	Total	Casualty	Property	Total
Net premiums written	$	48.1		19.4	67.5	45.7	15.6	61.3
Net premiums earned	43.8			18.2	62.0	44.1	14.9	59.0

Loss and loss expense ratio	55.3		%	94.4	66.8	62.7	41.6	57.4
Underwriting expense ratio	33.1			30.8	32.4	36.1	36.3	36.1

Combined ratio	88.4		%	125.2	99.2	98.8	77.9	93.5

Underwriting gain (loss)	$	5.1		(4.6)	0.5	0.5	3.3	3.8
















Note: Amounts may not foot due to rounding.

Page 11

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED INVESTMENT INCOME

(Unaudited)


		Quarter ended
		Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ in millions)		2021			2020	2020	2020	2020

Net investment income
Fixed income securities
	Taxable	$	45.3		43.9	43.7	43.6	42.5
	Tax-exempt	7.6			7.4	7.6	7.5	7.8
Total fixed income securities		52.8			51.3	51.3	51.1	50.3
Commercial mortgage loans		0.5			0.4	0.2	0.2	0.1
Equity securities		2.5			3.8	1.9	2.0	1.6
Other investments		17.4			17.8	18.7	(15.8)	6.3
Short-term investments		—			—	0.2	0.4	1.2
Investment income		73.3			73.2	72.4	37.8	59.4
Investment expenses		(3.6)			(4.7)	(4.2)	(3.4)	(3.4)
Investment tax expense		(13.4)			(13.1)	(13.1)	(5.9)	(10.5)
Total net investment income, after-tax		$	56.3		55.5	55.1	28.5	45.5












Net realized and unrealized investment gains (losses), pre-tax		$	5.1		20.1	7.7	12.6	(44.7)

Change in unrealized gains (losses) recognized in other comprehensive income, pre-tax		$	(109.0)		39.6	43.7	219.6	(132.2)


Average investment yields
	Fixed income investments, pre-tax	3.3		%	3.2	3.2	3.3	3.3
	Fixed income investments, after-tax	2.6			2.6	2.6	2.7	2.7

	Total portfolio, pre-tax	3.7		%	3.7	3.8	2.0	3.3
	Total portfolio, after-tax	3.0			3.0	3.1	1.6	2.7


Effective tax rate on net investment income		19.2		%	19.1	19.1	17.1	18.7
New money purchase rates for fixed income investments, pre-tax		2.1			2.7	2.8	3.5	3.1
New money purchase rates for fixed income investments, after-tax		1.7			2.2	2.2	2.7	2.5
Effective duration of fixed income investments including short-term (in years)		3.9			3.7	3.7	3.6	3.3

Note: Amounts may not foot due to rounding.

Page 12

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CONSOLIDATED COMPOSITION OF INVESTED ASSETS

(Unaudited)


	Mar. 31,					Dec. 31,		Sept. 30,		June 30,		Mar.31,
	2021					2020		2020		2020		2020
($ in millions)	Amount		Percent			Amount	Percent	Amount	Percent	Amount	Percent	Amount	Percent

Fixed income securities, at fair value	$	6,546.8	87		%	6,473.9	86	6,457.8	89	6,378.9	89	5,967.3	87
Commercial mortgage loans, at fair value	62.2		1			47.3	1	30.6	—	17.9	—	13.9	—
Total fixed income investments	6,609.1		88			6,521.2	87	6,488.3	89	6,396.8	89	5,981.1	87
Short-term investments	337.8		4			409.9	5	380.9	5	370.4	5	517.6	8
Total fixed income and short-term investments	6,946.9		92			6,931.1	92	6,869.2	94	6,767.2	94	6,498.7	95
Equity securities, at fair value	324.3		4			310.4	4	151.8	2	134.1	2	100.0	1
Other investments	290.2		4			266.3	4	258.6	4	230.5	4	244.9	4
Total investments	$	7,561.3	100		%	7,507.8	100	7,279.7	100	7,131.8	100	6,843.6	100

Fixed income investments, at carry value
U.S. government obligations	$	136.3	2		%	116.1	2	117.5	2	119.7	2	142.2	3
Foreign government obligations	19.7		—			18.4	—	17.0	—	17.9	—	12.9	—
Obligations of state and political subdivisions	1,218.6		19			1,251.6	19	1,236.0	19	1,207.9	19	1,201.8	20
Corporate securities	2,365.6		36			2,340.4	36	2,313.4	36	2,271.0	36	1,925.3	32
Collateralized loan obligations and other asset-backed securities	1,202.1		18			1,026.6	16	945.6	15	839.5	13	722.3	12
Residential mortgage-backed securities	947.5		14			1,051.8	16	1,183.0	18	1,318.4	21	1,430.2	24
Commercial mortgage-backed securities	656.2		10			667.9	10	644.2	10	603.2	9	531.0	9
Commercial mortgage loans	61.1		1			46.3	1	29.5	—	17.7	—	13.9	—
Total fixed income investments	$	6,607.1	100		%	6,519.1	100	6,486.1	100	6,395.4	100	5,979.6	100

Expected maturities of fixed income investments at carry value
Due in one year or less	$	454.8	7		%	434.4	7	337.6	5	315.8	5	296.8	5
Due after one year through five years	3,444.4		52			3,679.2	56	3,742.7	58	3,661.7	57	3,487.2	58
Due after five years through 10 years	2,071.6		31			1,920.7	30	1,972.9	30	2,061.5	32	1,937.5	32
Due after 10 years	636.2		10			484.7	7	432.9	7	356.4	6	258.1	5
Total fixed income investments	$	6,607.1	100		%	6,519.1	100	6,486.1	100	6,395.4	100	5,979.6	100

Weighted average credit quality of fixed income and short-term investments
Investment grade credit quality	$	6,687.7	96		%	6,635.0	96	6,594.2	96	6,489.4	96	6,290.9	97
Non-investment grade credit quality	259.1		4			296.1	4	275.1	4	277.8	4	207.8	3
Total fixed income and short-term investments, at fair value	$	6,946.9	100		%	6,931.1	100	6,869.2	100	6,767.2	100	6,498.7	100

Weighted average credit quality of fixed income and short-term investments	AA-					AA-		AA-		AA-		AA-

Alternative investments	Mar. 31, 2021
							Current
	Number of		Original			Remaining	Market
Strategy	Funds		Commitment			Commitment	Value
Private equity	46		$	269.8		104.1	182.0
Private credit	16		189.9			98.1	56.8
Real assets	7		37.5			15.9	19.7
Total	69		$	497.3		218.0	258.5

Note: Amounts may not foot due to rounding.

Page 13

Selective Insurance Group, Inc. & Consolidated Subsidiaries

CREDIT QUALITY OF INVESTED ASSETS

(Unaudited)


At March 31, 2021												Credit Rating
($ in millions)			Amortized Cost		Fair Value		% of Invested Assets		Yield to Worst	Effective Duration in Years	Average Life in Years	AAA		AA		A		BBB		Non-Investment Grade		Not Rated
Fixed income investments:
	U.S. government obligations		135		136		1.8		1.3	6.0	8.5	129		7		—		—		—		—
	Foreign government obligations		19		20		0.3		1.8	5.2	6.4	—		3		10		7		—		—
	State and municipal obligations		1,145		1,219		16.1		1.1	5.3	4.9	231		561		369		58		—		—
	Corporate securities		2,259		2,366		31.3		2.1	4.8	6.5	13		140		915		1,096		203		—
	Mortgage-backed securities:
		Residential mortgage-backed securities ("RMBS"):
		Agency RMBS	792		831		11.0		1.5	3.7	4.1	831		—		—		—		—		—
		Non-agency RMBS	114		116		1.5		1.5	1.7	3.8	53		12		52		—		—		—
		Total RMBS	906		948		12.5		1.5	3.5	4.1	884		12		52		—		—		—
		Commercial mortgage-backed securities	625		656		8.7		1.9	4.3	5.6	574		39		33		11		—		—
		Total mortgage-backed securities	1,531		1,604		21.2		1.7	3.8	4.7	1,458		50		84		11		—		—
	Collateralized loan obligations ("CLO") and other asset-backed securities ("ABS"):
		Auto	41		42		0.6		0.9	2.1	2.1	32		6		3		—		1		—
		Aircraft	56		56		0.7		4.4	3.2	3.5	—		1		19		34		2		—
		CLOs	783		786		10.4		2.6	1.0	5.0	401		282		43		16		42		1
		Credit cards	21		22		0.3		0.4	1.0	1.0	16		—		6		—		—		—
		Other ABS	287		295		3.9		2.3	3.5	5.3	68		26		158		34		8		1
		Total CLOs and ABS	1,189		1,202		15.9		2.5	1.8	4.8	517		316		229		85		54		2
Total securitized assets			2,720		2,806		37.1		2.0	2.9	4.8	1,975		366		313		96		54		2
		Commercial mortgage loans	61		62		0.8		3.8	3.4	6.7	—		—		27		35		—		—
Total fixed income investments			6,338		6,609		87.4		1.9	4.1	5.5	2,348		1,077		1,634		1,291		257		2
		Short-term investments	338		338		4.5		0.1	0.0	0.0	317		20		—		1		—		—
		Total fixed income and short-term investments	6,676		6,947		91.9		1.8	3.9	5.2	2,665		1,097		1,634		1,292		257		2
Total fixed income securities and short-term investments by credit rating percentage												38.4	%	15.8	%	23.5	%	18.6	%	3.7	%	—	%
Equity Securities:
	Common Stock(1)		303		323		4.3		—	—	—	—		—		—		—		—		323
	Preferred stock		2		2		—		—	—	—	—		—		—		1		1		—
		Total equity securities	304		324		4.3		—	—	—	—		—		—		1		1		323
Other investments:
	Alternative investments
		Private equity	182		182		2.4		—	—	—	—		—		—		—		—		182
		Private credit	57		57		0.7		—	—	—	—		—		—		—		—		57
		Real assets	20		20		0.3		—	—	—	—		—		—		—		—		20
		Total alternative investments	259		259		3.4		—	—	—	—		—		—		—		—		259
	Other investments		32		32		0.4		—	—	—	—		—		—		—		—		32
	Total other investments		290		290		3.8		—	—	—	—		—		—		—		—		290
Total invested assets			$	7,271	$	7,561	100.0	%	—	—	—	$2,665		$1,097		$1,634		$1,293		$258		$615

(1) Includes investments in exchange traded funds, mutual funds, business development corporations, and real estate investment trusts.
Note: Amounts may not foot due to rounding.

Page 14

Selective Insurance Group, Inc. & Consolidated Subsidiaries

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

(Unaudited)


	Quarter ended
	Mar. 31,			Dec. 31,	Sept. 30,	June 30,	Mar. 31,
($ in millions, except per share data)	2021			2020	2020	2020	2020

Reconciliation of net income available to common stockholders to non-GAAP operating income
Net income available to common stockholders	$	106.8		127.1	69.9	34.2	15.2
Net realized and unrealized (gains) losses, before tax	(5.1)			(20.1)	(7.7)	(12.6)	44.7

Tax on reconciling items	1.1			4.2	1.6	2.7	(9.4)


Non-GAAP operating income	$	102.8		111.2	63.8	24.2	50.5

Reconciliation of net income available to common stockholders per diluted common share to non-GAAP operating income per diluted common share
Net income available to common stockholders per diluted common share	$	1.77		2.10	1.16	0.57	0.25
Net realized and unrealized (gains) losses, before tax	(0.08)			(0.33)	(0.13)	(0.21)	0.74

Tax on reconciling items	0.01			0.07	0.03	0.04	(0.15)


Non-GAAP operating income per diluted common share	$	1.70		1.84	1.06	0.40	0.84

Reconciliation of annualized ROE to annualized non-GAAP operating ROE
Annualized ROE	16.8		%	20.6	11.9	6.2	2.8
Net realized and unrealized (gains) losses, before tax	(0.8)			(3.3)	(1.3)	(2.3)	8.3

Tax on reconciling items	0.2			0.7	0.3	0.5	(1.7)


Annualized non-GAAP operating ROE	16.2		%	18.0	10.9	4.4	9.4

Non-GAAP operating income, non-GAAP operating income per diluted common share, and non-GAAP operating return on common equity are measures comparable to net income available to common stockholders, net income available to common stockholders per diluted common share, and return on common equity, respectively, but excludes after-tax net realized and unrealized gains and losses on investments. They are used as important financial measures by management, analysts, and investors, because the timing of realized investment gains and losses on sales of securities in any given period is largely discretionary. In addition, net realized and unrealized gains and losses on investments that are charged to earnings could distort the analysis of trends. These operating measurements are not intended as a substitute for net income available to common stockholders, net income available to common stockholders per diluted common share, and return on common equity prepared in accordance with U.S. generally accepted accounting principles (GAAP). Reconciliations of net income available to common stockholders, net income available to common stockholders per diluted common share, and return on common equity to non-GAAP operating income, non-GAAP operating income per diluted common share, and non-GAAP operating return on common equity, respectively, are provided in the tables above.








Note: Amounts may not foot due to rounding.

Page 15

Selective Insurance Group, Inc. & Consolidated Subsidiaries

RATINGS AND CONTACT INFORMATION

Address:

As of March 31, 2021

40 Wantage Avenue

AM Best

Standard & Poor's

Moody's

Fitch

Branchville, NJ 07890

Financial Strength Ratings:

A+

Preferred Stock Rating:

n/a

BB+

Ba1

BBB-

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 16

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