Investments | Investments (a) Information regarding our held-to-maturity ("HTM") fixed income securities as of June 30, 2017 and December 31, 2016 was as follows: June 30, 2017 ($ in thousands) Amortized Cost Net Unrealized Gains (Losses) Carrying Value Unrecognized Holding Gains Unrecognized Holding Losses Fair Value Obligations of states and political subdivisions $ 53,734 185 53,919 1,703 — 55,622 Corporate securities 18,714 (119 ) 18,595 1,323 — 19,918 Total HTM fixed income securities $ 72,448 66 72,514 3,026 — 75,540 December 31, 2016 ($ in thousands) Amortized Cost Net Unrealized Gains (Losses) Carrying Value Unrecognized Holding Gains Unrecognized Holding Losses Fair Value Obligations of states and political subdivisions $ 77,466 317 77,783 2,133 — 79,916 Corporate securities 22,711 (143 ) 22,568 1,665 (158 ) 24,075 Commercial mortgage-backed securities ("CMBS") 1,220 (15 ) 1,205 15 — 1,220 Total HTM fixed income securities $ 101,397 159 101,556 3,813 (158 ) 105,211 Unrecognized holding gains and losses of HTM securities are not reflected in the Financial Statements, as they represent fair value fluctuations from the later of: (i) the date a security is designated as HTM; or (ii) the date that an other-than-temporary impairment (“OTTI”) charge is recognized on an HTM security, through the date of the balance sheet. (b) Information regarding our AFS securities as of June 30, 2017 and December 31, 2016 was as follows: June 30, 2017 ($ in thousands) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value AFS fixed income securities: U.S. government and government agencies $ 66,932 1,103 (32 ) 68,003 Foreign government 18,157 557 — 18,714 Obligations of states and political subdivisions 1,360,211 45,641 (1,086 ) 1,404,766 Corporate securities 1,782,993 39,041 (524 ) 1,821,510 Collateralized loan obligations and other asset-backed securities ("CLO and other ABS") 698,594 4,108 (178 ) 702,524 CMBS 277,320 2,128 (243 ) 279,205 Residential mortgage-backed securities (“RMBS”) 718,798 6,068 (866 ) 724,000 Total AFS fixed income securities 4,923,005 98,646 (2,929 ) 5,018,722 AFS equity securities: Common stock 115,315 30,108 (987 ) 144,436 Preferred stock 16,148 1,110 — 17,258 Total AFS equity securities 131,463 31,218 (987 ) 161,694 Total AFS securities $ 5,054,468 129,864 (3,916 ) 5,180,416 December 31, 2016 ($ in thousands) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value AFS fixed income securities: U.S. government and government agencies $ 75,139 2,230 (36 ) 77,333 Foreign government 26,559 322 (16 ) 26,865 Obligations of states and political subdivisions 1,366,287 18,610 (5,304 ) 1,379,593 Corporate securities 1,976,556 27,057 (5,860 ) 1,997,753 CLO and other ABS 527,876 1,439 (355 ) 528,960 CMBS 256,356 1,514 (1,028 ) 256,842 RMBS 524,986 3,006 (2,798 ) 525,194 Total AFS fixed income securities 4,753,759 54,178 (15,397 ) 4,792,540 AFS equity securities: Common stock 104,663 26,250 (305 ) 130,608 Preferred stock 16,226 274 (355 ) 16,145 Total AFS equity securities 120,889 26,524 (660 ) 146,753 Total AFS securities $ 4,874,648 80,702 (16,057 ) 4,939,293 Unrealized gains and losses of AFS securities represent fair value fluctuations from the later of: (i) the date a security is designated as AFS; or (ii) the date that an OTTI charge is recognized on an AFS security, through the date of the balance sheet. These unrealized gains and losses are recorded in "Accumulated other comprehensive income (loss)" ("AOCI") on the Consolidated Balance Sheets. (c) The severity of impairment on securities in an unrealized/unrecognized loss position averaged 1% of amortized cost at both June 30, 2017 and December 31, 2016 . Quantitative information regarding unrealized losses on our AFS portfolio is provided below. June 30, 2017 Less than 12 months 12 months or longer Total ($ in thousands) Fair Value Unrealized Losses 1 Fair Value Unrealized Losses 1 Fair Value Unrealized 1 AFS fixed income securities: U.S. government and government agencies $ 12,670 (32 ) — — 12,670 (32 ) Obligations of states and political subdivisions 107,387 (1,086 ) — — 107,387 (1,086 ) Corporate securities 72,991 (517 ) 2,531 (7 ) 75,522 (524 ) CLO and other ABS 156,406 (178 ) — — 156,406 (178 ) CMBS 42,671 (243 ) — — 42,671 (243 ) RMBS 179,293 (860 ) 449 (6 ) 179,742 (866 ) Total AFS fixed income securities 571,418 (2,916 ) 2,980 (13 ) 574,398 (2,929 ) AFS equity securities: Common stock 18,423 (987 ) — — 18,423 (987 ) Total AFS equity securities 18,423 (987 ) — — 18,423 (987 ) Total AFS $ 589,841 (3,903 ) 2,980 (13 ) 592,821 (3,916 ) December 31, 2016 Less than 12 months 12 months or longer Total ($ in thousands) Fair Value Unrealized Losses 1 Fair Value Unrealized Losses 1 Fair Value Unrealized 1 AFS fixed income securities: U.S. government and government agencies $ 6,419 (36 ) — — 6,419 (36 ) Foreign government 13,075 (16 ) — — 13,075 (16 ) Obligations of states and political subdivisions 306,509 (5,304 ) — — 306,509 (5,304 ) Corporate securities 462,902 (5,771 ) 4,913 (89 ) 467,815 (5,860 ) CLO and other ABS 189,795 (354 ) 319 (1 ) 190,114 (355 ) CMBS 82,492 (1,021 ) 1,645 (7 ) 84,137 (1,028 ) RMBS 279,480 (2,489 ) 8,749 (309 ) 288,229 (2,798 ) Total AFS fixed income securities 1,340,672 (14,991 ) 15,626 (406 ) 1,356,298 (15,397 ) AFS equity securities: Common stock 11,271 (305 ) — — 11,271 (305 ) Preferred stock 6,168 (355 ) — — 6,168 (355 ) Total AFS equity securities 17,439 (660 ) — — 17,439 (660 ) Total AFS $ 1,358,111 (15,651 ) 15,626 (406 ) 1,373,737 (16,057 ) 1 Gross unrealized losses include non-OTTI unrealized amounts and OTTI losses recognized in AOCI. We do not intend to sell any of the securities in the tables above, nor do we believe we will be required to sell any of these securities. We have also reviewed these securities under our OTTI policy, as described in Note 2. “Summary of Significant Accounting Policies” within Item 8. “Financial Statements and Supplementary Data.” of our 2016 Annual Report , and have concluded that they are temporarily impaired. This conclusion reflects our current judgment as to the financial position and future prospects of the entity that issued the investment security and underlying collateral. (d) Fixed income securities at June 30, 2017 , by contractual maturity, are shown below. Mortgage-backed securities ("MBS") are included in the maturity tables using the estimated average life of each security. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations, with or without call or prepayment penalties. Listed below are the contractual maturities of fixed income securities at June 30, 2017 : AFS HTM ($ in thousands) Fair Value Carrying Value Fair Value Due in one year or less $ 306,493 34,521 34,898 Due after one year through five years 2,095,055 29,648 31,498 Due after five years through 10 years 2,379,624 8,345 9,144 Due after 10 years 237,550 — — Total fixed income securities $ 5,018,722 72,514 75,540 (e) We evaluate the alternative investments and tax credit investments included in our other investments portfolio to determine whether those investments are VIEs and if so, whether consolidation is required. A VIE is an entity that either has equity investors that lack certain essential characteristics of a controlling financial interest or lacks sufficient funds to finance its own activities without financial support provided by other entities. We consider several significant factors in determining if our investments are VIEs and if we are the primary beneficiary, including whether we have: (i) the power to direct activities of the VIE; (ii) the ability to remove the decision maker of the VIE; (iii) the ability to participate in making decisions that are significant to the VIE; and (iv) the obligation to absorb losses and the right to receive benefits that could potentially be significant to the VIE. We have determined that the investments in our other investment portfolio are VIEs, but that we are not the primary beneficiary and therefore, consolidation is not required. The following table summarizes our other investment portfolio by strategy: Other Investments June 30, 2017 December 31, 2016 ($ in thousands) Carrying Value Remaining Commitment Maximum Exposure to Loss 1 Carrying Value Remaining Commitment Maximum Exposure to Loss 1 Alternative Investments Private equity $ 46,945 76,027 122,972 41,135 76,774 117,909 Private credit 29,942 57,391 87,333 28,193 40,613 68,806 Real assets 20,783 31,237 52,020 14,486 22,899 37,385 Total alternative investments 97,670 164,655 262,325 83,814 140,286 224,100 Other securities 18,741 — 18,741 18,583 3,400 21,983 Total other investments $ 116,411 164,655 281,066 102,397 143,686 246,083 1 The maximum exposure to loss includes both the carry value of these investments and the related unfunded commitments. In addition, tax credits that have been previously recognized in Other securities are subject to the risk of recapture, which we do not consider significant. We do not have a future obligation to fund losses or debts on behalf of the investments above; however, we are contractually committed to make additional investments up to the remaining commitment outlined above. We have not provided any non-contractual financial support at any time during 2017 or 2016 . For a description of our alternative investment strategies, as well as information regarding redemption, restrictions, and fund liquidations, refer to Note 5. “Investments” in Item 8. “Financial Statements and Supplementary Data.” of our 2016 Annual Report . The following table sets forth gross summarized financial information for our other investments portfolio, including the portion not owned by us. The majority of these investments are carried under the equity method of accounting. The last line of the table below reflects our share of the aggregate income or loss, which is the portion included in our Financial Statements. As the majority of these investments report results to us on a one quarter lag, the summarized financial statement information for the three and six-month periods ended March 31 is included in our Second Quarter and Six Months results. This information is as follows: Income Statement Information Quarter ended June 30, Six Months ended June 30, ($ in millions) 2017 2016 2017 2016 Net investment (loss) income $ (9.9 ) (4.6 ) (62.4 ) 37.0 Realized gains (70.2 ) 193.2 (304.3 ) 981.1 Net change in unrealized depreciation 1,418.5 (253.9 ) 1,890.0 (1,236.5 ) Net gain $ 1,338.4 (65.3 ) 1,523.3 (218.4 ) Selective’s insurance subsidiaries’ other investments gain (loss) $ 5.2 (0.6 ) 6.8 (1.7 ) (f) We have pledged certain AFS fixed income securities as collateral related to our relationships with the Federal Home Loan Bank of Indianapolis ("FHLBI") and the Federal Home Loan Bank of New York ("FHLBNY"). In addition, certain securities were on deposit with various state and regulatory agencies at June 30, 2017 to comply with insurance laws. We retain all rights regarding all securities pledged as collateral. The following table summarizes the market value of these securities at June 30, 2017 : ($ in millions) FHLBI Collateral FHLBNY Collateral State and Regulatory Deposits Total U.S. government and government agencies $ 3.1 — 23.9 27.0 Obligations of states and political subdivisions — — 2.0 2.0 CMBS 3.6 4.8 — 8.4 RMBS 60.6 51.9 — 112.5 Total pledged as collateral $ 67.3 56.7 25.9 149.9 (g) We did not have exposure to any credit concentration risk of a single issuer greater than 10% of our stockholders' equity, other than certain U.S. government-backed investments, as of June 30, 2017 or December 31, 2016 . (h) The components of pre-tax net investment income earned were as follows: Quarter ended June 30, Six Months ended June 30, ($ in thousands) 2017 2016 2017 2016 Fixed income securities $ 37,668 31,753 $ 74,559 63,397 Equity securities 1,419 2,204 2,887 4,434 Short-term investments 377 142 627 301 Other investments 5,231 (611 ) 6,834 (1,677 ) Investment expenses (3,265 ) (2,306 ) (6,058 ) (4,504 ) Net investment income earned $ 41,430 31,182 $ 78,849 61,951 (i) The following tables summarize OTTI by asset type for the periods indicated: Second Quarter 2017 Gross Included in Other Comprehensive Income ("OCI") Recognized in ($ in thousands) AFS fixed income securities: U.S. government and government agencies $ 2 — 2 Obligations of states and political subdivisions 239 — 239 Corporate securities 381 — 381 CLO and other ABS 62 — 62 CMBS 220 — 220 RMBS 71 (6 ) 77 Total AFS fixed income securities 975 (6 ) 981 AFS equity securities: Common stock 46 — 46 Total AFS equity securities 46 — 46 Other Investments 190 — 190 Total OTTI losses $ 1,211 $ (6 ) $ 1,217 Second Quarter 2016 Gross Included in OCI Recognized in ($ in thousands) AFS fixed income securities: Corporate securities $ 104 — 104 RMBS 98 10 88 Total AFS fixed income securities 202 10 192 AFS equity securities: Common stock 357 — 357 Total AFS equity securities 357 — 357 Total OTTI losses $ 559 10 549 Six Months 2017 Gross Included in Other Comprehensive Income ("OCI") Recognized in ($ in thousands) AFS fixed income securities: U.S. government and government agencies $ 31 — 31 Obligations of states and political subdivisions 612 — 612 Corporate securities 575 — 575 CLO and other ABS 85 — 85 CMBS 670 — 670 RMBS 1,163 (6 ) 1,169 Total AFS fixed income securities 3,136 (6 ) 3,142 AFS equity securities: Common stock 1,360 — 1,360 Total AFS equity securities 1,360 — 1,360 Other Investments 190 — 190 Total OTTI losses $ 4,686 $ (6 ) $ 4,692 Six Months 2016 Gross Included in OCI Recognized in ($ in thousands) AFS fixed income securities: Corporate securities $ 1,077 — 1,077 RMBS 98 10 88 Total AFS fixed income securities 1,175 10 1,165 AFS equity securities: Common stock 2,974 — 2,974 Preferred stock 3 — 3 Total AFS equity securities 2,977 — 2,977 Total OTTI losses $ 4,152 10 4,142 For a discussion of our evaluation for OTTI refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2016 Annual Report . (j) The components of net realized gains, excluding OTTI charges, for the periods indicated were as follows: Quarter ended June 30, Six Months ended June 30, ($ in thousands) 2017 2016 2017 2016 HTM fixed income securities Gains $ 44 3 44 3 Losses — — (1 ) (1 ) AFS fixed income securities Gains 2,715 365 6,267 985 Losses (153 ) (5 ) (1,740 ) (41 ) AFS equity securities Gains 350 2,171 350 2,501 Losses — (220 ) — (240 ) Other investments Gains — — 480 — Losses (5 ) — (19 ) (4 ) Total net realized gains (excluding OTTI charges) $ 2,951 2,314 5,381 3,203 Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold. Proceeds from the sale of AFS securities were $123.1 million and $88.7 million in Second Quarter 2017 and Second Quarter 2016 , respectively, and $723.4 million and $105.9 million in Six Months 2017 and Six Months 2016, respectively. This increase was driven by higher trading volume in our fixed income securities portfolio related to the recent hiring of new external investment managers. |