Investments | Investments (a) Information regarding our held-to-maturity ("HTM") fixed income securities as of June 30, 2018 and December 31, 2017 was as follows: June 30, 2018 ($ in thousands) Amortized Cost Net Unrealized Gains (Losses) Carrying Value Unrecognized Holding Gains Unrecognized Holding Losses Fair Value Obligations of states and political subdivisions $ 22,490 49 22,539 721 — 23,260 Corporate securities 19,567 (90 ) 19,477 761 (125 ) 20,113 Total HTM fixed income securities $ 42,057 (41 ) 42,016 1,482 (125 ) 43,373 December 31, 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 $ 25,154 84 25,238 1,023 — 26,261 Corporate securities 16,996 (105 ) 16,891 1,003 (55 ) 17,839 Total HTM fixed income securities $ 42,150 (21 ) 42,129 2,026 (55 ) 44,100 Unrecognized holding gains and losses of HTM securities are not reflected in the Financial Statements, as they represent fair value fluctuations from the date a security is designated as HTM through the date of the balance sheet. (b) Information regarding our AFS securities as of June 30, 2018 and December 31, 2017 was as follows: June 30, 2018 ($ in thousands) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value AFS fixed income securities: U.S. government and government agencies $ 39,368 291 (763 ) 38,896 Foreign government 18,024 87 (129 ) 17,982 Obligations of states and political subdivisions 1,240,487 17,622 (4,442 ) 1,253,667 Corporate securities 1,630,998 6,617 (23,131 ) 1,614,484 Collateralized loan obligations and other asset-backed securities ("CLO and other ABS") 768,466 4,948 (1,817 ) 771,597 Commercial mortgage-backed securities ("CMBS") 457,344 258 (6,009 ) 451,593 Residential mortgage-backed securities (“RMBS”) 999,050 2,726 (12,342 ) 989,434 Total AFS securities $ 5,153,737 32,549 (48,633 ) 5,137,653 December 31, 2017 ($ in thousands) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value AFS fixed income securities: U.S. government and government agencies $ 49,326 647 (233 ) 49,740 Foreign government 18,040 526 (11 ) 18,555 Obligations of states and political subdivisions 1,539,307 44,245 (582 ) 1,582,970 Corporate securities 1,588,339 30,891 (1,762 ) 1,617,468 CLO and other ABS 789,152 6,508 (202 ) 795,458 CMBS 382,727 1,563 (841 ) 383,449 RMBS 709,825 6,487 (1,430 ) 714,882 Total AFS fixed income securities 5,076,716 90,867 (5,061 ) 5,162,522 AFS equity securities: Common stock 129,696 38,287 (226 ) 167,757 Preferred stock 14,115 904 (71 ) 14,948 Total AFS equity securities 143,811 39,191 (297 ) 182,705 Total AFS securities $ 5,220,527 130,058 (5,358 ) 5,345,227 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 other-than-temporary impairment ("OTTI") charge is recognized on an AFS security, through the date of the balance sheet. These unrealized gains and losses are recorded in AOCI on the Consolidated Balance Sheets. As of the first quarter of 2018, equity securities are no longer required to be included in the table above with the adoption of new accounting guidance through which unrealized gains and losses on equity securities are no longer recognized in AOCI, but are instead recognized through income. Refer to Note 2. "Adoption of Accounting Pronouncements" for additional information regarding the adoption of ASU 2016-01. (c) The severity of impairment on securities in an unrealized/unrecognized loss position averaged approximately 1% of amortized cost at both June 30, 2018 and December 31, 2017 . Quantitative information regarding unrealized losses on our AFS portfolio is provided below. Our HTM portfolio had $0.3 million of unrealized/unrecognized losses at June 30, 2018 , and $0.1 million of unrealized/unrecognized losses at December 31, 2017 . June 30, 2018 Less than 12 months 12 months or longer Total ($ 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 $ 28,005 (763 ) — — 28,005 (763 ) Foreign government 7,740 (129 ) — — 7,740 (129 ) Obligations of states and political subdivisions 342,653 (4,316 ) 3,422 (126 ) 346,075 (4,442 ) Corporate securities 1,147,312 (22,989 ) 2,762 (142 ) 1,150,074 (23,131 ) CLO and other ABS 427,307 (1,813 ) 774 (4 ) 428,081 (1,817 ) CMBS 378,523 (6,009 ) — — 378,523 (6,009 ) RMBS 739,217 (11,962 ) 10,895 (380 ) 750,112 (12,342 ) Total AFS securities $ 3,070,757 (47,981 ) 17,853 (652 ) 3,088,610 (48,633 ) December 31, 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 $ 23,516 (233 ) 250 — 23,766 (233 ) Foreign government 1,481 (11 ) — — 1,481 (11 ) Obligations of states and political subdivisions 107,514 (422 ) 14,139 (160 ) 121,653 (582 ) Corporate securities 238,326 (1,744 ) 3,228 (18 ) 241,554 (1,762 ) CLO and other ABS 74,977 (196 ) 1,655 (6 ) 76,632 (202 ) CMBS 154,267 (773 ) 5,214 (68 ) 159,481 (841 ) RMBS 269,485 (1,285 ) 11,200 (145 ) 280,685 (1,430 ) Total AFS fixed income securities 869,566 (4,664 ) 35,686 (397 ) 905,252 (5,061 ) AFS equity securities: Common stock 4,727 (226 ) — — 4,727 (226 ) Preferred stock 3,833 (71 ) — — 3,833 (71 ) Total AFS equity securities 8,560 (297 ) — — 8,560 (297 ) Total AFS $ 878,126 (4,961 ) 35,686 (397 ) 913,812 (5,358 ) 1 Gross unrealized losses include non-OTTI unrealized amounts and OTTI losses recognized in AOCI. The increase in the less than 12 months unrealized loss position was driven by higher interest rates, with a 65-basis point increase in 2-year U.S. Treasury Note yields and a 45-basis point increase in the 10-year U.S. Treasury Note yields during Six Months 2018 . We do not intend to sell any of the securities in the tables above, nor will we be required to sell any of these securities. Considering these factors, and in accordance with our review of 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 2017 Annual Report, we 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, 2018 , by contractual maturity, are shown below. Mortgage-backed securities 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, 2018 : AFS HTM ($ in thousands) Fair Value Carrying Value Fair Value Due in one year or less $ 186,138 8,309 8,383 Due after one year through five years 2,034,623 27,160 28,544 Due after five years through 10 years 2,733,420 6,547 6,446 Due after 10 years 183,472 — — Total fixed income securities $ 5,137,653 42,016 43,373 (e) The following table summarizes our other investment portfolio by strategy: Other Investments June 30, 2018 December 31, 2017 ($ in thousands) Carrying Value Remaining Commitment Maximum Exposure to Loss 1 Carrying Value Remaining Commitment Maximum Exposure to Loss 1 Alternative Investments Private equity $ 59,681 110,833 170,514 52,251 99,026 151,277 Private credit 40,916 89,757 130,673 37,743 94,959 132,702 Real assets 23,430 36,588 60,018 25,379 27,014 52,393 Total alternative investments 124,027 237,178 361,205 115,373 220,999 336,372 Other securities 21,176 — 21,176 16,895 — 16,895 Total other investments $ 145,203 237,178 382,381 132,268 220,999 353,267 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 2018 or 2017 . 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) 2018 2017 2018 2017 Net investment loss $ (6.4 ) (88.0 ) (41.8 ) (62.4 ) Realized gains (losses) 629.5 (69.2 ) 1,223.5 (304.3 ) Net change in unrealized (depreciation) appreciation (1,200.2 ) 1,328.5 (738.6 ) 1,890.0 Net (loss) gain $ (577.1 ) 1,171.3 443.1 1,523.3 Selective’s insurance subsidiaries’ alternative investments gain $ 1.9 5.2 3.5 6.8 (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, 2018 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, 2018 : ($ in millions) FHLBI Collateral FHLBNY Collateral State and Regulatory Deposits Total U.S. government and government agencies $ — — 22.3 22.3 Obligations of states and political subdivisions — — 3.1 3.1 CMBS 7.2 9.6 — 16.8 RMBS 58.2 79.8 — 138.0 Total pledged as collateral $ 65.4 89.4 25.4 180.2 (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, 2018 or December 31, 2017 . (h) The components of pre-tax net investment income earned were as follows: Quarter ended June 30, Six Months ended June 30, ($ in thousands) 2018 2017 2018 2017 Fixed income securities $ 43,774 37,668 $ 85,815 74,559 Equity securities 1,820 1,419 3,797 2,887 Short-term investments 611 377 1,134 627 Other investments 2,094 5,231 3,657 6,834 Investment expenses (2,746 ) (3,265 ) (5,619 ) (6,058 ) Net investment income earned $ 45,553 41,430 $ 88,784 78,849 (i) OTTI charges were $2.8 million and $1.2 million in Second Quarter 2018 and Second Quarter 2017 , respectively, and $4.0 million and $4.7 million in Six Months 2018 and Six Months 2017 , respectively. All of the OTTI charges in 2018 and a majority of the charges in 2017 were related to securities for which we had the intent to sell, with each security type's charge not exceeding 1% of its fair value. For a discussion of our evaluation for OTTI, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2017 Annual Report. (j) Net realized and unrealized gains and losses (excluding OTTI charges) for Second Quarter and Six Months 2018 and 2017 included the following: Quarter ended June 30, Six Months ended June 30, ($ in thousands) 2018 2017 2018 2017 Net realized (losses) gains on the disposals of securities: Fixed income securities $ (1,174 ) 2,606 (4,509 ) 4,570 Equity securities 1,226 350 9,295 350 Short-term investments 2 — (1 ) — Other investments — (5 ) — 461 Net realized gains on the disposal of securities 54 2,951 4,785 5,381 OTTI charges (2,821 ) (1,217 ) (4,033 ) (4,692 ) Net realized (losses) gains (2,767 ) 1,734 752 689 Unrealized gains (losses) recognized in income on equity securities 1 1,115 — (12,953 ) — Total net realized and unrealized investment (losses) gains $ (1,652 ) 1,734 $ (12,201 ) 689 1 Includes unrealized holding gains (losses) of: (i) $2.3 million in Second Quarter 2018 and $(2.7) million in Six Months 2018 on equity securities remaining in our portfolio as of June 30, 2018 ; and (ii) $(1.2) million in Second Quarter 2018 and $(10.3) million in Six Months 2018 on equity securities sold during the period. The components of net realized gains on disposals of securities for the periods indicated were as follows: Quarter ended June 30, Six Months ended June 30, ($ in thousands) 2018 2017 2018 2017 HTM fixed income securities Gains $ — 44 2 44 Losses — — — (1 ) AFS fixed income securities Gains 1,971 2,715 4,594 6,267 Losses (3,145 ) (153 ) (9,105 ) (1,740 ) Equity securities Gains 1,226 350 9,625 350 Losses — — (330 ) — Short-term investments Gains 2 — 3 2 Losses — — (4 ) (2 ) Other investments Gains — — — 480 Losses — (5 ) — (19 ) Total net realized gains on disposals of securities $ 54 2,951 4,785 5,381 Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold. Net realized gains in Second Quarter and Six Months 2018 were primarily driven by opportunistic sales in our equity portfolio and higher trading volume in our fixed income securities portfolio. Proceeds from the sales of AFS fixed income securities were $262.9 million and $122.3 million in Second Quarter 2018 and Second Quarter 2017 , respectively, and $938.3 million and $717.1 million in Six Months 2018 and Six Months 2017 , respectively. Proceeds from the sales of equity securities were $2.9 million and $0.8 million in Second Quarter 2018 and Second Quarter 2017 , respectively, and $43.6 million and $6.3 million in Six Months 2018 and Six Months 2017 , respectively. |