Selective Insurance (SIGI) 8-K Results of Operations and Financial Condition

EXHIBIT 99.2

Supplemental Investor Package

_______________________________________________

Third Quarter 2011

Investor Contact:

Jennifer DiBerardino

Senior Vice President, Investor Relations and Treasurer

Tel:  973-948-1364

jennifer.diberardino@selective.com

 Selective Insurance Group, Inc.

 Selected Balance Sheet Data (unaudited)

 ($ in thousands, except per share amounts)

	September 30,								September 30,								December 31,
	2011								2010								2010
						Unrecognized/								Unrecognized/								Unrecognized/
	Balance			Market		Unrealized			Balance			Market		Unrealized			Balance			Market		Unrealized
	Sheet			Value		Gain/(Loss)			Sheet			Value		Gain/(Loss)			Sheet			Value		Gain/(Loss)
Invested Assets:
Corporate bonds1	$	1,900,130			1,915,953		68,871		$	1,548,160			1,569,975		73,054		$	1,683,336			1,704,600		35,334
Gov't\ Municipal bonds		1,725,061			1,757,780		109,189			1,939,587			1,985,217		121,589			1,873,730			1,894,436		77,913
Total bonds		3,625,191			3,673,733		178,060			3,487,747			3,555,192		194,643			3,557,066			3,599,036		113,247
Equities		139,203			139,203		(11,314	)		63,116			63,116		8,065			69,636			69,636		11,597
Short-term investments		162,812			162,812		-			265,043			265,043		-			161,155			161,155		-
Other investments		135,560			135,560		(3,189	)		154,728			154,728		(19,452	)		137,865			137,865		(4,982	)
Total invested assets		4,062,766			4,111,308		163,557			3,970,634			4,038,079		183,256			3,925,722			3,967,692		119,862
Invested assets per $ of stockholders' equity		3.74								3.64								3.67
Total assets		5,748,990								5,334,521								5,231,772
Liabilities:
Reserve for losses and loss expenses		3,243,622								2,809,797								2,830,058
Unearned premium reserve		902,112								880,698								823,596
Total liabilities		4,662,435								4,242,205								4,160,663
Stockholders' equity		1,086,555								1,092,316								1,071,109
Total debt to capitalization ratio		19.4	%							19.4	%							19.7	%
Adjusted total debt to capitalization ratio 2		12.8	%							12.7	%							12.9	%
Book value per share		20.04								20.41								19.95
Book value per share excluding   unrealized gain or loss on bond portfolio		18.49								18.87								19.09
NPW per insurance segment employee		771								760								761
Statutory premiums to surplus ratio		1.4	x							1.4	x							1.3	x
Statutory surplus		1,010,144								1,034,321								1,073,025

1 Includes mortgage-backed and asset-backed securities.

2 The adjusted debt to capitalization ratio reflects an estimated equity treatment of 90% applied to our $100 million Junior Subordinated Notes issued September 25, 2006 as applied by A.M. Best.

Selective Insurance Group, Inc.
Selected Income Statement Data (unaudited)
September 2011		THREE MONTHS ENDED September 30,												NINE MONTHS ENDED September 30,
($ in thousands, except per share amounts)		2011						2010						2011						2010
					Per diluted share						Per diluted share						Per diluted share						Per diluted share
Consolidated
Revenue		$	394,069					$	389,702					$	1,197,095					$	1,170,532
Operating (loss) income			(18,163	)		(0.34	)		18,794			0.35			572			0.01			47,641			0.88
Net realized (losses) gains, after tax			(1,329	)		(0.02	)		37			-			3,810			0.07			(2,126	)		(0.04	)
(Loss) Income from continuing operations			(19,492	)		(0.36	)		18,831			0.35			4,382			0.08			45,515			0.84
Loss on discontinued operations, after tax			(650	)		(0.01	)		(1,634	)		(0.03	)		(650	)		(0.01	)		(3,749	)		(0.07	)
Net (loss) income			(20,142	)		(0.37	)		17,197			0.32			3,732			0.07			41,766			0.77
Operating return on equity			-6.6	%					7.0	%					0.1	%					6.1	%
Insurance Operations
Gross premiums written			476,343						446,684						1,354,470						1,295,622
Net premiums written			396,832						367,114						1,133,170						1,088,729
Net premiums earned			358,963						354,709						1,065,886						1,063,101
Underwriting loss	- before tax		(68,124	)					(3,933	)					(111,890	)					(21,699	)
	- after tax		(44,281	)		(0.82	)		(2,556	)		(0.05	)		(72,728	)		(1.32	)		(14,104	)		(0.26	)
GAAP combined ratio			119.0	%					101.1	%					110.5	%					102.0	%
Commercial lines
Net premiums earned			292,363						293,225						869,421						884,134
GAAP combined ratio			113.5	%					100.0	%					107.6	%					100.9	%
Personal lines
Net premiums earned			66,600						61,484						196,465						178,967
GAAP combined ratio			143.2	%					106.4	%					123.1	%					107.8	%
Investments
Net investment income	- before tax		35,786						32,986						118,604						104,237
	- after tax		26,976			0.50			25,305			0.46			88,521			1.60			80,058			1.47
Effective tax rate			24.6	%					23.3	%					25.4	%					23.2	%
Annual after-tax yield on investment portfolio															3.0	%					2.8	%
Annual after-tax, after-interest expense yield															2.7	%					2.4	%
Invested assets per $ of stockholders' equity															3.74						3.64
Other expenses (net of other income)
Interest expense	- before tax		(4,559	)					(4,559	)					(13,675	)					(14,056	)
	- after tax		(2,963	)		(0.05	)		(2,963	)		(0.05	)		(8,888	)		(0.16	)		(9,136	)		(0.17	)
Other Income (Expense) - after tax		$	2,105			0.03		$	(992	)		(0.01	)	$	(6,333	)		(0.11	)	$	(9,177	)		(0.16	)
Diluted weighted avg shares outstanding			54,183						54,573						55,172						54,390

Selective Insurance Group, Inc. and Consolidated Subsidiaries

GAAP Investment Income

 (unaudited)

 ($ in thousands)

	For the three months ended						%			Year to Date						%
	September			September			Increase			September			September			Increase
	2011			2010			(Decrease)			2011			2010			(Decrease)
Investment Income:
Interest:
Fixed Maturity Securities	$	31,960			31,741			1		$	97,835			97,914			-
Short-term		28			134			(79	)		123			367			(66	)
Alternative Investments		4,453			2,359			89			23,994			11,122			116
Dividends		1,197			347			245			2,299			1,279			80
Miscellaneous		41			41			-			88			94			(6	)
		37,679			34,622			9			124,339			110,776			12
Investment Expense		1,893			1,636			16			5,735			6,539			(12	)
Net Investment Income Before Tax		35,786			32,986			8			118,604			104,237			14
Tax		8,810			7,681			15			30,083			24,179			24
Net Investment Income After Tax		26,976			25,305			7		$	88,521			80,058			11
Net Investment Income per Share	$	0.50			0.46			9		$	1.60			1.47			9
Effective Tax Rate		24.6	%		23.3	%					25.4	%		23.2	%
Average Yields :
Fixed Maturity Securities:
Pre Tax											3.46	%		3.60	%
After Tax											2.66	%		2.81	%
Portfolio:
Pre Tax											3.96	%		3.59	%
After Tax											2.95	%		2.75	%
	For the three months ended									Year to date:
	September			September						September			September
Net Realized Gains(Losses)		2011			2010						2011			2010
Total Fixed Maturities		262			1,791						1,497			(14,806	)
Total Equity Securities		(2,307	)		(1,734	)					4,364			11,535
Total		(2,045	)		57						5,861			(3,271	)
Net of Tax		(1,329	)		37						3,810			(2,126	)
As of September 30, 2011 new money rates for taxable fixed maturity securities were 2.53% on a pre-tax basis and 1.65% on an after-tax basis.

Selective Insurance Group, Inc.
2011 Statutory Results by Line of Business
3rd Qtr 2011 (unaudited)
($ in thousands)
	Net					Net											Underwriting			Dividends to
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Combined Ratio			Combined Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2011			2010			Gain/(Loss)
Personal Lines:
Homeowners	$	31,054		9.9	%	$	25,923		15.0	%		168.8	%		8.7	%		29.9	%		0.0	%		207.4	%		108.4	%	$	(29,374	)
Auto		38,406		(0.1	)%		37,372		4.0	%		76.0	%		10.4	%		30.3	%		0.0	%		116.7	%		109.0	%		(6,537	)
Other (including flood)		3,676		8.0	%		3,305		9.7	%		94.7	%		(141.6	)%		(47.4	)%		0.0	%		(94.3	)%		(5.4	)%		6,599
Total	$	73,136		4.3	%	$	66,600		8.3	%		113.0	%		2.2	%		26.2	%		0.0	%		141.4	%		103.2	%	$	(29,311	)
Commercial Lines:
Commerical property	$	55,725		3.6	%	$	48,050		(3.0	)%		107.3	%		5.8	%		34.9	%		0.1	%		148.1	%		90.2	%	$	(25,770	)
Workers compensation		64,269		10.8	%		63,497		3.8	%		71.7	%		15.8	%		25.3	%		1.4	%		114.2	%		130.2	%		(9,183	)
General liability		95,187		13.1	%		87,480		5.1	%		44.9	%		19.2	%		31.8	%		0.0	%		95.9	%		99.1	%		1,176
Auto		76,031		0.8	%		70,173		(4.4	)%		57.6	%		8.2	%		30.0	%		0.1	%		95.9	%		83.3	%		1,153
Business owners policies		16,514		5.6	%		16,663		1.6	%		74.4	%		13.0	%		38.9	%		0.0	%		126.3	%		105.7	%		(4,328	)
Bonds		5,019		(5.2	)%		4,727		(3.2	)%		19.2	%		10.5	%		58.3	%		0.0	%		88.0	%		76.3	%		399
Other		10,950		296.2	%		1,773		(29.9	)%		16.2	%		9.7	%		57.0	%		0.0	%		82.9	%		47.6	%		(4,919	)
Total	$	323,696		9.7	%	$	292,363		0.4	%		65.1	%		13.1	%		32.1	%		0.4	%		110.7	%		99.8	%	$	(41,472	)
Grand Total	$	396,832		8.7	%	$	358,963		1.8	%		74.0	%		11.1	%		31.0	%		0.3	%		116.4	%		100.3	%	$	(70,783	)
Note: Some amounts may not foot due to rounding.
				2011			2010
	Losses Paid		$	215,140		$	219,404
	LAE Paid			35,243			40,101
	Total Paid		$	250,383		$	259,505

Selective Insurance Group, Inc.
2011 Statutory Results by Line of Business
September 2011 YTD (unaudited)
($ in thousands)
	Net					Net											Underwriting			Dividends to
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Combined Ratio			Combined Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2011			2010			Gain/(Loss)
Personal Lines:
Homeowners	$	81,962		14.4	%	$	75,538		17.7	%		109.7	%		8.8	%		31.0	%		0.0	%		149.5	%		110.1	%	$	(39,363	)
Auto		114,024		1.6	%		111,522		5.7	%		75.2	%		10.9	%		30.6	%		0.0	%		116.7	%		112.3	%		(19,438	)
Other (including flood)		9,849		9.4	%		9,404		1.0	%		88.2	%		(60.7	)%		(47.1	)%		0.0	%		(19.6	)%		(3.6	)%		11,456
Total	$	205,835		6.7	%	$	196,464		9.8	%		89.1	%		6.6	%		27.1	%		0.0	%		122.8	%		105.9	%	$	(47,345	)
Commercial Lines:
Commerical property	$	153,105		(0.2	)%	$	144,121		(4.0	)%		79.5	%		5.7	%		36.5	%		0.1	%		121.8	%		96.3	%	$	(34,684	)
Workers compensation		198,742		6.0	%		189,878		1.1	%		74.6	%		15.9	%		25.3	%		1.9	%		117.7	%		124.4	%		(35,891	)
General liability		274,422		6.7	%		255,717		1.3	%		49.2	%		17.8	%		32.7	%		0.0	%		99.7	%		95.1	%		(5,283	)
Auto		220,500		(1.4	)%		209,042		(5.4	)%		55.8	%		7.0	%		30.6	%		0.1	%		93.5	%		87.4	%		10,012
Business owners policies		49,657		1.6	%		49,555		1.5	%		67.3	%		13.3	%		39.0	%		0.0	%		119.6	%		121.5	%		(9,737	)
Bonds		14,655		(3.2	)%		14,219		(0.7	)%		15.0	%		8.1	%		60.2	%		0.0	%		83.3	%		81.3	%		2,112
Other		16,254		103.9	%		6,890		(8.7	)%		5.8	%		2.6	%		52.5	%		0.0	%		60.9	%		47.0	%		(2,214	)
Total	$	927,335		3.8	%	$	869,422		(1.4	)%		61.5	%		12.3	%		32.4	%		0.4	%		106.6	%		100.5	%	$	(75,686	)
Grand Total	$	1,133,170		4.3	%	$	1,065,886		0.4	%		66.6	%		11.2	%		31.4	%		0.4	%		109.6	%		101.4	%	$	(123,032	)
Note: Some amounts may not foot due to rounding.
			��	2011			2010
	Losses Paid		$	612,066		$	588,974
	LAE Paid			113,151			114,703
	Total Paid		$	725,217		$	703,677

SELECTIVE INSURANCE GROUP, INC.	Unaudited
CONSOLIDATED BALANCE SHEETS	September 30,			December 31,
($ in thousands, except share amounts)	2011			2010
ASSETS
Investments:
Fixed maturity securities, held-to-maturity – at carrying value
(fair value:  $901,385 – 2011; $1,256,294 – 2010)	$	852,843			1,214,324
Fixed maturity securities, available-for-sale – at fair value
(amortized cost:  $2,649,035 – 2011; $2,285,988 – 2010)		2,772,348			2,342,742
Equity securities, available-for-sale – at fair value
(cost of:  $150,517 – 2011; $58,039 – 2010)		139,203			69,636
Short-term investments (at cost which approximates fair value)		162,812			161,155
Other investments		135,560			137,865
Total investments		4,062,766			3,925,722
Cash		287			645
Interest and dividends due or accrued		35,107			37,007
Premiums receivable, net of allowance for uncollectible
accounts of:  $3,863 – 2011; $4,691 – 2010		477,869			414,105
Reinsurance recoverables, net		631,732			318,752
Prepaid reinsurance premiums		121,560			110,327
Current federal income tax		17,518			11,200
Deferred federal income tax		83,299			93,234
Property and equipment – at cost, net of accumulated
depreciation and amortization of:  $158,383 – 2011; $151,704 – 2010		39,247			41,775
Deferred policy acquisition costs		220,044			209,627
Goodwill		7,849			7,849
Other assets		51,712			61,529
Total assets	$	5,748,990			5,231,772
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for losses and loss expenses	$	3,243,622			2,830,058
Unearned premiums		902,112			823,596
Notes payable		262,353			262,333
Accrued salaries and benefits		98,485			100,933
Other liabilities		155,863			143,743
Total liabilities	$	4,662,435			4,160,663
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:  97,044,503 – 2011; 96,362,667 – 2010		194,089			192,725
Additional paid-in capital		253,939			244,613
Retained earnings		1,158,308			1,176,155
Accumulated other comprehensive income		32,164			7,024
Treasury stock – at cost (shares:  42,823,871 – 2011; 42,686,204 – 2010)		(551,945	)		(549,408	)
Total stockholders’ equity		1,086,555			1,071,109
Commitments and contingencies
Total liabilities and stockholders’ equity	$	5,748,990			5,231,772

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME	Quarter ended						Nine Months ended
	September 30,						September 30,
($ in thousands, except per share amounts)	2011			2010			2011			2010
Revenues:
Net premiums earned	$	358,963			354,709			1,065,886			1,063,101
Net investment income earned		35,786			32,986			118,604			104,237
Net realized gains (losses):
Net realized investment gains (losses)		498			2,864			9,203			13,960
Other-than-temporary impairments		(2,693	)		(4,091	)		(3,062	)		(16,326	)
Other-than-temporary impairments on fixed maturity securities
recognized in other comprehensive income		150			1,284			(280	)		(905	)
Total net realized gains (losses)		(2,045	)		57			5,861			(3,271	)
Other income		1,365			1,950			6,744			6,465
Total revenues		394,069			389,702			1,197,095			1,170,532
Expenses:
Losses and loss expenses incurred		305,958			245,019			829,719			739,142
Policy acquisition costs		119,456			114,042			346,729			346,143
Interest expense		4,559			4,559			13,675			14,056
Other expenses		4,924			4,022			18,807			18,636
Total expenses		434,897			367,642			1,208,930			1,117,977
(Loss) income from continuing operations, before federal income tax		(40,828	)		22,060			(11,835	)		52,555
Federal income tax (benefit) expense:
Current		(20,001	)		(1,691	)		(12,614	)		8,475
Deferred		(1,335	)		4,920			(3,603	)		(1,435	)
Total federal income tax (benefit) expense		(21,336	)		3,229			(16,217	)		7,040
Net (loss) income from continuing operations		(19,492	)		18,831			4,382			45,515
Loss on disposal of discontinued operations, net of tax of $(350) and $(880) for Third Quarter 2011 and 2010 and $(350) and $(2,019) for
Nine Months 2011 and 2010		(650	)		(1,634	)		(650	)		(3,749	)
Net (loss) income	$	(20,142	)		17,197			3,732			41,766
Earnings per share:
Basic net (loss) income from continuing operations		(0.36	)		0.35			0.08			0.85
Basic net loss from disposal of discontinued operations		(0.01	)		(0.03	)		(0.01	)		(0.07	)
Basic net (loss) income	$	(0.37	)		0.32			0.07			0.78
Diluted net (loss) income from continuing operations		(0.36	)		0.35			0.08			0.84
Diluted net loss from disposal of discontinued operations		(0.01	)		(0.03	)		(0.01	)		(0.07	)
Diluted net (loss) income	$	(0.37	)		0.32			0.07			0.77
Dividends to stockholders	$	0.13			0.13			0.39			0.39

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY
	Nine Months ended September 30,
($ in thousands, except per share amounts)	2011				2010
Common stock:
Beginning of year	$	192,725				191,646
Dividend reinvestment plan
(shares:  74,777 – 2011; 81,471 – 2010)		150				163
Stock purchase and compensation plans
(shares:  607,059 – 2011; 284,793 – 2010)		1,214				569
End of period		194,089				192,378
Additional paid-in capital:
Beginning of year		244,613				231,933
Dividend reinvestment plan		1,066				1,098
Stock purchase and compensation plans		8,260				8,441
End of period		253,939				241,472
Retained earnings:
Beginning of year		1,176,155				1,138,978
Net income		3,732		3,732		41,766		41,766
Dividends to stockholders ($0.39 per share – 2011 and 2010)		(21,579	)			(21,248	)
End of period		1,158,308				1,159,496
Accumulated other comprehensive income (loss):
Beginning of year		7,024				(12,460	)
Other comprehensive income (loss), increase (decrease) in:
Unrealized gains on investment securities:
Non-credit portion of other-than-temporary impairment losses
recognized in other comprehensive income, net of deferred income tax		336				3,026
Other net unrealized gains on investment securities, net of
deferred income tax		22,617				55,556
Total unrealized gains on investment securities		22,953		22,953		58,582		58,582
Defined benefit pension plans, net of deferred income tax		2,187		2,187		2,098		2,098
End of period		32,164				48,220
Comprehensive income				28,872				102,446
Treasury stock:
Beginning of year		(549,408	)			(547,722	)
Acquisition of treasury stock
(shares:  137,667 – 2011; 98,419 – 2010)		(2,537	)			(1,528	)
End of period		(551,945	)			(549,250	)
Total stockholders’ equity	$	1,086,555				1,092,316

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW	Nine Months ended
	September 30,
($ in thousands)	2011			2010
Operating Activities
Net Income	$	3,732			41,766
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		25,260			23,175
Loss on disposal of discontinued operations		650			3,749
Stock-based compensation expense		6,383			6,875
Undistributed income of equity method investments		(1,793	)		(6,338	)
Net realized (gains) losses		(5,861	)		3,271
Changes in assets and liabilities:
Increase in reserves for losses and loss expenses, net of reinsurance recoverables		100,584			32,912
Increase in unearned premiums, net of prepaid reinsurance and advance premiums		67,816			25,123
Increase in net federal income tax recoverable		(9,570	)		(6,514	)
Increase in premiums receivable		(63,764	)		(13,817	)
(Increase) decrease in deferred policy acquisition costs		(10,417	)		11
Decrease (increase) in interest and dividends due or accrued		1,943			(1,491	)
(Decrease) increase in accrued salaries and benefits		(2,448	)		150
Decrease in accrued insurance expenses		(6,772	)		(6,872	)
Other-net		20,817			1,284
Net adjustments		122,828			61,518
Net cash provided by operating activities		126,560			103,284
Investing Activities
Purchase of fixed maturity securities, available-for-sale		(350,140	)		(699,133	)
Purchase of equity securities, available-for-sale		(148,104	)		(47,930	)
Purchase of other investments		(11,778	)		(14,348	)
Purchase of short-term investments		(1,030,834	)		(1,409,971	)
Sale of subsidiary		919			681
Sale of fixed maturity securities, available-for-sale		85,773			157,823
Sale of short-term investments		1,029,178			1,358,779
Redemption and maturities of fixed maturity securities, held-to-maturity		138,907			238,923
Redemption and maturities of fixed maturity securities, available-for-sale		95,951			251,875
Sale of equity securities, available-for-sale		59,991			76,277
Distributions from other investments		15,666			18,468
Sale of other investments		16,357			-
Purchase of property, equipment and other assets		(8,932	)		(4,062	)
Net cash used in investing activities		(107,046	)		(72,618	)
Financing Activities
Dividends to stockholders		(19,863	)		(19,516	)
Acquisition of treasury stock		(2,537	)		(1,528	)
Principal payment of notes payable		-			(12,300	)
Net proceeds from stock purchase and compensation plans		2,718			3,084
Excess tax benefits from share-based payment arrangements		(190	)		(795	)
Net cash used in financing activities		(19,872	)		(31,055	)
Net decrease in cash		(358	)		(389	)
Cash, beginning of year		645			811
Cash, end of period	$	287			422

Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
Unaudited Statutory Balance Sheets
($ in thousands)
	Sep-30			Sep-30			Dec-31
	2011			2010			2010
ASSETS
Bonds	$	3,482,530			3,355,540			3,482,204
Common stocks		139,203			63,116			69,636
Affiliated mortgage loan		38,297			38,944			38,785
Other investments		162,689			190,958			174,067
Short-term investments		109,468			212,664			111,021
Total investments		3,932,187			3,861,222			3,875,713
Cash on hand and in banks		(49,209	)		(33,420	)		(30,343	)
Interest and dividends due and accrued		35,173			36,448			37,172
Premiums receivable		475,442			456,588			410,809
Reinsurance recoverable on paid losses and expenses		9,376			6,097			5,013
Federal income tax recoverable		7,001			14,679			-
Deferred tax recoverable		135,884			123,873			133,100
EDP equipment		1,004			1,331			1,409
Equities and deposits in pools and associations		9,625			7,530			6,681
Receivable for sold securities		14			23,698			16,738
Other assets		29,334			31,964			30,164
Total assets	$	4,585,831			4,530,010			4,486,456
LIABILITIES
Reserve for losses	$	2,209,177			2,100,648			2,111,557
Reinsurance payable on paid loss and loss expense		1,243			1,191			1,030
Reserve for loss expenses		408,024			404,738			401,508
Unearned premiums		780,552			764,953			713,268
Reserve for commissions payable		39,987			41,525			43,590
Ceded balances payable		10,746			13,313			12,835
Federal income tax payable		-			-			1,645
Premium and other taxes payable		20,291			23,129			23,466
Borrowed money		13,017			13,017			13,018
Reserve for dividends to policyholders		3,451			2,568			2,390
Reserves for unauthorized reinsurance		1,811			1,013			1,811
Payable for securities		976			45,918			5,028
Funds withheld on account of others		5,690			5,771			7,015
Accrued salaries and benefits		63,306			64,405			61,353
Other liabilities		17,416			13,500			13,917
Total liabilities		3,575,687			3,495,689			3,413,431
POLICYHOLDERS' SURPLUS
Capital		28,325			28,325			28,325
Aggregate write-ins for special surplus funds		39,055			34,971			40,521
Paid in surplus		255,792			255,792			255,792
Unassigned surplus		686,972			715,233			748,387
Total policyholders' surplus		1,010,144			1,034,321			1,073,025
Total liabilities and policyholders' surplus	$	4,585,831			4,530,010			4,486,456

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Unaudited Statutory Statements Of Income

($ in thousands)

	Three Months Ended										Nine Months Ended
	September										September
UNDERWRITING	2011					2010					2011					2010
Net premiums written	$	396,832					365,129					1,133,170					1,086,744
Net premiums earned		358,963					352,723					1,065,886					1,061,115
Net losses paid		215,140					219,404					612,066					588,974
Change in reserve for losses		50,591					(16,787	)				97,620					28,272
Net losses incurred		265,731		74.0	%		202,617		57.4	%		709,686		66.6	%		617,246		58.2	%
Net loss expenses paid		35,243					40,101					113,151					114,703
Change in reserve for loss expenses		4,449					608					6,516					5,281
Net loss expenses incurred		39,692		11.1	%		40,709		11.5	%		119,667		11.2	%		119,984		11.3	%
Net underwriting expenses incurred		123,316		31.0	%		114,210		31.3	%		358,447		31.6	%		346,042		31.8	%
Total deductions		428,739					357,536					1,187,800					1,083,272
Statutory underwriting loss		(69,776	)				(4,813	)				(121,914	)				(22,157	)
Net loss from premium balances charged off		(1,300	)				(1,239	)				(4,003	)				(4,085	)
Finance charges and other income		1,349					2,005					6,688					6,683
Total other income		49		0.0	%		766		-0.2	%		2,685		-0.2	%		2,598		-0.2	%
Policyholders' dividends incurred		(1,056	)	0.3	%		(728	)	0.2	%		(3,803	)	0.4	%		(2,867	)	0.3	%
Total underwriting loss		(70,783	)	116.4	%		(4,775	)	100.3	%		(123,032	)	109.6	%		(22,426	)	101.4	%
INVESTMENT
Net investment income earned		34,967					31,750					117,546					98,659
Net realized gain / (loss)		(2,061	)				(108	)				5,816					(3,373	)
Total income before income tax		(37,877	)				26,867					330					72,860
Federal income tax (benefit) / expense		(14,525	)				990					(2,241	)				17,304
Net (loss) / income	$	(23,352	)				25,877					2,571					55,556
Policyholders' Surplus
Surplus, beginning of period	$	1,070,297					1,008,534					1,073,025					981,955
Net (loss) / income		(23,352	)				25,877					2,571					55,556
Change in deferred taxes		4,551					(8,831	)				5,471					(772	)
Change in unrealized gains		(12,286	)				6,771					(13,446	)				13,692
Dividends to stockholders		(17,006	)				(12,003	)				(46,018	)				(36,008	)
Change in non-admitted assets		(10,894	)				15,279					(8,712	)				19,114
Change in additional admitted deferred taxes		115					(1,446	)				(1,466	)				1,020
Surplus adjustments		(1,281	)				140					(1,281	)				(236	)
Net change in surplus for period		(60,153	)				25,787					(62,881	)				52,366
Surplus, end of period	$	1,010,144					1,034,321					1,010,144					1,034,321
Statutory underwriting loss	$	(70,783	)				(4,775	)				(123,032	)				(22,426	)
Adjustments under GAAP:
Deferred policy acquisition costs		3,859					390					10,417					(11	)
Pension costs		63					754					1,868					1,289
Other, net		(1,263	)				(302	)				(1,143	)				(551	)
GAAP underwriting loss	$	(68,124	)				(3,933	)				(111,890	)				(21,699	)
Note: Some amounts or ratios may not foot due to rounding.
Certain amounts have been reclassified to conform to the current year's presentation.

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Alternative Investments
as of September 30, 2011
(unaudited)
	Inception	Original		Remaining		Current		YTD			DPI(1)		TVPI(2)
Fund	Year	Commitment		Commitment		Market Value		Income			Ratio		Ratio
Real Estate
Silverpeak RE II	2005		20,000,000		2,473,976		10,548,405		1,434,454			0.45		0.96
Silverpeak RE III	2008		15,000,000		8,127,743		3,484,704		50,621			0.01		0.52
Total - Real Estate			35,000,000		10,601,719		14,033,109		1,485,075			0.34		0.85
Mezzanine Financing
Neovara Euro Mezz	2004		9,000,000		-		1,298,790		(610,120	)		0.95		1.05
GS Mezz V	2007		25,000,000		15,909,553		8,694,654		1,538,008			0.57		1.24
Total - Mezz. Financing			34,000,000		15,909,553		9,993,444		927,888			0.76		1.14
Distressed Debt
Varde VIII	2006		10,000,000		-		9,252,120		(57,395	)		0.22		1.15
GS Distressed Opp III	2007		15,000,000		3,168,884		10,032,863		1,298,782			0.23		1.02
Total - Distressed Debt			25,000,000		3,168,884		19,284,983		1,241,387			0.23		1.07
Private Equity
Prospector	1997		5,000,000		-		411,265		(179	)		2.79		2.88
Trilantic Capital Partners III	2004		10,000,000		1,226,685		4,182,468		1,604,200			1.27		1.72
NB Co-Invest	2006		15,000,000		1,847,495		9,986,580		1,986,128			0.53		1.24
Trilantic Capital Partners IV	2007		11,098,351		3,563,239		6,486,281		1,807,980			0.47		1.30
Total - Private Equity			41,098,351		6,637,419		21,066,594		5,398,129			1.02		1.60
Private Equity, Secondary Market
NB SOF	2005		12,000,000		899,494		6,722,098		924,459			0.62		1.23
GS Vintage IV	2007		20,000,000		5,277,941		15,088,262		3,451,307			0.37		1.21
NB SOF II	2008		12,000,000		4,869,961		7,266,555		1,519,022			0.37		1.36
Total - Pvt. Eq. Sec. Mkt.			44,000,000		11,047,396		29,076,915		5,894,788			0.45		1.24
Energy/Power Generation
ArcLight I	2002		15,000,000		1,655,505		330,194		1,157,765			1.80		1.82
ArcLight II	2003		15,000,000		2,295,492		4,298,335		1,631,668			1.15		1.38
ArcLight III	2006		15,000,000		2,037,794		10,597,801		2,071,450			0.60		1.27
Quintana Energy	2006		10,000,000		1,902,067		8,972,120		1,679,768			0.09		1.19
ArcLight IV	2007		10,000,000		2,404,868		6,593,611		1,058,360			0.57		1.24
Total - Energy/Power Generation			65,000,000		10,295,726		30,792,061		7,599,011			0.97		1.42
Venture Capital
Venture V	2001		10,000,000		900,000		7,909,078		1,448,062			0.27		1.14
Total - Venture Capital			10,000,000		900,000		7,909,078		1,448,062			0.27		1.14
TOTAL - ALTERNATIVE INVESTMENTS		$	254,098,351		58,560,697		132,156,184		23,994,340			0.69		1.27
(1) Distributed to paid in ratio
(2) Total value to paid in ratio
Note: Some amounts may not foot due to rounding

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Municipal Bond Portfolio

State and Repayment Source Composition

September 30, 2011

($  in thousands)

(unaudited)

Exposure = 58% Held-to-Maturity; 42% Available-for-Sale

Repayment Source Composition by State

Market Values

State	Revenue		% of State			General Obligation (GO)-Local		% of State			General Obligation (GO)-State		% of State			TX - Permanent School Fund (PSF)		% of State			Total		% of Total
TX		59,322		57	%		44,381		42	%		1,090		1	%		-		0	%		104,793		8	%
TX-PSF		-		0	%		-		0	%		-		0	%		40,893		100	%		40,893		3	%
WA		38,468		45	%		46,120		55	%		-		0	%		-		0	%		84,588		6	%
AZ		66,671		91	%		6,984		9	%		-		0	%		-		0	%		73,655		6	%
NC		23,975		34	%		24,328		34	%		22,846		32	%		-		0	%		71,149		5	%
NY		68,107		100	%		-		0	%		-		0	%		-		0	%		68,107		5	%
FL		58,817		100	%		-		0	%		-		0	%		-		0	%		58,817		4	%
OH		32,973		61	%		13,699		25	%		7,327		14	%		-		0	%		53,999		4	%
MN		6,435		12	%		5,097		10	%		41,540		78	%		-		0	%		53,072		4	%
IL		28,414		58	%		20,310		42	%		-		0	%		-		0	%		48,724		4	%
CO		17,191		36	%		29,005		60	%		1,830		4	%		-		0	%		48,026		4	%
Pre-refunded		39,656		57	%		20,310		29	%		5,338		8	%		3,678		5	%		68,982		5	%
Other		367,017		65	%		120,598		21	%		76,921		14	%		-		0	%		564,536		42	%
Grand Total		807,046		60	%		330,832		25	%		156,892		12	%		44,571		3	%		1,339,341		100	%

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Available-for-Sale Fixed Maturity Securities
September 30, 2011
($ in millions)
(unaudited)
	Fair Value		Unrealized Gain (Loss)			Average Credit Quality
AFS Fixed Maturity Portfolio:
U.S. government obligations1	$	380.0		21.9		AA+
Foreign government obligations		32.9		1.3		AA
State and municipal obligations		561.5		37.3		AA+
Corporate securities		1,125.6		40.5		A
Mortgage-backed securities ("MBS")		593.6		22.0		AA
Asset-backed securities ("ABS")		78.7		0.3		AAA
Total AFS fixed maturity portfolio	$	2,772.3		123.3		AA-
State and Municipal Obligations:
Government obligations	$	296.8		21.3		AA+
Special revenue obligations		264.7		16.0		AA
Total state and municipal obligations	$	561.5		37.3		AA+
Corporate Securities:
Financial	$	349.0		3.7		A+
Industrials		82.0		5.7		A-
Utilities		68.9		2.7		BBB+
Consumer discretion		98.0		3.7		A-
Consumer staples		125.6		6.2		A
Healthcare		149.0		9.7		AA-
Materials		52.7		1.2		A-
Energy		64.5		2.8		A-
Information technology		74.0		2.2		A+
Telecommunications services		46.3		1.1		BBB+
Other		15.6		1.5		AA+
Total corporate securities	$	1,125.6		40.5		A
MBS:
Government Guaranteed Agency commercial mortgage-backed securities ("CMBS")	$	78.0		5.8		AA+
Non-agency CMBS		34.9		(0.3	)	A
Government Guaranteed Agency residential mortgage-backed securities ("RMBS")		101.3		5.5		AA+
Other Agency RMBS		336.8		11.6		AA+
Non-agency RMBS		34.6		(0.6	)	BBB-
Alternative-A ("Alt-A") RMBS		8.0		-		AA+
Total MBS	$	593.6		22.0		AA
ABS:
ABS	$	77.6		1.3		AAA
Alt-A ABS3		0.4		(1.0	)	D
Sub-prime ABS2,3		0.7		-		D
Total ABS	$	78.7		0.3		AAA
1 U.S. Government includes coporate securities fully guaranteed by the FDIC.
2 We define sub-prime exposure as exposure to direct and indirect investments in non-agency residential mortgages with average FICO® scores below 650.
3 Alt-A ABS and sub-prime ABS each consist of one security that is currently expected by rating agencies to default on its obligations.

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Held-to-Maturity Securities
September 30, 2011
($ in millions)
(unaudited)
	Fair Value		Carry Value		Unrecognized Holding Gain (Loss)			Unrealized Gain (Loss) in Accumulated Other Comprehensive Income			Total Unrealized Unrecognized Gain (Loss)			Average Credit Quality
HTM Fixed Maturity Portfolio:
Foreign government obligations	$	5.5		5.6		(0.1	)		0.3			0.2		AA+
State and municipal obligations		777.8		745.0		32.8			15.7			48.5		AA
Corporate securities		72.2		64.5		7.7			(2.6	)		5.1		A
Mortgage-backed securities		37.6		30.9		6.7			(5.6	)		1.1		AA
Asset-backed securities		8.3		6.8		1.5			(1.6	)		(0.1	)	A
Total HTM fixed maturity portfolio	$	901.4		852.8		48.6			6.2			54.8		AA
State and Municipal Obligations:
Government obligations	$	235.4		226.0		9.4			7.4			16.8		AA
Special revenue obligations		542.4		519.0		23.4			8.3			31.7		AA
Total state and municipal obligations	$	777.8		745.0		32.8			15.7			48.5		AA
Corporate Securities:
Financial	$	20.8		18.3		2.5			(1.7	)		0.8		A-
Industrials		20.5		17.7		2.8			(0.8	)		2.0		A
Utilities		17.8		15.9		1.9			(0.1	)		1.8		A
Consumer discretion		5.8		5.7		0.1			0.1			0.2		AA-
Consumer staples		5.2		5.0		0.2			-			0.2		A
Materials		2.1		1.9		0.2			(0.1	)		0.1		BBB
Total corporate securities	$	72.2		64.5		7.7			(2.6	)		5.1		A
MBS:
Non-agency CMBS	$	37.5		30.8		6.7			(5.6	)		1.1		AA
Non-agency RMBS		0.1		0.1		-			-			-		BBB
Total MBS	$	37.6		30.9		6.7			(5.6	)		1.1		AA
ABS:
ABS	$	6.0		5.2		0.8			(0.6	)		0.2		BBB+
Alt-A ABS		2.3		1.6		0.7			(1.0	)		(0.3	)	AAA
Total ABS	$	8.3		6.8		1.5			(1.6	)		(0.1	)	A