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

Exhibit 99.2

		®
Supplemental Investor Package
________________________________
Fourth Quarter and Full Year 2008
		Investor Contact:
		Jennifer DiBerardino
		Vice President, Investor Relations
		Tel:  973-948-1364
		Jennifer.diberardino@selective.com

SELECTIVE INSURANCE GROUP, INC.

INVESTOR PACKET

TABLE OF CONTENTS

Earnings Press Release		1
Selected Balance Sheet Data		8
Selected Income Statement Data		9
Quarterly Investment Income		10
Investment Yield and Tax Rate Portfolio Breakdown		11
Statutory Combined Ratio Summary by LOB Quarter		12
Statutory Combined Ratio Summary by LOB YTD		13
DIS Results and PEO Statistics		14
Consolidated Balance Sheet		15
Consolidated Statement of Income		16
Consolidated Statement of Stockholder’s Equity		17
Consolidated Statement of Cash Flows		18
Statutory Balance Sheet		19
Statutory Statement of Combined Income		20
Investment Portfolio – Appendix
	Municipal Fixed Income Portfolio Exhibit	21
	Ratings on Municipal Fixed Income Portfolio Exhibit	22
	Muni Bonds with Credit Enhancement Exhibit	23
	Structured Securities Chart	24
	RMBS & RABS Chart	25
	RMBS & RABS by Vintage Year Exhibit	26
	RMBS and RABS by Type Exhibit	27
	RMBS & RABS Ratings Migrations	28
	CMBS Chart	29
	CMBS by Vintage Year Exhibit	30
	CMBS by Type Exhibit	31
	CMBS Ratings Migration	32
	2007 Vintage CMBS Chart	33
	2007 Vintage CMBS Exhibit	34
	Alt-A RMBS Chart	35
	Alt-A by Vintage Year Exhibit	36
	Asset Backed Securities with Insurance Exhibit	37
	Fixed Income Government & Agency Exposure Exhibit	38
	AFS Fixed Maturities Severity & Duration of Unrealized Losses Exhibit	39
	Credit Quality of AFS Securities Exhibit	40

Selective Insurance Group, Inc.

Selected Balance Sheet Data (unaudited)

($ in thousands, except per share amounts)

	December 31,								December 31,
	2008								2007
	Balance			Market		Unrealized			Balance			Market		Unrealized
	Sheet			Value		Gain/(Loss)			Sheet			Value		Gain/(Loss)
Invested Assets:
Corporate bonds1,2	$	1,024,179			1,024,181		(124,294	)	$	1,299,055			1,299,057		(688	)
Gov't\ Municipal bonds2		2,011,262			2,011,275		35,240			1,780,275			1,780,417		24,466
Total bonds		3,035,441			3,035,456		(89,054	)		3,079,330			3,079,474		23,778
Equities		132,131			132,131		6,184			274,705			274,705		114,315
Short-term investments		198,111			198,111		-			190,167			190,167		-
Trading securities		2,569			2,569		(1,216	)		-			-		-
Other investments		172,057			172,057		(5,585	)		188,827			188,827		30,647
Total invested assets		3,540,309			3,540,324		(89,671	)		3,733,029			3,733,173		168,740
Total assets		4,941,332								5,001,992
Liabilities:
Reserve for losses		2,256,329								2,182,572
Reserve for loss expenses		384,644								359,975
Unearned premium reserve		844,334								841,348
Total liabilities		4,050,839								3,925,949
Stockholders' equity		890,493								1,076,043
Total debt to capitalization ratio		23.5	%							21.5	%
Adjusted total debt to capitalization ratio 3		17.0	%							15.2	%
Book value per share		16.84								19.81
Book value per share excluding
FAS 115 unrealized gain or loss on bond portfolio		17.94								19.53
NPW per insurance segment employee		797								797
Statutory premiums to surplus ratio		1.7	x							1.5	x
Statutory surplus		866,035								1,034,294

1	Includes mortgage-backed and asset backed securities.
2	Certain prior year amounts were reclassified to confrom with currrent year presentation.
3	The adjusted debt to capitalization ratio reflects a reduction in debt for amounts held in an irrevocable trust for the benefit of senior note holders as well as the median rating agency equity treatment of 75% applied to our $100 million Junior Subordinated Notes issued September 25, 2006.

Selective Insurance Group, Inc.
Selected Income Statement Data (unaudited)
December 2008	THREE MONTHS ENDED DECEMBER 31,												TWELVE MONTHS ENDED DECEMBER 31,
($ in thousands, except per share amounts)	2008						2007						2008						2007
				Per diluted share						Per diluted share						Per diluted share						Per diluted share
Consolidated
Revenue	$	380,398					$	466,611					$	1,695,979					$	1,846,228
Operating income		5,315			0.10			32,243			0.60			75,902			1.42			124,818			2.21
Net realized (losses) gains, after tax		(19,703	)		(0.38	)		3,997			0.07			(32,144	)		(0.60	)		21,680			0.38
Net (Loss) income		(14,388	)		(0.28	)		36,240			0.67			43,758			0.82			146,498			2.59
Operating return on equity		2.3	%					12.2	%					7.7	%					11.6	%
Insurance Operations
Gross premiums written		358,381						369,702						1,708,793						1,752,248
Net premiums written		306,431						323,236						1,484,041						1,554,867
Net premiums earned		366,618						382,682						1,495,490						1,517,306
Underwriting (loss) profit - before tax		(4,785	)					1,264						(15,226	)					15,957
- after tax		(3,110	)		(0.06	)		822			0.02			(9,897	)		(0.19	)		10,372			0.18
GAAP combined ratio		101.3	%					99.7	%					101.0	%					98.9	%
Commercial lines
Net premiums earned		312,887						331,044						1,285,547						1,314,002
GAAP combined ratio		99.6	%					95.9	%					99.5	%					96.8	%
Personal lines
Net premiums earned		53,731						51,638						209,943						203,304
GAAP combined ratio		111.2	%					123.8	%					110.2	%					112.9	%
Diversified Insurance Services
Revenue		26,002						26,380						116,346						115,566
(Loss) income  - after tax		(217	)		(0.00	)		2,358			0.04			9,606			0.18			12,355			0.22
Return on revenue		(0.8	)%					8.9	%					8.3	%					10.7	%
Investments
Net investment income - before tax		18,517						49,965						131,032						174,144
- after tax		17,043			0.33			37,315			0.68			105,039			1.97			133,669			2.34
Effective tax rate		8.0	%					25.3	%					19.8	%					23.2	%
Annual after-tax yield on
investment portfolio														2.9	%					3.6	%
Annual after-tax, after-interest
expense yield														2.5	%					3.2	%
Invested assets per $ of
stockholders' equity														3.98						3.47
Other expenses (net of
other income)
Interest expense - before tax		(5,036	)					(5,640	)					(20,508	)					(23,795	)
Actual interest expense - after tax		(3,273	)					(3,666	)					(13,330	)					(15,467	)
Interest expense addback for dilution
- after tax		-						208						-						1,293
Adjusted interest expense - after tax		(3,273	)		(0.06	)		(3,458	)		(0.06	)		(13,330	)		(0.25	)		(14,174	)		(0.25	)
Other - after tax	$	(5,128	)		(0.11	)	$	(4,586	)		(0.08	)		(15,516	)		(0.29	)	$	(16,111	)		(0.28	)
Diluted weighted avg shares
outstanding		51,948						54,746						53,319						57,165

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Quarterly

GAAP Investment Income

($ in thousands)

(Unaudited)

	For the three months ended						%			Year to Date						%
	December			December			Increase			December			December			Increase
	2008			2007			(Decrease)			2008			2007			(Decrease)
Investment Income:
Interest:
Fixed Maturity Securities	$	36,874			36,665			0.6		$	146,555			140,383			4.4
Short-term		549			2,369			(76.8	)		4,252			8,563			(50.3	)
Other Investments:
Alternative Investments		(18,036	)		6,361			(383.5	)		(12,676	)		19,201			(166.0	)
Other		-			2,391			(100.0	)		-			2,391			(100.0	)
Dividends		1,920			3,619			(46.9	)		5,603			8,626			(35.0	)
Change in Fair Value (1)		(1,681	)		-			N/M			(8,129	)		-			N/M
Miscellaneous		105			77			36.4			340			236			44.1
		19,731			51,482			(61.7	)		135,945			179,400			(24.2	)
Investment Expense		1,214			1,517			(20.0	)		4,913			5,256			(6.5	)
Net Investment Income Before Tax		18,517			49,965			(62.9	)		131,032			174,144			(24.8	)
Tax		1,474			12,650			(88.3	)		25,993			40,475			(35.8	)
Net Investment Income
After Tax	$	17,043			37,315			(54.3	)	$	105,039			133,669			(21.4	)
Net Investment Income
per Share		0.33			0.68			(51.5	)		1.97			2.34			(15.8	)
Effective Tax Rate		8.0	%		25.3	%					19.8	%		23.2	%
Average Yields:
Fixed Maturity Securities
Pre Tax											4.6	%		4.5	%
After Tax											3.6	%		3.6	%
Portfolio
Pre Tax											3.6	%		4.8	%
After Tax											2.9	%		3.6	%
	For the three months ended									Year to Date
	December			December						December			December
Net Realized Gains (Losses)	2008			2007						2008			2007
Fixed Maturities		(13,388	)		(5,063	)					(54,159	)		(6,705	)
Equity Securities		(11,769	)		11,212						13,292			40,895
Other		(5,156	)		-						(8,585	)		(836	)
Total		(30,313	)		6,149						(49,452	)		33,354
Net of Tax		(19,703	)		3,997						(32,144	)		21,680

(1 )	Selective adopted Fas 159, the Fair Value Option for Financial Assets and Financial Liablilities - Including an amendment
	of FASB Statement No. 115,  on January 1, 2008 and elected to apply the fair value option to certain securities that were
	being managed by an outside manager at the time of adoption.

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Investment Yield and Effective Tax Rate Portfolio Breakdown

December 31, 2008

($ in thousands)

(Unaudited)

			Q4 2008					FY 2008
	Market Value		Yield			Effective Tax Rate		Yield			Effective Tax Rate
	($)		(%)			(%)		(%)			(%)
Fixed Maturities Securities:
State & Municipal T/E		1,686,822		0.9			3.3		3.8			4.1
State & Municipal Tax		72,302		1.3			35.0		5.4			35.0
State & Municipal		1,759,124		0.9			5.2		3.9			6.1
U.S. Gov't (1) (2)		252,151		1.0			35.0		3.5			35.0
Corporate		366,535		1.4			35.0		5.8			35.0
ABS's (1)		61,418		2.3			35.0		6.8			35.0
MBS's (1)		596,228		1.5			35.0		5.9			35.0
Total Debt Securities		3,035,456		1.1			20.8		3.0			21.6
Equity Securities		132,131		1.1			29.2		2.8			20.4
Trading Securities (3)		2,569		(30.8	)		35.0		(56.6	)		35.0
Short-term Investments		198,111		0.3			35.0		2.1			29.8
Other Investments
Alternative Investments		165,017		(9.5	)		35.0		(7.6	)		35.0
Other		7,040		0.0			0.0		0.0			0.0
		3,540,324		0.5			8.0		3.6			19.8

(1)	Certain prior year amounts were reclassified to conform with current year presentation.
(2)	U.S. Government includes corporate securities fully guaranteed by the Federal Deposit Insurance Corporation (FDIC).
(3)	Selective adopted Fas 159, the Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment
	of FASB Statement No. 115,  on January 1, 2008 and elected to apply the fair value option to certain securities that were
	being managed by an outside manager at the time of adoption.

Selective Insurance Group, Inc.

2008 Statutory Results by Line of Business

4th Qtr 2008 (unaudited)

($ in thousands)

	Net					Net											Underwriting			Dividends to			Combined			Combined
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Ratio			Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2008			2007			Gain/(Loss)
Personal Lines:
Homeowners	$	16,867		3.0	%	$	17,311		7.2	%		47.2	%		7.6	%		34.4	%		0.0	%		89.2	%		126.5	%	$	2,026
Auto		31,653		1.6	%		34,018		2.1	%		77.8	%		10.8	%		30.1	%		0.0	%		118.7	%		116.8	%		(5,658	)
Other (including
flood)		2,488		8.6	%		2,401		10.2	%		89.7	%		(7.7	)%		(37.7	)%		0.0	%		44.3	%		97.8	%		1,369
Total	$	51,009		2.4	%	$	53,731		4.1	%		68.5	%		9.0	%		28.1	%		0.0	%		105.6	%		118.8	%	$	(2,263	)
Commercial Lines:
Fire/IM	$	42,168		(0.9	)%	$	48,936		(0.2	)%		38.5	%		4.8	%		39.1	%		0.1	%		82.5	%		94.6	%	$	11,210
Workers
compensation		58,077		(8.3	)%		74,267		(9.7	)%		56.4	%		13.0	%		30.3	%		2.4	%		102.1	%		108.2	%		3,348
General liability		74,766		(12.5	)%		95,004		(7.9	)%		54.7	%		18.3	%		37.2	%		0.1	%		110.3	%		100.0	%		(2,268	)
Auto		61,114		(3.7	)%		74,995		(3.8	)%		66.9	%		5.6	%		32.3	%		0.0	%		104.8	%		94.5	%		859
BOP		15,708		9.9	%		14,944		9.1	%		69.3	%		12.8	%		34.7	%		0.0	%		116.8	%		90.3	%		(2,780	)
Bonds		3,754		(13.7	)%		4,606		(4.2	)%		18.1	%		4.8	%		67.0	%		0.0	%		89.9	%		96.7	%		1,034
Other		2,055		0.8	%		2,356		5.1	%		(4.7	)%		0.2	%		57.0	%		0.0	%		52.5	%		46.8	%		1,291
Total	$	257,643		(6.5	)%	$	315,108		(5.4	)%		55.2	%		11.4	%		35.2	%		0.6	%		102.4	%		99.4	%	$	12,694
Grand Total	$	308,651		(5.1	)%	$	368,839		(4.1	)%		57.2	%		11.0	%		34.0	%		0.5	%		102.7	%		101.9	%	$	10,431

Note: Some amounts may not foot due to rounding.

	2008		2007
Losses Paid	$	199,130	$	151,857
LAE Paid		36,095		36,233
Total Paid	$	235,225	$	188,090

Selective Insurance Group, Inc.

2008 Statutory Results by Line of Business

December 2008 YTD (unaudited)

($ in thousands)

	Net					Net											Underwriting			Dividends to			Combined			Combined
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Ratio			Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2008			2007			Gain/(Loss)
Personal Lines:
Homeowners	$	69,087		5.6	%	$	68,088		9.3	%		56.0	%		7.8	%		35.1	%		0.0	%		98.9	%		114.7	%	$	410
Auto		134,535		3.4	%		132,845		(0.1	)%		71.0	%		12.8	%		30.0	%		0.0	%		113.8	%		109.6	%		(18,893	)
Other (including
flood)		9,564		12.4	%		9,010		11.5	%		60.8	%		(15.7	)%		(51.1	)%		0.0	%		(6.0	)%		29.8	%		9,837
Total	$	213,185		4.5	%	$	209,943		3.3	%		65.7	%		10.0	%		28.0	%		0.0	%		103.7	%		107.9	%	$	(8,646	)
Commercial Lines:
Fire/IM	$	194,550		(2.2	)%	$	196,189		2.9	%		50.3	%		4.6	%		37.8	%		0.2	%		92.9	%		92.7	%	$	14,465
Workers
compensation		303,783		(9.6	)%		308,618		(5.2	)%		57.4	%		11.6	%		25.6	%		1.5	%		96.1	%		101.6	%		13,180
General liability		393,012		(6.5	)%		396,066		(3.4	)%		51.1	%		17.4	%		33.5	%		0.0	%		102.0	%		98.8	%		(6,715	)
Auto		300,391		(5.9	)%		307,388		(2.5	)%		61.8	%		7.4	%		30.5	%		0.0	%		99.7	%		88.1	%		3,099
BOP		60,428		8.6	%		58,058		9.8	%		64.0	%		12.6	%		36.5	%		0.0	%		113.1	%		109.7	%		(8,444	)
Bonds		18,239		(5.2	)%		18,831		(1.3	)%		14.1	%		4.1	%		62.3	%		0.0	%		80.5	%		84.4	%		4,038
Other		9,350		2.6	%		9,295		12.4	%		(0.2	)%		0.3	%		47.2	%		0.0	%		47.3	%		41.3	%		4,870
Total	$	1,279,753		(5.8	)%	$	1,294,444		(2.1	)%		54.7	%		11.2	%		32.2	%		0.4	%		98.5	%		95.9	%	$	24,493
Grand Total	$	1,492,938		(4.5	)%	$	1,504,387		(1.4	)%		56.2	%		11.0	%		31.7	%		0.3	%		99.2	%		97.5	%	$	15,847

Note: Some amounts may not foot due to rounding.

	2008		2007
Losses Paid	$	768,165	$	635,173
LAE Paid		140,877		133,983
Total Paid	$	909,042	$	769,156

Selective Insurance Group, Inc.
Diversified Insurance Services
( $ in thousands)
Three Months Ended December 31, 2008 (unaudited)
	Revenue							Net Income (Loss)								Return on Revenue
	2008		2007		% Change			2008			2007		% Change			2008			2007			Pt Change
Flood		11,620		10,754		8	%		1,442			1,220		18	%		12.4	%		11.3	%		1.1
Human Resource   Administration Outsourcing		11,836		13,339		(11	)%		(2,208	)		442		(600	)%		(18.7	)%		3.3	%		(22.0	)
Other		2,546		2,287		11	%		549			696		(21	)%		21.6	%		30.4	%		(8.8	)
Total		26,002		26,380		(1	)%		(217	)		2,358		(109	)%		(0.8	)%		8.9	%		(9.7	)
Twelve Months Ended December 31, 2008 (unaudited)
	Revenue							Net Income								Return on Revenue
	2008		2007		% Change			2008			2007		% Change			2008			2007			Pt Change
Flood		52,943		47,842		11	%		6,920			6,734		3	%		13.1	%		14.1	%		(1.0	)
Human Resource   Administration Outsourcing		53,147		59,109		(10	)%		(343	)		2,862		(112	)%		(0.6	)%		4.8	%		(5.4	)
Other		10,256		8,615		19	%		3,029			2,759		10	%		29.5	%		32.0	%		(2.5	)
Total		116,346		115,566		1	%		9,606			12,355		(22	)%		8.3	%		10.7	%		(2.4	)
Human Resource Administration Outsourcing Statistics (unaudited)
	2008		2007		% Change
New Worksite EE -   (Selective Agents Production)		1,491		2,025		(26	)%
Total New Worksite EE -   All Agents (Production)		1,789		2,740		(35	)%
Total Worksite EE		22,520		25,111		(10	)%
Annual Gross Billings (000's)	$	948,263		1,000,126		(5	)%
Annual Gross Billings /   Avg Worksite EE	$	39,476		37,980		4	%

SELECTIVE INSURANCE GROUP, INC.	Unaudited
CONSOLIDATED BALANCE SHEETS	December 31,			December 31,
( in thousands, except share amounts)	2008			2007
ASSETS
Investments:
Fixed maturity securities, held-to-maturity - at amortized cost
(fair value: $1,178 – 2008; $5,927 – 2007)	$	1,163			5,783
Fixed maturity securities, available-for-sale - at fair value
(amortized cost: $3,123,346 – 2008; $3,049,913 – 2007)		3,034,278			3,073,547
Equity securities, available-for-sale - at fair value
(cost of: $125,947 – 2008; $160,390 – 2007)		132,131			274,705
Short-term investments (at cost which approximates fair value)		198,111			190,167
Equity securities, trading – at fair value		2,569			-
Other investments		172,057			188,827
Total investments		3,540,309			3,733,029
Cash and cash equivalents		18,643			8,383
Interest and dividends due or accrued		36,538			36,141
Premiums receivable, net of allowance for uncollectible
accounts of: $4,237 – 2008; $3,905 – 2007		480,894			496,363
Other trade receivables, net of allowance for uncollectible
accounts of: $299 – 2008; $244 – 2007		19,461			21,875
Reinsurance recoverable on paid losses and loss expenses		6,513			7,429
Reinsurance recoverable on unpaid losses and loss expenses		224,192			227,801
Prepaid reinsurance premiums		96,617			82,182
Current federal income tax		26,327			4,235
Deferred federal income tax		146,801			22,375
Property and Equipment – at cost, net of accumulated
depreciation and amortization of: $132,609 – 2008; $117,832 – 2007		51,697			58,561
Deferred policy acquisition costs		212,319			226,434
Goodwill		29,637			33,637
Other assets		51,384			43,547
Total assets	$	4,941,332			5,001,992
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for losses	$	2,256,329			2,182,572
Reserve for loss expenses		384,644			359,975
Unearned premiums		844,334			841,348
Senior convertible notes		-			8,740
Notes payable		273,878			286,151
Commissions payable		48,560			60,178
Accrued salaries and benefits		147,050			88,079
Other liabilities		96,044			98,906
Total liabilities		4,050,839			3,925,949
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: 95,263,508 – 2008; 94,652,930 – 2007		190,527			189,306
Additional paid-in capital		217,195			192,627
Retained earnings		1,128,149			1,105,946
Accumulated other comprehensive (loss) income		(100,666	)		86,043
Treasury stock – at cost (shares: 42,386,921 – 2008; 40,347,894 – 2007)		(544,712	)		(497,879	)
Total stockholders' equity		890,493			1,076,043
Commitments and contingencies
Total liabilities and stockholders' equity	$	4,941,332			5,001,992

Consolidated Statements of Income
Years Ended December 31,
(in thousands, except per share amounts)	2008			2007			2006
Revenues:
Net premiums written	$	1,484,041			1,554,867			1,535,961
Net decrease (increase) in unearned premiums and prepaid reinsurance
premiums		11,449			(37,561	)		(36,297	)
Net premiums earned		1,495,490			1,517,306			1,499,664
Net investment income earned		131,032			174,144			156,802
Net realized (losses) gains		(49,452	)		33,354			35,479
Diversified Insurance Services revenue		116,346			115,566			110,526
Other income		2,563			5,858			5,396
Total revenues		1,695,979			1,846,228			1,807,867
Expenses:
Losses incurred		845,656			829,524			791,955
Loss expenses incurred		168,160			169,682			168,028
Policy acquisition costs		490,040			497,229			478,339
Dividends to policyholders		5,211			7,202			5,927
Interest expense		20,508			23,795			21,411
Diversified Insurance Services expenses		97,819			96,943			92,718
Goodwill impairment		4,000			-			-
Other expenses		25,199			29,095			28,979
Total expenses		1,656,593			1,653,470			1,587,357
Income before federal income tax		39,386			192,758			220,510
Federal income tax expense (benefit):
Current		22,293			43,046			66,717
Deferred		(26,665	)		3,214			(9,781	)
Total federal income tax (benefit) expense		(4,372	)		46,260			56,936
Net Income		43,758			146,498			163,574
Earnings per share:
Basic net income	$	0.84			2.80			2.98
Diluted net income	$	0.82			2.59			2.65
Dividends to stockholders	$	0.52			0.49			0.44

Consolidated Statements of Stockholders' Equity
Years Ended December 31,
(in thousands, except per share amounts)		2008				2007				2006
Common stock:
Beginning of year	$	189,306				183,124				173,085
Dividend reinvestment plan
(shares: 81,200 – 2008; 78,762 – 2007;
64,072 – 2006)		162				158				128
Convertible debentures
(shares: 45,759 – 2008; 2,074,067 – 2007;
3,999,128 – 2006)		92				4,148				7,998
Stock purchase and compensation plans
(shares: 483,619 – 2008; 937,835 – 2007;
956,520 – 2006)		967				1,876				1,913
End of year		190,527				189,306				183,124
Additional paid-in capital:
Beginning of year		192,627				153,246				71,638
Dividend reinvestment plan		1,677				1,708				1,604
Convertible debentures		645				9,806				51,249
Stock purchase and compensation plans		22,246				27,867				28,755
End of year		217,195				192,627				153,246
Retained earnings:
Beginning of year		1,105,946				986,017				847,687
Cumulative-effect adjustment due to adoption of FAS
159, net of deferred income tax effect of $3,344		6,210
Net income		43,758		43,758		146,498		146,498		163,574		163,574
Dividends to stockholders
($0.52 per share –2008; $0.49 per share – 2007;
$0.44 per share – 2006)		(27,765	)			(26,569	)			(25,244	)
End of year		1,128,149				1,105,946				986,017
Accumulated other comprehensive (loss) income:
Beginning of year		86,043				100,601				118,121
Cumulative-effect adjustment due to adoption of FAS
159, net of deferred income tax effect of $(3,344)		(6,210	)
Other comprehensive (loss) income, (increase) decrease in:
Net unrealized gains on investment securities,
Net of deferred income tax effect of
$(76,831) –  2008; $(10,925) – 2007;
$(2,031) –  2006		(142,685	)	(142,685	)	(20,289	)	(20,289	)	(3,772	)	(3,772	)
Defined benefit pension plans, net of deferred
income tax effect of $(20,362) – 2008;
$3,086 – 2007; $(7,403) – 2006		(37,814	)	(37,814	)	5,731		5,731		(13,748	)	-
End of year		(100,666	)			86,043				100,601
Comprehensive (loss) income				(136,741	)			131,940				159,802
Treasury stock:
Beginning of year		(497,879	)			(345,761	)			(229,407	)
Acquisition of treasury stock
(shares: 2,039,027 – 2008; 6,057,920 – 2007;
4,335,622 – 2006)		(46,833	)			(152,118	)			(116,354	)
End of year		(544,712	)			(497,879	)			(345,761	)
Total stockholders' equity	$	890,493				1,076,043				1,077,227

Consolidated Statements of Cash Flows
Years Ended December 31,
(in thousands)	2008			2007			2006
Operating Activities
Net income	$	43,758			146,498			163,574
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,552			29,139			25,684
Stock-based compensation expense		17,215			20,992			14,524
Undistributed losses (income) of equity method investments		13,753			(4,281	)		(3,511	)
Net realized losses (gains)		49,452			(33,354	)		(35,479	)
Deferred tax (benefit) expense		(26,665	)		3,214			(9,781	)
Unrealized loss on trading securities		8,129			-			-
Debt conversion inducement		-			-			2,117
Impairment of goodwill		4,000			-			-
Changes in assets and liabilities:
Increase in reserves for losses and loss expenses, net of reinsurance recoverable
on unpaid losses and loss expenses		102,100			227,749			223,231
Increase (decrease) in unearned premiums, net of prepaid reinsurance and advance
premium		(10,766	)		38,346			35,708
Increase in net federal income tax recoverable		(22,092	)		(3,767	)		(2,761	)
Decrease (increase) in premiums receivable		15,469			(37,911	)		(11,232	)
Decrease (increase) in other trade receivables		2,414			(487	)		(4,835	)
Decrease (increase) in deferred policy acquisition costs		14,115			(8,331	)		(13,271	)
Increase in interest and dividends due or accrued		(431	)		(1,331	)		(2,280	)
Decrease (increase) in reinsurance recoverable on paid losses and loss expenses		916			(2,736	)		(144	)
Increase (decrease) in accrued salaries and benefits		(3,100	)		(3,266	)		5,385
(Decrease) increase in accrued insurance expenses		(15,880	)		6,370			(1,566	)
Purchase of trading securities		(6,587	)		-			-
Sale of trading securities		21,002			-			-
Other, net		5,819			9,444			7,692
Net adjustments		197,415			239,790			229,481
Net cash provided by operating activities		241,173			386,288			393,055
Investing Activities
Purchase of fixed maturity securities, available-for-sale		(587,430	)		(580,864	)		(801,647	)
Purchase of equity securities, available-for-sale		(70,651	)		(148,569	)		(52,429	)
Purchase of other investments		(53,089	)		(80,147	)		(71,486	)
Purchase of short-term investments		(2,204,107	)		(2,198,362	)		(2,290,937	)
Net proceeds from sale of subsidiary		-			-			376
Sale of fixed maturity securities, available-for-sale		152,655			102,613			306,044
Sale of short-term investments		2,196,162			2,205,194			2,279,055
Redemption and maturities of fixed maturity securities, held-to-maturity		4,652			4,051			3,635
Redemption and maturities of fixed maturity securities, available-for-sale		294,342			319,118			187,608
Sale of equity securities, available-for-sale		102,313			187,259			108,382
Proceeds from other investments		26,164			40,115			8,350
Purchase of property and equipment		(8,083	)		(14,511	)		(18,670	)
Net cash used in investing activities		(147,072	)		(164,103	)		(341,719	)
Financing Activities
Dividends to stockholders		(25,804	)		(24,464	)		(22,831	)
Acquisition of treasury stock		(46,833	)		(152,118	)		(116,354	)
Proceeds from issuance of notes payable, net of issuance costs		-			-			96,263
Principal payments of notes payable		(12,300	)		(18,300	)		(18,300	)
Net proceeds from stock purchase and compensation plans		8,222			8,609			11,560
Excess tax benefits from share-based payment arrangements		1,628			3,484			3,903
Borrowings under line of credit agreement		-			6,000			-
Repayment of borrowings under line of credit agreement		-			(6,000	)		-
Principal payments of convertible bonds		(8,754	)		-			(2,117	)
Principal payments of senior convertible notes		-			(37,456	)		-
Net cash used in financing activities		(83,841	)		(220,245	)		(47,876	)
Net increase in cash and cash equivalents		10,260			1,940			3,460
Cash and cash equivalents, beginning of year		8,383			6,443			2,983
Cash and cash equivalents, end of year	$	18,643			8,383			6,443
Supplemental Disclosures of Cash Flows Information
Cash paid during the year for:
Interest	$	20,647			25,311			21,391
Federal income tax		42,750			43,809			65,575
Supplemental schedule of non-cash financing activity:
Conversion of convertible debentures		169			12,066			58,534

Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
Unaudited Statutory Balance Sheets
($ in thousands)
	December 31			December 31
	2008			2007
ASSETS
Bonds	$	3,104,395			3,041,373
Common stocks		156,304			297,102
Other investments		172,346			188,827
Short-term investments		137,878			125,650
Total investments		3,570,923			3,652,952
Cash on hand and in banks		(36,472	)		(33,209	)
Interest and dividends due and accrued		36,523			36,057
Premiums receivable		476,768			491,308
Reinsurance recoverable on paid losses and expenses		6,513			7,429
Federal income tax recoverable		12,069			-
Deferred tax recoverable		86,208			87,951
EDP equipment		3,815			4,691
Equities and deposits in pools and associations		8,517			10,411
Receivable for sold securities		13,278			167
Other assets		28,720			32,105
Total assets	$	4,206,862			4,289,862
LIABILITIES
Reserve for losses	$	2,031,947			1,953,960
Reinsurance payable on paid loss and loss expense		716			1,310
Reserve for loss expenses		382,796			358,126
Unearned premiums		747,717			759,166
Reserve for commissions payable		48,560			60,178
Ceded balances payable		8,421			8,192
Federal income tax payable		-			14,084
Premium and other taxes payable		20,721			24,982
Reserve for dividends to policyholders		5,023			5,651
Reserves for unauthorized/overdue reinsurance		1,416			1,258
Funds withheld on account of others		4,977			5,070
Accrued salaries and benefits		74,287			48,582
Other liabilities		14,246			15,009
Total liabilities		3,340,827			3,255,568
POLICYHOLDERS' SURPLUS
Capital		28,325			28,325
Paid in surplus		235,792			235,792
Unassigned surplus		601,918			770,177
Total policyholders' surplus		866,035			1,034,294
Total liabilities and policyholders' surplus	$	4,206,862			4,289,862

Selective Insurance Group, Inc.
Combined Insurance Company Subsidiaries
Unaudited Statutory Statements Of Income
($ in thousands)
	Three Months Ended								Twelve Months Ended
	December								December
UNDERWRITING	2008				2007				2008				2007
Net premiums written	$	308,651				325,309				1,492,938				1,562,728
Net premiums earned		368,839				384,772				1,504,386				1,525,163
Net losses paid		199,130				151,857				768,165				635,173
Change in reserve for losses		11,670				61,553				77,988				194,809
Net losses incurred		210,800		57.2%		213,410		55.5%		846,153		56.2%		829,982		54.4%
Net loss expenses paid		36,095				36,233				140,877				133,983
Change in reserve for loss expenses		4,512				5,085				24,670				33,265
Net loss expenses incurred		40,607		11.0%		41,318		10.7%		165,547		11.0%		167,248		11.0%
Net underwriting expenses incurred		103,189		33.4%		113,795		35.1%		470,362		31.6%		497,946		31.8%
Total deductions		354,596				368,523				1,482,062				1,495,176
Statutory gain		14,243				16,249				22,324				29,987
Net loss from premium balances
charged off		(1,440	)			(880	)			(3,876	)			(2,831	)
Finance charges and other income		(426	)			1,437				2,610				5,833
Total other income		(1,866	)	0.6%		557		-0.2%		(1,266	)	0.1%		3,002		-0.2%
Policyholders' dividends incurred		(1,946	)	0.5%		(3,253	)	0.8%		(5,211	)	0.3%		(7,202	)	0.5%
Total underwriting gain		10,431		102.7%		13,553		101.9%		15,847		99.2%		25,787		97.5%
INVESTMENT
Net investment income earned		32,886				48,237				156,336				166,327
Net realized (loss) gain		(23,392	)			6,148				(37,352	)			33,359
Total income before income tax		19,925				67,938				134,831				225,473
Federal income tax (benefit) expense		(9,996	)			18,022				34,898				57,851
Net income	$	29,921				49,916				99,933				167,622
Policyholders' Surplus
Surplus, beginning of period	$	932,846				1,071,166				1,034,294				1,030,078
Net income		29,921				49,916				99,933				167,622
Change in deferred tax		(4,682	)			(1,669	)			14,677				1,047
Change in unrealized losses		(44,624	)			(13,433	)			(107,020	)			(20,288	)
Dividends to stockholders		-				(63,637	)			(77,045	)			(139,649	)
Change in reserve for unauthorized		(159	)			312				(159	)			312
Change in non-admitted assets		(19,068	)			(8,190	)			(70,169	)			(11,542	)
Change in minimum pension liability		(28,748	)			-				(28,748	)			-
Surplus adjustments		549				(171	)			272				6,714
Net change in surplus for period		(66,811	)			(36,872	)			(168,259	)			4,216
Surplus, end of period	$	866,035				1,034,294				866,035				1,034,294
Statutory underwriting gain:	$	10,431				13,553				15,847				25,787
Adjustments under GAAP:
Deferred policy acquisition costs		(11,785	)			(8,725	)			(14,116	)			8,331
Flood income reclassification		(2,225	)			(1,884	)			(10,672	)			(10,386	)
Other, net		(1,206	)			(1,680	)			(6,285	)			(7,775	)
GAAP underwriting (loss) gain	$	(4,785	)			1,264				(15,226	)			15,957
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

Municipal Fixed Income Portfolio as of December 31, 2008

($ in millions)

(unaudited)

	Average	Market		% of Total			Unrealized
	Credit Rating	Value		Muni Portfolio			Gain/(Loss)
Uninsured Securities	AA+		932		53	%		7
Securities with Insurance Enhanced1	AA+		827		47	%		12
Without Insurance Enhancement	AA-
Total		$	1,758		100	%	$	19

1 Includes $13.3 million of unrated municipal fixed income securities which we consider to be investment grade.

A "BBB-" rating has been applied to these municipal fixed income securities in the interest of conservatism.

Note: Some amounts may not foot due to rounding.

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Ratings on Municipal Fixed Income Portfolio

December 31, 2008

($ in millions)

(unaudited)

	Uninsured Securities					Insurance Enhanced Securities1					Underlying Rating of Insurance Enhanced Securities1					Total Municipal Fixed Income Portfolio (with Insurance Enhancement)					Total Municipal Fixed Income Portfolio (without Insurance Enhancement)
	(1)					(2)					(3)					(1) + (2)					(1) + (3)
S&P or equivalent ratings	Market Value		% of Total			Market Value		% of Total			Market Value		% of Total			Market Value		% of Total			Market Value		% of Total
AAA	$	486		52	%	$	238		29	%	$	61		7	%	$	724		41	%	$	548		31	%
AA+		148		16	%		70		8	%		107		13	%		218		12	%		254		14	%
AA		194		21	%		357		43	%		158		19	%		551		31	%		352		20	%
AA-		56		6	%		90		11	%		249		30	%		146		8	%		304		17	%
A+		20		2	%		12		1	%		88		11	%		32		2	%		108		6	%
A		3		0	%		52		6	%		86		10	%		54		3	%		89		5	%
A-		18		2	%		5		1	%		52		6	%		23		1	%		70		4	%
BBB+		1		0	%		3		0	%		7		1	%		4		0	%		8		0	%
BBB		6		1	%		-		0	%		-		0	%		6		0	%		6		0	%
BBB-		-		0	%		-		0	%		18		2	%		-		0	%		18		1	%
BB+		1		0	%		-		0	%		-		0	%		1		0	%		1		0	%
Total	$	932		100	%	$	827		100	%	$	827		100	%	$	1,758		100	%	$	1,758		100	%
Average Rating:			AA+					AA+					AA-					AA+					AA
Unrealized Gain/(Loss):		7					12										19

1 Includes $13.3 million of unrated municipal fixed income securities which we consider to be investment grade.

A "BBB-" rating has been applied to these municipal fixed income securities in the interest of conservatism.

Note: Some amounts may not foot due to rounding.

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Muni Bonds with Credit Enhancement

December 31, 2008

($ in thousands)

(unaudited)

Credit  Enhancement	Underlying Composite Rating	Market Value		Book Value		Unrealized
AMBAC	AAA		17,161		16,643		519
(Ratings:	AA+		19,006		18,651		355
Moody's = Baa1	AA		21,965		21,728		236
S&P = A	AA-		14,378		14,077		300
Fitch = WD)	A+		6,116		6,067		49
	A		28,301		29,055		(754	)
	A-		9,027		9,097		(70	)
	BBB+		2,954		3,257		(302	)
	N/R		5,682		5,720		(38	)
AMBAC Total		$	124,590	$	124,296	$	295
BHAC (Ratings: Moody's = Aaa S&P = AAA Fitch = NR)	A		4,265		4,161		104
BHAC Total		$	4,265	$	4,161	$	104
FGIC	AAA		12,508		11,914		595
(Ratings:	AA+		17,704		17,186		518
Moody's = Caa1	AA		23,510		22,855		656
S&P = CCC	AA-		59,491		59,364		127
Fitch = WD)	A+		24,974		25,672		(698	)
	A		8,814		8,746		68
	A-		8,749		8,713		36
	BBB-		2,782		2,873		(91	)
	N/R		513		514		(2	)
FGIC Total		$	159,045	$	157,837	$	1,208
FSA	AAA		25,406		25,140		266
(Ratings:	AA+		53,033		52,002		1,031
Moody's =Aa3	AA		42,587		41,799		789
S&P = AAA	AA-		72,737		70,337		2,400
Fitch = AAA)	A+		18,889		18,654		236
	A		22,610		22,305		304
	A-		9,106		8,935		172
FSA Total		$	244,369	$	239,172	$	5,197
MBIA	AAA		6,107		5,691		416
(Ratings:	AA+		17,172		16,938		234
Moody's = Baa1	AA		70,288		68,249		2,040
S&P = AA	AA-		101,985		98,847		3,138
Fitch = WD)	A+		34,988		34,673		315
	A		22,199		22,468		(269	)
	A-		25,469		25,862		(393	)
	BBB-		1,800		2,127		(327	)
	BBB+		4,159		4,060		99
	N/R		7,070		7,182		(112	)
MBIA Total		$	291,236	$	286,095	$	5,142
XLCA (now Syncora) (Ratings: Moody's = Caa1 S&P = B Fitch = WD)	A+		3,346		3,874		(528	)
XLCA Total		$	3,346	$	3,874	$	(528	)
Grand Total		$	826,852	$	815,435	$	11,418

Muni's with Insurance as a % of total Munis	47%
Note: Some amounts may not foot due to rounding.

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Structured Securities

December 31, 2008

($ in thousands)

(unaudited)

•Market Value = $657,645 ; Unrealized Gain/(Loss) = ($101,444)

•Structured Security Portfolio S&P Average Rating =   AA+

•Structured Securities = 18.6% of the Total Portfolio

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Residential Mortgage Backed (RMBS) and Residential Asset Backed (RABS) Securities

December 31, 2008

($ in thousands)

(unaudited)

•Market Value = $372,215; Unrealized Gain/(Loss) = ($54,323)

•RMBS & RABS Portfolio S&P Average Rating = AA+

•RMBS & RABS Securities = 10.5% of the Total Portfolio

Selective Insurance Group Inc. and Consolidated Subsidiaries

Residential Mortgage Backed Securities (RMBS) and Residential Asset Backed (RABS)- by Vintage Year

December 31, 2008

($ in thousands)

(unaudited)

Market Value

Vintage Yr	AAA	AA	A	BBB	BB	B	Total	% of Total RMBS & RABS	% of Total Fixed Income Portfolio	% of Total GAAP Equity
1983	$            19	$               -	$              -	$              -	$              -	$              -	$             19	0%	0%	0%
2002	66,512	-	2,227	-	-	-	68,739	18%	2%	8%
2003	61,812	-	1,628	-	-	-	63,441	17%	2%	7%
2004	34,531	1,296	-	-	-	-	35,827	10%	1%	4%
2005	53,839	-	-	-	-	-	53,839	14%	2%	6%
2006	79,335	4,221	-	11,920	7,364	2,096	104,936	28%	3%	12%
2007	11,000	1,759	2,579	435	-	-	15,773	4%	1%	2%
2008	29,641	-	-	-	-	-	29,641	8%	1%	3%
Total RMBS & RABS-Market Value	$    336,689	$       7,276	$       6,435	$      12,355	$       7,364	$      2,096	$     372,215	100%	12%	42%
% of Total RMBS & RABS	90%	2%	2%	3%	2%	1%	100%
% of Total Fixed Income Portfolio	11%	0%	0%	1%	0%	0%	12%
% of Total GAAP Equity	38%	1%	1%	1%	1%	0%	42%
Weighted Average Market Price	92.7	67.4	40.6	65.6	49.1	68.7	87.3

Unrealized Gain/(Loss)
Vintage Yr	AAA	AA	A	BBB	BB	B	Total
1983	$             1	$            -	$              -	$             -	$             -	$             -	$              1
2002	1,653	-	(247)	-	-	-	1,405
2003	(527)	-	(784)	-	-	-	(1,311)
2004	(2,692)	(534)	-	-	-	-	(3,226)
2005	(12,329)	-	-	-	-	-	(12,329)
2006	(12,845)	(2,028)	-	(6,197)	(7,630)	(956)	(29,657)
2007	150	(956)	(8,372)	(290)	-	-	(9,468)
2008	261	-	-	-	-	-	261
Total RMBS & RABS - Unrealized	$    (26,329)	$     (3,518)	$      (9,403)	$     (6,487)	$     (7,630)	$        (956)	$    (54,323)
% of Total RMBS & RABS	48%	7%	17%	12%	14%	2%	100%
Note: Some amounts may not foot due to rounding.

Selective Insurance Group Inc. and Consolidated Subsidiaries

Residential Mortgage Backed Securities (RMBS) and Residential Asset Backed (RABS)- by Type

December 31, 2008

($ in thousands)

(unaudited)

Market Value

RMBS Type	AAA	AA	A	BBB	BB	B	Total	% of Total RMBS & RABS	% of Total Fixed Income Portfolio	% of Total GAAP Equity
Agency	$    233,700	$              -	$              -	$             -	$             -	$              -	$     233,700	63%	8%	26%
FHA/VA	11,825	-	-	-	-	-	11,825	3%	0%	1%
Total Agency	245,525	-	-	-	-	-	245,525	66%	8%	28%
Alt-A	39,162	1,296	-	3,516	4,122	1,182	49,278	13%	2%	6%
Alt-A CDO	-	-	-	-	-	913	913	0%	0%	0%
Home Equity ABS	-	-	2,227	-	-	-	2,227	1%	0%	0%
Non-Agency & Other Prime	52,002	5,980	4,208	8,839	3,242	-	74,271	20%	2%	8%
Total RMBS & RABS-Market Value	$      336,689	$       7,276	$       6,435	$     12,355	$       7,364	$       2,096	$     372,215	100%	12%	42%
% of Total RMBS & RABS	90%	2%	2%	3%	2%	1%	100%
% of Total Fixed Income Portfolio	11%	0%	0%	1%	0%	0%	12%
% of Total GAAP Equity	38%	1%	1%	1%	1%	0%	42%
Weighted Average Market Price	92.7	67.4	40.6	65.6	49.1	68.7	87.3
Unrealized Gain/(Loss)
RMBS Type	AAA	AA	A	BBB	BB	B	Total
Agency	$     5,233	$             -	$            -	$             -	$             -	$             -	$        5,233
FHA/VA	(978)	-	-	-	-	-	(978)
Total Agency	4,255	-	-	-	-	-	4,255
Alt-A	(16,411)	(534)	-	(6,141)	(5,874)	(956)	(29,916)
Alt-A CDO	-	-	-	-	-	-	-
Home Equity ABS	-	-	(247)	-	-	-	(247)
Non-Agency & Other Prime	(14,173)	(2,984)	(9,156)	(346)	(1,756)	-	(28,415)
Total RMBS & RABS - Unrealized	$   (26,329)	$     (3,518)	$      (9,403)	$     (6,487)	$     (7,630)	$         (956)	$     (54,323)
% of Total RMBS & RABS	48%	7%	17%	12%	14%	2%	100%
Note: Some amounts may not foot due to rounding.

Selective Insurance Group Inc. and Consolidated Subsidiaries

Residential Mortgage Backed (RMBS) and Residential Asset Backed (RABS) Securities

Ratings Migration (1)

December 31, 2008

($ thousands)

(unaudited)

Original Rating		Current Rating
Rating	Amount	AAA	AA	A	BBB	BB	B
AAA	364,690	336,479	5,517	2,227	11,920	7,364	1,183
AA	4,978	210	1,759	2,096	-	-	913
A	2,112	-	-	2,112	-	-	-
BBB	435	-	-	-	435	-	-
BB	-	-	-	-	-	-	-
Total Market Value	372,215	336,689	7,276	6,435	12,355	7,364	2,096
Note (1): Migration period is from the purchase date of each security to December 31, 2008

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Commercial Mortgage Backed (CMBS) Securities

December 31, 2008

($ in thousands)

(unaudited)

•Market Value = $227,152; Unrealized Gain/(Loss) = ($32,028)

•CMBS Portfolio S&P Average Rating = AAA

•CMBS Securities = 6.4% of the Total Portfolio

Selective Insurance Group Inc. and Consolidated Subsidiaries

Commercial Mortgage Backed Securities (CMBS)- by Vintage Year

December 31, 2008

($ in thousands)

(unaudited)

Market Value

Vintage Yr	AAA	AA	A	BBB	BB	Total	% of Total CMBS	% of Total Fixed Income Portfolio	% of Total GAAP Equity
1996	$         4,981	$              -	$              -	$              -	$              -	$          4,981	2%	0%	1%
1999	26,945	-	-	-	-	26,945	12%	1%	3%
2000	33,119	-	-	-	-	33,119	15%	1%	4%
2001	47,429	-	-	-	-	47,429	21%	2%	5%
2002	44,277	-	-	-	-	44,277	19%	1%	5%
2003	1,819	-	-	-	-	1,819	1%	0%	0%
2004	8,586	-	-	-	-	8,586	4%	0%	1%
2005	1,628	-	1,361	894	423	4,306	2%	0%	0%
2006	14,327	568	-	-	-	14,895	7%	1%	2%
2007	35,139	800	-	1,421	3,435	40,795	18%	1%	5%
Total CMBS-Market Value	$     218,250	$        1,368	$       1,361	$       2,315	$      3,858	$      227,152	100%	7%	26%
% of Total CMBS	96%	1%	1%	1%	2%	100%
% of Total Fixed Income Portfolio	7%	0%	0%	0%	0%	7%
% of Total GAAP Equity	25%	0%	0%	0%	1%	26%
Weighted Average Market Price	93.3	32.5	30.0	28.4	46.7	87.6
Unrealized Gain/(Loss)
Vintage Yr	AAA	AA	A	BBB	BB	Total
1996	$          (275)	$               -	$               -	$               -	$               -	$          (275)
1999	(61)	-	-	-	-	(61)
2000	(380)	-	-	-	-	(380)
2001	420	-	-	-	-	420
2002	(1,555)	-	-	-	-	(1,555)
2003	(186)	-	-	-	-	(186)
2004	(914)	-	-	-	-	(914)
2005	(407)	-	(3,175)	(3,906)	(2,399)	(9,887)
2006	(9,175)	-	-	-	-	(9,175)
2007	(3,247)	(2,836)	-	(1,932)	(2,000)	(10,015)
Total CMBS-Unrealized	$      (15,780)	$       (2,836)	$       (3,175)	$       (5,837)	$      (4,399)	$     (32,028)
% of Total CMBS	49%	9%	10%	18%	14%	100%
Note: Some amounts may not foot due to rounding.

Selective Insurance Group Inc. and Consolidated Subsidiaries

Commercial Mortgage Backed Securities (CMBS)- by Type

December 31, 2008

($ thousands)

(unaudited)

Market Value

CMBS Type	AAA	AA	A	BBB	BB	Total	% of Total CMBS	% of Total Fixed Income Portfolio	% of Total GAAP Equity
Agency MultiFamily	$             72,887	$                  -	$                -	$                 -	$                -	$            72,887	32%	2%	8%
Conduit	24,706	-	-	-	-	24,706	11%	1%	3%
Fusion (1)	104,599	800	-	1,114	435	106,947	47%	4%	12%
Lease-Backed	4,264	-	-	-	-	4,264	2%	0%	0%
Re-Securitization	6,844	568	1,361	-	423	9,197	4%	0%	1%
Single Borrower - Multiple Properties	4,949	-	-	1,201	3,000	9,150	4%	0%	1%
Total CMBS-Market Value	$           218,250	$            1,368	$          1,361	$           2,315	$          3,858	$          227,152	100%	7%	26%
% of Total CMBS	96%	1%	1%	1%	2%	100%
% of Total Fixed Income Portfolio	7%	0%	0%	0%	0%	7%
% of Total GAAP Equity	25%	0%	0%	0%	1%	26%
Weighted Average Market Price	93.3	32.5	30.0	28.4	46.7	87.6
Unrealized Gain/(Loss)
CMBS Type	AAA	AA	A	BBB	BB	Total
Agency MultiFamily	$               2,800	$                  -	$                -	$                 -	$                -	$              2,800
Conduit	(1,075)	-	-	-	-	(1,075)
Fusion (1)	(8,622)	(2,836)	-	(5,039)	-	(16,496)
Lease-Backed	(95)	-	-	-	-	(95)
Re-Securitization	(8,693)	-	(3,175)	-	(2,399)	(14,268)
Single Borrower - Multiple Properties	(95)	-	-	(799)	(2,000)	(2,894)
Total CMBS-Unrealized	$           (15,780)	$           (2,836)	$         (3,175)	$         (5,837)	$        (4,399)	$           (32,028)
% of Total CMBS	49%	9%	10%	18%	14%	100%
(1) Fusion means a CMBS composed of large and small loans.
Note: Some amounts may not foot due to rounding.

Selective Insurance Group Inc. and Consolidated Subsidiaries

Commercial Mortgage Backed Securities (CMBS)

Ratings Migration (1)

December 31, 2008

($ thousands)

(unaudited)

Original Rating		Current Rating
Rating	Amount	AAA	AA	A	BBB	BB
AAA	208,800	206,448	568	1,361	-	423
AA	12,602	11,802	800	-	-	-
A	-	-	-	-	-	-
BBB	2,750	-	-	-	2,315	435
BB	3,000	-	-	-	-	3,000
Total Market Value	227,152	218,250	1,368	1,361	2,315	3,858

Note (1): Migration period is from the purchase date of each security to December 31, 2008

Selective Insurance Group, Inc. and Consolidated Subsidiaries

2007 Vintage Commercial Mortgage Backed (CMBS) Securities

December 31, 2008

($ in thousands)

(unaudited)

•Market Value = $40,795; Unrealized Gain/(Loss) = ($10,015)

•2007 Vintage CMBS Portfolio S&P Average Rating = AA+

•2007 Vintage CMBS Securities = 1.2% of the Total Portfolio

Selective Insurance Group Inc. and Consolidated Subsidiaries

2007 Vintage Commercial Mortgage Backed Securities (CMBS)

December 31, 2008

($ in thousands)

(unaudited)

Market Value

CMBS Type	AAA	AA	BBB	BB	Total	% of 2007 Vintage CMBS	% of Total Fixed Income Portfolio	% of Total GAAP Equity
Agency MultiFamily	$          29,395	$                   -	$                  -	$                 -	$          29,395	72%	1%	3%
Fusion (1)	5,744	800	220	435	7,199	18%	0%	1%
Single Borrower - Multiple Properties	-	-	1,201	3,000	4,201	10%	0%	1%
2007 Vintage CMBS-Market Value	$          35,139	$               800	$           1,421	$          3,435	$           40,795	100%	1%	5%
% of 2007 Vintage CMBS	86%	2%	4%	8%	100%
% of Total Fixed Income Portfolio	1%	0%	0%	0%	1%
% of Total GAAP Equity	4%	0%	0%	1%	5%
Weighted Average Market Price	91.5	22.0	42.4	63.2	80.3

Unrealized Gain/(Loss)

CMBS Type	AAA	AA	BBB	BB	Total
Agency MultiFamily	$               1,033	$                    -	$                  -	$                  -	$              1,033
Fusion (1)	(4,280)	(2,836)	(1,133)	-	(8,249)
Single Borrower - Multiple Properties	-	-	(799)	(2,000)	(2,799)
2007 Vintage CMBS-Unrealized	$             (3,247)	$           (2,836)	$          (1,932)	$         (2,000)	$           (10,015)
% of 2007 Vintage CMBS	33%	28%	19%	20%	100%

(1) Fusion means a CMBS composed of large and small loans

Note: Some amounts may not foot due to rounding

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Alt-A RMBS Securities

December 31, 2008

($ in thousands)

(unaudited)

•Market Value = $50,191; Unrealized Gain/(Loss) = ($29,916)

•Alt-A RMBS Portfolio S&P Average Rating = AA+

•Alt-A RMBS Securities = 1.4% of the Total Portfolio

–Fixed-30 Loan-to-Value Ratio        = 72.8%

–Hybrid ARM Loan-to-Value Ratio   = 72.0%

–Fixed-15 Loan-to-Value Ratio        = 43.1%

Selective Insurance Group, Inc. and Consolidated Subsidiaries

ALT-A by Vintage Year

December 31, 2008

($ in thousands)

(unaudited)

Market Value

Vintage Yr	ALT-A Fixed-15	Alt-A Fixed-30	Alt-A Hybrid ARM	Alt-A CDO	Total	% of Total Alt-A	% of Total Fixed Income Portfolio	% of Total GAAP Equity
2002	$           5,639	$                  -	$                   -	$                    -	$             5,639	11%	0%	1%
2003	-	1,690	425	-	2,116	4%	0%	0%
2004	-	2,236	1,395	-	3,631	7%	0%	0%
2005	-	3,269	2,390	-	5,659	11%	0%	1%
2006	-	30,700	1,533	913	33,147	66%	1%	4%
Total ALT-A, Market Value	$           5,639	$         37,895	$            5,744	$               913	$          50,191	100%	1%	6%
% of Total ALT-A	11%	76%	11%	2%	100%
% of Total Fixed Income Portfolio	0%	1%	0%	0%	1%
% of Total GAAP Equity	1%	4%	1%	0%	6%
Weighted Average Market Price	99.8	61.2	49.5	100.0	62.7
Unrealized Gain/(Loss)
Vintage Yr	ALT-A Fixed-15	Alt-A Fixed-30	Alt-A Hybrid ARM	Alt-A CDO	Total
2002	$              (9)	$                -	$                 -	$                -	$              (9)
2003	-	(398)	(76)	-	(474)
2004	-	(305)	(612)	-	(917)
2005	-	(818)	(2,321)	-	(3,139)
*2006	-	(22,527)	(2,851)	-	(25,378)
Total ALT-A, Unrealized	$              (9)	$       (24,049)	$         (5,859)	$               -	$     (29,916)
% of Total ALT-A	0%	80%	20%	0%	100%

*We halted Alt-A purchases in 3Q06—we have no 2007 or later vintage

Note: Some amounts may not foot due to rounding.

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Asset Backed Securities with Insurance

December 31, 2008

($ in thousands)

(unaudited)

				Market			Unrealized		% Unreal
Credit Enhancement		Security Name	Rating	Value		% Market	Gain/Loss		G/L
AMBAC	*	RASC 2002-KS4 AI6	Baa1/A	$	1,225	11.7%	$	(200)	6.5%
	*	RFMS2 2002-HI1 A7	Baa1/A	1,002		9.6%	(48)		1.6%
		UHAUL 2007-BT1 BT	Aa3/A	4,015		38.4%	(1,583)		51.2%
AMBAC Total				6,242		59.7%	(1,831)		59.2%
CIFG	**	SHCDO 2006-1A A1	NR/B	913		8.7%	-		0.0%
CIFG Total				913		8.7%	��            -		0.0%
FGIC		USXL 2006-1A A	Baa3/BBB-	1,659		15.9%	(220)		7.1%
FGIC Total				1,659		15.9%	(220)		7.1%
MBIA	*	AERLS 2007-1A G3	A2/AA	1,636		15.7%	(1,040)		33.6%
MBIA Total				1,636		15.7%	(1,040)		33.6%
Grand Total				$	10,450	100.0%	$	(3,091)	100.0%

% of Total ABS	17%
% of Total Fixed Income Portfolio	0%
% of Total GAAP Equity	1%
* Securities written down in 2nd Quarter 2008
** Securities written down in 2nd, 3rd & 4th Quarters 2008
Ratings:
AMBAC: (Moody's = Baa1; S&P = A; Fitch = WD)
CIFG: (Moody's = B3; S&P = B; Fitch = WD)
FGIC: (Moody's = Caa1; S&P = CCC; Fitch = WD)
MBIA: (Moody's = Baa1; S&P = AA; Fitch = WD)
Note: Some amounts may not foot due to rounding.

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Fixed Income Government & Agency Exposure

December 31, 2008

($ in thousands)

(unaudited)

							Unrealized
			Book Value		Market Value		Gains
US Government
	Small Business Adm		$	17,894	$	18,503	$	609
	US Treasury (1)			84,593		94,811		10,218
	Other US Govt Guaranteed (2)			33,001		34,323		1,322
		Total US Government		135,488		147,637		12,149
Government Agency Debt
	Fannie Mae			19,963		20,416		453
	Freddie Mac			10,000		10,296		296
				29,963		30,712		749
	Federal Farm Credit Bank			17,233		17,597		364
	Federal Home Loan Bank			40,191		41,544		1,353
	Tenn Valley Authority			12,665		14,661		1,996
				70,089		73,802		3,713
		Total Govt Agency Debt		100,052		104,514		4,462
Total US Government Obligations				235,540		252,151		16,611
Agency MBS
	Fannie Mae			68,086		69,844		1,758
	Freddie Mac			105,320		107,728		2,408
		Total Agency MBS(3)		173,406		177,572		4,166
Total Government & Agency Exposure			$	408,946	$	429,723	$	20,777

(1) $26 Million on Deposit.

(2) U.S. Government includes corporate securities fully guaranteed by the FDIC.

(3) In addition, we have $125.1 million book value/$129.0 million market value of Ginnie Mae MBS

   which benefit from a direct government guarantee.

Note: Some amounts may not foot due to rounding.

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Available-for-Sale Fixed Maturity Securities
Severity and Duration of Unrealized Losses
December 31, 2008
($ in millions)
(unaudited)
	Unrealized			Fair
Fair Value as a Percentage of Amortized Cost	(Loss) Gain			Value
85% but less than 100% of amortized cost	$	(37.5	)		820.3
75% or more but less than 85% of amortized cost		(21.9	)		84.4
Less than 75% of amortized cost		(100.8	)		106.1
Gross unrealized losses on fixed maturity securities		(160.2	)		1,010.8
Gross unrealized gains on fixed maturity securities		71.1			2,023.5
Net unrealized losses on fixed maturity securities	$	(89.1	)		3,034.3
	75% or more but less than 85% of Amortized Cost			Less than 75% of Amortized Cost
Duration of Unrealized Loss Position
0 – 3 months	$	(18.4	)		(31.4	)
4 – 6 months		(2.3	)		(14.2	)
7 – 9 months		-			(11.3	)
10 – 12 months		(1.2	)		(32.6	)
Greater than 12 months		-			(11.3	)
Gross unrealized losses	$	(21.9	)		(100.8	)

Selective Insurance Group, Inc. and Consolidated Subsidiaries
Credit Quality of Available for Sale Securities
December 31, 2008
($ in millions)
(unaudited)
		December 31, 2008			December 31, 2007
		Fair Value	Unrealized Gain (Loss)	Credit Quality	Fair Value	Unrealized Gain (Loss)	Credit Quality
AFS Portfolio:
U.S. government obligations1	$	252.2	16.6	AAA	179.7	6.9	AAA
State and municipal obligations		1,758.0	18.6	AA+	1,611.1	17.6	AA+
Corporate securities		366.5	(22.9)	A	487.1	7.9	A
MBS		596.2	(86.1)	AA+	697.9	(7.3)	AA+
ABS		61.4	(15.3)	AA	97.7	(1.5)	AA+
Total AFS portfolio	$	3,034.3	(89.1)	AA+	3,073.5	23.6	AA+
State and Municipal Obligations:
Government obligations	$	574.1	16.2	AA+	521.5	7.3	AA+
Special revenue obligations		1,183.9	2.4	AA+	1,089.6	10.3	AA+
Total state and municipal obligations	$	1,758.0	18.6	AA+	1,611.1	17.6	AA+
Corporate Securities:
Financial	$	101.0	(13.1)	A+	183.6	1.6	A+
Industrials		67.7	(2.1)	A-	86.0	2.0	A-
Utilities		47.6	(0.8)	A	49.9	1.5	A
Consumer discretion		33.9	(1.5)	A-	46.7	1.4	A-
Consumer staples		42.0	0.5	A	36.8	0.1	A+
Health care		22.7	0.7	A+	26.7	0.7	A+
Materials		13.2	(3.7)	BBB+	17.1	0.1	A-
Energy		19.1	(0.2)	A-	18.1	0.3	A
Information technology		10.1	(1.9)	BBB	12.3	0.3	BBB
Telecommunications services		9.2	(0.8)	A-	9.9	(0.1)	A-
Total corporate securities	$	366.5	(22.9)	A	487.1	7.9	A
MBS:
CMBS	$	227.2	(32.0)	AAA	284.4	(4.6)	AA+
Agency RMBS		245.5	4.2	AAA	221.8	2.2	AAA
Non-agency RMBS		74.3	(28.4)	AA+	119.4	(1.9)	AA+
Alt-A RMBS		49.2	(29.9)	AA+	72.3	(3.0)	AAA
Total MBS	$	596.2	(86.1)	AA+	697.9	(7.3)	AA+
ABS:
ABS	$	59.3	(15.1)	AA+	76.5	(1.3)	AA+
Alt-A ABS		0.9	-	B	19.2	(0.2)	AAA
Sub-prime ABS2		1.2	(0.2)	A	2.0	-	AAA
Total ABS	$	61.4	(15.3)	AA	97.7	(1.5)	AA+
1 U.S. Government includes corporate 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.