10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2014

or

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________________________to_____________________________

Commission File Number: 001-33067

SELECTIVE INSURANCE GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

New Jersey	22-2168890
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
40 Wantage Avenue
Branchville, New Jersey	07890
(Address of Principal Executive Offices)	(Zip Code)

(973) 948-3000

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesx           No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesx           No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                              Yeso          Nox

As of June 30, 2014, there were 56,373,933 shares of common stock, par value $2.00 per share, outstanding. 

	SELECTIVE INSURANCE GROUP, INC.
	Table of Contents
		Page No.
PART I.   FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013	1
	Unaudited Consolidated Statements of Income for the Quarter and Six Months Ended June 30, 2014 and 2013	2
	Unaudited Consolidated Statements of Comprehensive Income for the Quarter and Six Months Ended June 30, 2014 and 2013	3
	Unaudited Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2014 and 2013	4
	Unaudited Consolidated Statements of Cash Flow for the Six Months Ended June 30, 2014 and 2013	5
	Notes to Unaudited Interim Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Forward-Looking Statements	27
	Introduction	27
	Critical Accounting Policies and Estimates	28
	Financial Highlights of Results for Second Quarter and Six Months 2014 and Second Quarter and Six Months 2013	28
	Results of Operations and Related Information by Segment	32
	Federal Income Taxes	49
	Financial Condition, Liquidity, Short-term Borrowings, and Capital Resources	50
	Ratings	52
	Off-Balance Sheet Arrangements	52
	Contractual Obligations, Contingent Liabilities, and Commitments	53
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4.	Controls and Procedures	53
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 6.	Exhibits	56
Signatures		57

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SELECTIVE INSURANCE GROUP, INC. CONSOLIDATED BALANCE SHEETS	Unaudited
($ in thousands, except share amounts)	June 30, 2014			December 31, 2013
ASSETS
Investments:
Fixed income securities, held-to-maturity – at carrying value (fair value:  $385,502 – 2014; $416,981 – 2013)	$	364,938		392,879
Fixed income securities, available-for-sale – at fair value (amortized cost: $3,792,036 – 2014; $3,675,977 – 2013)	3,890,200			3,715,536
Equity securities, available-for-sale – at fair value (cost:  $166,214 – 2014; $155,350 – 2013)	211,348			192,771
Short-term investments (at cost which approximates fair value)	166,488			174,251
Other investments	106,125			107,875
Total investments (Note 5)	4,739,099			4,583,312
Cash	1,547			193
Interest and dividends due or accrued	37,747			37,382
Premiums receivable, net of allowance for uncollectible accounts of:  $3,733 – 2014; $4,442 – 2013	589,617			524,870
Reinsurance recoverables, net	558,758			550,897
Prepaid reinsurance premiums	148,256			143,000
Current federal income tax	—			512
Deferred federal income tax	97,401			122,613
Property and equipment – at cost, net of accumulated depreciation and amortization of: $184,748 – 2014; $179,192 – 2013	53,836			50,834
Deferred policy acquisition costs	182,087			172,981
Goodwill	7,849			7,849
Other assets	74,388			75,727
Total assets	$	6,490,585		6,270,170
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for loss and loss expenses	$	3,451,306		3,349,770
Unearned premiums	1,100,864			1,059,155
Notes payable	392,290			392,414
Current federal income tax	10,150			—
Accrued salaries and benefits	84,870			111,427
Other liabilities	213,030			203,476
Total liabilities	$	5,252,510		5,116,242
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: 99,697,374 – 2014; 99,120,235 – 2013	199,395			198,240
Additional paid-in capital	298,352			288,182
Retained earnings	1,234,462			1,202,015
Accumulated other comprehensive income (Note 10)	68,012			24,851
Treasury stock – at cost (shares:  43,323,441– 2014; 43,198,622 – 2013)	(562,146		)	(559,360	)
Total stockholders’ equity	1,238,075			1,153,928
Commitments and contingencies
Total liabilities and stockholders’ equity	$	6,490,585		6,270,170

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

1

SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME	Quarter ended June 30,					Six Months ended June 30,
($ in thousands, except per share amounts)	2014			2013		2014		2013
Revenues:
Net premiums earned	$	463,625		426,252		920,120		847,192
Net investment income earned	36,774			34,003		72,308		66,873
Net realized gains:
Net realized investment gains	4,958			5,709		13,139		11,013
Other-than-temporary impairments	(419		)	(508	)	(1,382	)	(2,427	)
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income	—			(47	)	—		(77	)
Total net realized gains	4,539			5,154		11,757		8,509
Other income	1,911			3,536		11,735		6,320
Total revenues	506,849			468,945		1,015,920		928,894
Expenses:
Loss and loss expense incurred	297,795			279,594		618,341		549,443
Policy acquisition costs	155,173			143,728		304,439		283,256
Interest expense	5,425			5,570		10,986		11,401
Other expenses	8,935			3,852		17,549		19,725
Total expenses	467,328			432,744		951,315		863,825
Income from continuing operations, before federal income tax	39,521			36,201		64,605		65,069
Federal income tax expense:
Current	8,781			6,221		15,319		13,674
Deferred	1,399			2,858		1,971		1,968
Total federal income tax expense	10,180			9,079		17,290		15,642
Net income from continuing operations	29,341			27,122		47,315		49,427
Loss on disposal of discontinued operations, net of tax of $(538) – 2013	—			—		—		(997	)
Net income	$	29,341		27,122		47,315		48,430
Earnings per share:
Basic net income from continuing operations	$	0.52		0.49		0.84		0.89
Basic net loss from discontinued operations	—			—		—		(0.02	)
Basic net income	$	0.52		0.49		0.84		0.87
Diluted net income from continuing operations	$	0.51		0.48		0.83		0.88
Diluted net loss from discontinued operations	—			—		—		(0.02	)
Diluted net income	$	0.51		0.48		0.83		0.86
Dividends to stockholders	$	0.13		0.13		0.26		0.26

The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 

2

SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Net income	$	29,341		27,122		47,315		48,430
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on investment securities:
Unrealized holding gains (losses) arising during period	29,329			(59,353	)	50,755		(56,959	)
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income	—			31		—		50
Amount reclassified into net income:
Held-to-maturity securities	(144		)	(399	)	(440	)	(865	)
Non-credit other-than-temporary impairments	305			3		305		8
Realized gains on available for sale securities	(3,255		)	(3,438	)	(7,954	)	(7,322	)
Total unrealized gains (losses) on investment securities	26,235			(63,156	)	42,666		(65,088	)
Defined benefit pension and post-retirement plans:
Net actuarial gain	—			—		—		28,600
Amounts reclassified into net income:
Net actuarial loss	248			513		495		1,709
Prior service cost	—			—		—		6
Curtailment expense	—			—		—		11
Total defined benefit pension and post-retirement plans	248			513		495		30,326
Other comprehensive income (loss)	26,483			(62,643	)	43,161		(34,762	)
Comprehensive income (loss)	$	55,824		(35,521	)	90,476		13,668

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

3

SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	Six Months ended June 30,
($ in thousands)	2014			2013
Common stock:
Beginning of year	$	198,240		196,388
Dividend reinvestment plan (shares:  29,949 – 2014; 33,514 – 2013)	60			67
Stock purchase and compensation plans (shares:  547,190 – 2014; 682,661 – 2013)	1,095			1,366
End of period	199,395			197,821
Additional paid-in capital:
Beginning of year	288,182			270,654
Dividend reinvestment plan	642			703
Stock purchase and compensation plans	9,528			10,657
End of period	298,352			282,014
Retained earnings:
Beginning of year	1,202,015			1,125,154
Net income	47,315			48,430
Dividends to stockholders ($0.26 per share – 2014 and 2013)	(14,868		)	(14,723	)
End of period	1,234,462			1,158,861
Accumulated other comprehensive income:
Beginning of year	24,851			54,040
Other comprehensive income (loss)	43,161			(34,762	)
End of period	68,012			19,278
Treasury stock:
Beginning of year	(559,360		)	(555,644	)
Acquisition of treasury stock (shares:  124,819 – 2014; 151,113 – 2013)	(2,786		)	(3,285	)
End of period	(562,146		)	(558,929	)
Total stockholders’ equity	$	1,238,075		1,099,045

Selective Insurance Group, Inc. also has authorized, but not issued, 5,000,000 shares of preferred stock, without par value, of which 300,000 shares have been

designated Series A junior preferred stock, without par value.

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

4

SELECTIVE INSURANCE GROUP, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW	Six Months ended June 30,
($ in thousands)	2014			2013
Operating Activities
Net income	$	47,315		48,430
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	18,912			23,103
Sale of renewal rights	(8,000		)	—
Loss on disposal of discontinued operations	—			997
Stock-based compensation expense	6,102			6,189
Undistributed (gains) losses of equity method investments	(138		)	419
Net realized gains	(11,757		)	(8,509	)
Retirement income plan curtailment expense	—			16
Changes in assets and liabilities:
Increase in reserve for loss and loss expenses, net of reinsurance recoverables	93,675			69,790
Increase in unearned premiums, net of prepaid reinsurance and advance premiums	36,997			65,225
Decrease in net federal income taxes	12,634			3,171
Increase in premiums receivable	(64,747		)	(84,135	)
Increase in deferred policy acquisition costs	(9,106		)	(9,555	)
Increase in interest and dividends due or accrued	(361		)	(1,066	)
Decrease in accrued salaries and benefits	(26,557		)	(6,173	)
Decrease in accrued insurance expenses	(16,872		)	(5,478	)
Other-net	(5,425		)	(4,526	)
Net adjustments	25,357			49,468
Net cash provided by operating activities	72,672			97,898
Investing Activities
Purchase of fixed income securities, available-for-sale	(339,362		)	(530,402	)
Purchase of equity securities, available-for-sale	(111,886		)	(42,546	)
Purchase of other investments	(6,039		)	(4,393	)
Purchase of short-term investments	(764,692		)	(1,116,873	)
Sale of subsidiary	—			1,225
Sale of fixed income securities, available-for-sale	19,557			6,851
Sale of short-term investments	772,455			1,144,853
Redemption and maturities of fixed income securities, held-to-maturity	28,595			48,186
Redemption and maturities of fixed income securities, available-for-sale	222,568			286,905
Sale of equity securities, available-for-sale	111,996			42,206
Distributions from other investments	7,726			6,077
Purchase of property and equipment	(6,628		)	(6,761	)
Sale of renewal rights	8,000			—
Net cash used in investing activities	(57,710		)	(164,672	)
Financing Activities
Dividends to stockholders	(13,914		)	(13,668	)
Acquisition of treasury stock	(2,786		)	(3,285	)
Net proceeds from stock purchase and compensation plans	3,091			3,769
Proceeds from issuance of notes payable, net of debt issuance costs	—			178,435
Repayment of notes payable	—			(100,000	)
Excess tax benefits from share-based payment arrangements	955			1,467
Repayments of capital lease obligations	(954		)	—
Net cash (used in) provided by financing activities	(13,608		)	66,718
Net increase (decrease) in cash	1,354			(56	)
Cash, beginning of year	193			210
Cash, end of period	$	1,547		154

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

5

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Organization

Selective Insurance Group, Inc., through its subsidiaries, (collectively referred to as “we,” “us,” or “our”) offers standard and excess and surplus lines (“E&S”) property and casualty insurance products. Selective Insurance Group, Inc. (referred to as the “Parent”) was incorporated in New Jersey in 1977 and its main offices are located in Branchville, New Jersey. The Parent’s common stock is publicly traded on the NASDAQ Global Select Market under the symbol “SIGI.”

We classify our business into three operating segments:

• Our Standard Insurance Operations segment, which is comprised of both commercial lines ("Commercial Lines") and personal lines ("Personal Lines") business, sells property and casualty insurance products and services in the standard market, including flood insurance through the National Flood Insurance Program's ("NFIPs") write-your-own ("WYO") program;

• Our E&S Insurance Operations segment sells Commercial Lines property and casualty insurance products and services to insureds who have not obtained coverage in the standard market; and

• Our Investments segment, which invests the premiums collected by our Standard and E&S Insurance Operations and amounts generated through our capital management strategies, which may include the issuance of debt and equity securities.

NOTE 2. Basis of Presentation

These interim unaudited consolidated financial statements (“Financial Statements”) include the accounts of the Parent and its subsidiaries, and have been prepared in conformity with: (i) U.S. generally accepted accounting principles (“GAAP”); and (ii) the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The preparation of the Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported financial statement balances, as well as the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. All significant intercompany accounts and transactions between the Parent and its subsidiaries are eliminated in consolidation.

These Financial Statements reflect all adjustments that, in our opinion, are normal, recurring, and necessary for a fair presentation of our results of operations and financial condition. The Financial Statements cover the second quarters ended June 30, 2014 (“Second Quarter 2014”) and June 30, 2013 (“Second Quarter 2013”) and the six-month periods ended June 30, 2014 ("Six Months 2014") and June 30, 2013 ("Six Months 2013"). The Financial Statements do not include all of the information and disclosures required by GAAP and the SEC for audited annual financial statements. Results of operations for any interim period are not necessarily indicative of results for a full year. Consequently, the Financial Statements should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 Annual Report”) filed with the SEC.

NOTE 3. Adoption of Accounting Pronouncements 

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-11, Income Taxes, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"). ASU 2013-11 applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. An unrecognized tax benefit is the difference between a tax position taken or expected to be taken in a tax return and the benefit that is more likely than not sustainable under examination. Under ASU 2013-11, an entity must net an unrecognized tax benefit, or a portion of an unrecognized tax benefit, against deferred tax assets for a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward except when:

• An NOL carryforward, a similar tax loss, or a tax credit carryfoward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position; or

• The entity does not intend to use the deferred tax asset for this purpose. If either of these conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset.

ASU 2013-11 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance did not impact our financial condition or results of operation.

6

Pronouncements to be effective in the future

In January 2014, the FASB issued ASU 2014-01, Accounting for Investments in Qualified Affordable Housing Projects ("ASU 2014-01").  ASU 2014-01 applies to all reporting entities that invest in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for a low-income housing tax credit. ASU 2014-01 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using a newly defined "proportional amortization method" if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as components of income tax expense (benefit).  For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment is required to be accounted for as an equity method investment or a cost method investment.

ASU 2014-01 is effective for public business entities for annual periods and interim periods within those annual periods, beginning after December 15, 2014.  The adoption of this guidance will not have a material impact on our financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (“ASU 2014-12”). ASU 2014-12 applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. That is the case when an employee is eligible to retire or otherwise terminate employment before the end of the period in which a performance target could be achieved and still be eligible to vest in the award if and when the performance target is achieved. ASU 2014-12 is intended to resolve the diverse accounting treatment of these types of awards in practice. Many reporting entities were accounting for these types of performance targets as non-vesting conditions that affect the grant-date fair value of the award while other entities treated these performance targets as performance conditions that do not affect the grant-date fair value of the award. ASU 2014-12 clarifies that these types of performance targets should be treated as performance conditions that do not impact the grant-date fair value of the award.

This guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. The implementation of ASU 2014-12 will not affect us, as we are currently recording expense consistent with the requirements of this accounting update.

NOTE 4. Statements of Cash Flow

Supplemental cash flow information for Six Months 2014 and 2013 are as follows:

	Six Months ended June 30,
($ in thousands)	2014		2013
Cash paid during the period for:
Interest	$	11,113	10,295
Federal income tax	3,699		11,000
Non-cash items:
Tax-free exchange of fixed income securities, available-for-sale ("AFS")	9,180		13,615
Tax-free exchange of fixed income securities, held-to-maturity ("HTM")	15		10,710
Stock split related to equity securities, AFS	334		—
Assets acquired under capital lease arrangements	2,124		1,898

At June 30, 2014, included in "Other assets" on the Consolidated Balance Sheets was $8.5 million of cash received from the NFIP, which is restricted to pay flood claims under the WYO program.

7

NOTE 5. Investments

(a) The amortized cost, net unrealized gains and losses, carrying value, unrecognized holding gains and losses, and fair value of HTM fixed income securities as of June 30, 2014 and December 31, 2013 were as follows:

June 30, 2014
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses		Fair Value
Foreign government	$	5,292	90		5,382	137	—		5,519
Obligations of state and political subdivisions	327,898		2,942		330,840	15,884	—		346,724
Corporate securities	21,893		(347	)	21,546	2,972	(5	)	24,513
Asset-backed securities (“ABS”)	3,260		(583	)	2,677	608	—		3,285
Commercial mortgage-backed securities (“CMBS”)	5,015		(522	)	4,493	968	—		5,461
Total HTM fixed income securities	$	363,358	1,580		364,938	20,569	(5	)	385,502

December 31, 2013
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses	Fair Value
Foreign government	$	5,292	131		5,423	168	—	5,591
Obligations of state and political subdivisions	348,109		4,013		352,122	17,634	—	369,756
Corporate securities	28,174		(346	)	27,828	2,446	—	30,274
ABS	3,413		(655	)	2,758	657	—	3,415
CMBS	5,634		(886	)	4,748	3,197	—	7,945
Total HTM fixed income securities	$	390,622	2,257		392,879	24,102	—	416,981

Unrecognized holding gains and losses of HTM securities are not reflected in the Financial Statements, as they represent fair value fluctuations from the later of: (i) the date a security is designated as HTM; or (ii) the date that an other-than-temporary impairment (“OTTI”) charge is recognized on an HTM security, through the date of the balance sheet. Our HTM securities had an average duration of 1.9 years as of June 30, 2014.

(b) The cost/amortized cost, unrealized gains and losses, and fair value of AFS securities as of June 30, 2014 and December 31, 2013 were as follows:

June 30, 2014
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	149,537	9,474	(202	)	158,809
Foreign government	27,046		983	(1	)	28,028
Obligations of states and political subdivisions	1,080,039		30,696	(3,681	)	1,107,054
Corporate securities	1,730,192		56,587	(4,186	)	1,782,593
ABS	131,434		945	(210	)	132,169
CMBS1	170,298		3,246	(1,073	)	172,471
Residential mortgage-backed securities (“RMBS”)2	503,490		9,534	(3,948	)	509,076
AFS fixed income securities	3,792,036		111,465	(13,301	)	3,890,200
AFS equity securities	166,214		45,137	(3	)	211,348
Total AFS securities	$	3,958,250	156,602	(13,304	)	4,101,548

8

December 31, 2013
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	163,218	10,661	(504	)	173,375
Foreign government	29,781		906	(72	)	30,615
Obligations of states and political subdivisions	946,455		25,194	(20,025	)	951,624
Corporate securities	1,707,928		44,004	(17,049	)	1,734,883
ABS	140,430		934	(468	)	140,896
CMBS1	172,288		2,462	(3,466	)	171,284
RMBS2	515,877		7,273	(10,291	)	512,859
AFS fixed income securities	3,675,977		91,434	(51,875	)	3,715,536
AFS equity securities	155,350		37,517	(96	)	192,771
Total AFS securities	$	3,831,327	128,951	(51,971	)	3,908,307

¹ CMBS includes government guaranteed agency securities with a fair value of $23.7 million at June 30, 2014 and $30.0 million at December 31, 2013.

² RMBS includes government guaranteed agency securities with a fair value of $41.8 million at June 30, 2014 and $55.2 million at December 31, 2013.

Unrealized gains and losses of AFS securities represent fair value fluctuations from the later of: (i) the date a security is designated as AFS; or (ii) the date that an OTTI charge is recognized on an AFS security, through the date of the balance sheet. These unrealized gains and losses are recorded in Accumulated other comprehensive income ("AOCI") on the Consolidated Balance Sheets.

(c) The following tables summarize, for all securities in a net unrealized/unrecognized loss position at June 30, 2014 and December 31, 2013, the fair value and gross pre-tax net unrealized/unrecognized loss by asset class and by length of time those securities have been in a net loss position:

June 30, 2014	Less than 12 months				12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Fair Value	Unrealized Losses1
AFS securities
U.S. government and government agencies	$	—	—		13,284	(202	)
Foreign government	—		—		2,997	(1	)
Obligations of states and political subdivisions	54,331		(187	)	246,340	(3,494	)
Corporate securities	55,362		(186	)	170,034	(4,000	)
ABS	14,992		(28	)	14,215	(182	)
CMBS	4,939		(4	)	58,286	(1,069	)
RMBS	2,761		(13	)	169,064	(3,935	)
Total fixed income securities	132,385		(418	)	674,220	(12,883	)
Equity securities	170		(3	)	—	—
Subtotal	$	132,555	(421	)	674,220	(12,883	)

	Less than 12 months						12 months or longer
($ in thousands)	Fair Value		Unrealized Gains (Losses)1		Unrecognized Losses2		Fair Value	Unrealized Losses1		Unrecognized Gains2
HTM securities
Corporate securities	1,482		3		(5	)	—	—		—
ABS	—		—		—		2,496	(583	)	564
Subtotal	$	1,482	3		(5	)	2,496	(583	)	564
Total AFS and HTM	$	134,037	(418	)	(5	)	676,716	(13,466	)	564

9

December 31, 2013	Less than 12 months				12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Fair Value	Unrealized Losses1
AFS securities
U.S. government and government agencies	$	16,955	(500	)	507	(4	)
Foreign government	2,029		(30	)	2,955	(42	)
Obligations of states and political subdivisions	442,531		(19,120	)	13,530	(905	)
Corporate securities	511,100		(15,911	)	14,771	(1,138	)
ABS	68,725		(468	)	—	—
CMBS	100,396		(2,950	)	6,298	(516	)
RMBS	268,943		(10,031	)	2,670	(260	)
Total fixed income securities	1,410,679		(49,010	)	40,731	(2,865	)
Equity securities	1,124		(96	)	—	—
Subtotal	$	1,411,803	(49,106	)	40,731	(2,865	)

	Less than 12 months					12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Unrecognized Gains2	Fair Value	Unrealized Losses1		Unrecognized Gains2
HTM securities
Obligations of states and political subdivisions	$	65	(5	)	5	441	(20	)	14
ABS	—		—		—	2,490	(655	)	621
Subtotal	65		(5	)	5	2,931	(675	)	635
Total AFS and HTM	$	1,411,868	(49,111	)	5	43,662	(3,540	)	635

 ¹ Gross unrealized losses include non-OTTI unrealized amounts and OTTI losses recognized in AOCI.  In addition, this column includes remaining unrealized gain or loss amounts on securities that were transferred to an HTM designation in the first quarter of 2009 for those securities that are in a net unrealized/unrecognized loss position.

² Unrecognized gains represent fair value fluctuations from the later of:  (i) the date a security is designated as HTM; or (ii) the date that an OTTI charge is recognized on an HTM security.

As evidenced by the table below, our net unrealized/unrecognized loss positions improved by $38.7 million as of June 30, 2014 compared to December 31, 2013 as follows:

($ in thousands)
June 30, 2014				December 31, 2013
Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss		Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss
288	80% - 99%	$	13,325	556	80% - 99%	$	51,835
—	60% - 79%	—		1	60% - 79%	176
—	40% - 59%	—		—	40% - 59%	—
—	20% - 39%	—		—	20% - 39%	—
—	0% - 19%	—		—	0% - 19%	—
		$	13,325			$	52,011

We have reviewed the securities in the tables above in accordance with our OTTI policy, as described in Note 2. “Summary of Significant Accounting Policies” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

At June 30, 2014, we had 288 securities in an aggregate unrealized/unrecognized loss position of $13.3 million, compared to 557 securities in an aggregate unrealized/unrecognized loss position of $52.0 million at December 31, 2013. This improvement was driven by a lower interest rate environment, as interest rates on the 10-year U.S. Treasury Note fell by 50 basis points in Six Months 2014. This interest rate movement had a positive impact on our fixed income securities portfolio's valuation, thus decreasing the number of securities in a loss position and the corresponding dollar amount of unrealized losses.

10

At June 30, 2014, $12.9 million of the aggregate unrealized/unrecognized losses related to securities that have been in a loss position for more than 12 months, while at December 31, 2013, these losses amounted to only $2.9 million. Despite these securities being in a loss position, the nature of the loss is interest-rate related as opposed to credit-related concerns, as was evidenced by the fact that the severity of impairment on these securities improved from an average of 6% of its amortized cost at year end to an average of 2% of its amortized cost at the end of the second quarter. This movement is reflective of the overall interest rate decline experienced during the year.

For a discussion regarding the impact of interest rate movements on our fixed income securities portfolio, refer to Item 7A. "Quantitative and Qualitative Disclosures About Market Risk." in our 2013 Annual Report.

We do not intend to sell any securities in an unrealized/unrecognized loss position, nor do we believe we will be required to sell these securities, and therefore we have concluded that they are temporarily impaired as of June 30, 2014. 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. If our judgment about an individual security changes in the future, we may ultimately record a credit loss after having originally concluded that one did not exist, which could have a material impact on our net income and financial position in future periods.

(d) Fixed income securities at June 30, 2014, by contractual maturity, are shown below. Mortgage-backed securities ("MBS") are included in the maturity tables using the estimated average life of each security. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations, with or without call or prepayment penalties.

Listed below are HTM fixed income securities at June 30, 2014:

($ in thousands)	Carrying Value		Fair Value
Due in one year or less	$	113,394	115,199
Due after one year through five years	230,116		245,500
Due after five years through 10 years	21,428		24,803
Total HTM fixed income securities	$	364,938	385,502

Listed below are AFS fixed income securities at June 30, 2014:

($ in thousands)	Fair Value
Due in one year or less	$	401,681
Due after one year through five years	2,007,460
Due after five years through 10 years	1,404,203
Due after 10 years	76,856
Total AFS fixed income securities	$	3,890,200

(e) The following table summarizes our other investment portfolio by strategy and the remaining commitment amount associated with each strategy:

Other Investments	Carrying Value			June 30, 2014
($ in thousands)	June 30, 2014		December 31, 2013	Remaining Commitment
Alternative Investments
Secondary private equity	$	23,575	25,618	7,230
Private equity	21,388		20,192	9,917
Energy/power generation	17,802		17,361	6,984
Mezzanine financing	13,243		12,738	14,470
Real estate	11,039		11,698	10,131
Distressed debt	9,947		11,579	2,971
Venture capital	7,089		7,025	350
Total alternative investments	104,083		106,211	52,053
Other securities	2,042		1,664	597
Total other investments	$	106,125	107,875	52,650

11

For a description of our seven alternative investment strategies, as well as information regarding redemption, restrictions, and fund liquidations, refer to Note 5. “Investments” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

The following table sets forth gross summarized financial information for our other investments portfolio, including the portion not owned by us. The investments are carried under the equity method of accounting. The last line of the table below reflects our share of the aggregate income, 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 as follows:

Income Statement Information	Quarter ended March 31,				Six Months ended March 31,
($ in millions)	2014		2013		2014		2013
Net investment income	$	22.8	46.8		$	85.7	255.0
Realized gains (losses)	74.2		(22.1	)	197.6		599.7
Net change in unrealized appreciation (depreciation)	207.6		378.8		842.4		(18.9	)
Net income	$	304.6	403.5		$	1,125.7	835.8
Selective’s insurance subsidiaries’ other investments income	$	3.6	3.9		$	8.8	7.5

(f) We have pledged certain AFS fixed income securities and short-term investments as collateral related to: (i) our outstanding borrowing of $58 million with the Federal Home Loan Bank of Indianapolis ("FHLBI"); and (ii) our reinsurance obligations related to our 2011 acquisition of our E&S book of business. In addition, certain securities were on deposit with various state and regulatory agencies 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, 2014:

($ in millions)	FHLBI Collateral		Reinsurance Collateral	State and Regulatory Deposits	Total
U.S. government and government agencies	$	22.9	—	26.0	48.9
Obligations of states and political subdivisions	—		5.7	—	5.7
Corporate securities	—		5.3	—	5.3
ABS	—		2.0	—	2.0
CMBS	1.9		—	—	1.9
RMBS	36.8		3.2	—	40.0
Total fixed income securities	$	61.6	16.2	26.0	103.8
Short-term investments	—		0.2	—	0.2
Total pledged as collateral	$	61.6	16.4	26.0	104.0

(g) The components of pre-tax net investment income earned for the periods indicated were as follows:

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Fixed income securities	$	33,781		30,298		$	64,809		$	60,387
Equity securities	1,736			1,874		3,185			3,081
Short-term investments	14			29		33			81
Other investments	3,553			3,869		8,771			7,471
Investment expenses	(2,310		)	(2,067	)	(4,490		)	(4,147		)
Net investment income earned	$	36,774		34,003		72,308			66,873

12

(h) The following tables summarize OTTI by asset type for the periods indicated:

Second Quarter 2014	Gross		Included in Other Comprehensive Income (“OCI”)	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	419	—	419
Total AFS Securities	419		—	419
OTTI losses	$	419	—	419

Second Quarter 2013	Gross			Included in OCI		Recognized in Earnings
($ in thousands)
HTM fixed income securities
ABS	$	(44	)	(47	)	3
Total HTM fixed income securities	(44		)	(47	)	3
Equity securities	429			—		429
Total AFS securities	429			—		429
Other investments	123			—		123
OTTI losses	$	508		(47	)	555

Six Months 2014	Gross		Included in OCI	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	1,382	—	1,382
Total AFS Securities	1,382		—	1,382
OTTI losses	$	1,382	—	1,382

Six Months 2013	Gross			Included in OCI		Recognized in Earnings
($ in thousands)
HTM fixed income securities
ABS	$	(44	)	(47	)	3
Total HTM fixed income securities	(44		)	(47	)	3
AFS fixed income securities
RMBS	(22		)	(30	)	8
Total AFS fixed income securities	(22		)	(30	)	8
Equity securities	646			—		646
Total AFS securities	624			(30	)	654
Other investments	1,847			—		1,847
OTTI losses	$	2,427		(77	)	2,504

The OTTI charges in Second Quarter 2014 and Six Months 2014 relate to equity securities for which we have the intent to sell. The majority of the OTTI charges in Six Months 2013 related to an investment in a limited liability company within our other investments portfolio that had sustained significant losses for which we did not anticipate recovery. For a discussion of our evaluation for OTTI of fixed income securities, short-term investments, equity securities, and other investments, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2013 Annual Report.

13

The following tables set forth, for the periods indicated, credit loss impairments on fixed income securities for which a portion of the OTTI charge was recognized in OCI, and the corresponding changes in such amounts:

	Quarter ended June 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	7,488		7,486
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(1,954		)	—
Reductions for securities for which the amount previously recognized in OCI was recognized in earnings because of intention or potential requirement to sell before recovery of amortized cost	—			—
Reductions for securities for which the entire amount previously recognized in OCI was recognized in earnings due to a decrease in cash flows expected	—			—
Additional increases to the amount related to credit loss for which an OTTI was previously recognized	—			2
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,534		7,488

	Six Months ended June 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	7,488		7,477
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(1,954		)	—
Reductions for securities for which the amount previously recognized in OCI was recognized in earnings because of intention or potential requirement to sell before recovery of amortized cost	—			—
Reductions for securities for which the entire amount previously recognized in OCI was recognized in earnings due to a decrease in cash flows expected	—			—
Additional increases to the amount related to credit loss for which an OTTI was previously recognized	—			11
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,534		7,488

(i) The components of net realized gains, excluding OTTI charges, for the periods indicated were as follows:

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
HTM fixed income securities
Gains	$	3		3		3		3
Losses	(3		)	(12	)	(14	)	(49	)
AFS fixed income securities
Gains	780			967		938		1,918
Losses	(31		)	(46	)	(143	)	(299	)
AFS equity securities
Gains	4,362			4,800		12,679		10,471
Losses	(153		)	(3	)	(324	)	(171	)
Other investments
Gains	—			—		—		—
Losses	—			—		—		(860	)
Total other net realized investment gains	4,958			5,709		13,139		11,013
Total OTTI charges recognized in earnings	(419		)	(555	)	(1,382	)	(2,504	)
Total net realized gains	$	4,539		5,154		11,757		8,509

Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold. The $5.0 million and $13.1 million in net realized gains in Second Quarter and Six Months 2014, respectively, were primarily related to the sale of AFS equity securities due to the rebalancing of our high dividend yield strategy holdings within our equity portfolio.

14

Of the $5.7 million and $11.0 million in net realized gains in Second Quarter and Six Months 2013, $4.7 million related to the sale of a private equity security due to the acquisition of this investment by a third party. In addition, $5.6 million in net realized gains in Six Months 2013 were related to the sale of AFS equity securities due to the rebalancing of our high dividend yield strategy holdings within our equity portfolio.

Proceeds from the sale of AFS securities were $68.7 million in Second Quarter 2014 and $131.6 million in Six Months 2014, and $42.2 million and $49.1 million in the same periods a year ago.

NOTE 6. Fair Value Measurements

The following table presents the carrying amounts and estimated fair values of our financial instruments as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
($ in thousands)	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial Assets
Fixed income securities:
HTM	$	364,938	385,502	392,879	416,981
AFS	3,890,200		3,890,200	3,715,536	3,715,536
Equity securities, AFS	211,348		211,348	192,771	192,771
Short-term investments	166,488		166,488	174,251	174,251
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	13,000		13,165	13,000	13,319
1.25% borrowings from FHLBI	45,000		45,338	45,000	45,259
7.25% Senior Notes	49,895		55,527	49,916	50,887
6.70% Senior Notes	99,395		110,926	99,498	98,247
5.875% Senior Notes	185,000		174,714	185,000	146,298
Total notes payable	$	392,290	399,670	392,414	354,010

The fair values of our financial assets and liabilities are generated using various valuation techniques and are placed into the fair value hierarchy considering the following: (i) the highest priority is given to quoted prices in active markets for identical assets (Level 1); (ii) the next highest priority is given to quoted prices in markets that are not active or inputs that are observable either directly or indirectly, including quoted prices for similar assets in markets that are not active and other inputs that can be derived principally from, or corroborated by, observable market data for substantially the full term of the assets (Level 2); and (iii) the lowest priority is given to unobservable inputs supported by little or no market activity and that reflect our assumptions about the exit price, including assumptions that market participants would use in pricing the asset (Level 3). An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. Transfers between levels in the fair value hierarchy are recognized at the end of the reporting period.

For a discussion of the techniques used to value the majority of our financial assets and liabilities, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2013 Annual Report.

15

The following tables provide quantitative disclosures of our financial assets that were measured at fair value at June 30, 2014 and December 31, 2013:

June 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets  Measured at  Fair Value  at 6/30/2014		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)1	Significant Other  Observable Inputs  (Level 2)1	Significant Unobservable  Inputs  (Level 3)
Description
Measured on a recurring basis:
AFS:
U.S. government and government agencies	$	158,809	52,552	106,257	—
Foreign government	28,028		—	28,028	—
Obligations of states and political subdivisions	1,107,054		—	1,107,054	—
Corporate securities	1,782,593		—	1,782,593	—
ABS	132,169		—	132,169	—
CMBS	172,471		—	172,471	—
RMBS	509,076		—	509,076	—
Total AFS fixed income securities	3,890,200		52,552	3,837,648	—
Equity securities	211,348		208,448	—	2,900
Total AFS Securities	4,101,548		261,000	3,837,648	2,900
Short-term investments	166,488		166,488	—	—
Total assets measured at fair value	$	4,268,036	427,488	3,837,648	2,900

¹ There were no transfers of securities between Level 1 and Level 2.

December 31, 2013			Fair Value Measurements Using
($ in thousands)	Assets  Measured at Fair Value at 12/31/13		Quoted Prices in  Active Markets for Identical Assets/Liabilities (Level 1)1	Significant Other Observable Inputs  (Level 2)1	Significant Unobservable Inputs  (Level 3)
Description
Measured on a recurring basis:
AFS:
U.S. government and government agencies	$	173,375	52,153	121,222	—
Foreign government	30,615		—	30,615	—
Obligations of states and political subdivisions	951,624		—	951,624	—
Corporate securities	1,734,883		—	1,734,883	—
ABS	140,896		—	140,896	—
CMBS	171,284		—	171,284	—
RMBS	512,859		—	512,859	—
Total AFS fixed income securities	3,715,536		52,153	3,663,383	—
Equity securities	192,771		189,871	—	2,900
Total AFS Securities	3,908,307		242,024	3,663,383	2,900
Short-term investments	174,251		174,251	—	—
Total assets measured at fair value	$	4,082,558	416,275	3,663,383	2,900

¹  There were no transfers of securities between Level 1 and Level 2.

16

There have been no changes in the fair value of securities measured using Level 3 prices during Six Months 2014. The following table provides a summary of these changes during 2013:

December 31, 2013
($ in thousands)	Government			Corporate			ABS			CMBS			Equity			Receivable for  Proceeds Related to Sale  of Selective HR Solutions ("Selective HR")			Total
Fair value, December 31, 2012	$	19,789		2,946			6,068			7,162			3,607			2,705			42,277
Total net (losses) gains for the period included in:
OCI1	(537		)	(7		)	(74		)	772			3,935			—			4,089
Net income2,3	(76		)	—			—			361			—			(1,480		)	(1,195		)
Purchases	—			—			—			—			—			—			—
Sales	—			—			—			—			—			—			—
Issuances	—			—			—			—			—			—			—
Settlements	(1,847		)	(168		)	—			(2,420		)	—			(225		)	(4,660		)
Transfers into Level 3	—			—			—			—			—			—			—
Transfers out of Level 3	(17,329		)	(2,771		)	(5,994		)	(5,875		)	(4,642		)	(1,000		)	(37,611		)
Fair value, December 31, 2013	$	—		$	—		$	—		$	—		$	2,900		$	—		$	2,900

¹ Amounts are reported in “Unrealized holding (losses) gains arising during period” on the Consolidated Statements of Comprehensive Income in our 2013 Annual Report.

² Amounts are reported in “Net realized gains” for realized gains and losses and “Net investment income earned” for amortization of securities on the Consolidated Statements of Income in our 2013 Annual Report.

³ For the receivable related to the sale of Selective HR, amounts in "Loss on disposal of discontinued operations, net of tax" relate to an impairment charge and amounts in "Other income" relate to interest accretion on the Consolidated Statements of Income in our 2013 Annual Report.

As discussed in Note 2. "Summary of Significant Accounting Policies," in Item 8. "Financial Statements and Supplementary Data." in our 2013 Annual Report, the fair value of our Level 3 fixed income securities is typically obtained through non-binding broker quotes based on unobservable inputs, which we review for reasonableness. There were no fixed income securities measured using Level 3 inputs at June 30, 2014 and December 31, 2013. However, in 2013, fixed income securities with a fair value of $32.0 million were transferred out of Level 3 during the year due to the availability of Level 2 pricing at December 31, 2013 that was not available previously.

Equity securities with fair values of $2.9 million were measured using Level 3 inputs at June 30, 2014 and at December 31, 2013. An equity security with a fair value of $4.6 million was transferred out of Level 3 during 2013 due to the availability of Level 2 pricing at the date of transfer. In addition, the receivable related to the sale of Selective HR was settled during 2013 and as a result was also transferred out of Level 3.

17

The following tables provide quantitative information regarding our financial assets and liabilities that were disclosed at fair value at June 30, 2014 and December 31, 2013:

June 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 6/30/2014		Quoted Prices in  Active Markets for  Identical Assets/ Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial Assets
HTM:
Foreign government	$	5,519	—	5,519	—
Obligations of states and political subdivisions	346,724		—	346,724	—
Corporate securities	24,513		—	24,513	—
ABS	3,285		—	3,285	—
CMBS	5,461		—	5,461	—
Total HTM fixed income securities	$	385,502	—	385,502	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,165	—	13,165	—
1.25% borrowings from FHLBI	45,338		—	45,338	—
7.25% Senior Notes	55,527		—	55,527	—
6.70% Senior Notes	110,926		—	110,926	—
5.875% Senior Notes	174,714		174,714	—	—
Total notes payable	$	399,670	174,714	224,956	—

December 31, 2013			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 12/31/2013		Quoted Prices in  Active Markets for  Identical Assets/ Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial Assets
HTM:
Foreign government	$	5,591	—	5,591	—
Obligations of states and political subdivisions	369,756		—	369,756	—
Corporate securities	30,274		—	30,274	—
ABS	3,415		—	3,415	—
CMBS	7,945		—	7,945	—
Total HTM fixed income securities	$	416,981	—	416,981	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,319	—	13,319	—
1.25% borrowings from FHLBI	45,259		—	45,259	—
7.25% Senior Notes	50,887		—	50,887	—
6.70% Senior Notes	98,247		—	98,247	—
5.875% Senior Notes	146,298		146,298	—	—
Total notes payable	$	354,010	146,298	207,712	—

18

NOTE 7. Reinsurance

The following table contains a listing of direct, assumed, and ceded reinsurance amounts for premiums written, premiums earned, and loss and loss expenses incurred for the periods indicated. For more information concerning reinsurance, refer to Note 8. “Reinsurance” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Premiums written:
Direct	$	572,314		551,190		1,130,205		1,080,006
Assumed	5,837			4,378		13,687		12,860
Ceded	(98,328		)	(93,391	)	(187,319	)	(180,565	)
Net	$	479,823		462,177		956,573		912,301
Premiums earned:
Direct	$	544,913		504,081		1,081,613		998,147
Assumed	10,385			8,951		20,570		21,414
Ceded	(91,673		)	(86,780	)	(182,063	)	(172,369	)
Net	$	463,625		426,252		920,120		847,192
Loss and loss expense incurred:
Direct	$	332,707		338,954		691,056		704,600
Assumed	7,377			6,420		14,856		15,494
Ceded	(42,289		)	(65,780	)	(87,571	)	(170,651	)
Net	$	297,795		279,594		618,341		549,443

The growth in direct premiums written ("DPW") for our ten insurance subsidiaries ("Insurance Subsidiaries") in both Second Quarter and Six Months 2014 compared to Second Quarter and Six Months 2013 reflects pure price increases and retention that we have achieved in our Standard Insurance Operations.

Direct premiums earned increases in Second Quarter 2014 and Six Months 2014 were consistent with the fluctuation in DPW for the twelve-month period ended June 30, 2014 as compared to the twelve-month period ended June 30, 2013.

The ceded premiums and losses related to our participation in the NFIP, under which 100% of our flood premiums, losses, and loss expenses are ceded to the NFIP, are as follows:

Ceded to NFIP	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Ceded premiums written	$	(65,775	)	(62,461	)	(123,078	)	(119,168	)
Ceded premiums earned	(59,213		)	(56,450	)	(117,499	)	(111,777	)
Ceded loss and loss expense incurred	(26,712		)	(51,725	)	(34,091	)	(127,901	)

19

NOTE 8. Segment Information

The disaggregated results of our three operating segments are used by senior management to manage our operations. These segments are evaluated based on the following:

• Our Standard Insurance Operations segment and our E&S Insurance Operations segment are evaluated based on statutory underwriting results (net premiums earned, incurred loss and loss expenses, policyholders dividends, policy acquisition costs, and other underwriting expenses), and statutory combined ratios; and

• Our Investments segment is evaluated based on after-tax net investment income and net realized gains and losses.

In computing the results of each segment, we do not make adjustments for interest expense or net general corporate expenses. While we do not fully allocate taxes to all segments, we do allocate taxes to our Investments segment as we manage that segment on after-tax results. We do not maintain separate investment portfolios for the segments and therefore, do not allocate assets to the segments.

In the first quarter of 2014, we sold the renewal rights to our $38 million self-insured group, or "SIG," book of business within the Standard Insurance Operations segment. We decided to opportunistically sell this very small and specialized book of pooled business as a significant portion of the business was produced outside of our standard lines footprint, and proved difficult to grow. As this was a renewal rights sale, we will continue to service policies that were in force at the date of the sale. We continue to remain active in the municipal and public school marketplace for individual risks that procure traditional insurance programs rather than pooling arrangements. The proceeds from this sale, which amounted to $8 million, are included in "Miscellaneous income" within the table below as a component of the Standard Insurance Operations revenue.

The following summaries present revenues from continuing operations (net investment income and net realized gains on investments in the case of the Investments segment) and pre-tax income from continuing operations for the individual segments:

Revenue by Segment	Quarter ended June 30,			Six Months ended June 30,
($ in thousands)	2014		2013	2014	2013
Standard Insurance Operations:
Net premiums earned:
Commercial automobile	$	83,472	76,706	165,688	151,053
Workers compensation	68,992		64,855	138,405	130,939
General liability	111,591		99,766	220,409	197,469
Commercial property	61,226		54,937	121,412	108,352
Businessowners’ policies	21,279		18,625	42,148	37,165
Bonds	4,734		4,775	9,490	9,539
Other	3,213		2,993	6,396	5,985
Total Standard Commercial Lines	354,507		322,657	703,948	640,502
Personal automobile	38,022		38,526	76,248	76,919
Homeowners	33,576		31,702	66,874	62,837
Other	2,946		3,320	6,240	6,828
Total Standard Personal Lines	74,544		73,548	149,362	146,584
Total Standard Insurance Operations net premiums earned	429,051		396,205	853,310	787,086
Miscellaneous income	1,908		3,528	11,727	6,248
Total Standard Insurance Operations revenue	430,959		399,733	865,037	793,334
E&S Insurance Operations:
Net premiums earned	34,574		30,047	66,810	60,106
Investments:
Net investment income	36,774		34,003	72,308	66,873
Net realized investment gains	4,539		5,154	11,757	8,509
Total investment revenues	41,313		39,157	84,065	75,382
Total all segments	506,846		468,937	1,015,912	928,822
Other income	3		8	8	72
Total revenues from continuing operations	$	506,849	468,945	1,015,920	928,894

20

Income from Continuing Operations before Federal Income Tax	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations:
Commercial Lines underwriting gain	$	15,703		9,743		$	12,073		15,845
Personal Lines underwriting (loss) gain	(5,582		)	(2,975	)	(7,942		)	2,998
Total Standard Insurance Operations underwriting gain, before federal income tax	10,121			6,768		4,131			18,843
GAAP combined ratio	97.6		%	98.3		99.5		%	97.6
Statutory combined ratio	97.3		%	97.0		99.2		%	96.9
E&S Insurance Operations:
Underwriting (loss) gain	(37		)	(2,285	)	938			(2,199	)
GAAP combined ratio	100.1		%	107.6		98.6		%	103.7
Statutory combined ratio	99.9		%	106.8		98.8		%	102.6
Investments:
Net investment income	36,774			34,003		72,308			66,873
Net realized investment gains	4,539			5,154		11,757			8,509
Total investment income, before federal income tax	41,313			39,157		84,065			75,382
Tax on investment income	10,941			10,107		22,516			19,312
Total investment income, after federal income tax	30,372			29,050		61,549			56,070

Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations underwriting gain, before federal income tax	$	10,121		6,768		$	4,131		18,843
E&S Insurance Operations underwriting (loss) gain, before federal income tax	(37		)	(2,285	)	938			(2,199	)
Investment income, before federal income tax	41,313			39,157		84,065			75,382
Total all segments	51,397			43,640		89,134			92,026
Interest expense	(5,425		)	(5,570	)	(10,986		)	(11,401	)
General corporate and other expenses	(6,451		)	(1,869	)	(13,543		)	(15,556	)
Income from continuing operations, before federal income tax	$	39,521		36,201		$	64,605		65,069

NOTE 9. Retirement Plans

The following table shows the net periodic benefit cost related to the Retirement Income Plan for Selective Insurance Company of America (“Retirement Income Plan”) and the life insurance benefits provided to eligible Selective Insurance Company of America retirees (referred to as the "Retirement Life Plan"). For more information concerning these plans, refer to Note 15. “Retirement Plans” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

	Retirement Income Plan Quarter ended June 30,					Retirement Life Plan Quarter ended June 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	1,626		1,857		—	—
Interest cost	3,253			3,051		73	69
Expected return on plan assets	(3,918		)	(3,985	)	—	—
Amortization of unrecognized net actuarial loss	368			772		13	17
Total net periodic cost	$	1,329		1,695		86	86

21

	Retirement Income Plan Six Months ended June 30,					Retirement Life Plan Six Months ended June 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	3,253		4,306		—	—
Interest cost	6,507			6,354		146	139
Expected return on plan assets	(7,837		)	(7,833	)	—	—
Amortization of unrecognized prior service	—			10		—	—
Amortization of unrecognized net actuarial loss	735			2,594		26	35
Curtailment expense	—			16		—	—
Total net periodic cost	$	2,658		5,447		172	174

	Retirement Income Plan Six Months ended June 30,			Retirement Life Plan Six Months ended June 30,
	2014		2013	2014		2013
Weighted-Average Expense Assumptions:
Discount rate	5.16	%	4.66	4.85	%	4.42
Expected return on plan assets	6.92		7.40	—		—
Rate of compensation increase	4.00		4.00	—		—

We presently anticipate contributing $9.8 million to the Retirement Income Plan in 2014, $5.4 million of which has been funded as of June 30, 2014.

NOTE 10. Comprehensive Income

The components of comprehensive income, both gross and net of tax, for Second Quarter and Six Months 2014 and 2013 are as follows:

Second Quarter 2014
($ in thousands)	Gross			Tax		Net
Net income	$	39,521		10,180		29,341
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	45,122			15,793		29,329
Amounts reclassified into net income:
HTM securities	(221		)	(77	)	(144	)
Non-credit OTTI	469			164		305
Realized gains on AFS securities	(5,008		)	(1,753	)	(3,255	)
Net unrealized gains	40,362			14,127		26,235
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	381			133		248
Defined benefit pension and post-retirement plans	381			133		248
Other comprehensive income	40,743			14,260		26,483
Comprehensive income	$	80,264		24,440		55,824

22

Second Quarter 2013
($ in thousands)	Gross			Tax		Net
Net income	$	36,201		9,079		27,122
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(91,314		)	(31,961	)	(59,353	)
Non-credit OTTI recognized in OCI	47			16		31
Amounts reclassified into net income:
HTM securities	(614		)	(215	)	(399	)
Non-credit OTTI	6			3		3
Realized gains on AFS securities	(5,288		)	(1,850	)	(3,438	)
Net unrealized losses	(97,163		)	(34,007	)	(63,156	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	789			276		513
Defined benefit pension and post-retirement plans	789			276		513
Other comprehensive loss	(96,374		)	(33,731	)	(62,643	)
Comprehensive loss	$	(60,173	)	(24,652	)	(35,521	)

Six Months 2014
($ in thousands)	Gross			Tax		Net
Net income	$	64,605		17,290		47,315
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	78,086			27,331		50,755
Amounts reclassified into net income:
HTM securities	(677		)	(237	)	(440	)
Non-credit OTTI	469			164		305
Realized gains on AFS securities	(12,237		)	(4,283	)	(7,954	)
Net unrealized gains	65,641			22,975		42,666
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	761			266		495
Defined benefit pension and post-retirement plans	761			266		495
Other comprehensive income	66,402			23,241		43,161
Comprehensive income	$	131,007		40,531		90,476

23

Six Months 2013
($ in thousands)	Gross			Tax		Net
Net income	$	63,534		15,104		48,430
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(87,630		)	(30,671	)	(56,959	)
Non-credit OTTI recognized in OCI	77			27		50
Amounts reclassified into net income:
HTM securities	(1,331		)	(466	)	(865	)
Non-credit OTTI	13			5		8
Realized gains on AFS securities	(11,264		)	(3,942	)	(7,322	)
Net unrealized losses	(100,135		)	(35,047	)	(65,088	)
Defined benefit pension and post-retirement plans:
Net actuarial gains	44,000			15,400		28,600
Amounts reclassified into net income:
Net actuarial loss	2,629			920		1,709
Prior service cost	10			4		6
Curtailment expense	16			5		11
Defined benefit pension and post-retirement plans	46,655			16,329		30,326
Other comprehensive loss	(53,480		)	(18,718	)	(34,762	)
Comprehensive income	$	10,054		(3,614	)	13,668

The balances of, and changes in, each component of AOCI (net of taxes) as of June 30, 2014 are as follows:

June 30, 2014	Net Unrealized (Loss) Gain on Investment Securities
($ in thousands)	OTTI Related			HTM Related		All Other		Investments Subtotal		Defined Benefit Pension and Post-Retirement Plans		Total AOCI
Balance, December 31, 2013	$	(1,599	)	1,467		51,635		51,503		(26,652	)	24,851
OCI before reclassifications	—			—		50,755		50,755		—		50,755
Amounts reclassified from AOCI	305			(440	)	(7,954	)	(8,089	)	495		(7,594	)
Net current period OCI	305			(440	)	42,801		42,666		495		43,161
Balance, June 30, 2014	$	(1,294	)	1,027		94,436		94,169		(26,157	)	68,012

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The reclassifications out of AOCI are as follows:

	Quarter ended June 30,				Six Months ended June 30,
($ in thousands)	2014		2013		2014		2013		Affected Line Item in the Unaudited Consolidated Statement of Income
OTTI related
Amortization of non-credit OTTI losses on HTM securities	—		6		—		13		Net investment income earned
Realized loss on disposal of non-credit OTTI securities	469		—		469		—		Net realized gains
	469		6		469		13		Income from continuing operations, before federal income tax
	(164	)	(3	)	(164	)	(5	)	Total federal income tax expense
	305		3		305		8		Net income
HTM related
Unrealized losses (gains) on HTM disposals	51		(70	)	75		(151	)	Net realized gains
Amortization of net unrealized gains on HTM securities	(272	)	(544	)	(752	)	(1,180	)	Net investment income earned
	(221	)	(614	)	(677	)	(1,331	)	Income from continuing operations, before federal income tax
	77		215		237		466		Total federal income tax expense
	(144	)	(399	)	(440	)	(865	)	Net income
Realized gains and losses on AFS and OTTI
Realized gains on AFS disposals and OTTI	(5,008	)	(5,288	)	(12,237	)	(11,264	)	Net realized gains
	(5,008	)	(5,288	)	(12,237	)	(11,264	)	Income from continuing operations, before federal income tax
	1,753		1,850		4,283		3,942		Total federal income tax expense
	(3,255	)	(3,438	)	(7,954	)	(7,322	)	Net income
Defined benefit pension and post-retirement life plans
Net actuarial loss	88		158		175		558		Loss and loss expense incurred
	293		631		586		2,071		Policy acquisition costs
	381		789		761		2,629		Income from continuing operations, before federal income tax
Prior service cost	—		—		—		7		Loss and loss adjustment expenses
	—		—		—		3		Policy acquisition costs
	—		—		—		10		Income from continuing operations, before federal income tax
Curtailment expense	—		—		—		16		Policy acquisition costs
	—		—		—		16		Income from continuing operations, before federal income tax
Total defined benefit pension and post-retirement life	381		789		761		2,655		Income from continuing operations, before federal income tax
	(133	)	(276	)	(266	)	(929	)	Total federal income tax expense
	248		513		495		1,726		Net income
Total reclassifications for the period	(2,846	)	(3,321	)	(7,594	)	(6,453	)	Net income

25

Note 11. Litigation

In the ordinary course of conducting business, we are named as defendants in various legal proceedings. Most of these proceedings are claims litigation involving our Insurance Subsidiaries as either: (i) liability insurers defending or providing indemnity for third-party claims brought against insureds; or (ii) insurers defending first-party coverage claims brought against them. We account for such activity through the establishment of unpaid loss and loss expense reserves. We expect that the ultimate liability, if any, with respect to such ordinary course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to our consolidated financial condition, results of operations, or cash flows.

Our Insurance Subsidiaries are also from time to time involved in other legal actions, some of which assert claims for substantial amounts. These actions include, among others, putative class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, improper reimbursement of medical providers paid under workers compensation and personal and commercial automobile insurance policies. Our Insurance Subsidiaries also are involved from time to time in individual actions in which extra-contractual damages, punitive damages, or penalties are sought, such as claims alleging bad faith in the handling of insurance claims. We believe that we have valid defenses to these cases. We expect that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to our consolidated financial condition. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods.

26

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

In this Quarterly Report on Form 10-Q, we discuss and make statements regarding our intentions, beliefs, current expectations, and projections regarding our company’s future operations and performance. Such statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by words such as “anticipates,” “believes,” “expects,” “will,” “should,” and “intends” and their negatives. We caution prospective investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in our future performance. Factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, those discussed under Item 1A. “Risk Factors” below in Part II “Other Information.” These risk factors may not be exhaustive. We operate in a continually changing business environment and new risk factors emerge from time to time. We can neither predict such new risk factors nor can we assess the impact, if any, of such new risk factors on our businesses or the extent to which any factor or combination of factors may cause actual results to differ materially from those expressed or implied in any forward-looking statements in this report. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed in this report might not occur. We make forward-looking statements based on currently available information and assume no obligation to update these statements due to changes in underlying factors, new information, future developments, or otherwise.

Introduction

We classify our business into three operating segments:

• Our Standard Insurance Operations segment, which is comprised of both commercial lines ("Commercial Lines") and personal lines ("Personal Lines") business, sells property and casualty insurance products and services in the standard market, including flood insurance through the National Flood Insurance Program's ("NFIPs") write-your-own ("WYO") program;

• Our Excess and Surplus ("E&S") Insurance Operations segment sells Commercial Lines property and casualty insurance products and services to insureds who have not obtained coverage in the standard market; and

• Our Investments segment, which invests the premiums collected by our Standard and E&S Insurance Operations and amounts generated through our capital management strategies, which may include the issuance of debt and equity securities.

Our Standard Insurance Operations products and services are sold through nine subsidiaries that write Commercial Lines and Personal Lines business, some of which write flood business through the NFIP's WYO program.

Our E&S Insurance Operations products and services are sold through one subsidiary. This subsidiary, Mesa Underwriters Specialty Insurance Company ("MUSIC"), provides us with a nationally-authorized non-admitted platform to write commercial and personal E&S lines business.

Our ten insurance subsidiaries are collectively referred to as the "Insurance Subsidiaries."

The purpose of Management’s Discussion and Analysis (“MD&A”) is to provide an understanding of the consolidated results of operations and financial condition and known trends and uncertainties that may have a material impact in future periods. Consequently, investors should read the MD&A in conjunction with the consolidated financial statements in our 2013 Annual Report filed with the U.S. Securities and Exchange Commission ("SEC").

In the MD&A, we will discuss and analyze the following:

• Critical Accounting Policies and Estimates;

• Financial Highlights of Results for Second Quarter and Six Months 2014 and Second Quarter and Six Months 2013;

• Results of Operations and Related Information by Segment;

• Federal Income Taxes;

• Financial Condition, Liquidity, Short-term Borrowings, and Capital Resources;

• Ratings;

• Off-Balance Sheet Arrangements; and

• Contractual Obligations, Contingent Liabilities, and Commitments.

27

Critical Accounting Policies and Estimates

These unaudited interim consolidated financial statements include amounts based on our informed estimates and judgments for those transactions that are not yet complete. Such estimates and judgments affect the reported amounts in the consolidated financial statements. Those estimates and judgments most critical to the preparation of the consolidated financial statements involve the following: (i) reserves for loss and loss expenses; (ii) pension and post-retirement benefit plan actuarial assumptions; (iii) other-than-temporary investment impairments ("OTTI"); and (iv) reinsurance. These estimates and judgments require the use of assumptions about matters that are highly uncertain and, therefore, are subject to change as facts and circumstances develop. If different estimates and judgments had been applied, materially different amounts might have been reported in the financial statements. For additional information regarding our critical accounting policies, refer to our 2013 Annual Report, pages 44 through 52.

Financial Highlights of Results for Second Quarterand Six Months 2014 and Second Quarter and Six Months 2013¹

	Quarter ended June 30,							Six Months ended June 30,
($ and shares in thousands, except per share amounts)	2014			2013	Change % or Points			2014		2013	Change % or Points
Generally Accepted Accounting Principles ("GAAP") measures:
Revenues	$	506,849		468,945	8		%	$	1,015,920	928,894	9		%
Pre-tax net investment income	36,774			34,003	8			72,308		66,873	8
Pre-tax net income	39,521			36,201	9			64,605		63,534	2
Net income	29,341			27,122	8			47,315		48,430	(2	)
Diluted net income per share	0.51			0.48	6			0.83		0.86	(3	)
Diluted weighted-average outstanding shares	57,260			56,616	1			57,215		56,530	1
GAAP combined ratio	97.8		%	98.9	(1.1	)	pts	99.4		98.0	1.4		pts
Statutory combined ratio2	97.5		%	97.7	(0.2	)		99.2		97.3	1.9
Return on average equity	9.7		%	9.7	—			7.9		8.8	(0.9	)
Non-GAAP measures:
Operating income3	$	26,390		23,773	11		%	$	39,673	43,897	(10	)	%
Diluted operating income per share3	0.46			0.42	10			0.70		0.78	(10	)
Operating return on average equity3	8.7		%	8.5	0.2		pts	6.6		8.0	(1.4	)	pts

¹  Refer to the Glossary of Terms attached to our 2013 Annual Report as Exhibit 99.1 for definitions of terms used in this Form 10-Q.

²  The statutory combined ratio for Six Months 2013 included 0.7 points related to the Retirement Income Plan amendments that curtailed the accrual of additional benefits for all eligible employees participating in the plans after March 31, 2016.

³  Operating income is used as an important financial measure by us, analysts, and investors, because the realization of investment gains and losses on sales in any given period is largely discretionary as to timing. In addition, these realized investment gains and losses, as well as OTTI that are charged to earnings and the results of discontinued operations, could distort the analysis of trends. See below for a reconciliation of operating income to net income in accordance with GAAP. Operating return on average equity is calculated by dividing annualized operating income by average stockholders’ equity.

 The following table reconciles operating income and net income for the periods presented above:

	Quarter ended June 30,			Six Months ended June 30,
($ in thousands, except per share amounts)	2014		2013	2014	2013
Operating income	$	26,390	23,773	39,673	43,897
Net realized gains, net of tax	2,951		3,349	7,642	5,530
Loss on disposal of discontinued operations, net of tax	—		—	—	(997	)
Net income	$	29,341	27,122	47,315	48,430
Diluted operating income per share	$	0.46	0.42	0.70	0.78
Diluted net realized gains per share	0.05		0.06	0.13	0.10
Diluted net loss from disposal of discontinued operations per share	—		—	—	(0.02	)
Diluted net income per share	$	0.51	0.48	0.83	0.86

28

Over the long term, we target a return on average equity that is three points higher than our cost of capital, or 12%, excluding the impact of realized gains and losses, which is referred to as operating return on average equity. Our operating return on average equity and contribution by component for Second Quarter 2014 and Six Months 2014 and the comparable prior year periods are as follows:

Operating Return on Average Equity	Quarter ended June 30,				Six Months ended June 30,
	2014		2013		2014		2013
Standard Insurance Operations	2.2	%	1.6	%	0.4	%	2.2	%
E&S Insurance Operations	—	%	(0.6	)%	0.1	%	(0.2	)%
Investments	9.1	%	9.2	%	9.0	%	9.2	%
Other	(2.6	)%	(1.7	)%	(2.9	)%	(3.2	)%
Total	8.7	%	8.5	%	6.6	%	8.0	%

Our operating return on average equity in Second Quarter 2014 and Six Months 2014 reflects GAAP combined ratios of 97.8% and 99.4%, compared to 98.9% and 98.0% in the same periods a year ago. Increased favorable prior year casualty reserve development and the impact of renewal pure price increases drove the improvement in operating return on average equity in the quarter, despite increased levels of catastrophe and non-catastrophe property losses. On a year-to-date basis, the increase in property losses resulted in an increase in the combined ratio and a corresponding decline in operating return on average equity compared to Six Months 2013. Further descriptions of the variances for the quarter and year-to-date periods are as follows:

• Catastrophe losses for Second Quarter 2014 and Six Months 2014 were $27.2 million, or 5.9 points, and $61.6 million, or 6.7 points, respectively, compared to $19.6 million, or 4.6 points, and $21.2 million, or 2.5 points, in the respective prior year periods. The majority of these catastrophe losses were attributed to extreme weather events in the first quarter of 2014, which brought freezing temperatures and snowstorms to our 22-state standard lines footprint, coupled with hail, tornadoes, and wind events in Second Quarter 2014.

• Non-catastrophe property losses in Second Quarter 2014 and Six Months 2014 were at some of the highest levels that we have experienced in recent years. The impact varied by line but, for both standard lines and E&S, non-catastrophe property losses for Second Quarter 2014 and Six Months 2014 were approximately $73.0 million, or 15.7 points, and $164.4 million, or 17.9 points, respectively. Non-catastrophe losses for the quarter and year-to-date periods were both about 4 points higher than the same periods last year. These non-catastrophe property losses were primarily the result of fires, roof collapses, and water damage, which were often related to the weather events experienced throughout our footprint states in both Second Quarter 2014 and Six Months 2014.

• Renewal pure price increases of 7.6% were achieved in full-year 2013, which are currently earning in at 6.9% in Second Quarter 2014 and 7.1% in Six Months 2014. This earned rate is above the loss cost trend of approximately 3%. After taking into account the incremental expenses associated with the additional premium, the net benefit to the combined ratio is approximately 2.5 points for both periods.

• Favorable prior year casualty development in Second Quarter 2014 and Six Months 2014 was $17.5 million, or 3.8 points, and $31.5 million, or 3.5 points, respectively, compared to favorable prior year casualty development of $2 million, or 0.5 points, and $4 million, or 0.4 points, in Second Quarter 2013 and Six Months 2013, respectively. We experienced stable workers compensation trends in the quarter and year-to-date periods, with no development either favorable or unfavorable. The level of releases in Second Quarter and Six Months 2014 were driven by improving claim trends within our general liability line of business for the 2012 and prior accident years.

Also contributing to Six Months 2014 Insurance Operations results, was the March 2014 sale of the renewal rights to our self-insured group, or "SIG," book of pooled public entity business, which contributed $8 million to other income, reducing the combined ratio by 0.9 points. Although we did not solicit buyers, we decided to sell this very small and specialized book of business when the opportunity presented itself because it had significant production outside of our standard lines footprint, and proved difficult to grow. We, however, have retained our substantial individual risk public entity book of business and we will continue to look for opportunities to grow it.

The remaining fluctuation in our Second Quarter 2014 operating return on average equity compared to Second Quarter 2013 was driven by higher long-term employee compensation expense associated with our performance relative to our peer group and fluctuations in our stock price. This item is captured within the "Other" component in the table above.

29

The following table provides a quantitative foundation for analyzing our overall Insurance Subsidiaries' underwriting results:

All Lines	Quarter ended June 30,							Six Months ended June 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
GAAP Insurance Operations Results:
Net premiums written ("NPW")	$	479,823		462,177	4		%	$	956,573		912,301	5		%
Net premiums earned (“NPE”)	463,625			426,252	9			920,120			847,192	9
Less:
Loss and loss expense incurred	297,795			279,594	7			618,341			549,443	13
Net underwriting expenses incurred	154,197			141,194	9			293,923			279,038	5
Dividends to policyholders	1,549			981	58			2,787			2,067	35
Underwriting gain	$	10,084		4,483	125		%	$	5,069		16,644	(70	)	%
GAAP Ratios:
Loss and loss expense ratio	64.2		%	65.6	(1.4	)	pts	67.2		%	64.9	2.3		pts
Underwriting expense ratio	33.3			33.1	0.2			31.9			32.9	(1.0	)
Dividends to policyholders ratio	0.3			0.2	0.1			0.3			0.2	0.1
Combined ratio	97.8			98.9	(1.1	)		99.4			98.0	1.4
Statutory Ratios:
Loss and loss expense ratio1	64.2			65.6	(1.4	)		67.2			64.9	2.3
Underwriting expense ratio1	33.0			31.9	1.1			31.7			32.2	(0.5	)
Dividends to policyholders ratio	0.3			0.2	0.1			0.3			0.2	0.1
Combined ratio1	97.5		%	97.7	(0.2	)	pts	99.2		%	97.3	1.9		pts

¹ Statutory ratios for Six Months 2013 included 0.2 points in the loss and loss expense ratio, 0.5 points in the underwriting ratio, and 0.7 points in the combined ratio related to the Retirement Income Plan amendments that curtailed the accrual of additional benefits for all eligible employees participating in the plans after March 31, 2016.

The growth in NPW for our Insurance Subsidiaries in Second Quarter and Six Months 2014 compared to Second Quarter and Six Months 2013 was primarily driven by renewal pure price increases and strong retention in our Standard Commercial Lines Insurance Operations.

NPE increases in Second Quarter 2014 and Six Months 2014 were consistent with the fluctuations in NPW for the twelve-month period ended June 30, 2014 compared to the twelve-month period ended June 30, 2013.

The combined ratios for both Second Quarter 2014 and Six Months 2014 were primarily driven by property results, renewal pure price increases, and favorable prior year casualty development, as discussed above.

Outlook

In their 2013 year-end review, dated February 4, 2014, A.M. Best and Company ("A.M. Best") projected an industry combined ratio of 99.4% for 2014. Their report cited: "In looking ahead to 2014, A.M. Best expects premiums to continue growing through price increases, but the pace of these rate changes are expected to slow and temper growth in premium." They expect that underwriting results should improve slightly on the rate level achieved in recent years, although less favorable development of prior years’ loss reserves is anticipated. In addition, a more normal level of catastrophe losses could increase combined ratios by almost 200 basis points, and the industry will continue to be challenged by the relatively low investment yields that are expected to persist through 2014, as well as the slow recovery from the recession of 2007 through 2009.

Although A.M. Best is continuing to maintain its negative outlook for the commercial lines market reflecting "the uncertainty around loss-reserve development and continued low profit margins driven by low investment yields," it anticipates a 99.9% statutory combined ratio for 2014, driven by: (i) a more normal level of catastrophe losses; (ii) less favorable loss-reserve development; and (iii) loss trends that are partially offset by lower pricing. For personal lines, A.M. Best maintains a stable outlook in the coming year reflecting ongoing stability of the auto line and successful carriers continuing to enhance the granularity of their home pricing models.

30

In its financial review issued on July 14, 2014, A.M. Best noted that increased catastrophe and weather-related claims led to an increase in losses for the U.S. property and casualty industry in the first quarter of 2014, causing underwriting and net income to decline compared with last year’s results. Losses related to the polar vortex account for much of this increase. Overall, catastrophe losses accounted for 3.4 points on the combined ratio, a substantial increase over the 2.1-point impact in the first quarter of last year. Despite these increased losses, the industry posted another quarter of profitable underwriting, producing a combined ratio of 96.4% for the first quarter of 2014, up from 92.7% for the first quarter of 2013.

In early 2012, we laid out a three-year plan to achieve overall annual renewal pure price increases of 5% to 8%. We achieved 6.0% in Six Months 2014, including 6.1% in our Standard Commercial Lines, 6.2% in our Standard Personal Lines, and 3.7% in our E&S Lines. The 7.6% overall renewal pure price increase in 2013 translated into earned price increases of 7.1% in Six Months 2014, which is above loss cost trends of approximately 3%. The 6% overall renewal pure price increase that we expect to achieve in 2014 is also above loss cost trends, and will continue to add to profitability in 2015.

Our Insurance Subsidiaries reported statutory combined ratios, excluding catastrophes, of 91.6% for Second Quarter 2014 and 92.5% for Six Months 2014, which are in line with our stated full-year 2014 goal of 92%. The catastrophe losses in Second Quarter 2014 of $27 million added 5.9 points to our statutory combined ratio, and the catastrophe losses in Six Months 2014 of $61.6 million added 6.7 points to our statutory combined ratio. This increased level of catastrophe losses was related to extreme winter weather in the first quarter of 2014 and Midwest storms in Second Quarter 2014.

The yield on the 10-year U.S. Treasury Notes fell by 50 basis points in Six Months 2014, but as the overall portfolio yield approaches the yield of new purchases, we have begun to see a declining rate of pressure on the yield of the existing portfolio. The continued low interest rate environment has several significant impacts on our business, some of which are beneficial and some of which present a challenge to us. The benefits include lower inflation rates that suppress loss trends, as well as reduce our cost of capital. However, the interest rate environment presents a significant challenge in generating after-tax return on our investment portfolio.

Given the results we have achieved in Six Months 2014, including the level of catastrophe losses we have incurred and the overall renewal pure price increases we have achieved, we currently expect to generate:

• A full-year combined ratio of 92% excluding catastrophe losses and assuming no additional prior year casualty reserve development;

• Five points of catastrophe losses for the year, which is one point higher than our previous guidance;

• Renewal pure price increases of approximately 6% on an overall company basis, at the low end of our previous estimate of 6%-7%;

• After-tax investment income of approximately $100 million; and

• Weighted-average shares of approximately 57.4 million.

31

Results of Operations and Related Information by Segment

Insurance Operations

Standard Insurance Operations

Our Standard Insurance Operations segment, which represents 93% of our combined insurance operations NPW, sells insurance products and services primarily in 22 states in the Eastern and Midwestern U.S. and the District of Columbia, through approximately 1,100 independent retail insurance agencies. This segment consists of two components: (i) Commercial Lines, which markets primarily to businesses and represents approximately 83% of the segment's NPW; and (ii) Personal Lines, including our flood business, which markets primarily to individuals and represents approximately 17% of the segment's NPW.

	Quarter ended June 30,							Six Months ended June 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
GAAP Insurance Operations Results:
NPW	$	442,041		429,511	3		%	$	888,729		851,255	4		%
NPE	429,051			396,205	8			853,310			787,086	8
Less:
Loss and loss expense incurred	275,395			258,520	7			576,061			509,251	13
Net underwriting expenses incurred	141,986			129,936	9			270,331			256,925	5
Dividends to policyholders	1,549			981	58			2,787			2,067	35
Underwriting gain	$	10,121		6,768	50		%	$	4,131		18,843	(78	)	%
GAAP Ratios:
Loss and loss expense ratio	64.2		%	65.2	(1.0	)	pts	67.5		%	64.7	2.8		pts
Underwriting expense ratio	33.0			32.9	0.1			31.7			32.6	(0.9	)
Dividends to policyholders ratio	0.4			0.2	0.2			0.3			0.3	—
Combined ratio	97.6			98.3	(0.7	)		99.5			97.6	1.9
Statutory Ratios:
Loss and loss expense ratio1	64.2			65.3	(1.1	)		67.5			64.7	2.8
Underwriting expense ratio1	32.7			31.5	1.2			31.4			31.9	(0.5	)
Dividends to policyholders ratio	0.4			0.2	0.2			0.3			0.3	—
Combined ratio1	97.3		%	97.0	0.3		pts	99.2		%	96.9	2.3		pts

¹  Statutory ratios for Six Months 2013 included 0.2 points in the loss and loss expense ratio, 0.5 points in the underwriting ratio, and 0.7 points in the combined ratio related to the Retirement Income Plan amendments that curtailed the accrual of additional benefits for all eligible employees participating in the plans after March 31, 2016.

The improvements in NPW in Second Quarter and Six Months 2014 compared to Second Quarter and Six Months 2013 include the following:

	Quarter ended June 30, 2014				Quarter ended June 30, 2013
($ in millions)	Renewal Pure Price Increase		Retention		Renewal Pure Price Increase		Retention
Standard Commercial Lines	5.9	%	82	%	7.2	%	83	%
Standard Personal Lines	6.5		82		8.3		87

	Six Months ended June 30, 2014				Six Months ended June 30, 2013
($ in millions)	Renewal Pure Price Increase		Retention		Renewal Pure Price Increase		Retention
Standard Commercial Lines	6.1	%	82	%	7.3	%	82	%
Standard Personal Lines	6.2		82		8.4		86

32

The decrease in the Standard Personal Lines retention was driven by targeted actions that we have taken to reduce our exposure to certain coverages that have historically been less profitable for us. Excluding the impact of these targeted actions, retention remains strong and comparable to last year.

NPE increases in Second Quarter and Six Months 2014 were consistent with the fluctuations in NPW for the twelve-month period ended June 30, 2014 compared to the twelve-month period ended June 30, 2013.

The GAAP loss and loss expense ratio decreased 1.0 points in Second Quarter 2014 compared to Second Quarter 2013 driven by: (i) renewal pure price increases that exceed our projected loss cost trends; and (ii) favorable prior year casualty reserve development. This was partially offset by higher non-catastrophe property losses and an increased level of catastrophe losses. Quantitative information regarding the property losses and the reserve development is as follows:

	Quarter ended June 30, 2014						Quarter ended June 30, 2013
($ in millions)	Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Change in Ratio
Catastrophe losses	$	25.5		5.9		pts	$	17.1		4.3		pts	1.6		pts
Non-catastrophe property losses	67.5			15.7			50.2			12.7			3.0
Favorable prior year casualty reserve development	(17.5		)	(4.1	)		(4.0		)	(1.0	)		(3.1	)

The GAAP loss and loss expense ratio increased 2.8 points in Six Months 2014 compared to Six Months 2013 driven by: (i) an increased level of catastrophe losses; and (ii) higher non-catastrophe property losses. This was partially offset by favorable prior year casualty reserve development and renewal pure price increases that exceed our projected loss cost trends. Quantitative information regarding the property losses and the reserve development is as follows:

	Six Months ended June 30, 2014						Six Months ended June 30, 2013
($ in millions)	Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Change in Ratio
Catastrophe losses	$	59.7		7.0		pts	$	18.3		2.3		pts	4.7		pts
Non-catastrophe property losses	153.7			18.0			110.9			14.1			3.9
Favorable prior year casualty reserve development	(31.5		)	(3.7	)		(6.0		)	(0.8	)		(2.9	)

The breakdown of favorable prior year casualty reserve development in our Standard Insurance Operations by line of business is as follows:

Favorable/(Unfavorable) Prior Year Casualty Reserve Development	Quarter ended June 30,							Six Months ended June 30,
($ in millions)	2014				2013			2014				2013
General liability	$	14.0			5.0			$	25.0			9.0
Commercial automobile	4.0				—			4.0				—
Workers compensation	—				(3.0	)		—				(11.0	)
Businessowners' policies	(2.5		)		3.0			(1.5		)		6.0
Homeowners	—				—			—				2.0
Personal automobile	2.0				(1.0	)		4.0				—
Total favorable prior year casualty reserve development	$	17.5			4.0			$	31.5			6.0
Favorable impact on loss ratio	4.1			pts	1.0		pts	3.7			pts.	0.8		pts.

Favorable prior year casualty reserve development of $17.5 million in Second Quarter 2014 and $31.5 million in Six Months 2014 was primarily driven by improving claim trends for the 2007 through 2012 accident years on our general liability line of business coupled with stable workers compensation trends in 2014. Included in this net favorable prior year casualty reserve development is unfavorable development in the 2009 accident year in our businessowners' policies line of business.

33

The improvement in the GAAP underwriting expense ratio in Six Months 2014 compared to Six Months 2013 was primarily driven by the income generated from the first quarter 2014 sale of the renewal rights to our SIG book of pooled public entity business for $8 million, or 0.9 points.  For additional information regarding the sale, see Note 8. “Segment Information” in Item 1. “Financial Statements.” of this Form 10-Q.

The statutory underwriting expense ratio increased 1.2 points in Second Quarter 2014 compared to Second Quarter 2013 partially due to an increase in commissions to our agents. This increase, which was due to the mix of NPW, coupled with higher supplemental commissions to agents, was recognized immediately on a statutory basis, but was deferred and amortized on a GAAP basis.

Review of Underwriting Results by Line of Business

Standard Commercial Lines
	Quarter ended June 30,							Six Months ended June 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
GAAP Insurance Operations Results:
NPW	$	363,860		350,651	4		%	$	743,210		703,840	6		%
NPE	354,507			322,657	10			703,948			640,502	10
Less:
Loss and loss expense incurred	216,532			201,316	8			459,171			404,455	14
Net underwriting expenses incurred	120,723			110,617	9			229,917			218,135	5
Dividends to policyholders	1,549			981	58			2,787			2,067	35
Underwriting gain	$	15,703		9,743	61		%	$	12,073		15,845	(24	)	%
GAAP Ratios:
Loss and loss expense ratio	61.1		%	62.4	(1.3	)	pts	65.2		%	63.1	2.1		pts
Underwriting expense ratio	34.1			34.3	(0.2	)		32.7			34.1	(1.4	)
Dividends to policyholders ratio	0.4			0.3	0.1			0.4			0.3	0.1
Combined ratio	95.6			97.0	(1.4	)		98.3			97.5	0.8
Statutory Ratios:
Loss and loss expense ratio1	61.1			62.4	(1.3	)		65.2			63.1	2.1
Underwriting expense ratio1	34.0			32.9	1.1			32.2			33.2	(1.0	)
Dividends to policyholders ratio	0.4			0.3	0.1			0.4			0.3	0.1
Combined ratio1	95.5		%	95.6	(0.1	)	pts	97.8		%	96.6	1.2		pts

¹ Statutory ratios for Six Months 2013 included 0.2 points in the loss and loss expense ratio, 0.5 points in the underwriting ratio, and 0.7 points in the combined ratio related to the Retirement Income Plan amendments that curtailed the accrual of additional benefits for all employees eligible to participate in the plans after March 31, 2016.

The increase in NPW in Second Quarter and Six Months 2014 compared to Second Quarter and Six Months 2013 is primarily the result of the following:

	Quarter ended June 30,			Six Months ended June 30,
($ in millions)	2014		2013	2013		2012
Retention	82	%	83	82	%	82
Renewal pure price increases	5.9		7.2	6.1		7.3

NPE increases in Second Quarter and Six Months 2014 were consistent with the fluctuations in NPW for the twelve-month period ended June 30, 2014 compared to the twelve-month period ended June 30, 2013.

34

The GAAP loss and loss expense ratio decreased 1.3 points in Second Quarter 2014 compared to Second Quarter 2013 driven by: (i) renewal pure price increases that averaged 6.1% in Six Months 2014 and 7.6% in full-year 2013, the earning of which exceeds our projected loss cost trend by approximately 3 points; and (ii) favorable prior year casualty reserve development. These were partially offset by the following: (i) an increased level of catastrophe losses; and (ii) higher non-catastrophe property losses. Quantitative information regarding the property losses and the reserve development is as follows:

	Quarter ended June 30, 2014						Quarter ended June 30, 2013
($ in millions)	Losses Incurred			Impact on Loss Ratio			Losses Incurred			Impact on  Loss Ratio			Change in Ratio
Catastrophe losses	$	12.8		3.6		pts	$	9.2		2.8		pts	0.8		pts
Non-catastrophe property losses	43.6			12.3			27.9			8.6			3.7
Favorable prior year casualty reserve development	(15.5		)	(4.4	)		(5.0		)	(1.5	)		(2.9	)

The GAAP loss and loss expense ratio increased 2.1 points in Six Months 2014 compared to Six Months 2013 driven by: (i) an increased level of catastrophe losses; and (ii) higher non-catastrophe property losses. These losses were partially offset by the following: (i) renewal pure price increases that averaged 6.1% in Six Months 2014 and 7.6% in full-year 2013, the earning of which exceeds our projected loss cost trend by approximately 3 points; and (ii) favorable prior year casualty reserve development. Quantitative information regarding the property losses and the reserve development are as follows:

	Six Months ended June 30, 2014						Six Months ended June 30, 2013
($ in millions)	Losses Incurred			Impact on Loss Ratio			Losses Incurred			Impact on Loss Ratio			Change in Ratio
Catastrophe losses	$	38.7		5.5		pts	$	9.9		1.6		pts	3.9		pts
Non-catastrophe property losses	102.4			14.5			64.8			10.1			4.4
Favorable prior year casualty reserve development	(27.5		)	(3.9	)		(4.5		)	(0.7	)		(3.2	)

The improvement in the GAAP and statutory underwriting expense ratios in Six Months 2014 compared to Six Months 2013 was primarily driven by the income generated from the renewal rights sale of our SIG book of business for $8 million, or 1.1 points, in the first quarter of 2014. For additional information regarding the sale, see Note 8. “Segment Information” in Item 1. “Financial Statements.” of this Form 10-Q.

The statutory underwriting expense ratio increased 1.1 points in Second Quarter 2014 compared to Second Quarter 2013 partially due to an increase in commissions to our agents. This increase was driven by: (i) the mix of NPW, specifically lower workers compensation NPW, which has a lower commission rate than our other lines of business; and (ii) higher supplemental commission to agents. These amounts are recognized immediately on a statutory basis, but are deferred and amortized on a GAAP basis.

The following is a discussion of our most significant standard Commercial Lines of business and their respective statutory results:

General Liability
	Quarter ended June 30,							Six Months ended June 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	118,176		110,232	7		%	$	237,680		219,637	8		%
Direct new business	19,839			20,859	(5	)		39,674			40,640	(2	)
Retention	82		%	82	—		pts	82		%	82	—		pts
Renewal pure price increases	7.2		%	8.7	(1.5	)		7.4		%	8.7	(1.3	)
Statutory NPE	$	111,591		99,766	12		%	$	220,409		197,469	12		%
Statutory combined ratio	80.7		%	94.9	(14.2	)	pts	80.7		%	95.4	(14.7	)	pts
% of total statutory standard Commercial Lines NPW	32		%	31				32		%	31

The growth in NPW and NPE for our general liability business in Second Quarter and Six Months 2014 reflects renewal pure price increases and strong retention.

35

The statutory combined ratio improvement for Second Quarter and Six Months 2014 was driven by renewal pure price increases of 7.2% and 7.4%, respectively, that continue to outpace loss cost trends on this line as well as the following:

	Quarter ended June 30, 2014						Quarter ended June 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense			Impact on Combined Ratio			Change Points
Favorable prior year casualty reserve development	$	(14.0	)	(12.5	)	pts	$	(5.0	)	(5.0	)	pts	(7.5	)	pts

	Six Months ended June 30, 2014						Six Months ended June 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense			Impact on Combined Ratio			Change Points
Favorable prior year casualty reserve development	$	(25.0	)	(11.3	)	pts	$	(9.0	)	(4.6	)	pts	(6.7	)	pts
Sale of SIG renewal rights	(2.1		)	(0.9	)		—			—			(0.9	)
Retirement Income Plan curtailment charge	—			—			1.4			0.7			(0.7	)

Favorable prior year casualty reserve development in Second Quarter and Six Months 2014 was driven by improving claim trends for the 2012 and prior accident years; whereas favorable prior year casualty reserve development in Second Quarter 2013 and Six Months 2013 was driven by the 2009 through 2011 accident years.

Commercial Automobile
	Quarter ended June 30,							Six Months ended June 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	87,413		84,254	4		%	$	176,535		166,126	6		%
Direct new business	13,679			16,166	(15	)		28,485			31,070	(8	)
Retention	82		%	82	—		pts	82		%	82	—		pts
Renewal pure price increases	5.8		%	7.0	(1.2	)		6.0		%	7.0	(1.0	)
Statutory NPE	$	83,472		76,706	9		%	$	165,688		151,053	10		%
Statutory combined ratio	93.5		%	95.3	(1.8	)	pts	94.2		%	96.6	(2.4	)	pts
% of total statutory standard Commercial Lines NPW	24		%	24				24		%	24

The growth in NPW and NPE for our commercial automobile business in Second Quarter and Six Months 2014 reflects renewal pure price increases and strong retention.

The statutory combined ratio improvements for Second Quarter 2014 and Six Months 2014 were impacted by the following:

	Quarter ended June 30, 2014						Quarter ended June 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense			Impact on Combined Ratio			Change Points
Catastrophe losses	$	1.4		1.7		pts	$	(0.3	)	(0.4	)	pts	2.1		pts
Favorable prior year casualty reserve development	(4.0		)	(4.8	)		—			—			(4.8	)

	Six Months ended June 30, 2014						Six Months ended June 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense			Impact on Combined Ratio			Change Points
Catastrophe losses	$	1.5		0.9		pts	$	(0.9	)	(0.6	)	pts	1.5		pts
Favorable prior year casualty reserve development	(4.0		)	(2.4	)		—			—			(2.4	)
Sale of SIG renewal rights	(1.5		)	(0.9	)		—			—			(0.9	)
Retirement Income Plan curtailment charge	—			—			1.0			0.6			(0.6	)

36

Favorable prior year casualty development in Second Quarter 2014 and Six Months 2014 was driven by the 2008 through 2012 accident years, partially offset by unfavorable prior year casualty development in the 2013 accident year.

Workers Compensation
	Quarter ended June 30,							Six Months ended June 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	65,210		68,589	(5	)	%	$	141,181		143,994	(2	)	%
Direct new business	11,069			14,813	(25	)		24,727			28,692	(14	)
Retention	81		%	81	—		pts	81		%	82	(1	)	pts
Renewal pure price increases	5.7		%	7.6	(1.9	)		5.3		%	7.8	(2.5	)
Statutory NPE	$	68,992		64,855	6		%	$	138,405		130,939	6		%
Statutory combined ratio	112.1		%	118.3	(6.2	)	pts	108.8		%	118.6	(9.8	)	pts
% of total statutory standard Commercial Lines NPW	18		%	20				19		%	20

Second Quarter and Six Months 2014 NPW decreased compared to Second Quarter and Six Months 2013 due to a decrease in direct new business. In addition, this line is beginning to be impacted by the sale of the SIG book of business in the first quarter of 2014. The reduction in NPW as a result of this sale was 0.6% for Second Quarter 2014 and 0.3% for Six Months 2014.  Although not substantial during the current quarter and year-to-date periods, the reduction in NPW will become more significant as the year progresses, with the greatest impact expected in the third quarter, due to the seasonality of these premiums.

NPE increases in Second Quarter and Six Months 2014 were consistent with the fluctuations in NPW for the twelve-month period ended June 30, 2014 compared to the twelve-month period ended June 30, 2013.

While we continue to view workers compensation in the context of an overall account, we remain very focused on improving this competitive line of business through both underwriting and claims initiatives. We achieved renewal pure price increases of 5.7% in Second Quarter 2014 and 5.3% in Six Months 2014. We are applying all the underwriting tools we have to move pricing higher and write the best risks. In addition, we have centralized the handling of lost-time and medical-only workers compensation claims alongside our strategic case management unit to create integration around our core strategy of early identification, escalation, and mitigation of potentially high-risk claims. We have supplemented our claims expertise within our strategic case management unit with the addition of medical specialists, including nurse practioners and a physician consultant.

The improvement in the statutory combined ratio was primarily attributable to the following:

	Quarter ended June 30, 2014				Quarter ended June 30, 2013
($ in millions)	(Benefit) Expense		Impact on Combined Ratio		(Benefit) Expense		Impact on Combined Ratio		Change Points
Unfavorable prior year casualty reserve development	$	—	—	pts	$	3.5	5.0	pts	(5.0	)	pts

	Six Months ended June 30, 2014						Six Months ended June 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense		Impact on Combined Ratio		Change Points
Unfavorable prior year casualty reserve development	$	—		—		pts	$	10.5	8.1	pts	(8.1	)	pts
Sale of SIG renewal rights	(1.5		)	(1.1	)		—		—		(1.1	)
Retirement Income Plan curtailment charge	—			—			1.2		0.9		(0.9	)

Second Quarter 2013 and Six Months 2013 unfavorable prior year casualty reserve development was primarily driven by development on the 2012 accident year. In addition, Six Months 2013 was also impacted by a single large claim prior to 2003.

37

Commercial Property
	Quarter ended June 30,							Six Months ended June 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	62,630		59,193	6		%	$	126,726		116,953	8		%
Direct new business	13,271			14,396	(8	)		27,766			28,781	(4	)
Retention	81		%	82	(1	)	pts	81		%	81	—		pts
Renewal pure price increases	4.0		%	5.0	(1.0	)		4.8		%	5.3	(0.5	)
Statutory NPE	$	61,226		54,937	11		%	$	121,412		108,352	12		%
Statutory combined ratio	101.7		%	80.9	20.8		pts	116.4		%	83.7	32.7		pts
% of total statutory standard Commercial Lines NPW	17		%	17				17		%	17

NPW and NPE increased in Second Quarter and Six Months 2014 compared to Second Quarter and Six Months 2013 primarily due to renewal pure price increases and strong retention.

The increase in the statutory combined ratio in Second Quarter and Six Months 2014 compared to the same prior year periods was due to the following:

	Quarter ended June 30, 2014				Quarter ended June 30, 2013
($ in millions)	(Benefit) Expense		Impact on Combined Ratio		(Benefit) Expense		Impact on Combined Ratio		Change % or Points
Catastrophe losses	$	10.1	16.5	pts	$	7.7	14.0	pts	2.5	pts
Non-catastrophe property losses	26.2		42.7		13.3		24.3		18.4

	Six Months ended June 30, 2014						Six Months ended June 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense		Impact on Combined Ratio		Change % or Points
Catastrophe losses	$	29.0		23.9		pts	$	9.5	8.8	pts	15.1		pts
Non-catastrophe property losses	62.6			51.5			34.0		31.3		20.2
Sale of SIG renewal rights	(1.4		)	(1.1	)		—		—		(1.1	)
Retirement Income Plan curtailment charge	—			—			0.8		0.7		(0.7	)

38

Standard Personal Lines
	Quarter ended June 30,									Six Months ended June 30,
($ in thousands)	2014				2013		Change % or Points			2014				2013	Change % or Points
GAAP Insurance Operations Results:
NPW	$	78,181			78,860		(1	)	%	$	145,519			147,415	(1	)	%
NPE	74,544				73,548		1			149,362				146,584	2
Less:
Loss and loss expense incurred	58,863				57,204		3			116,890				104,796	12
Net underwriting expenses incurred	21,263				19,319		10			40,414				38,790	4
Underwriting (loss) gain	$	(5,582	)		(2,975	)	(88	)	%	$	(7,942	)		2,998	(365	)	%
GAAP Ratios:
Loss and loss expense ratio	79.0			%	77.8		1.2		pts	78.3			%	71.5	6.8		pts
Underwriting expense ratio	28.5				26.2		2.3			27.0				26.5	0.5
Combined ratio	107.5				104.0		3.5			105.3				98.0	7.3
Statutory Ratios:
Loss and loss expense ratio1	79.0				77.9		1.1			78.3				71.6	6.7
Underwriting expense ratio1	27.1				25.0		2.1			27.0				26.0	1.0
Combined ratio1	106.1			%	102.9		3.2		pts	105.3			%	97.6	7.7		pts

¹ Statutory ratios for Six Months 2013 included 0.1 points in the loss and loss expense ratio, 0.5 points in the underwriting ratio, and 0.6 points in the combined ratio related to the Retirement Income Plan amendments that curtailed the accrual of additional benefits for all employees eligible to participate in the plans after March 31, 2016.

The decreases in NPW for both the quarter and year-to-date periods were primarily driven by a marginal decrease in new business and lower retention compared to the same periods a year ago. Partially offsetting these decreases were renewal pure price increases. Quantitative information regarding these items is as follows:

	Quarter ended June 30,				Six Months ended June 30,
($ in millions)	2014			2013	2014			2013
New Business	$	9.7		10.8	$	17.7		20.8
Retention	82		%	87	82		%	86
Renewal pure price increase	6.5			8.3	6.2			8.4

The decrease in retention was driven by targeted actions that we have taken to reduce our exposure to certain coverages that have historically been less profitable for us. Excluding the impact of these targeted actions, retention remains strong and comparable to last year.

NPE increases in Second Quarter and Six Months 2014 compared to Second Quarter and Six Months 2013, are consistent with the fluctuations in NPW for the twelve-month period ended June 30, 2014 compared to the twelve-month period ended June 30, 2013.

The variance in the loss and loss expense ratios was driven by storms and fires, resulting in: (i) an increased level of catastrophe losses; and (ii) higher non-catastrophe property losses. Partially offsetting these losses were renewal pure price increases of 6.2% for Six Months 2014, and 7.8% for full-year 2013, the earning of which exceeds our projected loss cost trend for the casualty component of our Personal Lines. Quantitative information regarding the property losses are as follows:

39

	Quarter ended June 30, 2014						Quarter ended June 30, 2013
($ in millions)	Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Change in Ratio
Catastrophe losses	$	12.7		17.1		pts	$	7.9		10.7		pts	6.4		pts
Non-catastrophe property losses	24.0			32.1			22.3			30.3			1.8
Flood claims handling fees	(1.0		)	(1.3	)		(1.3		)	(1.7	)		0.4
(Favorable)/unfavorable prior year casualty development	(2.0		)	(2.7	)		1.0			1.2			(3.9	)

	Six Months ended June 30, 2014						Six Months ended June 30, 2013
($ in millions)	Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Loss and Loss Expense Incurred			Impact on Loss and Loss Expense Ratio			Change in Ratio
Catastrophe losses	$	21.0		14.1		pts	$	8.4		5.7		pts	8.4		pts
Non-catastrophe property losses	51.3			34.4			46.1			31.4			3.0
Flood claims handling fees	(1.6		)	(1.0	)		(2.8		)	(1.9	)		0.9
Favorable prior year casualty development	(4.0		)	(2.7	)		(1.5		)	(1.2	)		(1.5	)

Favorable prior year casualty reserve development in Second Quarter 2014 and Six Months 2014 was driven by the 2009 through 2013 accident years on our personal auto line of business. Unfavorable prior year casualty reserve development in Second Quarter 2013 was driven by accident years prior to 2003, whereas favorable prior year casualty reserve development in Six Months 2013 was due to the 2010 and 2011 accident years in our homeowners line of business.

The increase in the GAAP and statutory underwriting expense ratios were driven by higher supplemental commissions to agents. In addition, the statutory underwriting expense ratio had a one-time favorable premium tax ruling on our Flood business of 1.5 points in Second Quarter 2013 and 0.8 points in Six Months 2013.

E&S Insurance Operations

Our E&S Insurance Operations segment, which represents 7% of our combined insurance operations NPW, sells Commercial Lines insurance products and services in all 50 states and the District of Columbia through approximately 85 wholesale general agents. Insurance policies in this segment typically cover business risks with unique characteristics, such as the nature of the business or its claim history, that have not obtained coverage in the standard commercial marketplace. E&S insurers have more flexibility in coverage terms and rates compared to standard market insurers, generally resulting in policies with higher rates, and terms and conditions that are customized for specific risks.

	Quarter ended June 30,									Six Months ended June 30,
($ in thousands)	2014				2013		Change % or Points			2014			2013		Change % or Points
GAAP Insurance Operations Results:
NPW	$	37,782			32,666		16		%	$	67,844		61,046		11		%
NPE	34,574				30,047		15			66,810			60,106		11
Less:
Loss and loss expense incurred	22,400				21,074		6			42,280			40,192		5
Net underwriting expenses incurred	12,211				11,258		8			23,592			22,113		7
Underwriting (loss) gain	$	(37	)		(2,285	)	98		%	$	938		(2,199	)	143		%
GAAP Ratios:
Loss and loss expense ratio	64.8			%	70.1		(5.3	)	pts	63.3		%	66.9		(3.6	)	pts
Underwriting expense ratio	35.3				37.5		(2.2	)		35.3			36.8		(1.5	)
Combined ratio	100.1				107.6		(7.5	)		98.6			103.7		(5.1	)
Statutory Ratios:
Loss and loss expense ratio	65.0				70.3		(5.3	)		63.4			66.9		(3.5	)
Underwriting expense ratio	34.9				36.5		(1.6	)		35.4			35.7		(0.3	)
Combined ratio	99.9			%	106.8		(6.9	)	pts	98.8		%	102.6		(3.8	)	pts

40

The improvement in the combined ratio in Second Quarter and Six Months 2014 was driven by the following:

• Significant underwriting actions that we have implemented to improve profitability, including achieving renewal pure price increases of 2.7% in Second Quarter 2014 and 3.7% in Six Months 2014.

• No prior year casualty reserve development in 2014 compared to unfavorable prior year casualty reserve development of $2.0 million, or 6.5 points, in Second Quarter 2013 and $2.5 million, or 4.1 points, in Six Months 2013.

• Catastrophe losses of 4.9 points in Second Quarter 2014 compared to 8.5 points in Second Quarter 2013 and 2.8 points in Six Months 2014 compared to 4.8 points in Six Months 2013.

These benefits were partially offset by increased non-catastrophe property losses in Second Quarter 2014 and Six Months 2014 compared to the same periods last year.

Reinsurance: Standard Insurance Operations

Reinsurance Treaties and Arrangement

We have successfully completed negotiations of our July 1, 2014 Standard Insurance Operations excess of loss treaties with

some enhancements in terms and conditions and the same structure as the expiring treaties as follows:

Property Excess of Loss

The property excess of loss treaty ("Property Treaty") continues to provide $38.0 million of coverage in excess of a $2.0 million retention:

• The per occurrence cap on the total program is $84.0 million.

• The first layer continues to have unlimited reinstatements. The annual aggregate limit for the $30.0 million in excess of $10.0 million second layer is $120.0 million.

• The Property Treaty continues to exclude nuclear, biological, chemical, and radiological terrorism losses.

Casualty Excess of Loss

The casualty excess of loss treaty (“Casualty Treaty”) continues to provide $88.0 million of coverage in excess of a $2.0 million retention:

• The first through sixth layers provide coverage for 100% of up to $88.0 million in excess of a $2.0 million

retention.

• The Casualty Treaty excludes nuclear, biological, chemical, and radiological terrorism losses, with the annual aggregate terrorism limits increased to $208.0 million from $201.0 million.

41

Investments

Our investment philosophy includes certain return and risk objectives for the fixed income, equity, and other investment portfolios. Although yield and income generation remain the key drivers to our investment strategy, our overall philosophy is to invest with a long-term horizon along with predominantly a “buy-and-hold” approach. The primary fixed income portfolio return objective is to maximize after-tax investment yield and income while balancing risk. A secondary objective is to meet or exceed a weighted-average benchmark of public fixed income indices. Within the equity portfolio, the high dividend yield strategy is designed to generate consistent dividend income while maintaining an expected tracking error to the S&P 500 Index. Additional equity strategies are focused on meeting or exceeding strategy-specific benchmarks of public equity indices. The return objective of the other investment portfolio, which includes alternative investments, is to meet or exceed the S&P 500 Index.

Total Invested Assets
($ in thousands)	June 30, 2014		December 31, 2013	Change %
Total invested assets	$	4,739,099	4,583,312	3	%
Unrealized gain – before tax	144,877		79,236	83
Unrealized gain – after tax	94,169		51,504	83

The increase in our investment portfolio compared to year-end 2013 was primarily due to: (i) cash flows provided by operating activities of $72.7 million; and (ii) an increase in pre-tax unrealized gains of $65.6 million. These gains were driven by increases in the market value of our fixed income securities portfolio as interest rates decreased during Six Months 2014.

During Six Months 2014, interest rates on the 10-year U.S. Treasury Note fell by 50 basis points. This decline in interest rates increased the unrealized gain position on our fixed income securities portfolio. The average after-tax yield on our purchases of fixed income securities was 2.3% during Second Quarter 2014. The interest rate environment over the past several years has put pressure on the existing investment yield of the portfolio, as new and reinvested money has been redeployed at lower rates. However, as the overall portfolio yield approaches the yield of new purchases, we have begun to see a declining rate of pressure on the yield of the existing portfolio.

We structure our portfolio conservatively with a focus on: (i) asset diversification; (ii) investment quality; (iii) liquidity, particularly to meet the cash obligations of our insurance operations segments; (iv) consideration of taxes; and (v) preservation of capital. We believe that we have a high quality and liquid investment portfolio. The breakdown of our investment portfolio is as follows:

	June 30, 2014		December 31, 2013
U.S. government obligations	3	%	4
Foreign government obligations	1		1
State and municipal obligations	30		28
Corporate securities	38		39
Mortgage-backed securities (“MBS”)	15		15
Asset-backed securities (“ABS”)	3		3
Total fixed income securities	90		90
Equity securities	4		4
Short-term investments	4		4
Other investments	2		2
Total	100	%	100

42

Fixed Income Securities 

The average duration of the fixed income securities portfolio as of June 30, 2014 was 3.6 years, including short-term investments, compared to the Insurance Subsidiaries’ liability duration of approximately 3.8 years. The current duration of the fixed income securities portfolio is within our historical range, and is monitored and managed to maximize yield while managing interest rate risk at an acceptable level. We are experiencing continued pressure on the yields within our fixed income securities portfolio, as higher yielding bonds that are either maturing or have been sold are being replaced with lower yielding bonds that are currently available in the marketplace. We manage liquidity with a laddered maturity structure and an appropriate level of short-term investments to avoid liquidation of available-for-sale ("AFS") fixed income securities in the ordinary course of business. We typically have a long investment time horizon, and every purchase or sale is made with the intent of maximizing risk-adjusted investment returns in the current market environment while balancing capital preservation.

Our fixed income securities portfolio had a weighted average credit rating of “AA-" as of June 30, 2014. The following table presents the credit ratings of this portfolio:

Fixed Income Security Rating	June 30, 2014		December 31, 2013
Aaa/AAA	16	%	15
Aa/AA	45		45
A/A	25		26
Baa/BBB	13		13
Ba/BB or below	1		1
Total	100	%	100

43

The following table summarizes the fair value, unrealized gain (loss) balances, and the weighted average credit qualities of our AFS fixed income securities at June 30, 2014 and December 31, 2013:

	June 30, 2014					December 31, 2013
($ in millions)	Fair Value		Unrealized Gain (Loss)		Weighted Average Credit Quality	Fair Value	Unrealized Gain (Loss)		Weighted Average Credit Quality
AFS Fixed Income Portfolio:
U.S. government obligations	$	158.8	9.3		AA+	173.4	10.1		AA+
Foreign government obligations	28.0		1.0		AA-	30.6	0.8		AA-
State and municipal obligations	1,107.1		27.0		AA+	951.6	5.2		AA
Corporate securities	1,782.6		52.4		A-	1,734.9	27.0		A
ABS	132.2		0.7		AAA	140.9	0.5		AAA
MBS	681.5		7.8		AA+	684.1	(4.0	)	AA+
Total AFS fixed income portfolio	$	3,890.2	98.2		AA-	3,715.5	39.6		AA-
State and Municipal Obligations:
General obligations	$	528.0	12.4		AA+	472.0	2.6		AA+
Special revenue obligations	579.1		14.6		AA	479.6	2.6		AA
Total state and municipal obligations	$	1,107.1	27.0		AA+	951.6	5.2		AA
Corporate Securities:
Financial	$	550.7	16.1		A	534.1	11.7		A
Industrials	140.6		5.3		A-	135.1	3.7		A-
Utilities	156.4		3.8		BBB+	146.5	(0.3	)	A-
Consumer discretionary	204.9		7.0		A-	190.6	2.7		A-
Consumer staples	171.5		4.8		A	171.9	3.0		A
Healthcare	167.8		5.4		A	168.5	3.1		A
Materials	109.3		3.5		BBB+	101.2	1.4		A-
Energy	108.1		2.8		A-	93.7	0.9		A-
Information technology	116.0		1.8		A+	121.2	(0.6	)	A+
Telecommunications services	50.4		1.5		BBB+	64.7	1.0		BBB+
Other	6.9		0.4		AA+	7.4	0.4		AA+
Total corporate securities	$	1,782.6	52.4		A-	1,734.9	27.0		A
ABS:
ABS	$	131.8	0.7		AAA	140.4	0.4		AAA
Sub-prime ABS1	0.4		—		D	0.5	0.1		D
Total ABS	132.2		0.7		AAA	140.9	0.5		AAA
MBS:
Government guaranteed agency commercial mortgage-backed securities ("CMBS")	$	23.7	0.6		AA+	30.0	0.9		AA+
Other agency CMBS	10.8		(0.1	)	AA+	9.1	(0.3	)	AA+
Non-agency CMBS	138.0		1.6		AA+	132.2	(1.5	)	AA+
Government guaranteed agency residential MBS ("RMBS")	41.8		1.2		AA+	55.2	1.4		AA+
Other agency RMBS	422.9		3.6		AA+	411.5	(5.1	)	AA+
Non-agency RMBS	40.1		0.8		A-	41.4	0.6		A-
Alternative-A (“Alt-A”) RMBS	4.2		0.1		A	4.7	—		A
Total MBS	$	681.5	7.8		AA+	684.1	(4.0	)	AA+

¹Subprime ABS consists of one security whose issuer is currently expected by rating agencies to default on its obligations. We define sub-prime exposure as exposure to direct and indirect investments in non-agency residential mortgages with average FICO^® scores below 650. 

44

The following tables provide information regarding our held-to-maturity (“HTM”) fixed income securities and their credit qualities at June 30, 2014 and December 31, 2013:

June 30, 2014
($ in millions)	Fair Value		Carry Value	Unrecognized Holding Gain (Loss)	Unrealized Gain (Loss) in Accumulated Other Comprehensive Income ("AOCI")		Total Unrealized/ Unrecognized Gain (Loss)	Weighted Average Credit Quality
HTM Fixed Income Portfolio:
Foreign government obligations	$	5.5	5.4	0.1	0.1		0.2	AA+
State and municipal obligations	346.7		330.8	15.9	2.9		18.8	AA
Corporate securities	24.5		21.5	3.0	(0.3	)	2.7	A+
ABS	3.3		2.7	0.6	(0.6	)	—	AAA
MBS	5.5		4.5	1.0	(0.5	)	0.5	AAA
Total HTM fixed income portfolio	$	385.5	364.9	20.6	1.6		22.2	AA
State and Municipal Obligations:
General obligations	$	110.6	105.9	4.7	1.5		6.2	AA
Special revenue obligations	236.1		224.9	11.2	1.4		12.6	AA
Total state and municipal obligations	$	346.7	330.8	15.9	2.9		18.8	AA
Corporate Securities:
Financial	$	2.3	1.9	0.4	(0.1	)	0.3	A-
Industrials	7.0		5.9	1.1	(0.1	)	1.0	A+
Utilities	13.7		12.2	1.5	(0.1	)	1.4	A+
Consumer discretionary	1.5		1.5	—	—		—	AA
Total corporate securities	$	24.5	21.5	3.0	(0.3	)	2.7	A+
ABS:
ABS	$	0.8	0.8	—	—		—	AA
Alt-A ABS	2.5		1.9	0.6	(0.6	)	—	AAA
Total ABS	$	3.3	2.7	0.6	(0.6	)	—	AAA
MBS:
Non-agency CMBS	$	5.5	4.5	1.0	(0.5	)	0.5	AAA
Total MBS	$	5.5	4.5	1.0	(0.5	)	0.5	AAA

45

December 31, 2013
($ in millions)	Fair Value		Carry Value	Unrecognized Holding Gain (Loss)	Unrealized Gain (Loss) in AOCI		Total Unrealized/ Unrecognized Gain (Loss)	Weighted Average Credit Quality
HTM Portfolio:
Foreign government obligations	$	5.6	5.4	0.2	0.1		0.3	AA+
State and municipal obligations	369.8		352.2	17.6	4.0		21.6	AA
Corporate securities	30.3		27.8	2.5	(0.3	)	2.2	A
ABS	3.4		2.8	0.6	(0.6	)	—	AA+
MBS	7.9		4.7	3.2	(0.9	)	2.3	AA-
Total HTM portfolio	$	417.0	392.9	24.1	2.3		26.4	AA
State and Municipal Obligations:
General obligations	$	118.5	113.1	5.4	2.0		7.4	AA
Special revenue obligations	251.3		239.1	12.2	2.0		14.2	AA
Total state and municipal obligations	$	369.8	352.2	17.6	4.0		21.6	AA
Corporate Securities:
Financial	$	7.3	6.8	0.5	(0.1	)	0.4	BBB+
Industrials	7.8		6.8	1.0	(0.2	)	0.8	A+
Utilities	13.2		12.2	1.0	—		1.0	A+
Consumer discretionary	2.0		2.0	—	—		—	AA
Total corporate securities	$	30.3	27.8	2.5	(0.3	)	2.2	A
ABS:
ABS	$	0.9	0.9	—	—		—	A
Alt-A ABS	2.5		1.9	0.6	(0.6	)	—	AAA
Total ABS	$	3.4	2.8	0.6	(0.6	)	—	AA+
MBS:
Non-agency CMBS	$	7.9	4.7	3.2	(0.9	)	2.3	AA-
Total MBS	$	7.9	4.7	3.2	(0.9	)	2.3	AA-

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The sector composition and credit quality of our municipal bonds did not significantly change from December 31, 2013. For details regarding our special revenue bond sectors and additional information regarding credit risk and our management of MBS exposure, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.” of our 2013 Annual Report.

The following table details the top 10 state exposures of the municipal bond portion of our fixed income securities portfolio at June 30, 2014:

State Exposures of Municipal Bonds
	General Obligation					Special Revenue		Fair Value		% of Total	Weighted Average Credit Quality
($ in thousands)	Local			State
New York	$	9,854		—		109,187		119,041		8%	AA+
Texas1	57,750			5,812		54,741		118,303		8%	AA+
Washington	39,628			6,912		43,399		89,939		6%	AA+
Florida	—			15,479		50,340		65,819		5%	AA
Arizona	8,062			1,003		54,865		63,930		4%	AA
California	8,873			—		40,809		49,682		4%	AA
Colorado	31,723			—		16,712		48,435		3%	AA-
Missouri	16,015			10,138		19,196		45,349		3%	AA+
North Carolina	13,079			8,275		22,998		44,352		3%	AA
Ohio	8,365			19,104		14,927		42,396		3%	AA+
Other	170,146			139,726		319,588		629,460		43%	AA
	363,495			206,449		746,762		1,316,706		90%	AA
Pre-refunded/escrowed to maturity bonds	52,757			15,878		68,437		137,072		10%	AA+
Total	$	416,252		222,327		815,199		1,453,778		100%	AA
% of Total Portfolio	29		%	15	%	56	%	100	%

¹ Of the $58 million in local Texas general obligation bonds, $28 million represents investments in Texas Permanent School Fund bonds, which are considered to have lower risk as a result of the bond guarantee program that supports these bonds.

A portion of our municipal bonds contain insurance enhancements. The following table provides information regarding these insurance-enhanced securities as of June 30, 2014:

Insurers of Municipal Bond Securities
($ in thousands)	Fair Value		Ratings  with Insurance	Ratings without Insurance
National Public Finance Guarantee Corporation, a subsidiary of MBIA, Inc.	$	185,126	AA-	AA-
Assured Guaranty	138,553		AA	AA-
Ambac Financial Group, Inc.	58,848		AA	AA
Other	10,575		AA	A+
Total	$	393,102	AA	AA-

Equity Securities

Our equity securities portfolio was 4% of invested assets as of both June 30, 2014 and December 31, 2013, while the value of this portfolio increased modestly to $211.3 million from $192.8 million over the same time period. During Six Months 2014, we rebalanced our high dividend yield strategy holdings within this portfolio, generating purchases of $111.8 million and sales of securities that had an original cost of $99.6 million.

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Unrealized/Unrecognized Losses

Our net unrealized/unrecognized loss positions improved by $38.7 million, to $13.3 million, as of June 30, 2014 compared to December 31, 2013. The majority of this improvement was in our fixed income securities portfolio.

The following table presents amortized cost and fair value information for our AFS fixed income securities that were in an unrealized loss position at June 30, 2014 by contractual maturity:

($ in thousands)	Amortized Cost		Fair Value	Unrealized Loss
One year or less	$	393	378	15
Due after one year through five years	256,800		253,974	2,826
Due after five years through ten years	559,252		548,852	10,400
Due after ten years	3,461		3,401	60
Total	$	819,906	806,605	13,301

The following table presents amortized cost and fair value information for our HTM fixed income securities that were in an unrealized/unrecognized loss position at June 30, 2014 by contractual maturity:

($ in thousands)	Amortized Cost		Fair Value	Unrecognized/Unrealized Loss
One year or less	$	1,484	1,482	2
Due after one year through five years	2,515		2,496	19
Total	$	3,999	3,978	21

We have reviewed the securities in the tables above in accordance with our OTTI policy, which is discussed in Note 2. “Summary of Significant Accounting Policies” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report. We have concluded that these securities were temporarily impaired as of June 30, 2014 and December 31, 2013. For additional information regarding the unrealized/unrecognized losses in our AFS and HTM portfolios, see Note 5. “Investments” in Item 1. “Financial Statements.” of this Form 10-Q.

Other Investments

As of June 30, 2014, other investments of $106.1 million represented 2% of our total invested assets.  In addition to the capital that we have already invested to date, we are contractually obligated to invest up to an additional $52.7 million in our other investments portfolio through commitments that currently expire at various dates through 2026. For a description of our seven alternative investment strategies, as well as redemption, restrictions, and fund liquidations, refer to Note 5. “Investments” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

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Net Investment Income

The components of net investment income earned for the indicated periods were as follows:

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Fixed income securities	$	33,781		30,298		64,809		60,387
Equity securities	1,736			1,874		3,185		3,081
Short-term investments	14			29		33		81
Other investments	3,553			3,869		8,771		7,471
Investment expenses	(2,310		)	(2,067	)	(4,490	)	(4,147	)
Net investment income earned – before tax	36,774			34,003		72,308		66,873
Net investment income tax expense	(9,353		)	(8,303	)	(18,401	)	(16,334	)
Net investment income earned – after tax	$	27,421		25,700		53,907		50,539
Effective tax rate	25.4		%	24.4		25.4		24.4
Annualized after-tax yield on fixed income securities	2.4			2.3		2.3		2.4
Annualized after-tax yield on investment portfolio	2.3			2.3		2.3		2.3

Net investment income before tax increased in Second Quarter and Six Months 2014 compared to the same periods last year primarily due to higher income from our fixed income securities, driven by an increase in the size of this portfolio, which more than offset the lower yield earned this year compared to last.

Realized Gains and Losses

Our general philosophy for sales of securities is to reduce our exposure to securities and sectors based on economic evaluations and when the fundamentals for that security or sector have deteriorated, or to opportunistically trade out of securities to other securities with better economic return characteristics. We typically have a long investment time horizon, and every purchase or sale is made with the intent of maximizing risk-adjusted investment returns in the current market environment while balancing capital preservation. Total net realized gains amounted to $4.5 million in Second Quarter 2014 and $11.8 million in Six Months 2014, and $5.2 million and $8.5 million in the same periods a year ago. These amounts included $0.4 million and $1.4 million in OTTI charges in Second Quarter and Six Months 2014, and $0.6 million and $2.5 million in Second Quarter and Six Months 2013, respectively.

We regularly review our entire investment portfolio for declines in fair value. If we believe that a decline in the value of a particular investment is other than temporary, we record it as an OTTI, through realized losses in earnings for the credit-related portion and through unrealized losses in other comprehensive income ("OCI") for the non-credit related portion. If there is a decline in fair value of an equity security that we do not intend to hold, or if we determine that the decline is other than temporary, we write down the cost of the investment to fair value and record the charge through earnings as a component of realized losses.

For discussion of our realized gains and losses as well as our OTTI methodology, see Note 2. “Summary of Significant Accounting Policies” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report, and for qualitative information about our OTTI charges, see Note 5. "Investments" in Item 1. "Financial Statements." of this

Form 10-Q.

Federal Income Taxes

The following table provides information regarding federal income taxes from continuing operations:

	Quarter ended June 30,				Six Months ended June 30,
($ in million)	2014			2013	2014	2013
Federal income tax expense from continuing operations	$	10.2		9.1	17.3	15.6
Effective tax rate	26		%	25	27	24

Despite lower pre-tax net income in Six Months 2014 compared to Six Months 2013, federal income tax expense, as well as the effective tax rate have increased year over year. This increase is driven by our expectation of relatively higher full-year insurance operations results in 2014. We are required, through accounting rules, to record each quarter’s taxes at the expected annual effective tax rate regardless of the relative magnitude of the individual components within any one quarter.

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Financial Condition, Liquidity, Short-term Borrowings, and Capital Resources

Capital resources and liquidity reflect our ability to generate cash flows from business operations, borrow funds at competitive rates, and raise new capital to meet operating and growth needs.

Liquidity

We manage liquidity with a focus on generating sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. Our cash and short-term investment position of $168 million at June 30, 2014 was comprised of $30.8 million at Selective Insurance Group, Inc. (the "Parent") and $137.2 million at the Insurance Subsidiaries. Short-term investments are generally maintained in "AAA" rated money market funds approved by the National Association of Insurance Commissioners. The Parent continues to maintain a fixed income security investment portfolio containing high-quality, highly-liquid government and corporate fixed income securities to generate additional yield. This portfolio amounted to $60 million at June 30, 2014 compared to $56 million at December 31, 2013.

Sources of cash for the Parent have historically consisted of dividends from the Insurance Subsidiaries, borrowings under lines of credit and loan agreements with certain Insurance Subsidiaries, and the issuance of stock and debt securities. We continue to monitor these sources, giving consideration to our long-term liquidity and capital preservation strategies.

We currently anticipate the Insurance Subsidiaries will pay approximately $57.5 million in total dividends to the Parent in 2014. Cash dividends of $28.8 million were paid in Six Months 2014. As of December 31, 2013, our allowable ordinary maximum dividend was approximately $127 million for 2014.

Any dividends to the Parent are subject to the approval and/or review of the insurance regulators in the respective domiciliary states and are generally payable only from earned surplus as reported in the statutory annual statements of those subsidiaries as of the preceding December 31. Although past dividends have historically been met with regulatory approval, there is no assurance that future dividends that may be declared will be approved. For additional information regarding dividend restrictions, refer to Note 20. “Statutory Financial Information, Capital Requirements, and Restrictions on Dividends and Transfers of Funds” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

The Parent had no private or public issuances of stock during Six Months 2014 and there were no borrowings under its $30 million line of credit ("Line of Credit") at June 30, 2014 or at any time during Six Months 2014.

We have two Insurance Subsidiaries domiciled in Indiana ("Indiana Subsidiaries") that are members of the Federal Home Loan Bank of Indianapolis ("FHLBI"). These Insurance Subsidiaries are Selective Insurance Company of South Carolina ("SICSC") and Selective Insurance Company of the Southeast ("SICSE"). Membership in the FHLBI provides these subsidiaries with access to additional liquidity. The Indiana Subsidiaries' aggregate investment of $2.9 million provides them with the ability to borrow up to 20 times the total amount of the FHLBI common stock purchased, at comparatively low borrowing rates. All borrowings from the FHLBI are required to be secured by certain investments. For additional information regarding the required collateral, refer to Note 5. "Investments" in Item 1. "Financial Statements." of this Form 10-Q.

The Parent's Line of Credit agreement permits collateralized borrowings by the Indiana Subsidiaries from the FHLBI so long as the aggregate amount borrowed does not exceed 10% of the respective Indiana Subsidiary's admitted assets from the preceding calendar year. Admitted assets amounted to $542.4 million for SICSC and $414.9 million for SICSE as of December 31, 2013, for a borrowing capacity of approximately $96 million. As our outstanding borrowing with the FHLBI is currently $58 million, the Indiana Subsidiaries have the ability to borrow approximately $38 million more until the Line of Credit borrowing limit is met, of which $30 million could be loaned to the Parent under lending agreements approved by the Indiana Department of Insurance. Similar to the Line of Credit agreement, these lending agreements limit borrowings by the Parent from the Indiana Subsidiaries to 10% of the admitted assets of the respective Indiana Subsidiary. For additional information regarding the Parent's Line of Credit, refer to the section below entitled “Short-term Borrowings.”

The Insurance Subsidiaries also generate liquidity through insurance float, which is created by collecting premiums and earning investment income before losses are paid. The period of the float can extend over many years. Our investment portfolio consists of maturity dates that are laddered to continually provide a source of cash flows for claims payments in the ordinary course of business. The duration of the fixed income securities portfolio including short-term investments was 3.6 years as of June 30, 2014, while the liabilities of the Insurance Subsidiaries have a duration of 3.8 years. In addition, the Insurance Subsidiaries purchase reinsurance coverage for protection against any significantly large claims or catastrophes that may occur during the year.

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The liquidity generated from the sources discussed above is used, among other things, to pay dividends to our shareholders. Dividends on shares of the Parent's common stock are declared and paid at the discretion of the Board of Directors based on our operating results, financial condition, capital requirements, contractual restrictions, and other relevant factors.

Our ability to meet our interest and principal repayment obligations on our debt, as well as our ability to continue to pay dividends to our stockholders, is dependent on liquidity at the Parent coupled with the ability of the Insurance Subsidiaries to pay dividends, if necessary, and/or the availability of other sources of liquidity to the Parent. Upcoming principal payments on our debt include $13 million in December 2014 and $45 million in December 2016. Subsequent to 2016, our next principal repayment is due in 2034. Restrictions on the ability of the Insurance Subsidiaries to declare and pay dividends, without alternative liquidity options, could materially affect our ability to service debt and pay dividends on common stock.

Short-term Borrowings

Our Line of Credit with Wells Fargo Bank, National Association, as administrative agent, and Branch Banking and Trust Company (BB&T), was renewed effective September 26, 2013 with a borrowing capacity of $30 million, which can be increased to $50 million with the approval of both lending partners.

The Line of Credit provides the Parent with an additional source of short-term liquidity. The interest rate on our Line of Credit varies and is based on, among other factors, the Parent’s debt ratings. The Line of Credit expires on September 26, 2017. There were no balances outstanding under the Line of Credit at June 30, 2014 or at any time during Six Months 2014.

The Line of Credit agreement contains representations, warranties, and covenants that are customary for credit facilities of this type, including, without limitation, financial covenants under which we are obligated to maintain a minimum consolidated net worth, minimum combined statutory surplus, and maximum ratio of consolidated debt to total capitalization, as well as covenants limiting our ability to: (i) merge or liquidate; (ii) incur debt or liens; (iii) dispose of assets; (iv) make certain investments and acquisitions; and (v) engage in transactions with affiliates.

The table below outlines information regarding certain of the covenants in the Line of Credit:

	Required as of June 30, 2014	Actual as of June 30, 2014
Consolidated net worth	$830 million	$1.2 billion
Statutory surplus	Not less than $750 million	$1.3 billion
Debt-to-capitalization ratio1	Not to exceed 35%	24.3%
A.M. Best financial strength rating	A-	A

¹  Calculated in accordance with the Line of Credit agreement.

Capital Resources

Capital resources provide protection for policyholders, furnish the financial strength to support the business of underwriting insurance risks, and facilitate continued business growth. At June 30, 2014, we had statutory surplus of $1.3 billion, GAAP stockholders’ equity of $1.2 billion, and total debt of $392.3 million, which equates to a debt-to-capital ratio of approximately 24.1%.

Our cash requirements include, but are not limited to, principal and interest payments on various notes payable, dividends to stockholders, payment of claims, payment of commitments under limited partnership agreements and capital expenditures, as well as other operating expenses, which include agents’ commissions, labor costs, premium taxes, general and administrative expenses, and income taxes. For further details regarding our cash requirements, refer to the section below entitled, “Contractual Obligations, Contingent Liabilities, and Commitments.”

We continually monitor our cash requirements and the amount of capital resources that we maintain at the holding company and operating subsidiary levels. As part of our long-term capital strategy, we strive to maintain capital metrics, relative to the macroeconomic environment, that support our targeted financial strength. Based on our analysis and market conditions, we may take a variety of actions, including, but not limited to, contributing capital to the Insurance Subsidiaries in our insurance operations, issuing additional debt and/or equity securities, repurchasing shares of the Parent’s common stock, and increasing stockholders’ dividends.

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Our capital management strategy is intended to protect the interests of the policyholders of the Insurance Subsidiaries and our stockholders, while enhancing our financial strength and underwriting capacity.

Book value per share increased to $21.96 as of June 30, 2014, from $20.63 as of December 31, 2013, due to $0.84 in net income coupled with a $0.76 increase in unrealized gains on our investment portfolio. These items were partially offset by $0.26 in dividends to our shareholders.

Ratings

We are rated by major rating agencies that issue opinions on our financial strength, operating performance, strategic position, and ability to meet policyholder obligations. We believe that our ability to write insurance business is most influenced by our rating from A.M. Best. In Second Quarter 2014, A.M. Best reaffirmed our rating of "A (Excellent)," their third highest of 13 financial strength ratings, with a “stable” outlook. The rating reflects our strong risk-adjusted capitalization, disciplined underwriting focus, increasing use of predictive modeling technology, strong independent retail agency relationships, and consistently stable loss reserves. We have been rated “A” or higher by A.M. Best for the past 84 years. A downgrade from A.M. Best to a rating below “A-” is an event of default under our Line of Credit and could affect our ability to write new business with customers and/or agents, some of whom are required (under various third-party agreements) to maintain insurance with a carrier that maintains a specified A.M. Best minimum rating.

Ratings by other major rating agencies are as follows:

• Fitch Ratings ("Fitch") - Our “A+” rating was reaffirmed in Second Quarter 2014, citing our improved underwriting results, strong independent agency relationships, solid loss reserve position, and enhanced diversification through continued efforts to reduce our concentration in New Jersey.  Our outlook has been revised to stable reflecting operating earnings-based interest coverage that showed improvement in 2013.

• S&P Ratings Services ("S&P") - In the third quarter of 2013, S&P lowered our financial strength rating to “A-” from “A” under their revised rating criteria. The rating reflects our strong business risk profile and moderately strong financial risk profile, built on a strong competitive position in the regional small to midsize commercial insurance markets in Mid-Atlantic states and strong capital and earnings. The rating revision reflects S&P's view of our capital and earnings volatility relative to our peers. The outlook for the rating is stable citing the expectation that we will sustain our strong competitive position and business risk profile while maintaining a strong capital and earnings profile.

• Moody's Investor Service ("Moody's") - Our "A2" financial strength rating was reaffirmed in the first quarter of 2013 by Moody's, which cited our strong regional franchise with established independent agency support, along with solid risk adjusted capitalization and strong invested asset quality. Our outlook was revised to negative, citing that our underwriting results have lagged similarly rated peers. 

Our S&P, Moody's, and Fitch financial strength and associated credit ratings affect our ability to access capital markets.  The interest rate on our Line of Credit varies and is based on, among other factors, the Parent's debt ratings. There can be no assurance that our ratings will continue for any given period of time or that they will not be changed.  It is possible that positive or negative ratings actions by one or more of the rating agencies may occur in the future.

Off-Balance Sheet Arrangements

At June 30, 2014 and December 31, 2013, we did not have any material relationships with unconsolidated entities or financial partnerships, such entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. As such, we are not exposed to any material financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships.

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Contractual Obligations, Contingent Liabilities, and Commitments

Our future cash payments associated with: (i) loss and loss expense reserves; (ii) contractual obligations pursuant to operating leases for office space and equipment; (iii) notes payable; and (iv) contractual obligations related to our alternative and other investments portfolio have not materially changed since December 31, 2013. We expect to have the capacity to repay and/or refinance these obligations as they come due.

We have issued no material guarantees on behalf of others and have no trading activities involving non-exchange traded contracts accounted for at fair value. We have no material transactions with related parties other than those disclosed in Note 17. "Related Party Transactions" included in Item 8. "Financial Statements and Supplementary Data." of our 2013 Annual Report.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes in the information about market risk set forth in our 2013 Annual Report.

ITEM 4.   CONTROLS AND PROCEDURES.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), as of the end of the period covered by this report. In performing this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework in 1992. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are: (i) effective in recording, processing, summarizing, and reporting information on a timely basis that we are required to disclose in the reports that we file or submit under the Exchange Act; and (ii) effective in ensuring that information that we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. No changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) occurred during Six Months 2014 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In the ordinary course of conducting business, we are named as defendants in various legal proceedings. Most of these proceedings are claims litigation involving our Insurance Subsidiaries as either: (i) liability insurers defending or providing indemnity for third-party claims brought against insureds; or (ii) insurers defending first-party coverage claims brought against them. We account for such activity through the establishment of unpaid loss and loss expense reserves. We expect that the ultimate liability, if any, with respect to such ordinary course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to our consolidated financial condition, results of operations, or cash flows.

Our Insurance Subsidiaries are also from time to time involved in other legal actions, some of which assert claims for substantial amounts. These actions include, among others, putative class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, improper reimbursement of medical providers paid under workers compensation and personal and commercial automobile insurance policies. Our Insurance Subsidiaries are also involved from time to time in individual actions in which extra-contractual damages, punitive damages, or penalties are sought, such as claims alleging bad faith in the handling of insurance claims. We believe that we have valid defenses to these cases. We expect that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to our consolidated financial condition. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods.

ITEM 1A. RISK FACTORS.

Certain risk factors exist that can have a significant impact on our business, liquidity, capital resources, results of operations, financial condition, and debt ratings. The impact of these risk factors also could impact certain actions that we take as part of our long-term capital strategy, including but not limited to, contributing capital to any or all of the Insurance Subsidiaries, issuing additional debt and/or equity securities, repurchasing our equity securities, redeeming our fixed income securities, or increasing or decreasing, stockholders dividends. We operate in a continually changing business environment and new risk factors emerge from time to time. Consequently, we can neither predict such new risk factors nor assess the potential future impact, if any, they might have on our business. There have been no material changes from the risk factors disclosed in Item 1A. “Risk Factors.” in our 2013 Annual Report other than as discussed below.

We face risks regarding our flood business because of uncertainties regarding the NFIP.

We are the fifth largest insurance group participating in the write-your-own ("WYO") arrangement of the NFIP, which is managed by the Mitigation Division of Federal Emergency Management Agency (“FEMA”) in the U.S. Department of Homeland Security. For WYO participation, we receive an expense allowance for policies written and a servicing fee for claims administered. Under the program, all losses are 100% reinsured by the Federal Government. Currently, the expense allowance is 30.7% of direct premiums written. The servicing fee is the combination of 0.9% of direct written premiums and 1.5% of incurred losses.

The NFIP is funded by Congress. In 2012, after the NFIP had numerous short-term funding delays, Congress passed, and the President signed, the Biggert-Waters Flood Insurance Reform Act of 2012 (“Biggert-Waters Act”). The Biggert-Waters Act: (i) extended NFIP funding to September 30, 2017; and (ii) moved the program to more market based rates for certain flood policyholders. FEMA implemented these rates throughout 2013, which created significant public discontent and Congressional concern over the impact of the new rates on NFIP insureds.

Consequently, Congress passed and, on March 21, 2014, the President signed into law, the Homeowner Flood Insurance Affordability Act of 2014 (“Flood Affordability Act”). The Flood Affordability Act substantially modifies certain provisions of the Biggert-Waters Act, and makes certain other program changes. Significantly, the Flood Affordability Act substantially modifies many of the Biggert-Waters Act rate increases. Consequently, we are working with FEMA to implement the new rate structures.

As a WYO carrier, we are required to follow certain NFIP procedures when administering flood policies and claims. Some of these requirements may differ from our normal business practices and may present a reputational risk to our brand. Insurance companies are regulated by states; however, the NFIP is a federal program. Consequently, we have the risk that regulatory positions taken by the NFIP and a state regulator on the same issue may conflict.

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Despite the passage of the Flood Affordability Act, the NFIP remains under scrutiny by policymakers. The uncertainty behind the public policy debate and politics of flood insurance funding and reform make it difficult for us to predict the future of the NFIP and the continued financial viability of our participation in the program.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table provides information regarding our purchases of our common stock in Second Quarter 2014:

Period	Total Number of Shares Purchased1	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Number of Shares that May Yet Be Purchased Under the Announced Programs
April 1 – 30, 2014	5,938	$	22.47	—	—
May 1 - 31, 2014	—	—		—	—
June 1 – 30, 2014	5	23.27		—	—
Total	5,943	$	22.47	—	—

¹During Second Quarter 2014, 5,943 shares were purchased from employees in connection with the vesting of restricted stock units. These repurchases were made to satisfy tax withholding obligations with respect to those employees. These shares were not purchased as part of any publicly announced program. The shares that were purchased in connection with the vesting of restricted stock units were purchased at fair market value as defined in the Selective Insurance Group, Inc. 2005 Omnibus Stock Plan As Amended and Restated Effective as of May 1, 2010.

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Item 6. EXHIBITS.

(a) Exhibits:

Exhibit No.
* 11	Statement Re: Computation of Per Share Earnings.
* 31.1	Certification of Chief Executive Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002.
* 31.2	Certification of Chief Financial Officer in accordance with Section 302 of the Sarbanes-Oxley Act of 2002.
* 32.1	Certification of Chief Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002.
* 32.2	Certification of Chief Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act of 2002.
** 101.INS	XBRL Instance Document.
** 101.SCH	XBRL Taxonomy Extension Schema Document.
** 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
** 101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
** 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
** 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

* Filed herewith.

** Furnished and not filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

SELECTIVE INSURANCE GROUP, INC.

Registrant

By: /s/ Gregory E. Murphy	July 31, 2014
Gregory E. Murphy
Chairman of the Board and Chief Executive Officer
By: /s/ Dale A. Thatcher	July 31, 2014
Dale A. Thatcher
Executive Vice President and Chief Financial Officer
(principal accounting officer and principal financial officer)

57

EX-11

Exhibit 11

SELECTIVE INSURANCE GROUP, INC. AND CONSOLIDATED SUBSIDIARIES

COMPUTATION OF EARNINGS PER SHARE

Second Quarter 2014	Income		Shares	Per Share
(in thousands, except per share amounts)	(Numerator)		(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	29,341	56,272	$	0.52
Effect of dilutive securities:
Stock compensation plans	—		988
Diluted EPS:
Net income available to common stockholders	$	29,341	57,260	$	0.51

Second Quarter 2013	Income		Shares	Per Share
(in thousands, except per share amounts)	(Numerator)		(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	27,122	55,609	$	0.49
Effect of dilutive securities:
Stock compensation plans	—		1,007
Diluted EPS:
Net income available to common stockholders	$	27,122	56,616	$	0.48

Six Months ended June 30, 2014	Income		Shares	Per Share
(in thousands, except per share amounts)	(Numerator)		(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	47,315	56,182	$	0.84
Effect of dilutive securities:
Stock compensation plans	—		1,033
Diluted EPS:
Net income available to common stockholders	$	47,315	57,215	$	0.83

Six Months ended June 30, 2013	Income			Shares	Per Share
(in thousands, except per share amounts)	(Numerator)			(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	49,427		55,490	$	0.89
Net loss from discontinued operations	(997		)	55,490	(0.02		)
Net income available to common stockholders	$	48,430		55,490	$	0.87
Effect of dilutive securities:
Stock compensation plans	—			1,040
Diluted EPS:
Net income from continuing operations	$	49,427		56,530	$	0.88
Net loss from discontinued operations	(997		)	56,530	(0.02		)
Net income available to common stockholders	$	48,430		56,530	$	0.86

EX-31.1

Exhibit 31.1

Certification pursuant to Rule 13a-14(a), as adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, GREGORY E. MURPHY, Chairman of the Board and Chief Executive Officer of Selective Insurance Group, Inc. (the “Company”), certify, that:

1. I have reviewed this quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations, comprehensive income and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	July 31, 2014	By: /s/ Gregory E. Murphy
		Gregory E. Murphy
		Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification pursuant to Rule 13a-14(a), as adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, DALE A. THATCHER, Executive Vice President and Chief Financial Officer of Selective Insurance Group, Inc. (the “Company”), certify, that:

1. I have reviewed this quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations, comprehensive income and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	July 31, 2014	By: /s/ Dale A. Thatcher
		Dale A. Thatcher
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

I, GREGORY E. MURPHY, Chairman of the Board and Chief Executive Officer of Selective Insurance Group, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report on Form 10-Q of the Company for the quarterly period ended June 30, 2014 (the “Form 10-Q”), which this certification accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 31, 2014	By: /s/ Gregory E. Murphy
		Gregory E. Murphy
		Chairman of the Board and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

I, DALE A. THATCHER, Executive Vice President and Chief Financial Officer of Selective Insurance Group, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report on Form 10-Q of the Company for the quarterly period ended June 30, 2014 (the “Form 10-Q”), which this certification accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 31, 2014	By: /s/ Dale A. Thatcher
		Dale A. Thatcher
		Executive Vice President and Chief Financial Officer

XML

Investments (Net Investment Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net Investment Income [Line Items]
Net investment income earned	$ 36,774	$ 34,003	$ 72,308	$ 66,873
Fixed Income Securities [Member]
Net Investment Income [Line Items]
Net investment income earned	33,781	30,298	64,809	60,387
Equity Securities [Member]
Net Investment Income [Line Items]
Net investment income earned	1,736	1,874	3,185	3,081
Short-Term Investments [Member]
Net Investment Income [Line Items]
Net investment income earned	14	29	33	81
Other Investments [Member]
Net Investment Income [Line Items]
Net investment income earned	3,553	3,869	8,771	7,471
Investment Expenses [Member]
Net Investment Income [Line Items]
Net investment income earned	$ (2,310)	$ (2,067)	$ (4,490)	$ (4,147)

XML

Retirement Plans (Weighted-Average Expense Assumptions) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Retirement Income Plan [Member]
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items]
Discount rate	5.16%	4.66%
Expected return on plan assets	6.92%	7.40%
Rate of compensation increase	4.00%	4.00%
Estimated contribution from the employer	$ 5.4
Retirement Life Plan [Member]
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items]
Discount rate	4.85%	4.42%
Expected return on plan assets	0.00%	0.00%
Rate of compensation increase	0.00%	0.00%
Scenario, Forecast [Member] | Retirement Income Plan [Member]
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items]
Estimated contribution from the employer	$ 9.8

XML

Reinsurance (Ceded Premiums and Losses Related to Flood Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Ceded premiums written	$ (98,328)	$ (93,391)	$ (187,319)	$ (180,565)
Ceded premiums earned	(91,673)	(86,780)	(182,063)	(172,369)
Ceded loss and loss expense incurred	(42,289)	(65,780)	(87,571)	(170,651)
National Flood Insurance Program [Member]
Ceded premiums written	(65,775)	(62,461)	(123,078)	(119,168)
Ceded premiums earned	(59,213)	(56,450)	(117,499)	(111,777)
Ceded loss and loss expense incurred	$ (26,712)	$ (51,725)	$ (34,091)	$ (127,901)

XML

Comprehensive Income (Components of Comprehensive Income-Gross and Net of Tax) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net income, Gross	$ 39,521	$ 36,201	$ 64,605	$ 63,534
Unrealized holding gains during the period, Gross	45,122	(91,314)	78,086	(87,630)
Non-credit portion of other-than-temporary impairment losses recognized in other comprehensive income, Gross		47		77
HTM securties, Gross	(221)	(614)	(677)	(1,331)
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	469	6	469	13
Realized gains on AFS securities, Gross	(5,008)	(5,288)	(12,237)	(11,264)
Net unrealized gains (losses), Gross	40,362	(97,163)	65,641	(100,135)
Net actuarial gain, Gross				44,000
Amount reclassified into Net Income: Net actuarial loss, Gross	381	789	761	2,629
Amount reclassified into Net Income: Prior service cost, Gross				10
Amount Reclassified Into Net Income: Curtailment Expense Before Tax				16
Defined pension and other post-retirement benefit plans, gross	381	789	761	46,655
Other comprehensive income (loss), Gross	40,743	(96,374)	66,402	(53,480)
Comprehensive income (loss), Gross	80,264	(60,173)	131,007	10,054
Net income, Tax	10,180	9,079	17,290	15,104
Unrealized holding gains (losses) during the period, Tax	15,793	(31,961)	27,331	(30,671)
Non-credit portion of other-than-temporary impairment losses recognized in other comprehensive income, Tax		16		27
HTM securities, Tax	(77)	(215)	(237)	(466)
Non-credit OTTI, Tax	164	3	164	5
Realized gains on AFS securities, Tax	(1,753)	(1,850)	(4,283)	(3,942)
Net unrealized gains (losses), Tax	14,127	(34,007)	22,975	(35,047)
Net actuarial gain, Tax				15,400
Amount reclassified into Net Income: Net actuarial loss, Tax	133	276	266	920
Amount reclassified into Net Income: Prior service cost, Tax				4
Amount reclassified into Net Income: Curtailment expense, tax				5
Defined pension and other post-retirement benefit plans, tax	133	276	266	16,329
Other comprehensive income (loss), Tax	14,260	(33,731)	23,241	(18,718)
Comprehensive income (loss), Tax	24,440	(24,652)	40,531	(3,614)
Net income	29,341	27,122	47,315	48,430
Unrealized holding gains (losses) arising during period	29,329	(59,353)	50,755	(56,959)
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income	0	31	0	50
HTM Securities	(144)	(399)	(440)	(865)
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	305	3	305	8
Realized gains on available for sale securities	(3,255)	(3,438)	(7,954)	(7,322)
Total unrealized gains (losses) on investment securities	26,235	(63,156)	42,666	(65,088)
Net actuarial gain	0	0	0	28,600
Amount reclassified into Net Income: Net actuarial loss	248	513	495	1,709
Amount reclassified into Net Income: Prior service cost	0	0	0	6
Amount reclassified into Net Income: Curtailment expense	0	0	0	11
Total defined benefit pension and post-retirement plans	248	513	495	30,326
Other comprehensive income (loss)	26,483	(62,643)	43,161	(34,762)
Comprehensive income (loss)	$ 55,824	$ (35,521)	$ 90,476	$ 13,668

XML

Fair Value Measurements (Quantitative Information of Our Financial Assets and Liabilities That Were Disclosed at Fair Value) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	$ 364,938	$ 392,879
Notes payable	392,290	392,414
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	385,502	416,981
Notes payable	399,670	354,010
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Notes payable	174,714	146,298
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	385,502	416,981
Notes payable	224,956	207,712
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Notes payable	0	0
Foreign Government [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	5,519	5,591
Foreign Government [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Foreign Government [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	5,519	5,591
Foreign Government [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Obligations of States and Political Subdivisions [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	346,724	369,756
Obligations of States and Political Subdivisions [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Obligations of States and Political Subdivisions [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	346,724	369,756
Obligations of States and Political Subdivisions [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Corporate Securities [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	24,513	30,274
Corporate Securities [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Corporate Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	24,513	30,274
Corporate Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Asset-Backed Securities [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	3,285	3,415
Asset-Backed Securities [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Asset-Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	3,285	3,415
Asset-Backed Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Commercial Mortgage Backed Securities [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	5,461	7,945
Commercial Mortgage Backed Securities [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Commercial Mortgage Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	5,461	7,945
Commercial Mortgage Backed Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	0	0
Two Point Ninety Percent Borrowing From Federal Home Loan Bank [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	13,165	13,319
Two Point Ninety Percent Borrowing From Federal Home Loan Bank [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
Two Point Ninety Percent Borrowing From Federal Home Loan Bank [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	13,165	13,319
Two Point Ninety Percent Borrowing From Federal Home Loan Bank [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
One Point Twenty Five Percent Borrowing From Federal Home Loan Bank [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	45,338	45,259
One Point Twenty Five Percent Borrowing From Federal Home Loan Bank [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
One Point Twenty Five Percent Borrowing From Federal Home Loan Bank [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	45,338	45,259
One Point Twenty Five Percent Borrowing From Federal Home Loan Bank [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
Seven Point Twenty Five Percent Senior Notes [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	55,527	50,887
Seven Point Twenty Five Percent Senior Notes [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
Seven Point Twenty Five Percent Senior Notes [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	55,527	50,887
Seven Point Twenty Five Percent Senior Notes [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
Six Point Seventy Percent Senior Notes [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	110,926	98,247
Six Point Seventy Percent Senior Notes [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
Six Point Seventy Percent Senior Notes [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	110,926	98,247
Six Point Seventy Percent Senior Notes [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
Five Point Eight Hundred Seventy Five Senior Notes [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	174,714	146,298
Five Point Eight Hundred Seventy Five Senior Notes [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	174,714	146,298
Five Point Eight Hundred Seventy Five Senior Notes [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	0	0
Five Point Eight Hundred Seventy Five Senior Notes [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable	$ 0	$ 0

XML

Investments (Number of Securities in an Unrealized Unrecognized Loss Position) (Details) (USD $)	6 Months Ended
	Jun. 30, 2014 Securities	Dec. 31, 2013 Securities
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In An Unrealized/Unrecognized Loss Position	288	557
Unrealized Unrecognized Loss	$ 13,325,000	$ 52,011,000
Unrealized Unrecognized Losses Period Improvement	38,700,000
Securities In Unrealized Unrecognized Loss Position For More Than Twelve Months Unrealized Unrecognized Loss	12,900,000	2,900,000
Percentage Decline in Fair Value Percentage	2.00%	6.00%
Eighty Percent to Ninety-Nine Percent [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In An Unrealized/Unrecognized Loss Position	288	556
Unrealized Unrecognized Loss	13,325,000	51,835,000
Sixty Percent to Seventy-Nine Percent [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In An Unrealized/Unrecognized Loss Position	0	1
Unrealized Unrecognized Loss	0	176,000
Forty Percent to Fifty-Nine Percent [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In An Unrealized/Unrecognized Loss Position	0	0
Unrealized Unrecognized Loss	0	0
Twenty Percent to Thirty-Nine Percent [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In An Unrealized/Unrecognized Loss Position	0	0
Unrealized Unrecognized Loss	0	0
Zero Percent to Nineteen Percent [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In An Unrealized/Unrecognized Loss Position	0	0
Unrealized Unrecognized Loss	$ 0	$ 0
10 year U.S. Treasury Note [Member]
Schedule of Available-for-sale Securities [Line Items]
Decrease of Yield on 10-year U.S. Treasury Note	50

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Comprehensive Income (Reclassification out of AOCI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	$ 469	$ 6	$ 469	$ 13
Non-credit OTTI, Tax	(164)	(3)	(164)	(5)
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	305	3	305	8
Total HTM Related, Tax	77	215	237	466
Amounts reclassified from AOCI, HTM Related	(144)	(399)	(440)	(865)
Realized gains on AFS disposals and OTTI	(5,008)	(5,288)	(12,237)	(11,264)
Total realized gains on AFS disposals and OTTI	1,753	1,850	4,283	3,942
Amounts reclassified into net income: realized gains on available for sale securities	(3,255)	(3,438)	(7,954)	(7,322)
Amount reclassified into Net Income: Net actuarial loss, Gross	381	789	761	2,629
Defined pension and other post-retirement benefit plans, tax	(133)	(276)	(266)	(16,329)
Amount reclassified into Net Income: Prior service cost, Gross				10
Amount Reclassified Into Net Income: Curtailment Expense Before Tax				16
Defined pension and other post-retirement benefit plans, gross	381	789	761	46,655
Total defined benefit pension and post-retirement plans	248	513	495	30,326
Net Investment Income Earned [Member]
Amortization of net unrealized gains on HTM securities	(272)	(544)	(752)	(1,180)
Net Investment Income Earned [Member] | Amortization Of Non Credit OTTI Losses On HTM Securities [Member]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0	6	0	13
Income From Continuing Operations Before Federal Income Tax [Member]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	469	6	469	13
Amortization of net unrealized gains on HTM securities	(221)	(614)	(677)	(1,331)
Realized gains on AFS disposals and OTTI	(5,008)	(5,288)	(12,237)	(11,264)
Amount reclassified into Net Income: Net actuarial loss, Gross	381	789	761	2,629
Amount reclassified into Net Income: Prior service cost, Gross	0	0	0	10
Amount Reclassified Into Net Income: Curtailment Expense Before Tax	0	0	0	16
Defined pension and other post-retirement benefit plans, gross	381	789	761	2,655
Total Federal Income Tax Expense [Member]
Non-credit OTTI, Tax	(164)	(3)	(164)	(5)
Total HTM Related, Tax	77	215	237	466
Total realized gains on AFS disposals and OTTI	1,753	1,850	4,283	3,942
Defined pension and other post-retirement benefit plans, tax	(133)	(276)	(266)	(929)
Net Income Financial Statement Line Item [Member]
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	305	3	305	8
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(2,846)	(3,321)	(7,594)	(6,453)
Amounts reclassified from AOCI, HTM Related	(144)	(399)	(440)	(865)
Amounts reclassified into net income: realized gains on available for sale securities	(3,255)	(3,438)	(7,954)	(7,322)
Total defined benefit pension and post-retirement plans	248	513	495	1,726
Net Realized Investment Gains [Member]
Unrealized gains and losses on HTM disposals	51	(70)	75	(151)
Realized gains on AFS disposals and OTTI	(5,008)	(5,288)	(12,237)	(11,264)
Net Realized Investment Gains [Member] | Realized Loss On Disposal Of Non Credit OTTI Securities [Member]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	469	0	469	0
Loss And Loss Expense Incurred [Member]
Amount reclassified into Net Income: Net actuarial loss, Gross	88	158	175	558
Amount reclassified into Net Income: Prior service cost, Gross	0	0	0	7
Policy acquisition costs [Member]
Amount reclassified into Net Income: Net actuarial loss, Gross	293	631	586	2,071
Amount reclassified into Net Income: Prior service cost, Gross	0	0	0	3
Amount Reclassified Into Net Income: Curtailment Expense Before Tax	$ 0	$ 0	$ 0	$ 16

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Revenue from Continuing Operations By Segment

Revenue by Segment	Quarter ended June 30,			Six Months ended June 30,
($ in thousands)	2014		2013	2014	2013
Standard Insurance Operations:
Net premiums earned:
Commercial automobile	$	83,472	76,706	165,688	151,053
Workers compensation	68,992		64,855	138,405	130,939
General liability	111,591		99,766	220,409	197,469
Commercial property	61,226		54,937	121,412	108,352
Businessowners’ policies	21,279		18,625	42,148	37,165
Bonds	4,734		4,775	9,490	9,539
Other	3,213		2,993	6,396	5,985
Total Standard Commercial Lines	354,507		322,657	703,948	640,502
Personal automobile	38,022		38,526	76,248	76,919
Homeowners	33,576		31,702	66,874	62,837
Other	2,946		3,320	6,240	6,828
Total Standard Personal Lines	74,544		73,548	149,362	146,584
Total Standard Insurance Operations net premiums earned	429,051		396,205	853,310	787,086
Miscellaneous income	1,908		3,528	11,727	6,248
Total Standard Insurance Operations revenue	430,959		399,733	865,037	793,334
E&S Insurance Operations:
Net premiums earned	34,574		30,047	66,810	60,106
Investments:
Net investment income	36,774		34,003	72,308	66,873
Net realized investment gains	4,539		5,154	11,757	8,509
Total investment revenues	41,313		39,157	84,065	75,382
Total all segments	506,846		468,937	1,015,912	928,822
Other income	3		8	8	72
Total revenues from continuing operations	$	506,849	468,945	1,015,920	928,894

Schedule of Income from Continuing Operations Before Federal Income Tax

Income from Continuing Operations before Federal Income Tax	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations:
Commercial Lines underwriting gain	$	15,703		9,743		$	12,073		15,845
Personal Lines underwriting (loss) gain	(5,582		)	(2,975	)	(7,942		)	2,998
Total Standard Insurance Operations underwriting gain, before federal income tax	10,121			6,768		4,131			18,843
GAAP combined ratio	97.6		%	98.3		99.5		%	97.6
Statutory combined ratio	97.3		%	97.0		99.2		%	96.9
E&S Insurance Operations:
Underwriting (loss) gain	(37		)	(2,285	)	938			(2,199	)
GAAP combined ratio	100.1		%	107.6		98.6		%	103.7
Statutory combined ratio	99.9		%	106.8		98.8		%	102.6
Investments:
Net investment income	36,774			34,003		72,308			66,873
Net realized investment gains	4,539			5,154		11,757			8,509
Total investment income, before federal income tax	41,313			39,157		84,065			75,382
Tax on investment income	10,941			10,107		22,516			19,312
Total investment income, after federal income tax	30,372			29,050		61,549			56,070

Schedule of Reconciliation of Segment Results to Income From Continuing Operations, Before Federal Income Tax

Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations underwriting gain, before federal income tax	$	10,121		6,768		$	4,131		18,843
E&S Insurance Operations underwriting (loss) gain, before federal income tax	(37		)	(2,285	)	938			(2,199	)
Investment income, before federal income tax	41,313			39,157		84,065			75,382
Total all segments	51,397			43,640		89,134			92,026
Interest expense	(5,425		)	(5,570	)	(10,986		)	(11,401	)
General corporate and other expenses	(6,451		)	(1,869	)	(13,543		)	(15,556	)
Income from continuing operations, before federal income tax	$	39,521		36,201		$	64,605		65,069

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Segment Information (Revenue From Continuing Operations by Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Total net premiums earned	$ 463,625	$ 426,252	$ 920,120	$ 847,192
Other income	1,911	3,536	11,735	6,320
Net investment income earned	36,774	34,003	72,308	66,873
Net realized investment gains	4,539	5,154	11,757	8,509
Total investment revenues	41,313	39,157	84,065	75,382
Total all segments	506,846	468,937	1,015,912	928,822
Total revenues from continuing operations	506,849	468,945	1,015,920	928,894
Commercial Automobile [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	83,472	76,706	165,688	151,053
Workers Compensation [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	68,992	64,855	138,405	130,939
General Liability [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	111,591	99,766	220,409	197,469
Commercial Property [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	61,226	54,937	121,412	108,352
Business Owners' Policies [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	21,279	18,625	42,148	37,165
Bonds Segment [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	4,734	4,775	9,490	9,539
Other Commercial [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	3,213	2,993	6,396	5,985
Total Standard Commercial Lines [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	354,507	322,657	703,948	640,502
Personal Automobile [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	38,022	38,526	76,248	76,919
Homeowners [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	33,576	31,702	66,874	62,837
Other Personal [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	2,946	3,320	6,240	6,828
Total Standard Personal Lines [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	74,544	73,548	149,362	146,584
Total Standard Insurance Operations [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	429,051	396,205	853,310	787,086
Total Standard insurance Operations revenues	430,959	399,733	865,037	793,334
Miscellaneous Income [Member]
Segment Reporting Information [Line Items]
Other income	1,908	3,528	11,727	6,248
Excess And Surplus Operations [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	34,574	30,047	66,810	60,106
Other Income [Member]
Segment Reporting Information [Line Items]
Other income	$ 3	$ 8	$ 8	$ 72

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Investments (Components Of Net Realized Gains, Excluding OTTI Charges) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
HTM fixed income securities Gains	$ 3,000	$ 3,000	$ 3,000	$ 3,000
HTM fixed income securities Losses	(3,000)	(12,000)	(14,000)	(49,000)
Other investments Gains	0	0	0	0
Other Investments Losses	0	0	0	(860,000)
Total other net realized investment gains	4,958,000	5,709,000	13,139,000	11,013,000
Total OTTI charges recognized in earnings	(419,000)	(555,000)	(1,382,000)	(2,504,000)
Total net realized gains	4,539,000	5,154,000	11,757,000	8,509,000
Proceeds From Sale Of Available For Sale Securities	68,700,000	42,200,000	131,600,000	49,100,000
Realized Gain On The Sale Of Private Equity [Member]
Schedule of Available-for-sale Securities [Line Items]
Total net realized gains		4,700,000		4,700,000
Fixed Income Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
AFS securities Gains	780,000	967,000	938,000	1,918,000
AFS securities Losses	(31,000)	(46,000)	(143,000)	(299,000)
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
AFS securities Gains	4,362,000	4,800,000	12,679,000	10,471,000
AFS securities Losses	(153,000)	(3,000)	(324,000)	(171,000)
Proceeds Due To Rebalancing Of Equity Securities Portfolio [Member]
Schedule of Available-for-sale Securities [Line Items]
Total net realized gains				$ 5,600,000

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Investments (Aggregated Income Statement Summarized Financial Information for Partnerhips in our Alternative Investment Portfolio) (Details) (USD $)	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Alternative Investments [Member]	Jun. 30, 2013 Alternative Investments [Member]	Jun. 30, 2014 Alternative Investments [Member]	Jun. 30, 2013 Alternative Investments [Member]	Mar. 31, 2014 Investments accounted for under the equity method [Member]	Mar. 31, 2013 Investments accounted for under the equity method [Member]	Mar. 31, 2014 Investments accounted for under the equity method [Member]	Mar. 31, 2013 Investments accounted for under the equity method [Member]
Schedule of Equity Method Investments [Line Items]
Net Investment Income									$ 22,800,000	$ 46,800,000	$ 85,700,000	$ 255,000,000
Realized gains									74,200,000	(22,100,000)	197,600,000	599,700,000
Net change in unrealized appreciation (depreciation)									207,600,000	378,800,000	842,400,000	(18,900,000)
Net income									304,600,000	403,500,000	1,125,700,000	835,800,000
Net investment income earned	$ 36,774,000	$ 34,003,000	$ 72,308,000	$ 66,873,000	$ 3,600,000	$ 3,900,000	$ 8,800,000	$ 7,500,000

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Segment Information (Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax (Details)) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Investment income, before federal income tax	$ 41,313	$ 39,157	$ 84,065	$ 75,382
Total all segments	51,397	43,640	89,134	92,026
Interest expense	(5,425)	(5,570)	(10,986)	(11,401)
General corporate and other expenses	(6,451)	(1,869)	(13,543)	(15,556)
Income from continuing operations, before federal income tax	39,521	36,201	64,605	65,069
Total Standard Insurance Operations [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Underwriting gain (loss), before federal income tax	10,121	6,768	4,131	18,843
Excess And Surplus Operations [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Underwriting gain (loss), before federal income tax	$ (37)	$ (2,285)	$ 938	$ (2,199)

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Reinsurance (List of Direct, Assumed, and Ceded Reinsurance Amounts) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Premiums written:
Direct	$ 572,314	$ 551,190	$ 1,130,205	$ 1,080,006
Assumed	5,837	4,378	13,687	12,860
Ceded premiums written	(98,328)	(93,391)	(187,319)	(180,565)
Net	479,823	462,177	956,573	912,301
Premiums earned:
Direct	544,913	504,081	1,081,613	998,147
Assumed	10,385	8,951	20,570	21,414
Ceded premiums earned	(91,673)	(86,780)	(182,063)	(172,369)
Net	463,625	426,252	920,120	847,192
Loss and loss expense incurred:
Direct	332,707	338,954	691,056	704,600
Assumed	7,377	6,420	14,856	15,494
Ceded loss and loss expense incurred	(42,289)	(65,780)	(87,571)	(170,651)
Net	$ 297,795	$ 279,594	$ 618,341	$ 549,443
Number of insurance subsidiaries			10
Percentage of NFIP claims ceded by federal government			100.00%

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Consolidated Statements of Cash Flow (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Operating Activities
Net income	$ 47,315	$ 48,430
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	18,912	23,103
Sale of renewal rights	(8,000)	0
Loss on disposal of discontinued operations	0	997
Stock-based compensation expense	6,102	6,189
Undistributed (gains) losses of equity method investments	(138)	419
Net realized gains	(11,757)	(8,509)
Retirement income plan curtailment expense	0	16
Changes in assets and liabilities:
Increase in reserve for loss and loss expenses, net of reinsurance recoverables	93,675	69,790
Increase in unearned premiums, net of prepaid reinsurance and advance premiums	36,997	65,225
Decrease in net federal income taxes	12,634	3,171
Increase in premiums receivable	(64,747)	(84,135)
Increase in deferred policy acquisition costs	(9,106)	(9,555)
Increase in interest and dividends due or accrued	(361)	(1,066)
Decrease in accrued salaries and benefits	(26,557)	(6,173)
Decrease in accrued insurance expenses	(16,872)	(5,478)
Other-net	(5,425)	(4,526)
Net adjustments	25,357	49,468
Net cash provided by operating activities	72,672	97,898
Investing Activities
Purchase of fixed income securities, available-for-sale	(339,362)	(530,402)
Purchase of equity securities, available-for-sale	(111,886)	(42,546)
Purchase of other investments	(6,039)	(4,393)
Purchase of short-term investments	(764,692)	(1,116,873)
Sale of subsidiary	0	1,225
Sale of fixed income securities, available-for-sale	19,557	6,851
Sale of short-term investments	772,455	1,144,853
Redemption and maturities of fixed income securities, held-to-maturity	28,595	48,186
Redemption and maturities of fixed income securities, available-for-sale	222,568	286,905
Sale of equity securities, available-for-sale	111,996	42,206
Distributions from other investments	7,726	6,077
Purchase of property and equipment	(6,628)	(6,761)
Sale of renewal rights	8,000	0
Net cash used in investing activities	(57,710)	(164,672)
Financing Activities
Dividends to stockholders	(13,914)	(13,668)
Acquisition of treasury stock	(2,786)	(3,285)
Net proceeds from stock purchase and compensation plans	3,091	3,769
Proceeds from issuance of notes payable, net of debt issuance costs	0	178,435
Repayment of notes payable	0	(100,000)
Excess tax benefits from share-based payment arrangements	955	1,467
Repayments of capital lease obligations	(954)	0
Net cash (used in) provided by financing activities	(13,608)	66,718
Net increase (decrease) in cash	1,354	(56)
Cash, beginning of year	193	210
Cash, end of period	$ 1,547	$ 154

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Fair Value Measurements (Carrying Value and Estimated Fair Value of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Held-to-maturity Securities	$ 364,938	$ 392,879
Available-for-sale Securities	3,890,200	3,715,536
Equity securities, AFS	211,348	192,771
Short-term investments	166,488	174,251
Notes payable	392,290	392,414
Carrying Amount [Member]
Held-to-maturity Securities	364,938	392,879
Available-for-sale Securities	3,890,200	3,715,536
Equity securities, AFS	211,348	192,771
Short-term investments	166,488	174,251
Notes payable	392,290	392,414
Carrying Amount [Member] | Two Point Ninety Percent Borrowing From Federal Home Loan Bank [Member]
Notes payable	13,000	13,000
Carrying Amount [Member] | One Point Twenty Five Percent Borrowing From Federal Home Loan Bank [Member]
Notes payable	45,000	45,000
Carrying Amount [Member] | Seven Point Twenty Five Percent Senior Notes [Member]
Notes payable	49,895	49,916
Carrying Amount [Member] | Six Point Seventy Percent Senior Notes [Member]
Notes payable	99,395	99,498
Carrying Amount [Member] | Five Point Eight Hundred Seventy Five Senior Notes [Member]
Notes payable	185,000	185,000
Fair Value [Member]
Held-to-maturity Securities	385,502	416,981
Available-for-sale Securities	3,890,200	3,715,536
Equity securities, AFS	211,348	192,771
Short-term investments	166,488	174,251
Notes payable	399,670	354,010
Fair Value [Member] | Two Point Ninety Percent Borrowing From Federal Home Loan Bank [Member]
Notes payable	13,165	13,319
Fair Value [Member] | One Point Twenty Five Percent Borrowing From Federal Home Loan Bank [Member]
Notes payable	45,338	45,259
Fair Value [Member] | Seven Point Twenty Five Percent Senior Notes [Member]
Notes payable	55,527	50,887
Fair Value [Member] | Six Point Seventy Percent Senior Notes [Member]
Notes payable	110,926	98,247
Fair Value [Member] | Five Point Eight Hundred Seventy Five Senior Notes [Member]
Notes payable	$ 174,714	$ 146,298

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Statements of Cash Flow (Cash Flow Supplemental Disclosures) (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Interest	$ 11,113,000	$ 10,295,000
Federal income tax	3,699,000	11,000,000
Tax-free exchange of fixed maturity security, AFS	9,180,000	13,615,000
Tax-free exchange of fixed maturity security, HTM	15,000	10,710,000
Stock Split Related To Equity Securities, AFS	334,000	0
Assets acquired under capital lease arrangements	2,124,000	1,898,000
National Flood Insurance Program [Member]
Restricted Cash	$ 8,500,000

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Organization (Narrative) (Details)	6 Months Ended
	Jun. 30, 2014
Number of Operating Segments	3

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Comprehensive Income (Components of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			$ 24,851
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	305	3	305	8
OCI before reclassifications, Defined Benefit Pension and Post Retirement Plans	0	0	0	28,600
Amounts reclassified from AOCI, HTM Related	(144)	(399)	(440)	(865)
Amounts reclassified from AOCI, All Other	(3,255)	(3,438)	(7,954)	(7,322)
Other comprehensive income (loss)	26,483	(62,643)	43,161	(34,762)
Other Comprehensive Income, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	248	513	495	30,326
Ending Balance, June 30, 2014	68,012		68,012
Available-for-sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			51,635
OCI before reclassifications			50,755
Other comprehensive income (loss)			42,801
Ending Balance, June 30, 2014	94,436		94,436
Investments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			51,503
OCI before reclassifications			50,755
Amounts reclassified from AOCI			(8,089)
Other comprehensive income (loss)			42,666
Ending Balance, June 30, 2014	94,169		94,169
Accumulated Other-than-Temporary Impairment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			(1,599)
OCI before reclassifications			0
Other comprehensive income (loss)			305
Ending Balance, June 30, 2014	(1,294)		(1,294)
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Held To Maturity Fixed Income Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			1,467
OCI before reclassifications			0
Other comprehensive income (loss)			(440)
Ending Balance, June 30, 2014	1,027		1,027
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			(26,652)
Other Comprehensive Income, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax			495
Ending Balance, June 30, 2014	(26,157)		(26,157)
Accumulated other comprehensive income [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			24,851
OCI before reclassifications			50,755
Amounts reclassified from AOCI			(7,594)
Other comprehensive income (loss)			43,161	(34,762)
Ending Balance, June 30, 2014	$ 68,012		$ 68,012

XML

Fair Value Measurements (Quantitative Disclosures of Fair Value Assets) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Available-for-sale Securities, Debt Securities	$ 3,890,200		$ 3,715,536
Equity securities, AFS	211,348		192,771
Total AFS securities	4,101,548		3,908,307
Short-term investments	166,488		174,251
Fair Value [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	3,890,200		3,715,536
Equity securities, AFS	211,348		192,771
Total AFS securities	4,101,548		3,908,307
Short-term investments	166,488		174,251
Total assets measured at fair value	4,268,036		4,082,558
Fair Value [Member] | U.S. Government and Government Agencies [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	158,809		173,375
Fair Value [Member] | Foreign Government [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	28,028		30,615
Fair Value [Member] | Obligations of States and Political Subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	1,107,054		951,624
Fair Value [Member] | Corporate Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	1,782,593		1,734,883
Fair Value [Member] | Asset-Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	132,169		140,896
Fair Value [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	172,471		171,284
Fair Value [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	509,076		512,859
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	52,552	[1]	52,153	[1]
Equity securities, AFS	208,448	[1]	189,871	[1]
Total AFS securities	261,000	[1]	242,024	[1]
Short-term investments	166,488	[1]	174,251	[1]
Total assets measured at fair value	427,488	[1]	416,275	[1]
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | U.S. Government and Government Agencies [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	52,552	[1]	52,153	[1]
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Foreign Government [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0	[1]	0	[1]
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Obligations of States and Political Subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0	[1]	0	[1]
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Corporate Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0	[1]	0	[1]
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Asset-Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0	[1]	0	[1]
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0	[1]	0	[1]
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0	[1]	0	[1]
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	3,837,648	[1]	3,663,383	[1]
Equity securities, AFS	0	[1]	0	[1]
Total AFS securities	3,837,648	[1]	3,663,383	[1]
Short-term investments	0	[1]	0	[1]
Total assets measured at fair value	3,837,648	[1]	3,663,383	[1]
Significant Other Observable Inputs (Level 2) [Member] | U.S. Government and Government Agencies [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	106,257	[1]	121,222	[1]
Significant Other Observable Inputs (Level 2) [Member] | Foreign Government [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	28,028	[1]	30,615	[1]
Significant Other Observable Inputs (Level 2) [Member] | Obligations of States and Political Subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	1,107,054	[1]	951,624	[1]
Significant Other Observable Inputs (Level 2) [Member] | Corporate Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	1,782,593	[1]	1,734,883	[1]
Significant Other Observable Inputs (Level 2) [Member] | Asset-Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	132,169	[1]	140,896	[1]
Significant Other Observable Inputs (Level 2) [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	172,471	[1]	171,284	[1]
Significant Other Observable Inputs (Level 2) [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	509,076	[1]	512,859	[1]
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0		0
Equity securities, AFS	2,900		2,900
Total AFS securities	2,900		2,900
Short-term investments	0		0
Total assets measured at fair value	2,900		2,900
Significant Unobservable Inputs (Level 3) [Member] | U.S. Government and Government Agencies [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Foreign Government [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Obligations of States and Political Subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Corporate Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Asset-Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	$ 0		$ 0

[1] 1 There were no transfers of securities between Level 1 and Level 2.

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Investments (Held-To-Maturity Securities Disclosure) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 363,358	$ 390,622
Net Unrealized Gains (Losses)	1,580	2,257
Carrying Value	364,938	392,879
Unrecognized Holding Gains	20,569	24,102
Unrecoginzed Holding Losses	(5)	0
Fixed income securities, held-to-maturity, fair value	385,502	416,981
Held To Maturity securities average duration	1 year 10 months 8 days
Foreign Government [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	5,292	5,292
Net Unrealized Gains (Losses)	90	131
Carrying Value	5,382	5,423
Unrecognized Holding Gains	137	168
Unrecoginzed Holding Losses	0	0
Fixed income securities, held-to-maturity, fair value	5,519	5,591
Obligations of States and Political Subdivisions [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	327,898	348,109
Net Unrealized Gains (Losses)	2,942	4,013
Carrying Value	330,840	352,122
Unrecognized Holding Gains	15,884	17,634
Unrecoginzed Holding Losses	0	0
Fixed income securities, held-to-maturity, fair value	346,724	369,756
Corporate Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	21,893	28,174
Net Unrealized Gains (Losses)	(347)	(346)
Carrying Value	21,546	27,828
Unrecognized Holding Gains	2,972	2,446
Unrecoginzed Holding Losses	(5)	0
Fixed income securities, held-to-maturity, fair value	24,513	30,274
Asset-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	3,260	3,413
Net Unrealized Gains (Losses)	(583)	(655)
Carrying Value	2,677	2,758
Unrecognized Holding Gains	608	657
Unrecoginzed Holding Losses	0	0
Fixed income securities, held-to-maturity, fair value	3,285	3,415
Commercial Mortgage Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	5,015	5,634
Net Unrealized Gains (Losses)	(522)	(886)
Carrying Value	4,493	4,748
Unrecognized Holding Gains	968	3,197
Unrecoginzed Holding Losses	0	0
Fixed income securities, held-to-maturity, fair value	$ 5,461	$ 7,945

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Investments (Available-For-Sale Securities Disclosure) (Details) (USD $)	Jun. 30, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	$ 3,958,250,000		$ 3,831,327,000
Unrealized Gains	156,602,000		128,951,000
Unrealized Losses	(13,304,000)		(51,971,000)
Total AFS securities	4,101,548,000		3,908,307,000
AFS Fixed Income Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	3,792,036,000		3,675,977,000
Unrealized Gains	111,465,000		91,434,000
Unrealized Losses	(13,301,000)		(51,875,000)
Total AFS securities	3,890,200,000		3,715,536,000
AFS Fixed Income Securities [Member] | U.S. Government and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	149,537,000		163,218,000
Unrealized Gains	9,474,000		10,661,000
Unrealized Losses	(202,000)		(504,000)
Total AFS securities	158,809,000		173,375,000
AFS Fixed Income Securities [Member] | Foreign Government [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	27,046,000		29,781,000
Unrealized Gains	983,000		906,000
Unrealized Losses	(1,000)		(72,000)
Total AFS securities	28,028,000		30,615,000
AFS Fixed Income Securities [Member] | Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	1,080,039,000		946,455,000
Unrealized Gains	30,696,000		25,194,000
Unrealized Losses	(3,681,000)		(20,025,000)
Total AFS securities	1,107,054,000		951,624,000
AFS Fixed Income Securities [Member] | Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	1,730,192,000		1,707,928,000
Unrealized Gains	56,587,000		44,004,000
Unrealized Losses	(4,186,000)		(17,049,000)
Total AFS securities	1,782,593,000		1,734,883,000
AFS Fixed Income Securities [Member] | Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	131,434,000		140,430,000
Unrealized Gains	945,000		934,000
Unrealized Losses	(210,000)		(468,000)
Total AFS securities	132,169,000		140,896,000
AFS Fixed Income Securities [Member] | Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	170,298,000	[1]	172,288,000	[1]
Unrealized Gains	3,246,000	[1]	2,462,000	[1]
Unrealized Losses	(1,073,000)	[1]	(3,466,000)	[1]
Total AFS securities	172,471,000	[1]	171,284,000	[1]
Government guaranteed agency securities fair value	23,700,000		30,000,000
AFS Fixed Income Securities [Member] | Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	503,490,000	[2]	515,877,000	[2]
Unrealized Gains	9,534,000	[2]	7,273,000	[2]
Unrealized Losses	(3,948,000)	[2]	(10,291,000)	[2]
Total AFS securities	509,076,000	[2]	512,859,000	[2]
Government guaranteed agency securities fair value	41,800,000		55,200,000
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	166,214,000		155,350,000
Unrealized Gains	45,137,000		37,517,000
Unrealized Losses	(3,000)		(96,000)
Total AFS securities	$ 211,348,000		$ 192,771,000

[1] CMBS includes government guaranteed agency securities with a fair value of $23.7 million at June 30, 2014 and $30.0 million at December 31, 2013.

[2] RMBS includes government guaranteed agency securities with a fair value of $41.8 million at June 30, 2014 and $55.2 million at December 31, 2013.

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Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Dividend reinvestment plan, shares			29,949	33,514
Stock purchase and compensation plans, shares			547,190	682,661
Dividends to stockholders, per share	$ 0.13	$ 0.13	$ 0.26	$ 0.26
Acquisition of treasury stock, shares			124,819	151,113
Preferred stock, par value per share	$ 0	$ 0	$ 0	$ 0
Preferred stock, shares authorized	5,000,000	5,000,000	5,000,000	5,000,000
Preferred stock, shares issued	0	0	0	0
Series A Preferred Stock [Member]
Preferred stock, par value per share	$ 0	$ 0	$ 0	$ 0
Preferred stock, shares authorized	300,000	300,000	300,000	300,000

XML

Investments (Fair Value and Gross Pre-Tax Net Unrealized Unrecognized Loss of Securities By Length of Time) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
AFS Fair Value, Less than 12 months	$ 132,555		$ 1,411,803
AFS Unrealized Losses, Less than 12 month	(421)	[1]	(49,106)	[1]
AFS Fair Value, 12 months or longer	674,220		40,731
AFS Unrealized Losses, 12 months or longer	(12,883)	[1]	(2,865)	[1]
HTM Fair Value, Less than 12 months	1,482		65
HTM Unrealized Losses, Less than 12 months	3	[1]	(5)	[1]
HTM Unrecognized Gains, Less than 12 months	(5)	[2]	5	[2]
HTM Fair Value, 12 months or longer	2,496		2,931
HTM Unrealized Losses, 12 months or longer	(583)	[1]	(675)	[1]
HTM Unrecognized Gains, 12 months or longer	564	[2]	635	[2]
Total AFS and HTM Fair Value, Less than 12 months	134,037		1,411,868
Total AFS and HTM Unrealized Losses, Less than 12 months	(418)	[1]	(49,111)	[1]
Total AFS and HTM Securities Unrecognized Gains (Losses), Less Than 12 Months	(5)	[2]	5	[2]
Total AFS and HTM Fair Value, 12 months or longer	676,716		43,662
Total AFS and HTM Unrealized Losses, 12 months or longer	(13,466)	[1]	(3,540)	[1]
Total AFS and HTM Securities Unrecognized Gains (Losses), 12 months or longer	564	[2]	635	[2]
Obligations of States and Political Subdivisions [Member]
HTM Fair Value, Less than 12 months			65
HTM Unrealized Losses, Less than 12 months			(5)	[1]
HTM Unrecognized Gains, Less than 12 months			5	[2]
HTM Fair Value, 12 months or longer			441
HTM Unrealized Losses, 12 months or longer			(20)	[1]
HTM Unrecognized Gains, 12 months or longer			14	[2]
Corporate Securities [Member]
HTM Fair Value, Less than 12 months	1,482
HTM Unrealized Losses, Less than 12 months	3	[1]
HTM Unrecognized Gains, Less than 12 months	(5)	[2]
HTM Fair Value, 12 months or longer	0
HTM Unrealized Losses, 12 months or longer	0	[1]
HTM Unrecognized Gains, 12 months or longer	0	[2]
Asset-Backed Securities [Member]
HTM Fair Value, Less than 12 months	0		0
HTM Unrealized Losses, Less than 12 months	0	[1]	0	[1]
HTM Unrecognized Gains, Less than 12 months	0	[2]	0	[2]
HTM Fair Value, 12 months or longer	2,496		2,490
HTM Unrealized Losses, 12 months or longer	(583)	[1]	(655)	[1]
HTM Unrecognized Gains, 12 months or longer	564	[2]	621	[2]
AFS Fixed Income Securities [Member]
AFS Fair Value, Less than 12 months	132,385		1,410,679
AFS Unrealized Losses, Less than 12 month	(418)	[1]	(49,010)	[1]
AFS Fair Value, 12 months or longer	674,220		40,731
AFS Unrealized Losses, 12 months or longer	(12,883)	[1]	(2,865)	[1]
AFS Fixed Income Securities [Member] | Obligations of States and Political Subdivisions [Member]
AFS Fair Value, Less than 12 months	54,331		442,531
AFS Unrealized Losses, Less than 12 month	(187)	[1]	(19,120)	[1]
AFS Fair Value, 12 months or longer	246,340		13,530
AFS Unrealized Losses, 12 months or longer	(3,494)	[1]	(905)	[1]
AFS Fixed Income Securities [Member] | U.S. Government and Government Agencies [Member]
AFS Fair Value, Less than 12 months	0		16,955
AFS Unrealized Losses, Less than 12 month	0	[1]	(500)	[1]
AFS Fair Value, 12 months or longer	13,284		507
AFS Unrealized Losses, 12 months or longer	(202)	[1]	(4)	[1]
AFS Fixed Income Securities [Member] | Foreign Government [Member]
AFS Fair Value, Less than 12 months	0		2,029
AFS Unrealized Losses, Less than 12 month	0	[1]	(30)	[1]
AFS Fair Value, 12 months or longer	2,997		2,955
AFS Unrealized Losses, 12 months or longer	(1)	[1]	(42)	[1]
AFS Fixed Income Securities [Member] | Corporate Securities [Member]
AFS Fair Value, Less than 12 months	55,362		511,100
AFS Unrealized Losses, Less than 12 month	(186)	[1]	(15,911)	[1]
AFS Fair Value, 12 months or longer	170,034		14,771
AFS Unrealized Losses, 12 months or longer	(4,000)	[1]	(1,138)	[1]
AFS Fixed Income Securities [Member] | Asset-Backed Securities [Member]
AFS Fair Value, Less than 12 months	14,992		68,725
AFS Unrealized Losses, Less than 12 month	(28)	[1]	(468)	[1]
AFS Fair Value, 12 months or longer	14,215		0
AFS Unrealized Losses, 12 months or longer	(182)	[1]	0	[1]
AFS Fixed Income Securities [Member] | Commercial Mortgage Backed Securities [Member]
AFS Fair Value, Less than 12 months	4,939		100,396
AFS Unrealized Losses, Less than 12 month	(4)	[1]	(2,950)	[1]
AFS Fair Value, 12 months or longer	58,286		6,298
AFS Unrealized Losses, 12 months or longer	(1,069)	[1]	(516)	[1]
AFS Fixed Income Securities [Member] | Residential Mortgage Backed Securities [Member]
AFS Fair Value, Less than 12 months	2,761		268,943
AFS Unrealized Losses, Less than 12 month	(13)	[1]	(10,031)	[1]
AFS Fair Value, 12 months or longer	169,064		2,670
AFS Unrealized Losses, 12 months or longer	(3,935)	[1]	(260)	[1]
Equity Securities [Member]
AFS Fair Value, Less than 12 months	170		1,124
AFS Unrealized Losses, Less than 12 month	(3)	[1]	(96)	[1]
AFS Fair Value, 12 months or longer	0		0
AFS Unrealized Losses, 12 months or longer	$ 0	[1]	$ 0	[1]

[1] Gross unrealized losses include non-OTTI unrealized amounts and OTTI losses recognized in AOCI. In addition, this column includes remaining unrealized gain or loss amounts on securities that were transferred to an HTM designation in the first quarter of 2009 for those securities that are in a net unrealized/unrecognized loss position.

[2] Unrecognized gains represent fair value fluctuations from the later of: (i) the date a security is designated as HTM; or (ii) the date that an OTTI charge is recognized on an HTM security.

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Investments (OTTI by Asset Type) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
OTTI Losses Gross	$ 419	$ 508	$ 1,382	$ 2,427
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income	0	(47)	0	(77)
OTTI Losses Recognized in Earnings	419	555	1,382	2,504
Other Investments [Member]
OTTI Losses Gross		123		1,847
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income		0		0
OTTI Losses Recognized in Earnings		123		1,847
Held To Maturity Fixed Maturity Securities [Member]
OTTI Losses Gross		(44)		(44)
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income		(47)		(47)
OTTI Losses Recognized in Earnings		3		3
Held To Maturity Fixed Maturity Securities [Member] | Asset-Backed Securities [Member]
OTTI Losses Gross		(44)		(44)
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income		(47)		(47)
OTTI Losses Recognized in Earnings		3		3
AFS Fixed Income Securities [Member]
OTTI Losses Gross				(22)
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income				(30)
OTTI Losses Recognized in Earnings				8
AFS Fixed Income Securities [Member] | Residential Mortgage Backed Securities [Member]
OTTI Losses Gross				(22)
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income				(30)
OTTI Losses Recognized in Earnings				8
Total AFS Securities [Member]
OTTI Losses Gross	419	429	1,382	624
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income	0	0	0	(30)
OTTI Losses Recognized in Earnings	419	429	1,382	654
Total AFS Securities [Member] | Equity Securities [Member]
OTTI Losses Gross	419	429	1,382	646
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income	0	0	0	0
OTTI Losses Recognized in Earnings	$ 419	$ 429	$ 1,382	$ 646

XML

Retirement Plans (Components of Net Periodic Benefit Cost and Other Amount Recognized in Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items]
Curtailment expense			$ 0	$ 16
Retirement Income Plan [Member]
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items]
Service cost	1,626	1,857	3,253	4,306
Interest cost	3,253	3,051	6,507	6,354
Expected return on plan assets	(3,918)	(3,985)	(7,837)	(7,833)
Amortization of unrecognized prior service cost			0	10
Amortization of unrecognized net actuarial loss	368	772	735	2,594
Curtailment expense			0	16
Total net periodic cost	1,329	1,695	2,658	5,447
Retirement Life Plan [Member]
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items]
Service cost	0	0	0	0
Interest cost	73	69	146	139
Expected return on plan assets	0	0	0	0
Amortization of unrecognized prior service cost			0	0
Amortization of unrecognized net actuarial loss	13	17	26	35
Curtailment expense			0	0
Total net periodic cost	$ 86	$ 86	$ 172	$ 174

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Fixed income securities, held-to-maturity – at carrying value (fair value: $385,502 – 2014; $416,981 – 2013)	$ 364,938	$ 392,879
Fixed income securities, available-for-sale – at fair value (amortized cost: $3,792,036– 2014; $3,675,977 – 2013)	3,890,200	3,715,536
Equity securities, available-for-sale – at fair value (cost: $166,214 – 2014; $155,350 – 2013)	211,348	192,771
Short-term investments (at cost which approximates fair value)	166,488	174,251
Other investments	106,125	107,875
Total investments	4,739,099	4,583,312
Cash	1,547	193
Interest and dividends due or accrued	37,747	37,382
Premiums receivable, net of allowance for uncollectible accounts of: $3,733 – 2014; $4,442 – 2013	589,617	524,870
Reinsurance recoverables, net	558,758	550,897
Prepaid reinsurance premiums	148,256	143,000
Current federal income tax	0	512
Deferred federal income tax	97,401	122,613
Property and equipment – at cost, net of accumulated depreciation and amortization of: $184,748 – 2014; $179,192 – 2013	53,836	50,834
Deferred policy acquisition costs	182,087	172,981
Goodwill	7,849	7,849
Other assets	74,388	75,727
Total assets	6,490,585	6,270,170
Liabilities And Stockholders' Equity
Reserve for loss and loss expenses	3,451,306	3,349,770
Unearned premiums	1,100,864	1,059,155
Notes payable	392,290	392,414
Current federal income tax	10,150	0
Accrued salaries and benefits	84,870	111,427
Other liabilities	213,030	203,476
Total liabilities	5,252,510	5,116,242
Stockholders' Equity:
Preferred stock of $0 par value per share: Authorized shares: 5,000,000; no shares issued or outstanding	0	0
Common stock of $2 par value per share Authorized shares: 360,000,000 Issued: 99,697,374 – 2014; 99,120,235 – 2013	199,395	198,240
Additional paid-in capital	298,352	288,182
Retained earnings	1,234,462	1,202,015
Accumulated other comprehensive income	68,012	24,851
Treasury stock - at cost (shares: 43,323,441 – 2014; 43,198,622 – 2013)	(562,146)	(559,360)
Total stockholders' equity	1,238,075	1,153,928
Commitments and contingencies
Total liabilities and stockholders' equity	$ 6,490,585	$ 6,270,170

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Fair Value Measurements (Changes in Fair Value of Securities Using Level 3 Inputs) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended								12 Months Ended
	Dec. 31, 2013		Dec. 31, 2013 Equity Securities [Member]		Dec. 31, 2013 Receivable For Proceeds From Divestiture Of Business [Member]		Jun. 30, 2014 Fixed Income Securities [Member]	Dec. 31, 2013 Fixed Income Securities [Member]	Dec. 31, 2013 Fixed Income Securities [Member] U.S. Government and Government Agencies [Member]		Dec. 31, 2013 Fixed Income Securities [Member] Corporate Securities [Member]		Dec. 31, 2013 Fixed Income Securities [Member] Asset-Backed Securities [Member]		Dec. 31, 2013 Fixed Income Securities [Member] Commercial Mortgage Backed Securities [Member]		Dec. 31, 2013 Fair Value, Inputs, Level 3 [Member] AFS Fixed Income Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, Beginning balance	$ 42,277		$ 3,607		$ 2,705		$ 0	$ 0	$ 19,789		$ 2,946		$ 6,068		$ 7,162
Total net (losses) gains for the period included in OCI	4,089	[1]	3,935	[1]	0	[1]			(537)	[1]	(7)	[1]	(74)	[1]	772	[1]
Total net (losses) gains for the period included in net income	(1,195)	[2],[3]	0	[2],[3]	(1,480)	[2],[3]			(76)	[2],[3]	0	[2],[3]	0	[2],[3]	361	[2],[3]
Purchases	0		0		0				0		0		0		0
Sales	0		0		0				0		0		0		0
Issuances	0		0		0				0		0		0		0
Settlements	(4,660)		0		(225)				(1,847)		(168)		0		(2,420)
Transfers into Level 3	0		0		0				0		0		0		0
Transfers out of Level 3	(37,611)		(4,642)		(1,000)				(17,329)		(2,771)		(5,994)		(5,875)		(32,000)
Fair value, Ending balance	$ 2,900		$ 2,900		$ 0		$ 0	$ 0	$ 0		$ 0		$ 0		$ 0

[1] Amounts are reported in “Unrealized holding (losses) gains arising during period” on the Consolidated Statements of Comprehensive Income in our 2013 Annual Report.

[2] For the receivable related to the sale of Selective HR, amounts in "Loss on disposal of discontinued operations, net of tax" relate to an impairment charge and amounts in "Other income" relate to interest accretion on the Consolidated Statements of Income in our 2013 Annual Report.

[3] Amounts are reported in “Net realized gains” for realized gains and losses and “Net investment income earned” for amortization of securities on the Consolidated Statements of Income in our 2013 Annual Report.

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Consolidation Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net income	$ 29,341	$ 27,122	$ 47,315	$ 48,430
Unrealized holding gains (losses) arising during period	29,329	(59,353)	50,755	(56,959)
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income	0	31	0	50
Amount reclassified into net income: Held-to-maturity Securities	(144)	(399)	(440)	(865)
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	305	3	305	8
Amounts reclassified into net income: realized gains on available for sale securities	(3,255)	(3,438)	(7,954)	(7,322)
Total unrealized gains (losses) on investment securities	26,235	(63,156)	42,666	(65,088)
Net actuarial gain	0	0	0	28,600
Amount reclassified into Net Income: Net actuarial loss	248	513	495	1,709
Amount reclassified into Net Income: Prior service cost	0	0	0	6
Amount reclassified into Net Income: Curtailment expense	0	0	0	11
Total defined benefit pension and post-retirement plans	248	513	495	30,326
Other comprehensive income (loss)	26,483	(62,643)	43,161	(34,762)
Comprehensive income (loss)	$ 55,824	$ (35,521)	$ 90,476	$ 13,668

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Investments (AFS Fixed Income securities by Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investments [Abstract]
Due in one year or less fair value	$ 401,681
Due after one year through five years fair value	2,007,460
Due after five years through 10 years fair value	1,404,203
Due after 10 years fair value	76,856
Total AFS fixed income securities	$ 3,890,200	$ 3,715,536

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Investments (Tables)

6 Months Ended

Jun. 30, 2014

Investments [Line Items]

Schedule of Held-to-maturity Securities

June 30, 2014
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses		Fair Value
Foreign government	$	5,292	90		5,382	137	—		5,519
Obligations of state and political subdivisions	327,898		2,942		330,840	15,884	—		346,724
Corporate securities	21,893		(347	)	21,546	2,972	(5	)	24,513
Asset-backed securities (“ABS”)	3,260		(583	)	2,677	608	—		3,285
Commercial mortgage-backed securities (“CMBS”)	5,015		(522	)	4,493	968	—		5,461
Total HTM fixed income securities	$	363,358	1,580		364,938	20,569	(5	)	385,502

December 31, 2013
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses	Fair Value
Foreign government	$	5,292	131		5,423	168	—	5,591
Obligations of state and political subdivisions	348,109		4,013		352,122	17,634	—	369,756
Corporate securities	28,174		(346	)	27,828	2,446	—	30,274
ABS	3,413		(655	)	2,758	657	—	3,415
CMBS	5,634		(886	)	4,748	3,197	—	7,945
Total HTM fixed income securities	$	390,622	2,257		392,879	24,102	—	416,981

Schedule Of Available For Sale Securities

June 30, 2014
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	149,537	9,474	(202	)	158,809
Foreign government	27,046		983	(1	)	28,028
Obligations of states and political subdivisions	1,080,039		30,696	(3,681	)	1,107,054
Corporate securities	1,730,192		56,587	(4,186	)	1,782,593
ABS	131,434		945	(210	)	132,169
CMBS1	170,298		3,246	(1,073	)	172,471
Residential mortgage-backed securities (“RMBS”)2	503,490		9,534	(3,948	)	509,076
AFS fixed income securities	3,792,036		111,465	(13,301	)	3,890,200
AFS equity securities	166,214		45,137	(3	)	211,348
Total AFS securities	$	3,958,250	156,602	(13,304	)	4,101,548

December 31, 2013
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	163,218	10,661	(504	)	173,375
Foreign government	29,781		906	(72	)	30,615
Obligations of states and political subdivisions	946,455		25,194	(20,025	)	951,624
Corporate securities	1,707,928		44,004	(17,049	)	1,734,883
ABS	140,430		934	(468	)	140,896
CMBS1	172,288		2,462	(3,466	)	171,284
RMBS2	515,877		7,273	(10,291	)	512,859
AFS fixed income securities	3,675,977		91,434	(51,875	)	3,715,536
AFS equity securities	155,350		37,517	(96	)	192,771
Total AFS securities	$	3,831,327	128,951	(51,971	)	3,908,307

¹ CMBS includes government guaranteed agency securities with a fair value of $23.7 million at June 30, 2014 and $30.0 million at December 31, 2013.

² RMBS includes government guaranteed agency securities with a fair value of $41.8 million at June 30, 2014 and $55.2 million at December 31, 2013.

Schedule of Fair Value and Gross Pre-Tax Net Unrealized/Unrecognized Loss of Securities by Length of Time

June 30, 2014	Less than 12 months				12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Fair Value	Unrealized Losses1
AFS securities
U.S. government and government agencies	$	—	—		13,284	(202	)
Foreign government	—		—		2,997	(1	)
Obligations of states and political subdivisions	54,331		(187	)	246,340	(3,494	)
Corporate securities	55,362		(186	)	170,034	(4,000	)
ABS	14,992		(28	)	14,215	(182	)
CMBS	4,939		(4	)	58,286	(1,069	)
RMBS	2,761		(13	)	169,064	(3,935	)
Total fixed income securities	132,385		(418	)	674,220	(12,883	)
Equity securities	170		(3	)	—	—
Subtotal	$	132,555	(421	)	674,220	(12,883	)

	Less than 12 months						12 months or longer
($ in thousands)	Fair Value		Unrealized Gains (Losses)1		Unrecognized Losses2		Fair Value	Unrealized Losses1		Unrecognized Gains2
HTM securities
Corporate securities	1,482		3		(5	)	—	—		—
ABS	—		—		—		2,496	(583	)	564
Subtotal	$	1,482	3		(5	)	2,496	(583	)	564
Total AFS and HTM	$	134,037	(418	)	(5	)	676,716	(13,466	)	564

December 31, 2013	Less than 12 months				12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Fair Value	Unrealized Losses1
AFS securities
U.S. government and government agencies	$	16,955	(500	)	507	(4	)
Foreign government	2,029		(30	)	2,955	(42	)
Obligations of states and political subdivisions	442,531		(19,120	)	13,530	(905	)
Corporate securities	511,100		(15,911	)	14,771	(1,138	)
ABS	68,725		(468	)	—	—
CMBS	100,396		(2,950	)	6,298	(516	)
RMBS	268,943		(10,031	)	2,670	(260	)
Total fixed income securities	1,410,679		(49,010	)	40,731	(2,865	)
Equity securities	1,124		(96	)	—	—
Subtotal	$	1,411,803	(49,106	)	40,731	(2,865	)

	Less than 12 months					12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Unrecognized Gains2	Fair Value	Unrealized Losses1		Unrecognized Gains2
HTM securities
Obligations of states and political subdivisions	$	65	(5	)	5	441	(20	)	14
ABS	—		—		—	2,490	(655	)	621
Subtotal	65		(5	)	5	2,931	(675	)	635
Total AFS and HTM	$	1,411,868	(49,111	)	5	43,662	(3,540	)	635

 ¹ Gross unrealized losses include non-OTTI unrealized amounts and OTTI losses recognized in AOCI.  In addition, this column includes remaining unrealized gain or loss amounts on securities that were transferred to an HTM designation in the first quarter of 2009 for those securities that are in a net unrealized/unrecognized loss position.

² Unrecognized gains represent fair value fluctuations from the later of:  (i) the date a security is designated as HTM; or (ii) the date that an OTTI charge is recognized on an HTM security.

Schedule Of The Number Of Securities In An Unrealized Unrecognized Loss Position

($ in thousands)
June 30, 2014				December 31, 2013
Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss		Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss
288	80% - 99%	$	13,325	556	80% - 99%	$	51,835
—	60% - 79%	—		1	60% - 79%	176
—	40% - 59%	—		—	40% - 59%	—
—	20% - 39%	—		—	20% - 39%	—
—	0% - 19%	—		—	0% - 19%	—
		$	13,325			$	52,011

Schedule Of Other Investment Portfolio By Strategy And Remaining Commitment Amount Associated With Each Strategy

Other Investments	Carrying Value			June 30, 2014
($ in thousands)	June 30, 2014		December 31, 2013	Remaining Commitment
Alternative Investments
Secondary private equity	$	23,575	25,618	7,230
Private equity	21,388		20,192	9,917
Energy/power generation	17,802		17,361	6,984
Mezzanine financing	13,243		12,738	14,470
Real estate	11,039		11,698	10,131
Distressed debt	9,947		11,579	2,971
Venture capital	7,089		7,025	350
Total alternative investments	104,083		106,211	52,053
Other securities	2,042		1,664	597
Total other investments	$	106,125	107,875	52,650

Schedule Of Aggregated Summarized Income Statement Financial Information For Partnerhips In Our Alternative Investment Portfolio

Income Statement Information	Quarter ended March 31,				Six Months ended March 31,
($ in millions)	2014		2013		2014		2013
Net investment income	$	22.8	46.8		$	85.7	255.0
Realized gains (losses)	74.2		(22.1	)	197.6		599.7
Net change in unrealized appreciation (depreciation)	207.6		378.8		842.4		(18.9	)
Net income	$	304.6	403.5		$	1,125.7	835.8
Selective’s insurance subsidiaries’ other investments income	$	3.6	3.9		$	8.8	7.5

Schedule Of Securities Pledged As Collateral

($ in millions)	FHLBI Collateral		Reinsurance Collateral	State and Regulatory Deposits	Total
U.S. government and government agencies	$	22.9	—	26.0	48.9
Obligations of states and political subdivisions	—		5.7	—	5.7
Corporate securities	—		5.3	—	5.3
ABS	—		2.0	—	2.0
CMBS	1.9		—	—	1.9
RMBS	36.8		3.2	—	40.0
Total fixed income securities	$	61.6	16.2	26.0	103.8
Short-term investments	—		0.2	—	0.2
Total pledged as collateral	$	61.6	16.4	26.0	104.0

Schedule of Net Investment Income earned

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Fixed income securities	$	33,781		30,298		$	64,809		$	60,387
Equity securities	1,736			1,874		3,185			3,081
Short-term investments	14			29		33			81
Other investments	3,553			3,869		8,771			7,471
Investment expenses	(2,310		)	(2,067	)	(4,490		)	(4,147		)
Net investment income earned	$	36,774		34,003		72,308			66,873

Schedule of OTTI By Asset Type

Second Quarter 2014	Gross		Included in Other Comprehensive Income (“OCI”)	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	419	—	419
Total AFS Securities	419		—	419
OTTI losses	$	419	—	419

Second Quarter 2013	Gross			Included in OCI		Recognized in Earnings
($ in thousands)
HTM fixed income securities
ABS	$	(44	)	(47	)	3
Total HTM fixed income securities	(44		)	(47	)	3
Equity securities	429			—		429
Total AFS securities	429			—		429
Other investments	123			—		123
OTTI losses	$	508		(47	)	555

Six Months 2014	Gross		Included in OCI	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	1,382	—	1,382
Total AFS Securities	1,382		—	1,382
OTTI losses	$	1,382	—	1,382

Six Months 2013	Gross			Included in OCI		Recognized in Earnings
($ in thousands)
HTM fixed income securities
ABS	$	(44	)	(47	)	3
Total HTM fixed income securities	(44		)	(47	)	3
AFS fixed income securities
RMBS	(22		)	(30	)	8
Total AFS fixed income securities	(22		)	(30	)	8
Equity securities	646			—		646
Total AFS securities	624			(30	)	654
Other investments	1,847			—		1,847
OTTI losses	$	2,427		(77	)	2,504

Schedule of Gross Credit Loss Impairments on Fixed Maturity Securities for Which a Portion of the OTTI Charge was Recognized in OCI

	Quarter ended June 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	7,488		7,486
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(1,954		)	—
Reductions for securities for which the amount previously recognized in OCI was recognized in earnings because of intention or potential requirement to sell before recovery of amortized cost	—			—
Reductions for securities for which the entire amount previously recognized in OCI was recognized in earnings due to a decrease in cash flows expected	—			—
Additional increases to the amount related to credit loss for which an OTTI was previously recognized	—			2
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,534		7,488

	Six Months ended June 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	7,488		7,477
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(1,954		)	—
Reductions for securities for which the amount previously recognized in OCI was recognized in earnings because of intention or potential requirement to sell before recovery of amortized cost	—			—
Reductions for securities for which the entire amount previously recognized in OCI was recognized in earnings due to a decrease in cash flows expected	—			—
Additional increases to the amount related to credit loss for which an OTTI was previously recognized	—			11
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,534		7,488

Schedule of Components of Net Realized Gains Excluding OTTI Charges

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
HTM fixed income securities
Gains	$	3		3		3		3
Losses	(3		)	(12	)	(14	)	(49	)
AFS fixed income securities
Gains	780			967		938		1,918
Losses	(31		)	(46	)	(143	)	(299	)
AFS equity securities
Gains	4,362			4,800		12,679		10,471
Losses	(153		)	(3	)	(324	)	(171	)
Other investments
Gains	—			—		—		—
Losses	—			—		—		(860	)
Total other net realized investment gains	4,958			5,709		13,139		11,013
Total OTTI charges recognized in earnings	(419		)	(555	)	(1,382	)	(2,504	)
Total net realized gains	$	4,539		5,154		11,757		8,509

Held To Maturity Fixed Income Securities [Member]

Investments [Line Items]

Schedule Of Fixed Maturity Securities By Contractual Maturities

($ in thousands)	Carrying Value		Fair Value
Due in one year or less	$	113,394	115,199
Due after one year through five years	230,116		245,500
Due after five years through 10 years	21,428		24,803
Total HTM fixed income securities	$	364,938	385,502

AFS Fixed Income Securities [Member]

Investments [Line Items]

Schedule Of Fixed Maturity Securities By Contractual Maturities

($ in thousands)	Fair Value
Due in one year or less	$	401,681
Due after one year through five years	2,007,460
Due after five years through 10 years	1,404,203
Due after 10 years	76,856
Total AFS fixed income securities	$	3,890,200

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Investments (Other Investment Portfolio by Strategy and the Remaining Commitment Amount Associated With Each Strategy) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Carrying Value	$ 106,125	$ 107,875
Other Investments [Member]
Carrying Value	106,125	107,875
Remaining Commitment	52,650
Alternative Investments [Member]
Carrying Value	104,083	106,211
Remaining Commitment	52,053
Secondary Private Equity Member | Alternative Investments [Member]
Carrying Value	23,575	25,618
Remaining Commitment	7,230
Private Equity [Member] | Alternative Investments [Member]
Carrying Value	21,388	20,192
Remaining Commitment	9,917
Energy Power Generation [Member] | Alternative Investments [Member]
Carrying Value	17,802	17,361
Remaining Commitment	6,984
Mezzanine Financing [Member] | Alternative Investments [Member]
Carrying Value	13,243	12,738
Remaining Commitment	14,470
Real estate [Member] | Alternative Investments [Member]
Carrying Value	11,039	11,698
Remaining Commitment	10,131
Distressed debt [Member] | Alternative Investments [Member]
Carrying Value	9,947	11,579
Remaining Commitment	2,971
Venture Capital [Member] | Alternative Investments [Member]
Carrying Value	7,089	7,025
Remaining Commitment	350
Other Securities [Member]
Carrying Value	2,042	1,664
Remaining Commitment	$ 597

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Reinsurance (Tables)

6 Months Ended

Jun. 30, 2014

Reinsurance Disclosures [Abstract]

Schedule of List Of Direct, Assumed, And Ceded Reinsurance Amounts

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Premiums written:
Direct	$	572,314		551,190		1,130,205		1,080,006
Assumed	5,837			4,378		13,687		12,860
Ceded	(98,328		)	(93,391	)	(187,319	)	(180,565	)
Net	$	479,823		462,177		956,573		912,301
Premiums earned:
Direct	$	544,913		504,081		1,081,613		998,147
Assumed	10,385			8,951		20,570		21,414
Ceded	(91,673		)	(86,780	)	(182,063	)	(172,369	)
Net	$	463,625		426,252		920,120		847,192
Loss and loss expense incurred:
Direct	$	332,707		338,954		691,056		704,600
Assumed	7,377			6,420		14,856		15,494
Ceded	(42,289		)	(65,780	)	(87,571	)	(170,651	)
Net	$	297,795		279,594		618,341		549,443

Schedule of Ceded Premiums and Losses Related to Flood Operations

Ceded to NFIP	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Ceded premiums written	$	(65,775	)	(62,461	)	(123,078	)	(119,168	)
Ceded premiums earned	(59,213		)	(56,450	)	(117,499	)	(111,777	)
Ceded loss and loss expense incurred	(26,712		)	(51,725	)	(34,091	)	(127,901	)

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands	Total	Common stock [Member]	Additional paid-in capital [Member]	Retained earnings [Member]	Accumulated other comprehensive income [Member]	Treasury stock [Member]
Beginning of year at Dec. 31, 2012		$ 196,388	$ 270,654	$ 1,125,154	$ 54,040	$ (555,644)
Dividend reinvestment plan (shares: 29,949 – 2014; 33,514 - 2013)		67	703
Stock purchase and compensation plans (shares: 547,190 - 2014; 682,661 - 2013)		1,366	10,657
Net income	48,430			48,430
Dividends to stockholders ($0.26 per share - 2014 and 2013)				(14,723)
Other comprehensive income (loss)	(34,762)				(34,762)
Acquisition of treasury stock (shares: 124,819- 2014; 151,113 - 2013)						(3,285)
End of period at Jun. 30, 2013	1,099,045	197,821	282,014	1,158,861	19,278	(558,929)
Beginning of year at Dec. 31, 2013	1,153,928	198,240	288,182	1,202,015	24,851	(559,360)
Dividend reinvestment plan (shares: 29,949 – 2014; 33,514 - 2013)		60	642
Stock purchase and compensation plans (shares: 547,190 - 2014; 682,661 - 2013)		1,095	9,528
Net income	47,315			47,315
Dividends to stockholders ($0.26 per share - 2014 and 2013)				(14,868)
Other comprehensive income (loss)	43,161				43,161
Acquisition of treasury stock (shares: 124,819- 2014; 151,113 - 2013)						(2,786)
End of period at Jun. 30, 2014	$ 1,238,075	$ 199,395	$ 298,352	$ 1,234,462	$ 68,012	$ (562,146)

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Fixed income securities, held-to-maturity, fair value	$ 385,502	$ 416,981
Fixed income securities, available-for-sale, amortized cost	3,792,036	3,675,977
Equity securities, available-for-sale, cost	166,214	155,350
Premiums receivable, allowance for uncollectible accounts	3,733	4,442
Property and equipment, accumulated depreciation and amortization	$ 184,748	$ 179,192
Preferred stock, par value per share	$ 0	$ 0
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 2	$ 2
Common stock, shares authorized	360,000,000	360,000,000
Common stock, shares issued	99,697,374	99,120,235
Treasury stock, shares	43,323,441	43,198,622

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Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

The disaggregated results of our three operating segments are used by senior management to manage our operations. These segments are evaluated based on the following:

• Our Standard Insurance Operations segment and our E&S Insurance Operations segment are evaluated based on statutory underwriting results (net premiums earned, incurred loss and loss expenses, policyholders dividends, policy acquisition costs, and other underwriting expenses), and statutory combined ratios; and

• Our Investments segment is evaluated based on after-tax net investment income and net realized gains and losses.

In computing the results of each segment, we do not make adjustments for interest expense or net general corporate expenses. While we do not fully allocate taxes to all segments, we do allocate taxes to our Investments segment as we manage that segment on after-tax results. We do not maintain separate investment portfolios for the segments and therefore, do not allocate assets to the segments.

In the first quarter of 2014, we sold the renewal rights to our $38 million self-insured group, or "SIG," book of business within the Standard Insurance Operations segment. We decided to opportunistically sell this very small and specialized book of pooled business as a significant portion of the business was produced outside of our standard lines footprint, and proved difficult to grow. As this was a renewal rights sale, we will continue to service policies that were in force at the date of the sale. We continue to remain active in the municipal and public school marketplace for individual risks that procure traditional insurance programs rather than pooling arrangements. The proceeds from this sale, which amounted to $8 million, are included in "Miscellaneous income" within the table below as a component of the Standard Insurance Operations revenue.

The following summaries present revenues from continuing operations (net investment income and net realized gains on investments in the case of the Investments segment) and pre-tax income from continuing operations for the individual segments:

Revenue by Segment	Quarter ended June 30,			Six Months ended June 30,
($ in thousands)	2014		2013	2014	2013
Standard Insurance Operations:
Net premiums earned:
Commercial automobile	$	83,472	76,706	165,688	151,053
Workers compensation	68,992		64,855	138,405	130,939
General liability	111,591		99,766	220,409	197,469
Commercial property	61,226		54,937	121,412	108,352
Businessowners’ policies	21,279		18,625	42,148	37,165
Bonds	4,734		4,775	9,490	9,539
Other	3,213		2,993	6,396	5,985
Total Standard Commercial Lines	354,507		322,657	703,948	640,502
Personal automobile	38,022		38,526	76,248	76,919
Homeowners	33,576		31,702	66,874	62,837
Other	2,946		3,320	6,240	6,828
Total Standard Personal Lines	74,544		73,548	149,362	146,584
Total Standard Insurance Operations net premiums earned	429,051		396,205	853,310	787,086
Miscellaneous income	1,908		3,528	11,727	6,248
Total Standard Insurance Operations revenue	430,959		399,733	865,037	793,334
E&S Insurance Operations:
Net premiums earned	34,574		30,047	66,810	60,106
Investments:
Net investment income	36,774		34,003	72,308	66,873
Net realized investment gains	4,539		5,154	11,757	8,509
Total investment revenues	41,313		39,157	84,065	75,382
Total all segments	506,846		468,937	1,015,912	928,822
Other income	3		8	8	72
Total revenues from continuing operations	$	506,849	468,945	1,015,920	928,894

Income from Continuing Operations before Federal Income Tax	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations:
Commercial Lines underwriting gain	$	15,703		9,743		$	12,073		15,845
Personal Lines underwriting (loss) gain	(5,582		)	(2,975	)	(7,942		)	2,998
Total Standard Insurance Operations underwriting gain, before federal income tax	10,121			6,768		4,131			18,843
GAAP combined ratio	97.6		%	98.3		99.5		%	97.6
Statutory combined ratio	97.3		%	97.0		99.2		%	96.9
E&S Insurance Operations:
Underwriting (loss) gain	(37		)	(2,285	)	938			(2,199	)
GAAP combined ratio	100.1		%	107.6		98.6		%	103.7
Statutory combined ratio	99.9		%	106.8		98.8		%	102.6
Investments:
Net investment income	36,774			34,003		72,308			66,873
Net realized investment gains	4,539			5,154		11,757			8,509
Total investment income, before federal income tax	41,313			39,157		84,065			75,382
Tax on investment income	10,941			10,107		22,516			19,312
Total investment income, after federal income tax	30,372			29,050		61,549			56,070

Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations underwriting gain, before federal income tax	$	10,121		6,768		$	4,131		18,843
E&S Insurance Operations underwriting (loss) gain, before federal income tax	(37		)	(2,285	)	938			(2,199	)
Investment income, before federal income tax	41,313			39,157		84,065			75,382
Total all segments	51,397			43,640		89,134			92,026
Interest expense	(5,425		)	(5,570	)	(10,986		)	(11,401	)
General corporate and other expenses	(6,451		)	(1,869	)	(13,543		)	(15,556	)
Income from continuing operations, before federal income tax	$	39,521		36,201		$	64,605		65,069

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Entity Registrant Name	SELECTIVE INSURANCE GROUP INC
Entity Central Index Key	0000230557
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock , Shares Outstanding	56,373,933

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Retirement Plans

6 Months Ended

Jun. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

Retirement Plans

The following table shows the net periodic benefit cost related to the Retirement Income Plan for Selective Insurance Company of America (“Retirement Income Plan”) and the life insurance benefits provided to eligible Selective Insurance Company of America retirees (referred to as the "Retirement Life Plan"). For more information concerning these plans, refer to Note 15. “Retirement Plans” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

	Retirement Income Plan Quarter ended June 30,					Retirement Life Plan Quarter ended June 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	1,626		1,857		—	—
Interest cost	3,253			3,051		73	69
Expected return on plan assets	(3,918		)	(3,985	)	—	—
Amortization of unrecognized net actuarial loss	368			772		13	17
Total net periodic cost	$	1,329		1,695		86	86

	Retirement Income Plan Six Months ended June 30,					Retirement Life Plan Six Months ended June 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	3,253		4,306		—	—
Interest cost	6,507			6,354		146	139
Expected return on plan assets	(7,837		)	(7,833	)	—	—
Amortization of unrecognized prior service	—			10		—	—
Amortization of unrecognized net actuarial loss	735			2,594		26	35
Curtailment expense	—			16		—	—
Total net periodic cost	$	2,658		5,447		172	174

	Retirement Income Plan Six Months ended June 30,			Retirement Life Plan Six Months ended June 30,
	2014		2013	2014		2013
Weighted-Average Expense Assumptions:
Discount rate	5.16	%	4.66	4.85	%	4.42
Expected return on plan assets	6.92		7.40	—		—
Rate of compensation increase	4.00		4.00	—		—

We presently anticipate contributing $9.8 million to the Retirement Income Plan in 2014, $5.4 million of which has been funded as of June 30, 2014.

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:
Net premiums earned	$ 463,625	$ 426,252	$ 920,120	$ 847,192
Net investment income earned	36,774	34,003	72,308	66,873
Net realized gains:
Net realized investment gains	4,958	5,709	13,139	11,013
Other-than-temporary impairments	(419)	(508)	(1,382)	(2,427)
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income	0	(47)	0	(77)
Total net realized gains	4,539	5,154	11,757	8,509
Other income	1,911	3,536	11,735	6,320
Total revenues	506,849	468,945	1,015,920	928,894
Expenses:
Loss and loss expense incurred	297,795	279,594	618,341	549,443
Policy acquisition costs	155,173	143,728	304,439	283,256
Interest expense	5,425	5,570	10,986	11,401
Other expenses	8,935	3,852	17,549	19,725
Total expenses	467,328	432,744	951,315	863,825
Income from continuing operations, before federal income tax	39,521	36,201	64,605	65,069
Federal income tax expense:
Current	8,781	6,221	15,319	13,674
Deferred	1,399	2,858	1,971	1,968
Total federal income tax expense	10,180	9,079	17,290	15,642
Net income from continuing operations	29,341	27,122	47,315	49,427
Loss on disposal of discontinued operations, net of tax of $(538) - 2013	0	0	0	(997)
Net income	$ 29,341	$ 27,122	$ 47,315	$ 48,430
Earnings per share:
Basic net income from continuing operations	$ 0.52	$ 0.49	$ 0.84	$ 0.89
Basic net loss from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ (0.02)
Basic net income	$ 0.52	$ 0.49	$ 0.84	$ 0.87
Diluted net income from continuing operations	$ 0.51	$ 0.48	$ 0.83	$ 0.88
Diluted net loss from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ (0.02)
Diluted net income	$ 0.51	$ 0.48	$ 0.83	$ 0.86
Dividends to stockholders	$ 0.13	$ 0.13	$ 0.26	$ 0.26

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Adoption of Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Adoption Of Accounting Pronouncements

Adoption of Accounting Pronouncements 

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-11, Income Taxes, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"). ASU 2013-11 applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. An unrecognized tax benefit is the difference between a tax position taken or expected to be taken in a tax return and the benefit that is more likely than not sustainable under examination. Under ASU 2013-11, an entity must net an unrecognized tax benefit, or a portion of an unrecognized tax benefit, against deferred tax assets for a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward except when:

• An NOL carryforward, a similar tax loss, or a tax credit carryfoward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position; or

• The entity does not intend to use the deferred tax asset for this purpose. If either of these conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset.

ASU 2013-11 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance did not impact our financial condition or results of operation.

Pronouncements to be effective in the future

In January 2014, the FASB issued ASU 2014-01, Accounting for Investments in Qualified Affordable Housing Projects ("ASU 2014-01").  ASU 2014-01 applies to all reporting entities that invest in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for a low-income housing tax credit. ASU 2014-01 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using a newly defined "proportional amortization method" if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as components of income tax expense (benefit).  For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment is required to be accounted for as an equity method investment or a cost method investment.

ASU 2014-01 is effective for public business entities for annual periods and interim periods within those annual periods, beginning after December 15, 2014.  The adoption of this guidance will not have a material impact on our financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (“ASU 2014-12”). ASU 2014-12 applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. That is the case when an employee is eligible to retire or otherwise terminate employment before the end of the period in which a performance target could be achieved and still be eligible to vest in the award if and when the performance target is achieved. ASU 2014-12 is intended to resolve the diverse accounting treatment of these types of awards in practice. Many reporting entities were accounting for these types of performance targets as non-vesting conditions that affect the grant-date fair value of the award while other entities treated these performance targets as performance conditions that do not affect the grant-date fair value of the award. ASU 2014-12 clarifies that these types of performance targets should be treated as performance conditions that do not impact the grant-date fair value of the award.

This guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. The implementation of ASU 2014-12 will not affect us, as we are currently recording expense consistent with the requirements of this accounting update.

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Basis of Presentation

6 Months Ended

Jun. 30, 2014

Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

These interim unaudited consolidated financial statements (“Financial Statements”) include the accounts of the Parent and its subsidiaries, and have been prepared in conformity with: (i) U.S. generally accepted accounting principles (“GAAP”); and (ii) the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The preparation of the Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported financial statement balances, as well as the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. All significant intercompany accounts and transactions between the Parent and its subsidiaries are eliminated in consolidation.

These Financial Statements reflect all adjustments that, in our opinion, are normal, recurring, and necessary for a fair presentation of our results of operations and financial condition. The Financial Statements cover the second quarters ended June 30, 2014 (“Second Quarter 2014”) and June 30, 2013 (“Second Quarter 2013”) and the six-month periods ended June 30, 2014 ("Six Months 2014") and June 30, 2013 ("Six Months 2013"). The Financial Statements do not include all of the information and disclosures required by GAAP and the SEC for audited annual financial statements. Results of operations for any interim period are not necessarily indicative of results for a full year. Consequently, the Financial Statements should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 Annual Report”) filed with the SEC.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Schedule of The Carrying Amounts and Estimated Fair Values of Financial Instruments

	June 30, 2014			December 31, 2013
($ in thousands)	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial Assets
Fixed income securities:
HTM	$	364,938	385,502	392,879	416,981
AFS	3,890,200		3,890,200	3,715,536	3,715,536
Equity securities, AFS	211,348		211,348	192,771	192,771
Short-term investments	166,488		166,488	174,251	174,251
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	13,000		13,165	13,000	13,319
1.25% borrowings from FHLBI	45,000		45,338	45,000	45,259
7.25% Senior Notes	49,895		55,527	49,916	50,887
6.70% Senior Notes	99,395		110,926	99,498	98,247
5.875% Senior Notes	185,000		174,714	185,000	146,298
Total notes payable	$	392,290	399,670	392,414	354,010

Schedule of Quantitative Disclosures of Our Financial Assets That Were Measured At Fair Value

June 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets  Measured at  Fair Value  at 6/30/2014		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)1	Significant Other  Observable Inputs  (Level 2)1	Significant Unobservable  Inputs  (Level 3)
Description
Measured on a recurring basis:
AFS:
U.S. government and government agencies	$	158,809	52,552	106,257	—
Foreign government	28,028		—	28,028	—
Obligations of states and political subdivisions	1,107,054		—	1,107,054	—
Corporate securities	1,782,593		—	1,782,593	—
ABS	132,169		—	132,169	—
CMBS	172,471		—	172,471	—
RMBS	509,076		—	509,076	—
Total AFS fixed income securities	3,890,200		52,552	3,837,648	—
Equity securities	211,348		208,448	—	2,900
Total AFS Securities	4,101,548		261,000	3,837,648	2,900
Short-term investments	166,488		166,488	—	—
Total assets measured at fair value	$	4,268,036	427,488	3,837,648	2,900

¹ There were no transfers of securities between Level 1 and Level 2.

December 31, 2013			Fair Value Measurements Using
($ in thousands)	Assets  Measured at Fair Value at 12/31/13		Quoted Prices in  Active Markets for Identical Assets/Liabilities (Level 1)1	Significant Other Observable Inputs  (Level 2)1	Significant Unobservable Inputs  (Level 3)
Description
Measured on a recurring basis:
AFS:
U.S. government and government agencies	$	173,375	52,153	121,222	—
Foreign government	30,615		—	30,615	—
Obligations of states and political subdivisions	951,624		—	951,624	—
Corporate securities	1,734,883		—	1,734,883	—
ABS	140,896		—	140,896	—
CMBS	171,284		—	171,284	—
RMBS	512,859		—	512,859	—
Total AFS fixed income securities	3,715,536		52,153	3,663,383	—
Equity securities	192,771		189,871	—	2,900
Total AFS Securities	3,908,307		242,024	3,663,383	2,900
Short-term investments	174,251		174,251	—	—
Total assets measured at fair value	$	4,082,558	416,275	3,663,383	2,900

¹  There were no transfers of securities between Level 1 and Level 2.

Schedule of Summary of the Changes in Fair Value of Securities measured Using Level 3 Inputs

December 31, 2013
($ in thousands)	Government			Corporate			ABS			CMBS			Equity			Receivable for  Proceeds Related to Sale  of Selective HR Solutions ("Selective HR")			Total
Fair value, December 31, 2012	$	19,789		2,946			6,068			7,162			3,607			2,705			42,277
Total net (losses) gains for the period included in:
OCI1	(537		)	(7		)	(74		)	772			3,935			—			4,089
Net income2,3	(76		)	—			—			361			—			(1,480		)	(1,195		)
Purchases	—			—			—			—			—			—			—
Sales	—			—			—			—			—			—			—
Issuances	—			—			—			—			—			—			—
Settlements	(1,847		)	(168		)	—			(2,420		)	—			(225		)	(4,660		)
Transfers into Level 3	—			—			—			—			—			—			—
Transfers out of Level 3	(17,329		)	(2,771		)	(5,994		)	(5,875		)	(4,642		)	(1,000		)	(37,611		)
Fair value, December 31, 2013	$	—		$	—		$	—		$	—		$	2,900		$	—		$	2,900

¹ Amounts are reported in “Unrealized holding (losses) gains arising during period” on the Consolidated Statements of Comprehensive Income in our 2013 Annual Report.

² Amounts are reported in “Net realized gains” for realized gains and losses and “Net investment income earned” for amortization of securities on the Consolidated Statements of Income in our 2013 Annual Report.

³ For the receivable related to the sale of Selective HR, amounts in "Loss on disposal of discontinued operations, net of tax" relate to an impairment charge and amounts in "Other income" relate to interest accretion on the Consolidated Statements of Income in our 2013 Annual Report.

Schedule of Quantitative Information of Our Financial Assets and Liabilities That Were Disclosed at Fair Value

:

June 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 6/30/2014		Quoted Prices in  Active Markets for  Identical Assets/ Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial Assets
HTM:
Foreign government	$	5,519	—	5,519	—
Obligations of states and political subdivisions	346,724		—	346,724	—
Corporate securities	24,513		—	24,513	—
ABS	3,285		—	3,285	—
CMBS	5,461		—	5,461	—
Total HTM fixed income securities	$	385,502	—	385,502	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,165	—	13,165	—
1.25% borrowings from FHLBI	45,338		—	45,338	—
7.25% Senior Notes	55,527		—	55,527	—
6.70% Senior Notes	110,926		—	110,926	—
5.875% Senior Notes	174,714		174,714	—	—
Total notes payable	$	399,670	174,714	224,956	—

December 31, 2013			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 12/31/2013		Quoted Prices in  Active Markets for  Identical Assets/ Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial Assets
HTM:
Foreign government	$	5,591	—	5,591	—
Obligations of states and political subdivisions	369,756		—	369,756	—
Corporate securities	30,274		—	30,274	—
ABS	3,415		—	3,415	—
CMBS	7,945		—	7,945	—
Total HTM fixed income securities	$	416,981	—	416,981	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,319	—	13,319	—
1.25% borrowings from FHLBI	45,259		—	45,259	—
7.25% Senior Notes	50,887		—	50,887	—
6.70% Senior Notes	98,247		—	98,247	—
5.875% Senior Notes	146,298		146,298	—	—
Total notes payable	$	354,010	146,298	207,712	—

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Comprehensive Income

6 Months Ended

Jun. 30, 2014

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Comprehensive Income

Comprehensive Income

The components of comprehensive income, both gross and net of tax, for Second Quarter and Six Months 2014 and 2013 are as follows:

Second Quarter 2014
($ in thousands)	Gross			Tax		Net
Net income	$	39,521		10,180		29,341
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	45,122			15,793		29,329
Amounts reclassified into net income:
HTM securities	(221		)	(77	)	(144	)
Non-credit OTTI	469			164		305
Realized gains on AFS securities	(5,008		)	(1,753	)	(3,255	)
Net unrealized gains	40,362			14,127		26,235
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	381			133		248
Defined benefit pension and post-retirement plans	381			133		248
Other comprehensive income	40,743			14,260		26,483
Comprehensive income	$	80,264		24,440		55,824

Second Quarter 2013
($ in thousands)	Gross			Tax		Net
Net income	$	36,201		9,079		27,122
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(91,314		)	(31,961	)	(59,353	)
Non-credit OTTI recognized in OCI	47			16		31
Amounts reclassified into net income:
HTM securities	(614		)	(215	)	(399	)
Non-credit OTTI	6			3		3
Realized gains on AFS securities	(5,288		)	(1,850	)	(3,438	)
Net unrealized losses	(97,163		)	(34,007	)	(63,156	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	789			276		513
Defined benefit pension and post-retirement plans	789			276		513
Other comprehensive loss	(96,374		)	(33,731	)	(62,643	)
Comprehensive loss	$	(60,173	)	(24,652	)	(35,521	)

Six Months 2014
($ in thousands)	Gross			Tax		Net
Net income	$	64,605		17,290		47,315
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	78,086			27,331		50,755
Amounts reclassified into net income:
HTM securities	(677		)	(237	)	(440	)
Non-credit OTTI	469			164		305
Realized gains on AFS securities	(12,237		)	(4,283	)	(7,954	)
Net unrealized gains	65,641			22,975		42,666
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	761			266		495
Defined benefit pension and post-retirement plans	761			266		495
Other comprehensive income	66,402			23,241		43,161
Comprehensive income	$	131,007		40,531		90,476

Six Months 2013
($ in thousands)	Gross			Tax		Net
Net income	$	63,534		15,104		48,430
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(87,630		)	(30,671	)	(56,959	)
Non-credit OTTI recognized in OCI	77			27		50
Amounts reclassified into net income:
HTM securities	(1,331		)	(466	)	(865	)
Non-credit OTTI	13			5		8
Realized gains on AFS securities	(11,264		)	(3,942	)	(7,322	)
Net unrealized losses	(100,135		)	(35,047	)	(65,088	)
Defined benefit pension and post-retirement plans:
Net actuarial gains	44,000			15,400		28,600
Amounts reclassified into net income:
Net actuarial loss	2,629			920		1,709
Prior service cost	10			4		6
Curtailment expense	16			5		11
Defined benefit pension and post-retirement plans	46,655			16,329		30,326
Other comprehensive loss	(53,480		)	(18,718	)	(34,762	)
Comprehensive income	$	10,054		(3,614	)	13,668

The balances of, and changes in, each component of AOCI (net of taxes) as of June 30, 2014 are as follows:

June 30, 2014	Net Unrealized (Loss) Gain on Investment Securities
($ in thousands)	OTTI Related			HTM Related		All Other		Investments Subtotal		Defined Benefit Pension and Post-Retirement Plans		Total AOCI
Balance, December 31, 2013	$	(1,599	)	1,467		51,635		51,503		(26,652	)	24,851
OCI before reclassifications	—			—		50,755		50,755		—		50,755
Amounts reclassified from AOCI	305			(440	)	(7,954	)	(8,089	)	495		(7,594	)
Net current period OCI	305			(440	)	42,801		42,666		495		43,161
Balance, June 30, 2014	$	(1,294	)	1,027		94,436		94,169		(26,157	)	68,012

The reclassifications out of AOCI are as follows:

	Quarter ended June 30,				Six Months ended June 30,
($ in thousands)	2014		2013		2014		2013		Affected Line Item in the Unaudited Consolidated Statement of Income
OTTI related
Amortization of non-credit OTTI losses on HTM securities	—		6		—		13		Net investment income earned
Realized loss on disposal of non-credit OTTI securities	469		—		469		—		Net realized gains
	469		6		469		13		Income from continuing operations, before federal income tax
	(164	)	(3	)	(164	)	(5	)	Total federal income tax expense
	305		3		305		8		Net income
HTM related
Unrealized losses (gains) on HTM disposals	51		(70	)	75		(151	)	Net realized gains
Amortization of net unrealized gains on HTM securities	(272	)	(544	)	(752	)	(1,180	)	Net investment income earned
	(221	)	(614	)	(677	)	(1,331	)	Income from continuing operations, before federal income tax
	77		215		237		466		Total federal income tax expense
	(144	)	(399	)	(440	)	(865	)	Net income
Realized gains and losses on AFS and OTTI
Realized gains on AFS disposals and OTTI	(5,008	)	(5,288	)	(12,237	)	(11,264	)	Net realized gains
	(5,008	)	(5,288	)	(12,237	)	(11,264	)	Income from continuing operations, before federal income tax
	1,753		1,850		4,283		3,942		Total federal income tax expense
	(3,255	)	(3,438	)	(7,954	)	(7,322	)	Net income
Defined benefit pension and post-retirement life plans
Net actuarial loss	88		158		175		558		Loss and loss expense incurred
	293		631		586		2,071		Policy acquisition costs
	381		789		761		2,629		Income from continuing operations, before federal income tax
Prior service cost	—		—		—		7		Loss and loss adjustment expenses
	—		—		—		3		Policy acquisition costs
	—		—		—		10		Income from continuing operations, before federal income tax
Curtailment expense	—		—		—		16		Policy acquisition costs
	—		—		—		16		Income from continuing operations, before federal income tax
Total defined benefit pension and post-retirement life	381		789		761		2,655		Income from continuing operations, before federal income tax
	(133	)	(276	)	(266	)	(929	)	Total federal income tax expense
	248		513		495		1,726		Net income
Total reclassifications for the period	(2,846	)	(3,321	)	(7,594	)	(6,453	)	Net income

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Fair Value Measurements

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following table presents the carrying amounts and estimated fair values of our financial instruments as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
($ in thousands)	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial Assets
Fixed income securities:
HTM	$	364,938	385,502	392,879	416,981
AFS	3,890,200		3,890,200	3,715,536	3,715,536
Equity securities, AFS	211,348		211,348	192,771	192,771
Short-term investments	166,488		166,488	174,251	174,251
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	13,000		13,165	13,000	13,319
1.25% borrowings from FHLBI	45,000		45,338	45,000	45,259
7.25% Senior Notes	49,895		55,527	49,916	50,887
6.70% Senior Notes	99,395		110,926	99,498	98,247
5.875% Senior Notes	185,000		174,714	185,000	146,298
Total notes payable	$	392,290	399,670	392,414	354,010

The fair values of our financial assets and liabilities are generated using various valuation techniques and are placed into the fair value hierarchy considering the following: (i) the highest priority is given to quoted prices in active markets for identical assets (Level 1); (ii) the next highest priority is given to quoted prices in markets that are not active or inputs that are observable either directly or indirectly, including quoted prices for similar assets in markets that are not active and other inputs that can be derived principally from, or corroborated by, observable market data for substantially the full term of the assets (Level 2); and (iii) the lowest priority is given to unobservable inputs supported by little or no market activity and that reflect our assumptions about the exit price, including assumptions that market participants would use in pricing the asset (Level 3). An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. Transfers between levels in the fair value hierarchy are recognized at the end of the reporting period.

For a discussion of the techniques used to value the majority of our financial assets and liabilities, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2013 Annual Report.

The following tables provide quantitative disclosures of our financial assets that were measured at fair value at June 30, 2014 and December 31, 2013:

June 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets  Measured at  Fair Value  at 6/30/2014		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)1	Significant Other  Observable Inputs  (Level 2)1	Significant Unobservable  Inputs  (Level 3)
Description
Measured on a recurring basis:
AFS:
U.S. government and government agencies	$	158,809	52,552	106,257	—
Foreign government	28,028		—	28,028	—
Obligations of states and political subdivisions	1,107,054		—	1,107,054	—
Corporate securities	1,782,593		—	1,782,593	—
ABS	132,169		—	132,169	—
CMBS	172,471		—	172,471	—
RMBS	509,076		—	509,076	—
Total AFS fixed income securities	3,890,200		52,552	3,837,648	—
Equity securities	211,348		208,448	—	2,900
Total AFS Securities	4,101,548		261,000	3,837,648	2,900
Short-term investments	166,488		166,488	—	—
Total assets measured at fair value	$	4,268,036	427,488	3,837,648	2,900

¹ There were no transfers of securities between Level 1 and Level 2.

December 31, 2013			Fair Value Measurements Using
($ in thousands)	Assets  Measured at Fair Value at 12/31/13		Quoted Prices in  Active Markets for Identical Assets/Liabilities (Level 1)1	Significant Other Observable Inputs  (Level 2)1	Significant Unobservable Inputs  (Level 3)
Description
Measured on a recurring basis:
AFS:
U.S. government and government agencies	$	173,375	52,153	121,222	—
Foreign government	30,615		—	30,615	—
Obligations of states and political subdivisions	951,624		—	951,624	—
Corporate securities	1,734,883		—	1,734,883	—
ABS	140,896		—	140,896	—
CMBS	171,284		—	171,284	—
RMBS	512,859		—	512,859	—
Total AFS fixed income securities	3,715,536		52,153	3,663,383	—
Equity securities	192,771		189,871	—	2,900
Total AFS Securities	3,908,307		242,024	3,663,383	2,900
Short-term investments	174,251		174,251	—	—
Total assets measured at fair value	$	4,082,558	416,275	3,663,383	2,900

¹  There were no transfers of securities between Level 1 and Level 2.

There have been no changes in the fair value of securities measured using Level 3 prices during Six Months 2014. The following table provides a summary of these changes during 2013:

December 31, 2013
($ in thousands)	Government			Corporate			ABS			CMBS			Equity			Receivable for  Proceeds Related to Sale  of Selective HR Solutions ("Selective HR")			Total
Fair value, December 31, 2012	$	19,789		2,946			6,068			7,162			3,607			2,705			42,277
Total net (losses) gains for the period included in:
OCI1	(537		)	(7		)	(74		)	772			3,935			—			4,089
Net income2,3	(76		)	—			—			361			—			(1,480		)	(1,195		)
Purchases	—			—			—			—			—			—			—
Sales	—			—			—			—			—			—			—
Issuances	—			—			—			—			—			—			—
Settlements	(1,847		)	(168		)	—			(2,420		)	—			(225		)	(4,660		)
Transfers into Level 3	—			—			—			—			—			—			—
Transfers out of Level 3	(17,329		)	(2,771		)	(5,994		)	(5,875		)	(4,642		)	(1,000		)	(37,611		)
Fair value, December 31, 2013	$	—		$	—		$	—		$	—		$	2,900		$	—		$	2,900

¹ Amounts are reported in “Unrealized holding (losses) gains arising during period” on the Consolidated Statements of Comprehensive Income in our 2013 Annual Report.

² Amounts are reported in “Net realized gains” for realized gains and losses and “Net investment income earned” for amortization of securities on the Consolidated Statements of Income in our 2013 Annual Report.

³ For the receivable related to the sale of Selective HR, amounts in "Loss on disposal of discontinued operations, net of tax" relate to an impairment charge and amounts in "Other income" relate to interest accretion on the Consolidated Statements of Income in our 2013 Annual Report.

As discussed in Note 2. "Summary of Significant Accounting Policies," in Item 8. "Financial Statements and Supplementary Data." in our 2013 Annual Report, the fair value of our Level 3 fixed income securities is typically obtained through non-binding broker quotes based on unobservable inputs, which we review for reasonableness. There were no fixed income securities measured using Level 3 inputs at June 30, 2014 and December 31, 2013. However, in 2013, fixed income securities with a fair value of $32.0 million were transferred out of Level 3 during the year due to the availability of Level 2 pricing at December 31, 2013 that was not available previously.

Equity securities with fair values of $2.9 million were measured using Level 3 inputs at June 30, 2014 and at December 31, 2013. An equity security with a fair value of $4.6 million was transferred out of Level 3 during 2013 due to the availability of Level 2 pricing at the date of transfer. In addition, the receivable related to the sale of Selective HR was settled during 2013 and as a result was also transferred out of Level 3.

The following tables provide quantitative information regarding our financial assets and liabilities that were disclosed at fair value at June 30, 2014 and December 31, 2013:

June 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 6/30/2014		Quoted Prices in  Active Markets for  Identical Assets/ Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial Assets
HTM:
Foreign government	$	5,519	—	5,519	—
Obligations of states and political subdivisions	346,724		—	346,724	—
Corporate securities	24,513		—	24,513	—
ABS	3,285		—	3,285	—
CMBS	5,461		—	5,461	—
Total HTM fixed income securities	$	385,502	—	385,502	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,165	—	13,165	—
1.25% borrowings from FHLBI	45,338		—	45,338	—
7.25% Senior Notes	55,527		—	55,527	—
6.70% Senior Notes	110,926		—	110,926	—
5.875% Senior Notes	174,714		174,714	—	—
Total notes payable	$	399,670	174,714	224,956	—

December 31, 2013			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 12/31/2013		Quoted Prices in  Active Markets for  Identical Assets/ Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial Assets
HTM:
Foreign government	$	5,591	—	5,591	—
Obligations of states and political subdivisions	369,756		—	369,756	—
Corporate securities	30,274		—	30,274	—
ABS	3,415		—	3,415	—
CMBS	7,945		—	7,945	—
Total HTM fixed income securities	$	416,981	—	416,981	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,319	—	13,319	—
1.25% borrowings from FHLBI	45,259		—	45,259	—
7.25% Senior Notes	50,887		—	50,887	—
6.70% Senior Notes	98,247		—	98,247	—
5.875% Senior Notes	146,298		146,298	—	—
Total notes payable	$	354,010	146,298	207,712	—

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Statements of Cash Flow

6 Months Ended

Jun. 30, 2014

Supplemental Cash Flow Information [Abstract]

Statements of Cash Flow

Statements of Cash Flow

Supplemental cash flow information for Six Months 2014 and 2013 are as follows:

	Six Months ended June 30,
($ in thousands)	2014		2013
Cash paid during the period for:
Interest	$	11,113	10,295
Federal income tax	3,699		11,000
Non-cash items:
Tax-free exchange of fixed income securities, available-for-sale ("AFS")	9,180		13,615
Tax-free exchange of fixed income securities, held-to-maturity ("HTM")	15		10,710
Stock split related to equity securities, AFS	334		—
Assets acquired under capital lease arrangements	2,124		1,898

At June 30, 2014, included in "Other assets" on the Consolidated Balance Sheets was $8.5 million of cash received from the NFIP, which is restricted to pay flood claims under the WYO program.

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Investments

6 Months Ended

Jun. 30, 2014

Investments [Abstract]

Investments

Investments

(a) The amortized cost, net unrealized gains and losses, carrying value, unrecognized holding gains and losses, and fair value of HTM fixed income securities as of June 30, 2014 and December 31, 2013 were as follows:

June 30, 2014
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses		Fair Value
Foreign government	$	5,292	90		5,382	137	—		5,519
Obligations of state and political subdivisions	327,898		2,942		330,840	15,884	—		346,724
Corporate securities	21,893		(347	)	21,546	2,972	(5	)	24,513
Asset-backed securities (“ABS”)	3,260		(583	)	2,677	608	—		3,285
Commercial mortgage-backed securities (“CMBS”)	5,015		(522	)	4,493	968	—		5,461
Total HTM fixed income securities	$	363,358	1,580		364,938	20,569	(5	)	385,502

December 31, 2013
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses	Fair Value
Foreign government	$	5,292	131		5,423	168	—	5,591
Obligations of state and political subdivisions	348,109		4,013		352,122	17,634	—	369,756
Corporate securities	28,174		(346	)	27,828	2,446	—	30,274
ABS	3,413		(655	)	2,758	657	—	3,415
CMBS	5,634		(886	)	4,748	3,197	—	7,945
Total HTM fixed income securities	$	390,622	2,257		392,879	24,102	—	416,981

Unrecognized holding gains and losses of HTM securities are not reflected in the Financial Statements, as they represent fair value fluctuations from the later of: (i) the date a security is designated as HTM; or (ii) the date that an other-than-temporary impairment (“OTTI”) charge is recognized on an HTM security, through the date of the balance sheet. Our HTM securities had an average duration of 1.9 years as of June 30, 2014.

(b) The cost/amortized cost, unrealized gains and losses, and fair value of AFS securities as of June 30, 2014 and December 31, 2013 were as follows:

June 30, 2014
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	149,537	9,474	(202	)	158,809
Foreign government	27,046		983	(1	)	28,028
Obligations of states and political subdivisions	1,080,039		30,696	(3,681	)	1,107,054
Corporate securities	1,730,192		56,587	(4,186	)	1,782,593
ABS	131,434		945	(210	)	132,169
CMBS1	170,298		3,246	(1,073	)	172,471
Residential mortgage-backed securities (“RMBS”)2	503,490		9,534	(3,948	)	509,076
AFS fixed income securities	3,792,036		111,465	(13,301	)	3,890,200
AFS equity securities	166,214		45,137	(3	)	211,348
Total AFS securities	$	3,958,250	156,602	(13,304	)	4,101,548

December 31, 2013
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	163,218	10,661	(504	)	173,375
Foreign government	29,781		906	(72	)	30,615
Obligations of states and political subdivisions	946,455		25,194	(20,025	)	951,624
Corporate securities	1,707,928		44,004	(17,049	)	1,734,883
ABS	140,430		934	(468	)	140,896
CMBS1	172,288		2,462	(3,466	)	171,284
RMBS2	515,877		7,273	(10,291	)	512,859
AFS fixed income securities	3,675,977		91,434	(51,875	)	3,715,536
AFS equity securities	155,350		37,517	(96	)	192,771
Total AFS securities	$	3,831,327	128,951	(51,971	)	3,908,307

¹ CMBS includes government guaranteed agency securities with a fair value of $23.7 million at June 30, 2014 and $30.0 million at December 31, 2013.

² RMBS includes government guaranteed agency securities with a fair value of $41.8 million at June 30, 2014 and $55.2 million at December 31, 2013.

Unrealized gains and losses of AFS securities represent fair value fluctuations from the later of: (i) the date a security is designated as AFS; or (ii) the date that an OTTI charge is recognized on an AFS security, through the date of the balance sheet. These unrealized gains and losses are recorded in Accumulated other comprehensive income ("AOCI") on the Consolidated Balance Sheets.

(c) The following tables summarize, for all securities in a net unrealized/unrecognized loss position at June 30, 2014 and December 31, 2013, the fair value and gross pre-tax net unrealized/unrecognized loss by asset class and by length of time those securities have been in a net loss position:

June 30, 2014	Less than 12 months				12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Fair Value	Unrealized Losses1
AFS securities
U.S. government and government agencies	$	—	—		13,284	(202	)
Foreign government	—		—		2,997	(1	)
Obligations of states and political subdivisions	54,331		(187	)	246,340	(3,494	)
Corporate securities	55,362		(186	)	170,034	(4,000	)
ABS	14,992		(28	)	14,215	(182	)
CMBS	4,939		(4	)	58,286	(1,069	)
RMBS	2,761		(13	)	169,064	(3,935	)
Total fixed income securities	132,385		(418	)	674,220	(12,883	)
Equity securities	170		(3	)	—	—
Subtotal	$	132,555	(421	)	674,220	(12,883	)

	Less than 12 months						12 months or longer
($ in thousands)	Fair Value		Unrealized Gains (Losses)1		Unrecognized Losses2		Fair Value	Unrealized Losses1		Unrecognized Gains2
HTM securities
Corporate securities	1,482		3		(5	)	—	—		—
ABS	—		—		—		2,496	(583	)	564
Subtotal	$	1,482	3		(5	)	2,496	(583	)	564
Total AFS and HTM	$	134,037	(418	)	(5	)	676,716	(13,466	)	564

December 31, 2013	Less than 12 months				12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Fair Value	Unrealized Losses1
AFS securities
U.S. government and government agencies	$	16,955	(500	)	507	(4	)
Foreign government	2,029		(30	)	2,955	(42	)
Obligations of states and political subdivisions	442,531		(19,120	)	13,530	(905	)
Corporate securities	511,100		(15,911	)	14,771	(1,138	)
ABS	68,725		(468	)	—	—
CMBS	100,396		(2,950	)	6,298	(516	)
RMBS	268,943		(10,031	)	2,670	(260	)
Total fixed income securities	1,410,679		(49,010	)	40,731	(2,865	)
Equity securities	1,124		(96	)	—	—
Subtotal	$	1,411,803	(49,106	)	40,731	(2,865	)

	Less than 12 months					12 months or longer
($ in thousands)	Fair Value		Unrealized Losses1		Unrecognized Gains2	Fair Value	Unrealized Losses1		Unrecognized Gains2
HTM securities
Obligations of states and political subdivisions	$	65	(5	)	5	441	(20	)	14
ABS	—		—		—	2,490	(655	)	621
Subtotal	65		(5	)	5	2,931	(675	)	635
Total AFS and HTM	$	1,411,868	(49,111	)	5	43,662	(3,540	)	635

 ¹ Gross unrealized losses include non-OTTI unrealized amounts and OTTI losses recognized in AOCI.  In addition, this column includes remaining unrealized gain or loss amounts on securities that were transferred to an HTM designation in the first quarter of 2009 for those securities that are in a net unrealized/unrecognized loss position.

² Unrecognized gains represent fair value fluctuations from the later of:  (i) the date a security is designated as HTM; or (ii) the date that an OTTI charge is recognized on an HTM security.

As evidenced by the table below, our net unrealized/unrecognized loss positions improved by $38.7 million as of June 30, 2014 compared to December 31, 2013 as follows:

($ in thousands)
June 30, 2014				December 31, 2013
Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss		Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss
288	80% - 99%	$	13,325	556	80% - 99%	$	51,835
—	60% - 79%	—		1	60% - 79%	176
—	40% - 59%	—		—	40% - 59%	—
—	20% - 39%	—		—	20% - 39%	—
—	0% - 19%	—		—	0% - 19%	—
		$	13,325			$	52,011

We have reviewed the securities in the tables above in accordance with our OTTI policy, as described in Note 2. “Summary of Significant Accounting Policies” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

At June 30, 2014, we had 288 securities in an aggregate unrealized/unrecognized loss position of $13.3 million, compared to 557 securities in an aggregate unrealized/unrecognized loss position of $52.0 million at December 31, 2013. This improvement was driven by a lower interest rate environment, as interest rates on the 10-year U.S. Treasury Note fell by 50 basis points in Six Months 2014. This interest rate movement had a positive impact on our fixed income securities portfolio's valuation, thus decreasing the number of securities in a loss position and the corresponding dollar amount of unrealized losses.

At June 30, 2014, $12.9 million of the aggregate unrealized/unrecognized losses related to securities that have been in a loss position for more than 12 months, while at December 31, 2013, these losses amounted to only $2.9 million. Despite these securities being in a loss position, the nature of the loss is interest-rate related as opposed to credit-related concerns, as was evidenced by the fact that the severity of impairment on these securities improved from an average of 6% of its amortized cost at year end to an average of 2% of its amortized cost at the end of the second quarter. This movement is reflective of the overall interest rate decline experienced during the year.

For a discussion regarding the impact of interest rate movements on our fixed income securities portfolio, refer to Item 7A. "Quantitative and Qualitative Disclosures About Market Risk." in our 2013 Annual Report.

We do not intend to sell any securities in an unrealized/unrecognized loss position, nor do we believe we will be required to sell these securities, and therefore we have concluded that they are temporarily impaired as of June 30, 2014. 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. If our judgment about an individual security changes in the future, we may ultimately record a credit loss after having originally concluded that one did not exist, which could have a material impact on our net income and financial position in future periods.

(d) Fixed income securities at June 30, 2014, by contractual maturity, are shown below. Mortgage-backed securities ("MBS") are included in the maturity tables using the estimated average life of each security. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations, with or without call or prepayment penalties.

Listed below are HTM fixed income securities at June 30, 2014:

($ in thousands)	Carrying Value		Fair Value
Due in one year or less	$	113,394	115,199
Due after one year through five years	230,116		245,500
Due after five years through 10 years	21,428		24,803
Total HTM fixed income securities	$	364,938	385,502

Listed below are AFS fixed income securities at June 30, 2014:

($ in thousands)	Fair Value
Due in one year or less	$	401,681
Due after one year through five years	2,007,460
Due after five years through 10 years	1,404,203
Due after 10 years	76,856
Total AFS fixed income securities	$	3,890,200

(e) The following table summarizes our other investment portfolio by strategy and the remaining commitment amount associated with each strategy:

Other Investments	Carrying Value			June 30, 2014
($ in thousands)	June 30, 2014		December 31, 2013	Remaining Commitment
Alternative Investments
Secondary private equity	$	23,575	25,618	7,230
Private equity	21,388		20,192	9,917
Energy/power generation	17,802		17,361	6,984
Mezzanine financing	13,243		12,738	14,470
Real estate	11,039		11,698	10,131
Distressed debt	9,947		11,579	2,971
Venture capital	7,089		7,025	350
Total alternative investments	104,083		106,211	52,053
Other securities	2,042		1,664	597
Total other investments	$	106,125	107,875	52,650

For a description of our seven alternative investment strategies, as well as information regarding redemption, restrictions, and fund liquidations, refer to Note 5. “Investments” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

The following table sets forth gross summarized financial information for our other investments portfolio, including the portion not owned by us. The investments are carried under the equity method of accounting. The last line of the table below reflects our share of the aggregate income, 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 as follows:

Income Statement Information	Quarter ended March 31,				Six Months ended March 31,
($ in millions)	2014		2013		2014		2013
Net investment income	$	22.8	46.8		$	85.7	255.0
Realized gains (losses)	74.2		(22.1	)	197.6		599.7
Net change in unrealized appreciation (depreciation)	207.6		378.8		842.4		(18.9	)
Net income	$	304.6	403.5		$	1,125.7	835.8
Selective’s insurance subsidiaries’ other investments income	$	3.6	3.9		$	8.8	7.5

(f) We have pledged certain AFS fixed income securities and short-term investments as collateral related to: (i) our outstanding borrowing of $58 million with the Federal Home Loan Bank of Indianapolis ("FHLBI"); and (ii) our reinsurance obligations related to our 2011 acquisition of our E&S book of business. In addition, certain securities were on deposit with various state and regulatory agencies 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, 2014:

($ in millions)	FHLBI Collateral		Reinsurance Collateral	State and Regulatory Deposits	Total
U.S. government and government agencies	$	22.9	—	26.0	48.9
Obligations of states and political subdivisions	—		5.7	—	5.7
Corporate securities	—		5.3	—	5.3
ABS	—		2.0	—	2.0
CMBS	1.9		—	—	1.9
RMBS	36.8		3.2	—	40.0
Total fixed income securities	$	61.6	16.2	26.0	103.8
Short-term investments	—		0.2	—	0.2
Total pledged as collateral	$	61.6	16.4	26.0	104.0

(g) The components of pre-tax net investment income earned for the periods indicated were as follows:

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014			2013
Fixed income securities	$	33,781		30,298		$	64,809		$	60,387
Equity securities	1,736			1,874		3,185			3,081
Short-term investments	14			29		33			81
Other investments	3,553			3,869		8,771			7,471
Investment expenses	(2,310		)	(2,067	)	(4,490		)	(4,147		)
Net investment income earned	$	36,774		34,003		72,308			66,873

(h) The following tables summarize OTTI by asset type for the periods indicated:

Second Quarter 2014	Gross		Included in Other Comprehensive Income (“OCI”)	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	419	—	419
Total AFS Securities	419		—	419
OTTI losses	$	419	—	419

Second Quarter 2013	Gross			Included in OCI		Recognized in Earnings
($ in thousands)
HTM fixed income securities
ABS	$	(44	)	(47	)	3
Total HTM fixed income securities	(44		)	(47	)	3
Equity securities	429			—		429
Total AFS securities	429			—		429
Other investments	123			—		123
OTTI losses	$	508		(47	)	555

Six Months 2014	Gross		Included in OCI	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	1,382	—	1,382
Total AFS Securities	1,382		—	1,382
OTTI losses	$	1,382	—	1,382

Six Months 2013	Gross			Included in OCI		Recognized in Earnings
($ in thousands)
HTM fixed income securities
ABS	$	(44	)	(47	)	3
Total HTM fixed income securities	(44		)	(47	)	3
AFS fixed income securities
RMBS	(22		)	(30	)	8
Total AFS fixed income securities	(22		)	(30	)	8
Equity securities	646			—		646
Total AFS securities	624			(30	)	654
Other investments	1,847			—		1,847
OTTI losses	$	2,427		(77	)	2,504

The OTTI charges in Second Quarter 2014 and Six Months 2014 relate to equity securities for which we have the intent to sell. The majority of the OTTI charges in Six Months 2013 related to an investment in a limited liability company within our other investments portfolio that had sustained significant losses for which we did not anticipate recovery. For a discussion of our evaluation for OTTI of fixed income securities, short-term investments, equity securities, and other investments, refer to Note 2. "Summary of Significant Accounting Policies" in Item 8. "Financial Statements and Supplementary Data." of our 2013 Annual Report.

The following tables set forth, for the periods indicated, credit loss impairments on fixed income securities for which a portion of the OTTI charge was recognized in OCI, and the corresponding changes in such amounts:

	Quarter ended June 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	7,488		7,486
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(1,954		)	—
Reductions for securities for which the amount previously recognized in OCI was recognized in earnings because of intention or potential requirement to sell before recovery of amortized cost	—			—
Reductions for securities for which the entire amount previously recognized in OCI was recognized in earnings due to a decrease in cash flows expected	—			—
Additional increases to the amount related to credit loss for which an OTTI was previously recognized	—			2
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,534		7,488

	Six Months ended June 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	7,488		7,477
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(1,954		)	—
Reductions for securities for which the amount previously recognized in OCI was recognized in earnings because of intention or potential requirement to sell before recovery of amortized cost	—			—
Reductions for securities for which the entire amount previously recognized in OCI was recognized in earnings due to a decrease in cash flows expected	—			—
Additional increases to the amount related to credit loss for which an OTTI was previously recognized	—			11
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,534		7,488

(i) The components of net realized gains, excluding OTTI charges, for the periods indicated were as follows:

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
HTM fixed income securities
Gains	$	3		3		3		3
Losses	(3		)	(12	)	(14	)	(49	)
AFS fixed income securities
Gains	780			967		938		1,918
Losses	(31		)	(46	)	(143	)	(299	)
AFS equity securities
Gains	4,362			4,800		12,679		10,471
Losses	(153		)	(3	)	(324	)	(171	)
Other investments
Gains	—			—		—		—
Losses	—			—		—		(860	)
Total other net realized investment gains	4,958			5,709		13,139		11,013
Total OTTI charges recognized in earnings	(419		)	(555	)	(1,382	)	(2,504	)
Total net realized gains	$	4,539		5,154		11,757		8,509

Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold. The $5.0 million and $13.1 million in net realized gains in Second Quarter and Six Months 2014, respectively, were primarily related to the sale of AFS equity securities due to the rebalancing of our high dividend yield strategy holdings within our equity portfolio.

Of the $5.7 million and $11.0 million in net realized gains in Second Quarter and Six Months 2013, $4.7 million related to the sale of a private equity security due to the acquisition of this investment by a third party. In addition, $5.6 million in net realized gains in Six Months 2013 were related to the sale of AFS equity securities due to the rebalancing of our high dividend yield strategy holdings within our equity portfolio.

Proceeds from the sale of AFS securities were $68.7 million in Second Quarter 2014 and $131.6 million in Six Months 2014, and $42.2 million and $49.1 million in the same periods a year ago.

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Reinsurance

6 Months Ended

Jun. 30, 2014

Reinsurance Disclosures [Abstract]

Reinsurance

Reinsurance

The following table contains a listing of direct, assumed, and ceded reinsurance amounts for premiums written, premiums earned, and loss and loss expenses incurred for the periods indicated. For more information concerning reinsurance, refer to Note 8. “Reinsurance” in Item 8. “Financial Statements and Supplementary Data.” of our 2013 Annual Report.

	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Premiums written:
Direct	$	572,314		551,190		1,130,205		1,080,006
Assumed	5,837			4,378		13,687		12,860
Ceded	(98,328		)	(93,391	)	(187,319	)	(180,565	)
Net	$	479,823		462,177		956,573		912,301
Premiums earned:
Direct	$	544,913		504,081		1,081,613		998,147
Assumed	10,385			8,951		20,570		21,414
Ceded	(91,673		)	(86,780	)	(182,063	)	(172,369	)
Net	$	463,625		426,252		920,120		847,192
Loss and loss expense incurred:
Direct	$	332,707		338,954		691,056		704,600
Assumed	7,377			6,420		14,856		15,494
Ceded	(42,289		)	(65,780	)	(87,571	)	(170,651	)
Net	$	297,795		279,594		618,341		549,443

The growth in direct premiums written ("DPW") for our ten insurance subsidiaries ("Insurance Subsidiaries") in both Second Quarter and Six Months 2014 compared to Second Quarter and Six Months 2013 reflects pure price increases and retention that we have achieved in our Standard Insurance Operations.

Direct premiums earned increases in Second Quarter 2014 and Six Months 2014 were consistent with the fluctuation in DPW for the twelve-month period ended June 30, 2014 as compared to the twelve-month period ended June 30, 2013.

The ceded premiums and losses related to our participation in the NFIP, under which 100% of our flood premiums, losses, and loss expenses are ceded to the NFIP, are as follows:

Ceded to NFIP	Quarter ended June 30,					Six Months ended June 30,
($ in thousands)	2014			2013		2014		2013
Ceded premiums written	$	(65,775	)	(62,461	)	(123,078	)	(119,168	)
Ceded premiums earned	(59,213		)	(56,450	)	(117,499	)	(111,777	)
Ceded loss and loss expense incurred	(26,712		)	(51,725	)	(34,091	)	(127,901	)

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Investments (HTM Fixed Income Securities by Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investments [Abstract]
Due in one year or less carrying value	$ 113,394
Due after one year through five years carrying value	230,116
Due after five years through 10 years carrying value	21,428
Carrying Value	364,938	392,879
Due in one year or less fair value	115,199
Due after one year through five years fair value	245,500
Due after five years through 10 years fair value	24,803
Fixed income securities, held-to-maturity, fair value	$ 385,502	$ 416,981

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Segment Information (Income From Continuing Operations, Before Federal Income Tax) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Net investment income earned	$ 36,774	$ 34,003	$ 72,308	$ 66,873
Net realized investment gains	4,539	5,154	11,757	8,509
Total investment revenues	41,313	39,157	84,065	75,382
Tax on investment income	10,941	10,107	22,516	19,312
Total Investment Income After Federal Income Tax	30,372	29,050	61,549	56,070
Total Standard Commercial Lines [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	15,703	9,743	12,073	15,845
Total Standard Personal Lines [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	(5,582)	(2,975)	(7,942)	2,998
Total Standard Insurance Operations [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	10,121	6,768	4,131	18,843
GAAP combined ratio	97.60%	98.30%	99.50%	97.60%
Statutory combined ratio	97.30%	97.00%	99.20%	96.90%
Excess And Surplus Operations [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	$ (37)	$ (2,285)	$ 938	$ (2,199)
GAAP combined ratio	100.10%	107.60%	98.60%	103.70%
Statutory combined ratio	99.90%	106.80%	98.80%	102.60%

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Statements of Cash Flow (Tables)

6 Months Ended

Jun. 30, 2014

Supplemental Cash Flow Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures

	Six Months ended June 30,
($ in thousands)	2014		2013
Cash paid during the period for:
Interest	$	11,113	10,295
Federal income tax	3,699		11,000
Non-cash items:
Tax-free exchange of fixed income securities, available-for-sale ("AFS")	9,180		13,615
Tax-free exchange of fixed income securities, held-to-maturity ("HTM")	15		10,710
Stock split related to equity securities, AFS	334		—
Assets acquired under capital lease arrangements	2,124		1,898

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Retirement Plans (Table)

6 Months Ended

Jun. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of Components Of Net Periodic Benefit Cost And Other Amounts Recognized In Other Comprehensive Income

	Retirement Income Plan Quarter ended June 30,					Retirement Life Plan Quarter ended June 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	1,626		1,857		—	—
Interest cost	3,253			3,051		73	69
Expected return on plan assets	(3,918		)	(3,985	)	—	—
Amortization of unrecognized net actuarial loss	368			772		13	17
Total net periodic cost	$	1,329		1,695		86	86

	Retirement Income Plan Six Months ended June 30,					Retirement Life Plan Six Months ended June 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	3,253		4,306		—	—
Interest cost	6,507			6,354		146	139
Expected return on plan assets	(7,837		)	(7,833	)	—	—
Amortization of unrecognized prior service	—			10		—	—
Amortization of unrecognized net actuarial loss	735			2,594		26	35
Curtailment expense	—			16		—	—
Total net periodic cost	$	2,658		5,447		172	174

Schedule Of Weighted-Average Expense Assumptions

	Retirement Income Plan Six Months ended June 30,			Retirement Life Plan Six Months ended June 30,
	2014		2013	2014		2013
Weighted-Average Expense Assumptions:
Discount rate	5.16	%	4.66	4.85	%	4.42
Expected return on plan assets	6.92		7.40	—		—
Rate of compensation increase	4.00		4.00	—		—

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Segment Information Narrative (Details) (USD $)	3 Months Ended	6 Months Ended
	Mar. 31, 2014	Jun. 30, 2014	Jun. 30, 2013
Number of Operating Segments		3
Gross premiums of self-insured pooled group renewal book of business sold	$ 38,000,000
Proceeds from sale of renewal rights	$ 8,000,000	$ 8,000,000	$ 0

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Investments (Gross Credit Loss Impairments of Fixed Maturity Securities for Which a Portion of the OTTI Charge was Recognized in OCI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Investments [Abstract]
Balance, beginning of period	$ 7,488	$ 7,486	$ 7,488	$ 7,477
Addition for the amount related to credit loss for which an OTTI was not previously recognized	0	0	0	0
Reductions for securities sold during the period	(1,954)	0	(1,954)	0
Reductions for securities for which the amount previously recognized in OCI was recognized in earnings because of intention or potential requirement to sell before recovery of amortized cost	0	0	0	0
Reductions for securities for which the entire amount previously recognized in OCI was recognized in earnings due to a decrease in cash flows expected	0	0	0	0
Additional increases to the amount related to credit loss for which an OTTI was previously recognized	0	2	0	11
Accretion of credit loss impairments previously recognized due to increase in cash flows expected to be collected	0	0	0	0
Balance, end of period	$ 5,534	$ 7,488	$ 5,534	$ 7,488

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Consolidated Statements of Income Parenthetical (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Tax effect of loss on disposal of discontinued operations	$ (538)

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Organization

6 Months Ended

Jun. 30, 2014

Organization [Abstract]

Organization

Organization

Selective Insurance Group, Inc., through its subsidiaries, (collectively referred to as “we,” “us,” or “our”) offers standard and excess and surplus lines (“E&S”) property and casualty insurance products. Selective Insurance Group, Inc. (referred to as the “Parent”) was incorporated in New Jersey in 1977 and its main offices are located in Branchville, New Jersey. The Parent’s common stock is publicly traded on the NASDAQ Global Select Market under the symbol “SIGI.”

We classify our business into three operating segments:

• Our Standard Insurance Operations segment, which is comprised of both commercial lines ("Commercial Lines") and personal lines ("Personal Lines") business, sells property and casualty insurance products and services in the standard market, including flood insurance through the National Flood Insurance Program's ("NFIPs") write-your-own ("WYO") program;

• Our E&S Insurance Operations segment sells Commercial Lines property and casualty insurance products and services to insureds who have not obtained coverage in the standard market; and

• Our Investments segment, which invests the premiums collected by our Standard and E&S Insurance Operations and amounts generated through our capital management strategies, which may include the issuance of debt and equity securities.

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2014

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of Components of Comprehensive Income-Gross and Net of Tax

Second Quarter 2014
($ in thousands)	Gross			Tax		Net
Net income	$	39,521		10,180		29,341
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	45,122			15,793		29,329
Amounts reclassified into net income:
HTM securities	(221		)	(77	)	(144	)
Non-credit OTTI	469			164		305
Realized gains on AFS securities	(5,008		)	(1,753	)	(3,255	)
Net unrealized gains	40,362			14,127		26,235
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	381			133		248
Defined benefit pension and post-retirement plans	381			133		248
Other comprehensive income	40,743			14,260		26,483
Comprehensive income	$	80,264		24,440		55,824

Second Quarter 2013
($ in thousands)	Gross			Tax		Net
Net income	$	36,201		9,079		27,122
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(91,314		)	(31,961	)	(59,353	)
Non-credit OTTI recognized in OCI	47			16		31
Amounts reclassified into net income:
HTM securities	(614		)	(215	)	(399	)
Non-credit OTTI	6			3		3
Realized gains on AFS securities	(5,288		)	(1,850	)	(3,438	)
Net unrealized losses	(97,163		)	(34,007	)	(63,156	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	789			276		513
Defined benefit pension and post-retirement plans	789			276		513
Other comprehensive loss	(96,374		)	(33,731	)	(62,643	)
Comprehensive loss	$	(60,173	)	(24,652	)	(35,521	)

Six Months 2014
($ in thousands)	Gross			Tax		Net
Net income	$	64,605		17,290		47,315
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	78,086			27,331		50,755
Amounts reclassified into net income:
HTM securities	(677		)	(237	)	(440	)
Non-credit OTTI	469			164		305
Realized gains on AFS securities	(12,237		)	(4,283	)	(7,954	)
Net unrealized gains	65,641			22,975		42,666
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	761			266		495
Defined benefit pension and post-retirement plans	761			266		495
Other comprehensive income	66,402			23,241		43,161
Comprehensive income	$	131,007		40,531		90,476

Six Months 2013
($ in thousands)	Gross			Tax		Net
Net income	$	63,534		15,104		48,430
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(87,630		)	(30,671	)	(56,959	)
Non-credit OTTI recognized in OCI	77			27		50
Amounts reclassified into net income:
HTM securities	(1,331		)	(466	)	(865	)
Non-credit OTTI	13			5		8
Realized gains on AFS securities	(11,264		)	(3,942	)	(7,322	)
Net unrealized losses	(100,135		)	(35,047	)	(65,088	)
Defined benefit pension and post-retirement plans:
Net actuarial gains	44,000			15,400		28,600
Amounts reclassified into net income:
Net actuarial loss	2,629			920		1,709
Prior service cost	10			4		6
Curtailment expense	16			5		11
Defined benefit pension and post-retirement plans	46,655			16,329		30,326
Other comprehensive loss	(53,480		)	(18,718	)	(34,762	)
Comprehensive income	$	10,054		(3,614	)	13,668

Schedule of Components of Accumulated Other Comprehensive Income

June 30, 2014	Net Unrealized (Loss) Gain on Investment Securities
($ in thousands)	OTTI Related			HTM Related		All Other		Investments Subtotal		Defined Benefit Pension and Post-Retirement Plans		Total AOCI
Balance, December 31, 2013	$	(1,599	)	1,467		51,635		51,503		(26,652	)	24,851
OCI before reclassifications	—			—		50,755		50,755		—		50,755
Amounts reclassified from AOCI	305			(440	)	(7,954	)	(8,089	)	495		(7,594	)
Net current period OCI	305			(440	)	42,801		42,666		495		43,161
Balance, June 30, 2014	$	(1,294	)	1,027		94,436		94,169		(26,157	)	68,012

Schedule of Reclassifications Out Of Accumulated Other Comprehensive Income

	Quarter ended June 30,				Six Months ended June 30,
($ in thousands)	2014		2013		2014		2013		Affected Line Item in the Unaudited Consolidated Statement of Income
OTTI related
Amortization of non-credit OTTI losses on HTM securities	—		6		—		13		Net investment income earned
Realized loss on disposal of non-credit OTTI securities	469		—		469		—		Net realized gains
	469		6		469		13		Income from continuing operations, before federal income tax
	(164	)	(3	)	(164	)	(5	)	Total federal income tax expense
	305		3		305		8		Net income
HTM related
Unrealized losses (gains) on HTM disposals	51		(70	)	75		(151	)	Net realized gains
Amortization of net unrealized gains on HTM securities	(272	)	(544	)	(752	)	(1,180	)	Net investment income earned
	(221	)	(614	)	(677	)	(1,331	)	Income from continuing operations, before federal income tax
	77		215		237		466		Total federal income tax expense
	(144	)	(399	)	(440	)	(865	)	Net income
Realized gains and losses on AFS and OTTI
Realized gains on AFS disposals and OTTI	(5,008	)	(5,288	)	(12,237	)	(11,264	)	Net realized gains
	(5,008	)	(5,288	)	(12,237	)	(11,264	)	Income from continuing operations, before federal income tax
	1,753		1,850		4,283		3,942		Total federal income tax expense
	(3,255	)	(3,438	)	(7,954	)	(7,322	)	Net income
Defined benefit pension and post-retirement life plans
Net actuarial loss	88		158		175		558		Loss and loss expense incurred
	293		631		586		2,071		Policy acquisition costs
	381		789		761		2,629		Income from continuing operations, before federal income tax
Prior service cost	—		—		—		7		Loss and loss adjustment expenses
	—		—		—		3		Policy acquisition costs
	—		—		—		10		Income from continuing operations, before federal income tax
Curtailment expense	—		—		—		16		Policy acquisition costs
	—		—		—		16		Income from continuing operations, before federal income tax
Total defined benefit pension and post-retirement life	381		789		761		2,655		Income from continuing operations, before federal income tax
	(133	)	(276	)	(266	)	(929	)	Total federal income tax expense
	248		513		495		1,726		Net income
Total reclassifications for the period	(2,846	)	(3,321	)	(7,594	)	(6,453	)	Net income

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Investments (Investments Pledged as Collateral) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	$ 61.6
Securities Pledged As Collateral For Reinsurance Obligations	16.4
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	26.0
Securities Pledged As Collateral	104.0
Outstanding Borrowing With The Federal Home Loan Bank Of Indianapolis	58
U.S. Government and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	22.9
Securities Pledged As Collateral For Reinsurance Obligations	0
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	26.0
Securities Pledged As Collateral	48.9
Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	0
Securities Pledged As Collateral For Reinsurance Obligations	5.7
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	5.7
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	0
Securities Pledged As Collateral For Reinsurance Obligations	5.3
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	5.3
Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	0
Securities Pledged As Collateral For Reinsurance Obligations	2.0
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	2.0
Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	1.9
Securities Pledged As Collateral For Reinsurance Obligations	0
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	1.9
Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	36.8
Securities Pledged As Collateral For Reinsurance Obligations	3.2
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	40.0
Fixed Income Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	61.6
Securities Pledged As Collateral For Reinsurance Obligations	16.2
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	26.0
Securities Pledged As Collateral	103.8
Short-Term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities PledgedFor FHLBI Collateral	0
Securities Pledged As Collateral For Reinsurance Obligations	0.2
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	$ 0.2

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Litigation

6 Months Ended

Jun. 30, 2014

Loss Contingency, Information about Litigation Matters [Abstract]

Litigation

Litigation

In the ordinary course of conducting business, we are named as defendants in various legal proceedings. Most of these proceedings are claims litigation involving our Insurance Subsidiaries as either: (i) liability insurers defending or providing indemnity for third-party claims brought against insureds; or (ii) insurers defending first-party coverage claims brought against them. We account for such activity through the establishment of unpaid loss and loss expense reserves. We expect that the ultimate liability, if any, with respect to such ordinary course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to our consolidated financial condition, results of operations, or cash flows.

Our Insurance Subsidiaries are also from time to time involved in other legal actions, some of which assert claims for substantial amounts. These actions include, among others, putative class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, improper reimbursement of medical providers paid under workers compensation and personal and commercial automobile insurance policies. Our Insurance Subsidiaries also are involved from time to time in individual actions in which extra-contractual damages, punitive damages, or penalties are sought, such as claims alleging bad faith in the handling of insurance claims. We believe that we have valid defenses to these cases. We expect that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to our consolidated financial condition. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, an adverse outcome in certain matters could, from time to time, have a material adverse effect on our consolidated results of operations or cash flows in particular quarterly or annual periods.