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: September 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 September 30, 2014, there were 56,424,220 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 September 30, 2014 (Unaudited) and December 31, 2013	1
	Unaudited Consolidated Statements of Income for the Quarter and Nine Months Ended September 30, 2014 and 2013	2
	Unaudited Consolidated Statements of Comprehensive Income for the Quarter and Nine Months Ended September 30, 2014 and 2013	3
	Unaudited Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2014 and 2013	4
	Unaudited Consolidated Statements of Cash Flow for the Nine Months Ended September 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 Third Quarter and Nine Months 2014 and Third Quarter and Nine 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)	September 30, 2014			December 31, 2013
ASSETS
Investments:
Fixed income securities, held-to-maturity – at carrying value (fair value:  $354,190 – 2014; $416,981 – 2013)	$	336,082		392,879
Fixed income securities, available-for-sale – at fair value (amortized cost: $3,884,252 – 2014; $3,675,977 – 2013)	3,967,638			3,715,536
Equity securities, available-for-sale – at fair value (cost:  $180,419 – 2014; $155,350 – 2013)	211,266			192,771
Short-term investments (at cost which approximates fair value)	181,593			174,251
Other investments	106,548			107,875
Total investments (Note 5)	4,803,127			4,583,312
Cash	2,501			193
Interest and dividends due or accrued	37,563			37,382
Premiums receivable, net of allowance for uncollectible accounts of:  $3,860 – 2014; $4,442 – 2013	591,686			524,870
Reinsurance recoverables, net	559,946			550,897
Prepaid reinsurance premiums	158,889			143,000
Current federal income tax	—			512
Deferred federal income tax	92,780			122,613
Property and equipment – at cost, net of accumulated depreciation and amortization of: $188,175 – 2014; $179,192 – 2013	55,532			50,834
Deferred policy acquisition costs	189,681			172,981
Goodwill	7,849			7,849
Other assets	77,865			75,727
Total assets	$	6,577,419		6,270,170
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for loss and loss expenses	$	3,445,706		3,349,770
Unearned premiums	1,143,979			1,059,155
Notes payable	392,294			392,414
Current federal income tax	16,322			—
Accrued salaries and benefits	97,469			111,427
Other liabilities	214,724			203,476
Total liabilities	$	5,310,494		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: 99,753,415 – 2014; 99,120,235 – 2013	199,507			198,240
Additional paid-in capital	300,425			288,182
Retained earnings	1,280,148			1,202,015
Accumulated other comprehensive income (Note 10)	49,125			24,851
Treasury stock – at cost (shares:  43,329,195 – 2014; 43,198,622 – 2013)	(562,280		)	(559,360	)
Total stockholders’ equity	1,266,925			1,153,928
Commitments and contingencies
Total liabilities and stockholders’ equity	$	6,577,419		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 September 30,				Nine Months ended September 30,
($ in thousands, except per share amounts)	2014		2013		2014		2013
Revenues:
Net premiums earned	$	462,639	437,568		1,382,759		1,284,760
Net investment income earned	34,292		32,457		106,600		99,330
Net realized gains:
Net realized investment gains	15,231		14,111		28,370		25,124
Other-than-temporary impairments	—		(680	)	(1,382	)	(3,107	)
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income	—		—		—		(77	)
Total net realized gains	15,231		13,431		26,988		21,940
Other income	3,196		3,357		14,931		9,677
Total revenues	515,358		486,813		1,531,278		1,415,707
Expenses:
Loss and loss expense incurred	270,932		283,317		889,273		832,760
Policy acquisition costs	158,101		145,314		462,540		428,570
Interest expense	5,558		5,570		16,544		16,971
Other expenses	5,441		8,127		22,990		27,852
Total expenses	440,032		442,328		1,391,347		1,306,153
Income from continuing operations, before federal income tax	75,326		44,485		139,931		109,554
Federal income tax expense:
Current	7,373		6,367		22,692		20,041
Deferred	14,791		5,465		16,762		7,433
Total federal income tax expense	22,164		11,832		39,454		27,474
Net income from continuing operations	53,162		32,653		100,477		82,080
Loss on disposal of discontinued operations, net of tax of $(538) – 2013	—		—		—		(997	)
Net income	$	53,162	32,653		100,477		81,083
Earnings per share:
Basic net income from continuing operations	$	0.94	0.59		1.79		1.48
Basic net loss from discontinued operations	—		—		—		(0.02	)
Basic net income	$	0.94	0.59		1.79		1.46
Diluted net income from continuing operations	$	0.93	0.57		1.75		1.45
Diluted net loss from discontinued operations	—		—		—		(0.02	)
Diluted net income	$	0.93	0.57		1.75		1.43
Dividends to stockholders	$	0.13	0.13		0.39		0.39

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 September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Net income	$	53,162		32,653		100,477		81,083
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains on investment securities:
Unrealized holding (losses) gains arising during period	(8,988		)	6,383		41,767		(50,576	)
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income	—			—		—		50
Amount reclassified into net income:
Held-to-maturity securities	(243		)	(307	)	(683	)	(1,172	)
Non-credit other-than-temporary impairments	780			1		1,085		9
Realized gains on available for sale securities	(10,683		)	(8,785	)	(18,637	)	(16,107	)
Total unrealized (losses) gains on investment securities	(19,134		)	(2,708	)	23,532		(67,796	)
Defined benefit pension and post-retirement plans:
Net actuarial gain	—			—		—		28,600
Amounts reclassified into net income:
Net actuarial loss	247			513		742		2,222
Prior service cost	—			—		—		6
Curtailment expense	—			—		—		11
Total defined benefit pension and post-retirement plans	247			513		742		30,839
Other comprehensive (loss) income	(18,887		)	(2,195	)	24,274		(36,957	)
Comprehensive income	$	34,275		30,458		124,751		44,126

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	Nine Months ended September 30,
($ in thousands)	2014			2013
Common stock:
Beginning of year	$	198,240		196,388
Dividend reinvestment plan (shares:  44,322 – 2014; 49,964 – 2013)	89			100
Stock purchase and compensation plans (shares:  588,858 – 2014; 712,994 – 2013)	1,178			1,426
End of period	199,507			197,914
Additional paid-in capital:
Beginning of year	288,182			270,654
Dividend reinvestment plan	957			1,052
Stock purchase and compensation plans	11,286			12,361
End of period	300,425			284,067
Retained earnings:
Beginning of year	1,202,015			1,125,154
Net income	100,477			81,083
Dividends to stockholders ($0.39 per share – 2014 and 2013)	(22,344		)	(22,153	)
End of period	1,280,148			1,184,084
Accumulated other comprehensive income:
Beginning of year	24,851			54,040
Other comprehensive income (loss)	24,274			(36,957	)
End of period	49,125			17,083
Treasury stock:
Beginning of year	(559,360		)	(555,644	)
Acquisition of treasury stock (shares:  130,573 – 2014; 151,555 – 2013)	(2,920		)	(3,295	)
End of period	(562,280		)	(558,939	)
Total stockholders’ equity	$	1,266,925		1,124,209

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	Nine Months ended September 30,
($ in thousands)	2014			2013
Operating Activities
Net income	$	100,477		81,083
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	31,059			32,861
Sale of renewal rights	(8,000		)	—
Loss on disposal of discontinued operations	—			997
Stock-based compensation expense	7,421			7,428
Undistributed (gains) losses of equity method investments	(131		)	248
Net realized gains	(26,988		)	(21,940	)
Retirement income plan curtailment expense	—			16
Changes in assets and liabilities:
Increase in reserve for loss and loss expenses, net of reinsurance recoverables	86,887			112,876
Increase in unearned premiums, net of prepaid reinsurance	68,935			120,288
Decrease in net federal income taxes	33,596			8,990
Increase in premiums receivable	(66,816		)	(84,826	)
Increase in deferred policy acquisition costs	(16,700		)	(21,688	)
Increase in interest and dividends due or accrued	(82		)	(45	)
(Decrease) increase in accrued salaries and benefits	(13,958		)	8,286
(Decrease) increase in accrued insurance expenses	(12,545		)	6,895
Other-net	(25,036		)	(13,480	)
Net adjustments	57,642			156,906
Net cash provided by operating activities	158,119			237,989
Investing Activities
Purchase of fixed income securities, available-for-sale	(560,493		)	(838,634	)
Purchase of equity securities, available-for-sale	(185,529		)	(112,742	)
Purchase of other investments	(8,498		)	(7,864	)
Purchase of short-term investments	(1,082,192		)	(1,619,948	)
Sale of subsidiary	—			1,225
Sale of fixed income securities, available-for-sale	35,499			6,851
Sale of short-term investments	1,074,850			1,662,340
Redemption and maturities of fixed income securities, held-to-maturity	56,375			87,952
Redemption and maturities of fixed income securities, available-for-sale	336,939			413,722
Sale of equity securities, available-for-sale	186,001			109,399
Distributions from other investments	13,514			10,546
Purchase of property and equipment	(9,178		)	(10,493	)
Sale of renewal rights	8,000			—
Net cash used in investing activities	(134,712		)	(297,646	)
Financing Activities
Dividends to stockholders	(20,899		)	(20,532	)
Acquisition of treasury stock	(2,920		)	(3,295	)
Net proceeds from stock purchase and compensation plans	3,554			4,305
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	1,024			1,479
Repayments of capital lease obligations	(1,858		)	(768	)
Net cash (used in) provided by financing activities	(21,099		)	59,624
Net increase (decrease) in cash	2,308			(33	)
Cash, beginning of year	193			210
Cash, end of period	$	2,501		177

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 ("NFIP") 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.

Certain amounts in our prior years' Financial Statements and related notes have been reclassified to conform to the 2014 presentation. Such reclassifications had no effect on our net income, stockholders' equity, or cash flows.

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 third quarters ended September 30, 2014 (“Third Quarter 2014”) and September 30, 2013 (“Third Quarter 2013”) and the nine-month periods ended September 30, 2014 ("Nine Months 2014") and September 30, 2013 ("Nine 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 exist, 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

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. This policy election is required to be applied consistently to all qualifying investments, rather than a decision to be applied to individual investments. 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).  When a company does not make a policy election to account for investments in qualified affordable housing projects using the proportional amortization method, these investments are 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, with early adoption being permitted. During Third Quarter 2014, we adopted this guidance and have made a policy election to use the proportional amortization method. The adoption of this guidance did not materially impact our financial condition or results of operation.

Pronouncements to be effective in the future

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 Nine Months 2014 and 2013 is as follows:

	Nine Months ended September 30,
($ in thousands)	2014		2013
Cash paid during the period for:
Interest	$	14,089	13,325
Federal income tax	4,699		17,000
Non-cash items:
Tax-free exchange of fixed income securities, available-for-sale ("AFS")	14,954		23,733
Tax-free exchange of fixed income securities, held-to-maturity ("HTM")	4,288		15,820
Stock split related to equity securities, AFS	334		—
Assets acquired under capital lease arrangements	4,853		2,290

At September 30, 2014, included in "Other assets" on the Consolidated Balance Sheets was $8.1 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 September 30, 2014 and December 31, 2013 were as follows:

September 30, 2014
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses		Fair Value
Foreign government	$	5,292	68		5,360	47	—		5,407
Obligations of state and political subdivisions	301,216		2,472		303,688	13,921	—		317,609
Corporate securities	20,303		(325	)	19,978	2,749	(1	)	22,726
Asset-backed securities (“ABS”)	3,111		(530	)	2,581	543	—		3,124
Commercial mortgage-backed securities (“CMBS”)	4,953		(478	)	4,475	849	—		5,324
Total HTM fixed income securities	$	334,875	1,207		336,082	18,109	(1	)	354,190

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 2.0 years as of September 30, 2014.

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

September 30, 2014
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	143,742	8,210	(263	)	151,689
Foreign government	27,041		832	(6	)	27,867
Obligations of states and political subdivisions	1,196,478		34,533	(1,777	)	1,229,234
Corporate securities	1,725,290		44,571	(6,631	)	1,763,230
ABS	146,557		791	(382	)	146,966
CMBS1	164,934		2,077	(1,493	)	165,518
Residential mortgage-backed securities (“RMBS”)2	480,210		7,664	(4,740	)	483,134
AFS fixed income securities	3,884,252		98,678	(15,292	)	3,967,638
AFS equity securities	180,419		34,797	(3,950	)	211,266
Total AFS securities	$	4,064,671	133,475	(19,242	)	4,178,904

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 $17.6 million at September 30, 2014 and $30.0 million at December 31, 2013.

² RMBS includes government guaranteed agency securities with a fair value of $35.9 million at September 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 September 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:

September 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	$	1,001	—		13,219	(263	)
Foreign government	4,755		(6	)	—	—
Obligations of states and political subdivisions	121,728		(292	)	98,944	(1,485	)
Corporate securities	274,501		(1,529	)	158,127	(5,102	)
ABS	47,542		(134	)	14,149	(248	)
CMBS	16,969		(89	)	57,634	(1,404	)
RMBS	30,958		(101	)	163,237	(4,639	)
Total fixed income securities	497,454		(2,151	)	505,310	(13,141	)
Equity securities	35,229		(3,950	)	—	—
Subtotal	$	532,683	(6,101	)	505,310	(13,141	)

	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	460		(9	)	8	—	—		—
ABS	—		—		—	2,428	(530	)	516
Subtotal	$	460	(9	)	8	2,428	(530	)	516
Total AFS and HTM	$	533,143	(6,110	)	8	507,738	(13,671	)	516

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.

The table below provides our net unrealized/unrecognized loss positions by impairment severity as of September 30, 2014 compared to December 31, 2013:

($ in thousands)
September 30, 2014				December 31, 2013
Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss		Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss
404	80% - 99%	$	16,417	556	80% - 99%	$	51,835
2	60% - 79%	2,840		1	60% - 79%	176
—	40% - 59%	—		—	40% - 59%	—
—	20% - 39%	—		—	20% - 39%	—
—	0% - 19%	—		—	0% - 19%	—
		$	19,257			$	52,011

At September 30, 2014, we had 406 securities in an aggregate unrealized/unrecognized loss position of $19.3 million, compared to 557 securities in an aggregate unrealized/unrecognized loss position of $52.0 million at December 31, 2013. This improvement was mainly driven by a lower interest rate environment. Fixed income security pricing in the marketplace has improved reflecting the 54 basis point decrease in 10-year U.S. Treasury Note yields during Nine Months 2014.

10

At September 30, 2014, $13.2 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 $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 amortized cost at year end to an average of 3% of amortized cost at the end of the third 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 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.

In addition, 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 September 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 September 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 September 30, 2014:

($ in thousands)	Carrying Value		Fair Value
Due in one year or less	$	99,364	100,786
Due after one year through five years	220,937		235,038
Due after five years through 10 years	15,781		18,366
Total HTM fixed income securities	$	336,082	354,190

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

($ in thousands)	Fair Value
Due in one year or less	$	435,053
Due after one year through five years	1,915,327
Due after five years through 10 years	1,507,315
Due after 10 years	109,943
Total AFS fixed income securities	$	3,967,638

11

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

Other Investments	Carrying Value			September 30, 2014
($ in thousands)	September 30, 2014		December 31, 2013	Remaining Commitment
Alternative Investments
Secondary private equity	$	23,064	25,618	6,978
Private equity	21,569		20,192	9,181
Energy/power generation	16,659		17,361	6,984
Mezzanine financing	11,273		12,738	13,774
Real estate	11,212		11,698	10,061
Distressed debt	9,205		11,579	2,981
Venture capital	7,115		7,025	350
Total alternative investments	100,097		106,211	50,309
Other securities	6,451		1,664	—
Total other investments	$	106,548	107,875	50,309

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 nine-month periods ended September 30 is based on the investments' results through June 30 and is as follows:

Income Statement Information	Quarter ended September 30,1				Nine Months ended September 30,2
($ in millions)	2014			2013	2014		2013
Net investment income	$	81.3		97.8	$	167.0	352.8
Realized (losses) gains	(26.1		)	162.8	171.5		762.5
Net change in unrealized appreciation	628.6			104.8	1,471.0		85.9
Net income	$	683.8		365.4	$	1,809.5	1,201.2
Selective’s insurance subsidiaries’ other investments income	$	3.9		2.6	$	12.7	10.1

¹ The majority of these results are for the second quarter of each respective year.

² The majority of these results are for the nine months ended June 30 of each respective year.

(f) We have pledged certain AFS fixed income securities 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 September 30, 2014:

($ in millions)	FHLBI Collateral		Reinsurance Collateral	State and Regulatory Deposits	Total
U.S. government and government agencies	$	22.8	—	25.6	48.4
Obligations of states and political subdivisions	—		5.7	—	5.7
Corporate securities	—		5.3	—	5.3
ABS	—		2.0	—	2.0
CMBS	1.2		—	—	1.2
RMBS	37.6		2.3	—	39.9
Total pledged as collateral	$	61.6	15.3	25.6	102.5

12

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

	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014			2013
Fixed income securities	$	30,706		30,569		$	95,515		$	90,956
Equity securities	1,909			1,341		5,094			4,422
Short-term investments	15			21		48			102
Other investments	3,906			2,639		12,677			10,110
Investment expenses	(2,244		)	(2,113	)	(6,734		)	(6,260		)
Net investment income earned	$	34,292		32,457		106,600			99,330

(h) The following tables summarize OTTI by asset type for the periods indicated. We had no OTTI charges in Third Quarter 2014:

Third Quarter 2013	Gross		Included in Other Comprehensive Income ("OCI")	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	680	—	680
OTTI losses	$	680	—	680

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

Nine 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	1,326			—		1,326
Total AFS securities	1,304			(30	)	1,334
Other investments	1,847			—		1,847
OTTI losses	$	3,107		(77	)	3,184

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 portionof the OTTI charge was recognized in OCI, and the corresponding changes in such amounts:

	Quarter ended September 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	5,534		7,488
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(90		)	—
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	—			—
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,444		7,488

	Nine Months ended September 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	(2,044		)	—
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	$	5,444		7,488

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

	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
HTM fixed income securities
Gains	$	—		32		3		35
Losses	(4		)	(37	)	(18	)	(86	)
AFS fixed income securities
Gains	695			662		1,633		2,580
Losses	(29		)	(31	)	(172	)	(330	)
AFS equity securities
Gains	14,576			13,801		27,255		24,272
Losses	(8		)	(236	)	(332	)	(407	)
Other investments
Gains	1			—		1		—
Losses	—			(80	)	—		(940	)
Total other net realized investment gains	15,231			14,111		28,370		25,124
Total OTTI charges recognized in earnings	—			(680	)	(1,382	)	(3,184	)
Total net realized gains	$	15,231		13,431		26,988		21,940

Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold. The $15.2 million and $28.4 million in net realized gains in Third Quarter and Nine 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 $14.1 million and $25.1 million in net realized gains in Third Quarter and Nine Months 2013, $13.5 million and $19.1 million, respectively, were related to the sale of AFS equity securities due to the rebalancing of our high dividend yield strategy holdings within our equity portfolio. In addition, $4.7 million in net realized gains in Nine Months 2013, was related to the sale of a private equity security due to the acquisition of this investment by a third party.

Proceeds from the sale of AFS securities were $89.9 million in Third Quarter 2014 and $221.5 million in Nine Months 2014, and $67.2 million and $116.3 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 September 30, 2014 and December 31, 2013:

	September 30, 2014			December 31, 2013
($ in thousands)	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial Assets
Fixed income securities:
HTM	$	336,082	354,190	392,879	416,981
AFS	3,967,638		3,967,638	3,715,536	3,715,536
Equity securities, AFS	211,266		211,266	192,771	192,771
Short-term investments	181,593		181,593	174,251	174,251
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	13,000		13,085	13,000	13,319
1.25% borrowings from FHLBI	45,000		45,220	45,000	45,259
7.25% Senior Notes	49,896		56,970	49,916	50,887
6.70% Senior Notes	99,398		110,310	99,498	98,247
5.875% Senior Notes	185,000		179,598	185,000	146,298
Total notes payable	$	392,294	405,183	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 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 September 30, 2014 and December 31, 2013:

September 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets  Measured at  Fair Value  at 9/30/2014		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	$	151,689	51,467	100,222	—
Foreign government	27,867		—	27,867	—
Obligations of states and political subdivisions	1,229,234		—	1,229,234	—
Corporate securities	1,763,230		—	1,763,230	—
ABS	146,966		—	146,966	—
CMBS	165,518		—	165,518	—
RMBS	483,134		—	483,134	—
Total AFS fixed income securities	3,967,638		51,467	3,916,171	—
Equity securities	211,266		208,366	—	2,900
Total AFS Securities	4,178,904		259,833	3,916,171	2,900
Short-term investments	181,593		181,593	—	—
Total assets measured at fair value	$	4,360,497	441,426	3,916,171	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 were no changes in the fair value of securities measured using Level 3 prices during Nine Months 2014. The following table provides a summary of these changes during full year 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 September 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 a fair value of $2.9 million were measured using Level 3 inputs at September 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 September 30, 2014 and December 31, 2013:

September 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 9/30/2014		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	$	5,407	—	5,407	—
Obligations of states and political subdivisions	317,609		—	317,609	—
Corporate securities	22,726		—	22,726	—
ABS	3,124		—	3,124	—
CMBS	5,324		—	5,324	—
Total HTM fixed income securities	$	354,190	—	354,190	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,085	—	13,085	—
1.25% borrowings from FHLBI	45,220		—	45,220	—
7.25% Senior Notes	56,970		—	56,970	—
6.70% Senior Notes	110,310		—	110,310	—
5.875% Senior Notes	179,598		179,598	—	—
Total notes payable	$	405,183	179,598	225,585	—

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 September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Premiums written:
Direct	$	592,858		570,849		1,723,063		1,650,855
Assumed	5,780			22,053		19,467		34,913
Ceded	(103,517		)	(100,154	)	(290,836	)	(280,719	)
Net	$	495,121		492,748		1,451,694		1,405,049
Premiums earned:
Direct	$	548,734		518,307		1,630,347		1,516,454
Assumed	6,789			11,066		27,359		32,480
Ceded	(92,884		)	(91,805	)	(274,947	)	(264,174	)
Net	$	462,639		437,568		1,382,759		1,284,760
Loss and loss expense incurred:
Direct	$	304,525		350,648		995,581		1,055,248
Assumed	5,362			7,264		20,218		22,758
Ceded	(38,955		)	(74,595	)	(126,526	)	(245,246	)
Net	$	270,932		283,317		889,273		832,760

Direct premiums earned increases in Third Quarter 2014 and Nine Months 2014 compared to Third Quarter 2013 and Nine Months 2013 reflect pure price increases coupled with stable retention that we have achieved in our Standard Insurance Operations. These increases were consistent with the fluctuation in DPW for the twelve-month period ended September 30, 2014 compared to the twelve-month period ended September 30, 2013.

Assumed premiums written and earned decreased in Third Quarter 2014 and Nine Months 2014 compared to the same periods last year as a result of the March 2014 sale of the renewal rights to our self-insured group, or "SIG," book of pooled public entity business.

Direct loss and loss expense incurred decreased by $46.1 million in Third Quarter 2014 compared to Third Quarter 2013 driven by: (i) lower catastrophe losses; (ii) favorable prior year casualty reserve development; and (iii) a $4.0 million reduction in our estimated ultimate exposure related to Hurricane Sandy, $3.6 million of which is ceded under our catastrophe excess of loss treaty.

In addition, 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 September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Ceded premiums written	$	(69,922	)	(64,196	)	(193,000	)	(183,364	)
Ceded premiums earned	(60,761		)	(57,920	)	(178,260	)	(169,697	)
Ceded loss and loss expense incurred	(14,008		)	(34,879	)	(48,099	)	(162,780	)

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 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 September 30,			Nine Months ended September 30,
($ in thousands)	2014		2013	2014	2013
Standard Insurance Operations:
Net premiums earned:
Commercial automobile	$	83,536	79,138	249,224	230,191
Workers compensation	66,732		66,510	205,137	197,449
General liability	110,894		100,925	331,303	298,394
Commercial property	61,304		57,004	182,716	165,356
Businessowners’ policies	21,649		19,629	63,797	56,794
Bonds	4,791		4,705	14,281	14,244
Other	3,237		3,051	9,633	9,036
Total Standard Commercial Lines	352,143		330,962	1,056,091	971,464
Personal automobile	37,695		38,513	113,943	115,432
Homeowners	33,957		32,374	100,831	95,211
Other	2,725		3,827	8,965	10,655
Total Standard Personal Lines	74,377		74,714	223,739	221,298
Total Standard Insurance Operations net premiums earned	426,520		405,676	1,279,830	1,192,762
Miscellaneous income	3,196		3,342	14,923	9,590
Total Standard Insurance Operations revenue	429,716		409,018	1,294,753	1,202,352
E&S Insurance Operations:
Net premiums earned	36,119		31,892	102,929	91,998
Investments:
Net investment income	34,292		32,457	106,600	99,330
Net realized investment gains	15,231		13,431	26,988	21,940
Total investment revenues	49,523		45,888	133,588	121,270
Total all segments	515,358		486,798	1,531,270	1,415,620
Other income	—		15	8	87
Total revenues from continuing operations	$	515,358	486,813	1,531,278	1,415,707

20

Income from Continuing Operations before Federal Income Tax	Quarter ended September 30,				Nine Months ended September 30,
($ in thousands)	2014			2013	2014			2013
Standard Insurance Operations:
Commercial Lines underwriting gain	$	27,771		8,776	$	39,844		24,621
Personal Lines underwriting gain	8,037			1,362	95			4,360
Total Standard Insurance Operations underwriting gain, before federal income tax	35,808			10,138	39,939			28,981
GAAP combined ratio	91.6		%	97.5	96.9		%	97.6
Statutory combined ratio	90.5		%	96.0	96.3		%	96.6
E&S Insurance Operations:
Underwriting (loss) gain	(1,371		)	13	(433		)	(2,186	)
GAAP combined ratio	103.8		%	100.0	100.4		%	102.4
Statutory combined ratio	102.9		%	100.5	100.3		%	101.9
Investments:
Net investment income	34,292			32,457	106,600			99,330
Net realized investment gains	15,231			13,431	26,988			21,940
Total investment income, before federal income tax	49,523			45,888	133,588			121,270
Tax on investment income	13,858			12,648	36,374			31,960
Total investment income, after federal income tax	35,665			33,240	97,214			89,310

Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations underwriting gain, before federal income tax	$	35,808		10,138		$	39,939		28,981
E&S Insurance Operations underwriting (loss) gain, before federal income tax	(1,371		)	13		(433		)	(2,186	)
Investment income, before federal income tax	49,523			45,888		133,588			121,270
Total all segments	83,960			56,039		173,094			148,065
Interest expense	(5,558		)	(5,570	)	(16,544		)	(16,971	)
General corporate and other expenses	(3,076		)	(5,984	)	(16,619		)	(21,540	)
Income from continuing operations, before federal income tax	$	75,326		44,485		$	139,931		109,554

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 September 30,					Retirement Life Plan Quarter ended September 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	1,627		1,857		—	—
Interest cost	3,253			3,053		73	69
Expected return on plan assets	(3,919		)	(3,986	)	—	—
Amortization of unrecognized net actuarial loss	367			772		14	18
Total net periodic cost	$	1,328		1,696		87	87

21

	Retirement Income Plan Nine Months ended September 30,					Retirement Life Plan Nine Months ended September 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	4,880		6,163		—	—
Interest cost	9,760			9,407		219	208
Expected return on plan assets	(11,756		)	(11,819	)	—	—
Amortization of unrecognized prior service	—			10		—	—
Amortization of unrecognized net actuarial loss	1,102			3,366		40	53
Curtailment expense	—			16		—	—
Total net periodic cost	$	3,986		7,143		259	261

	Retirement Income Plan Nine Months ended September 30,			Retirement Life Plan Nine Months ended September 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 $10.4 million to the Retirement Income Plan in 2014, $8.0 million of which has been funded as of September 30, 2014.

NOTE 10. Comprehensive Income

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

Third Quarter 2014
($ in thousands)	Gross			Tax		Net
Net income	$	75,326		22,164		53,162
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(13,831		)	(4,843	)	(8,988	)
Amounts reclassified into net income:
HTM securities	(373		)	(130	)	(243	)
Non-credit OTTI	1,200			420		780
Realized gains on AFS securities	(16,435		)	(5,752	)	(10,683	)
Net unrealized losses	(29,439		)	(10,305	)	(19,134	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	381			134		247
Defined benefit pension and post-retirement plans	381			134		247
Other comprehensive loss	(29,058		)	(10,171	)	(18,887	)
Comprehensive income	$	46,268		11,993		34,275

22

Third Quarter 2013
($ in thousands)	Gross			Tax		Net
Net income	$	44,485		11,832		32,653
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding gains during the period	9,820			3,437		6,383
Amounts reclassified into net income:
HTM securities	(472		)	(165	)	(307	)
Non-credit OTTI	1			—		1
Realized gains on AFS securities	(13,516		)	(4,731	)	(8,785	)
Net unrealized losses	(4,167		)	(1,459	)	(2,708	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	790			277		513
Defined benefit pension and post-retirement plans	790			277		513
Other comprehensive loss	(3,377		)	(1,182	)	(2,195	)
Comprehensive loss	$	41,108		10,650		30,458

Nine Months 2014
($ in thousands)	Gross			Tax		Net
Net income	$	139,931		39,454		100,477
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	64,255			22,488		41,767
Amounts reclassified into net income:
HTM securities	(1,050		)	(367	)	(683	)
Non-credit OTTI	1,669			584		1,085
Realized gains on AFS securities	(28,672		)	(10,035	)	(18,637	)
Net unrealized gains	36,202			12,670		23,532
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	1,142			400		742
Defined benefit pension and post-retirement plans	1,142			400		742
Other comprehensive income	37,344			13,070		24,274
Comprehensive income	$	177,275		52,524		124,751

23

Nine Months 2013
($ in thousands)	Gross			Tax		Net
Net income	$	108,019		26,936		81,083
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(77,810		)	(27,234	)	(50,576	)
Non-credit OTTI recognized in OCI	77			27		50
Amounts reclassified into net income:
HTM securities	(1,803		)	(631	)	(1,172	)
Non-credit OTTI	14			5		9
Realized gains on AFS securities	(24,780		)	(8,673	)	(16,107	)
Net unrealized losses	(104,302		)	(36,506	)	(67,796	)
Defined benefit pension and post-retirement plans:
Net actuarial gains	44,000			15,400		28,600
Amounts reclassified into net income:
Net actuarial loss	3,419			1,197		2,222
Prior service cost	10			4		6
Curtailment expense	16			5		11
Defined benefit pension and post-retirement plans	47,445			16,606		30,839
Other comprehensive loss	(56,857		)	(19,900	)	(36,957	)
Comprehensive income	$	51,162		7,036		44,126

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

September 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	—			—		41,767		41,767		—		41,767
Amounts reclassified from AOCI	1,085			(683	)	(18,637	)	(18,235	)	742		(17,493	)
Net current period OCI	1,085			(683	)	23,130		23,532		742		24,274
Balance, September 30, 2014	$	(514	)	784		74,765		75,035		(25,910	)	49,125

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The reclassifications out of AOCI are as follows:

	Quarter ended September 30,				Nine Months ended September 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	—		1		—		14		Net investment income earned
Non-credit OTTI on disposed securities	1,200		—		1,669		—		Net realized gains
	1,200		1		1,669		14		Income from continuing operations, before federal income tax
	(420	)	—		(584	)	(5	)	Total federal income tax expense
	780		1		1,085		9		Net income
HTM related
Unrealized losses (gains) on HTM disposals	12		(19	)	87		(170	)	Net realized gains
Amortization of net unrealized gains on HTM securities	(385	)	(453	)	(1,137	)	(1,633	)	Net investment income earned
	(373	)	(472	)	(1,050	)	(1,803	)	Income from continuing operations, before federal income tax
	130		165		367		631		Total federal income tax expense
	(243	)	(307	)	(683	)	(1,172	)	Net income
Realized gains and losses on AFS and OTTI
Realized gains on AFS disposals and OTTI	(16,435	)	(13,516	)	(28,672	)	(24,780	)	Net realized gains
	(16,435	)	(13,516	)	(28,672	)	(24,780	)	Income from continuing operations, before federal income tax
	5,752		4,731		10,035		8,673		Total federal income tax expense
	(10,683	)	(8,785	)	(18,637	)	(16,107	)	Net income
Defined benefit pension and post-retirement life plans
Net actuarial loss	88		159		263		717		Loss and loss expense incurred
	293		631		879		2,702		Policy acquisition costs
	381		790		1,142		3,419		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		790		1,142		3,445		Income from continuing operations, before federal income tax
	(134	)	(277	)	(400	)	(1,206	)	Total federal income tax expense
	247		513		742		2,239		Net income
Total reclassifications for the period	(9,899	)	(8,578	)	(17,493	)	(15,031	)	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 Third Quarter and Nine Months 2014 and Third Quarter and Nine 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 example, the Society of Actuaries issued final versions of its mortality tables and mortality improvement scale in October 2014, which reflect increasing life expectancies in the United States. We will adopt the new mortality information in the fourth quarter of this year, which will potentially result in a pre-tax charge to other comprehensive income of approximately $20 million as of December 31, 2014, assuming all other assumptions related to the post-retirement plan remain unchanged.

For additional information regarding our critical accounting policies, refer to our 2013 Annual Report, pages 44 through 52.

Financial Highlights of Results for Third Quarterand Nine Months 2014 and Third Quarter and Nine Months 2013¹

	Quarter ended September 30,							Nine Months ended September 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	$	515,358		486,813	6		%	$	1,531,278	1,415,707	8		%
Pre-tax net investment income	34,292			32,457	6			106,600		99,330	7
Pre-tax net income	75,326			44,485	69			139,931		108,019	30
Net income	53,162			32,653	63			100,477		81,083	24
Diluted net income per share	0.93			0.57	63			1.75		1.43	22
Diluted weighted-average outstanding shares	57,406			56,900	1			57,286		56,719	1
GAAP combined ratio	92.6		%	97.7	(5.1	)	pts	97.1		97.9	(0.8	)	pts
Statutory combined ratio	91.5		%	96.3	(4.8	)		96.6		96.9	(0.3	)
Return on average equity	17.0		%	11.7	5.3			11.1		9.8	1.3
Non-GAAP measures:
Operating income2	$	43,262		23,922	81		%	$	82,935	67,819	22		%
Diluted operating income per share2	0.76			0.42	81			1.44		1.20	20
Operating return on average equity2	13.8		%	8.6	5.2		pts	9.1		8.2	0.9		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  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 September 30,			Nine Months ended September 30,
($ in thousands, except per share amounts)	2014		2013	2014	2013
Operating income	$	43,262	23,922	82,935	67,819
Net realized gains, net of tax	9,900		8,731	17,542	14,261
Loss on disposal of discontinued operations, net of tax	—		—	—	(997	)
Net income	$	53,162	32,653	100,477	81,083
Diluted operating income per share	$	0.76	0.42	1.44	1.20
Diluted net realized gains per share	0.17		0.15	0.31	0.25
Diluted net loss from disposal of discontinued operations per share	—		—	—	(0.02	)
Diluted net income per share	$	0.93	0.57	1.75	1.43

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 Third Quarter 2014 and Nine Months 2014 and the comparable prior year periods are as follows:

Operating Return on Average Equity	Quarter ended September 30,				Nine Months ended September 30,
	2014		2013		2014		2013
Standard Insurance Operations	7.4	%	2.4	%	2.9	%	2.3	%
E&S Insurance Operations	(0.3	)%	—	%	—	%	(0.2	)%
Investments	8.2	%	8.8	%	8.8	%	9.0	%
Other	(1.5	)%	(2.6	)%	(2.6	)%	(2.9	)%
Total	13.8	%	8.6	%	9.1	%	8.2	%

Our operating return on average equity in Third Quarter 2014 and Nine Months 2014 reflects GAAP combined ratios of 92.6% and 97.1%, respectively, compared to 97.7% and 97.9% in the same periods a year ago. Lower catastrophe losses coupled with 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. On a year-to-date basis, higher property losses, including catastrophe losses, partially offset the benefits of rate and favorable prior year casualty reserve development, resulting in a modest improvement over last year. Further descriptions of the variances for the quarter and year-to-date periods are as follows:

• Catastrophe losses for Third Quarter 2014 and Nine Months 2014 were $5.4 million, or 1.2 points, and $66.9 million, or 4.8 points, respectively, compared to $11.9 million, or 2.7 points, and $33.1 million, or 2.6 points, in the respective prior year periods. The majority of these catastrophe losses in the year-to-date period 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 the second quarter of 2014.

• Non-catastrophe property losses of $60.4 million, or 13.0 points, for Third Quarter 2014 were comparable to last year. However, on a year-to-date basis, non-catastrophe property losses of $224.8 million, or 16.3 points, were 2.8 points higher than Nine Months 2013. 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 the first half of 2014.

• Renewal pure price increases of 7.6% and 5.8% were achieved in full-year 2013 and Nine Months 2014, respectively, which are currently earning in at 6.4% in Third Quarter 2014 and 6.8% in Nine Months 2014. This earned rate is above the loss inflation 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 Third Quarter 2014 and Nine Months 2014 was $7.5 million, or 1.6 points, and $39.5 million, or 2.8 points, respectively, compared to favorable prior year casualty development of $3.5 million, or 0.8 points, and $7.5 million, or 0.6 points, in Third Quarter 2013 and Nine Months 2013, respectively. We experienced improved workers compensation trends in the quarter and year-to-date periods, with no development either favorable or unfavorable. We believe the stability in workers compensation reserves over the past three quarters is largely due to our claims initiatives. Our strategic case management unit employs a triage process that focuses on claims with the potential for high severity. After the claims are directed into the unit, specialists and expert medical resources manage the cases through settlement. The level of prior year casualty reserve releases in Third Quarter and Nine Months 2014 were driven by improving claim trends within our general liability line of business attributable to the 2007 through 2013 accident years, partially offset by unfavorable prior year casualty development in our E&S Insurance Operations of $4 million attributable to the 2012 and 2013 accident years.

Also contributing to Nine Months 2014 Insurance Operations results, was the March 2014 sale of the renewal rights to our self-insured group's book of pooled public entity business ("SIG"), which contributed $8 million to other income and reduced the combined ratio by 0.6 points. Although we did not solicit buyers, we decided to sell this 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.

29

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

The following table provides a quantitative foundation for analyzing our overall Insurance Subsidiaries' underwriting results, the significant changes of which are described above:

All Lines	Quarter ended September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
GAAP Insurance Operations Results:
Net premiums written ("NPW")	$	495,121		492,748	—		%	$	1,451,694		1,405,049	3		%
Net premiums earned (“NPE”)	462,639			437,568	6			1,382,759			1,284,760	8
Less:
Loss and loss expense incurred	270,932			283,317	(4	)		889,273			832,760	7
Net underwriting expenses incurred	156,114			142,774	9			450,037			421,812	7
Dividends to policyholders	1,156			1,326	(13	)		3,943			3,393	16
Underwriting gain	$	34,437		10,151	239		%	$	39,506		26,795	47		%
GAAP Ratios:
Loss and loss expense ratio	58.6		%	64.7	(6.1	)	pts	64.3		%	64.8	(0.5	)	pts
Underwriting expense ratio	33.8			32.7	1.1			32.5			32.8	(0.3	)
Dividends to policyholders ratio	0.2			0.3	(0.1	)		0.3			0.3	—
Combined ratio	92.6			97.7	(5.1	)		97.1			97.9	(0.8	)
Statutory Ratios:
Loss and loss expense ratio	58.4			64.7	(6.3	)		64.2			64.8	(0.6	)
Underwriting expense ratio	32.9			31.3	1.6			32.1			31.8	0.3
Dividends to policyholders ratio	0.2			0.3	(0.1	)		0.3			0.3	—
Combined ratio	91.5		%	96.3	(4.8	)	pts	96.6		%	96.9	(0.3	)	pts

Outlook

In its financial review issued on September 19, 2014, A.M. Best and Company ("A.M. Best") noted that increased catastrophe and non-catastrophe losses and lower levels of favorable development of prior years' loss reserves drove the U.S. property and casualty industry to break-even underwriting results through the first six months of 2014. Overall, catastrophe losses accounted for 5.3 points on the industry combined ratio, an increase over the 4.6-point impact in the first six months of 2013. Partially offsetting the decline in loss experience was an improvement in industry premiums, which grew 4% during the first six months of 2014 compared to the same period last year. The overall result of these changes was a modest underwriting loss, producing an industry combined ratio of 99.1% for the first six months of 2014, up from 96.6% for the first six months of 2013.

A.M. Best, in their Segment Review of U.S. Surplus Lines issued in September 2014, views the surplus lines segment as "stable but believes profit margins may shrink in the near term as average rate increases diminish on various lines of coverage." However, "the surplus lines market still appears to be in a good position to produce healthy returns and net operating profits in 2014."

A.M. Best's estimate for the 2014 property and casualty industry combined ratio was 99.4%, as noted in their 2013 year-end review. 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." We believe standard commercial lines renewal pure pricing is under pressure industry-wide. Commercial lines pricing for the industry was up only 3% for the second quarter of 2014, according to the Towers Watson Commercial Lines Insurance Price Survey. For Third Quarter 2014, our Standard Commercial Lines renewal pure price increased 5.3%, about 200 basis points higher than the industry's pricing in the second quarter of 2014, which we view as positive compared to our expectations for the industry in the third quarter.

30

In early 2012, we laid out a three-year plan to achieve overall annual renewal pure price increases of 5% to 8%. We achieved 5.8% in Nine Months 2014, including 5.8% in our Standard Commercial Lines, 6.5% in our Standard Personal Lines, and 3.8% in our E&S Lines. Overall renewal pure price increases of 7.6% in full-year 2013 and the 5.8% in Nine Months 2014 translated into earned price increases of 6.8% in Nine Months 2014, which is above loss inflation trends of approximately 3%. The 5.5% overall renewal pure price increase that we expect to achieve in 2014 is also above loss inflation trends, and will continue to add to profitability in 2015.

Our Insurance Subsidiaries reported a statutory combined ratio, excluding catastrophes, of 91.8% for Nine Months 2014, which is in line with our stated full-year 2014 goal of 92%. Catastrophe losses in the year of $66.9 million added 4.8 points to our statutory combined ratio. These catastrophe losses were primarily related to extreme winter weather in the first quarter of 2014 and Midwest storms in the second quarter of 2014.

The yield on the 10-year U.S. Treasury Note fell by 54 basis points in Nine Months 2014. The continued low interest rate environment has several 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. While the low interest rate environment presents a challenge to us in generating after-tax return, we believe the after-tax yield on our fixed income securities portfolio has stabilized at around 2.25%, as new purchase yields are approximating the average yield on bonds that are currently being disposed.

Given the results we have achieved in Nine Months 2014, including 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 any additional prior year casualty reserve development;

• 4 to 4.5 points of catastrophe losses for the year;

• Renewal pure price increases of approximately 5.5% on an overall company basis;

• After-tax investment income of approximately $105 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 92% 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 September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
GAAP Insurance Operations Results:
NPW	$	455,486		457,173	—		%	$	1,344,215		1,308,428	3		%
NPE	426,520			405,676	5			1,279,830			1,192,762	7
Less:
Loss and loss expense incurred	246,489			262,697	(6	)		822,550			771,948	7
Net underwriting expenses incurred	143,067			131,515	9			413,398			388,440	6
Dividends to policyholders	1,156			1,326	(13	)		3,943			3,393	16
Underwriting gain	$	35,808		10,138	253		%	$	39,939		28,981	38		%
GAAP Ratios:
Loss and loss expense ratio	57.8		%	64.8	(7.0	)	pts	64.3		%	64.7	(0.4	)	pts
Underwriting expense ratio	33.5			32.4	1.1			32.3			32.6	(0.3	)
Dividends to policyholders ratio	0.3			0.3	—			0.3			0.3	—
Combined ratio	91.6			97.5	(5.9	)		96.9			97.6	(0.7	)
Statutory Ratios:
Loss and loss expense ratio	57.6			64.7	(7.1	)		64.2			64.7	(0.5	)
Underwriting expense ratio	32.6			31.0	1.6			31.8			31.6	0.2
Dividends to policyholders ratio	0.3			0.3	—			0.3			0.3	—
Combined ratio	90.5		%	96.0	(5.5	)	pts	96.3		%	96.6	(0.3	)	pts

NPW is relatively consistent with last year for both the quarter and year-to-date periods. Renewal pure price increases and strong retention have more than offset a reduction in premiums that has resulted from the sale of the SIG renewal rights. SIG NPW was approximately $27 million for Third Quarter 2013 and $28 million for Nine Months 2013. Renewal pure price increases and retention was as follows:

	Quarter ended September 30, 2014				Quarter ended September 30, 2013
($ in millions)	Renewal Pure Price Increase		Retention		Renewal Pure Price Increase		Retention
Standard Commercial Lines	5.3	%	83	%	7.9	%	83	%
Standard Personal Lines	6.8		81		7.5		86

	Nine Months ended September 30, 2014				Nine Months ended September 30, 2013
($ in millions)	Renewal Pure Price Increase		Retention		Renewal Pure Price Increase		Retention
Standard Commercial Lines	5.8	%	82	%	7.6	%	82	%
Standard Personal Lines	6.5		81		8.0		86

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.

32

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

The GAAP loss and loss expense ratio improved 7.0 points in Third Quarter 2014 and 0.4 points in Nine Months 2014 compared to the same periods a year ago. In addition to the quantitative information provided below, renewal pure price increases that exceeded our projected loss inflation trend contributed to the improvement in both periods.

	Quarter ended September 30, 2014						Quarter ended September 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	$	4.9		1.1		pts	$	10.9		2.7		pts	(1.6	)	pts
Non-catastrophe property losses	57.0			13.4			54.8			13.5			(0.1	)
Favorable prior year casualty reserve development	(12.0		)	(2.7	)		(3.5		)	(0.8	)		(1.9	)

	Nine Months ended September 30, 2014						Nine Months ended September 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	$	64.6		5.0		pts	$	29.3		2.5		pts	2.5		pts
Non-catastrophe property losses	210.7			16.5			165.7			13.9			2.6
Favorable prior year casualty reserve development	(43.5		)	(3.4	)		(9.5		)	(0.8	)		(2.6	)

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 September 30,							Nine Months ended September 30,
($ in millions)	2014				2013			2014				2013
General liability	$	(11.0	)		(3.0	)		$	(36.0	)		(12.0	)
Commercial automobile	—				—			(4.0		)		—
Workers compensation	—				3.5			—				14.0
Businessowners' policies	1.0				(2.0	)		2.5				(8.0	)
Homeowners	—				(1.0	)		—				(2.5	)
Personal automobile	(2.0		)		(1.0	)		(6.0		)		(1.0	)
Total favorable prior year casualty reserve development	$	(12.0	)		(3.5	)		$	(43.5	)		(9.5	)
Favorable impact on loss ratio	(2.7		)	pts	(0.8	)	pts	(3.4		)	pts	(0.8	)	pts

Favorable prior year casualty reserve development of $12.0 million in Third Quarter 2014 and $43.5 million in Nine Months 2014 was primarily driven by improving claim trends attributable to the 2007 through 2013 accident years on our general liability line of business coupled with stable workers compensation trends in 2014.

The GAAP underwriting expense ratio increased 1.1 points in Third Quarter 2014 compared to Third Quarter 2013 due to higher supplemental commissions to agents. On a year-to-date basis, the underwriting expense ratio decreased 0.3 points due to: (i) an increase in premiums that outpaced expense growth; and (ii) a gain from the SIG sale of $8 million, or 0.6 points. Partially offsetting these items were higher supplemental commissions to agents. For additional information regarding the sale, see Note 8. “Segment Information” in Item 1. “Financial Statements.” of this Form 10-Q.

33

Review of Underwriting Results by Line of Business

Standard Commercial Lines
	Quarter ended September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
GAAP Insurance Operations Results:
NPW	$	376,438		376,373	—		%	$	1,119,648		1,080,213	4		%
NPE	352,143			330,962	6			1,056,091			971,464	9
Less:
Loss and loss expense incurred	201,352			209,771	(4	)		660,523			614,226	8
Net underwriting expenses incurred	121,864			111,089	10			351,781			329,224	7
Dividends to policyholders	1,156			1,326	(13	)		3,943			3,393	16
Underwriting gain	$	27,771		8,776	216		%	$	39,844		24,621	62		%
GAAP Ratios:
Loss and loss expense ratio	57.2		%	63.4	(6.2	)	pts	62.5		%	63.2	(0.7	)	pts
Underwriting expense ratio	34.6			33.5	1.1			33.3			34.0	(0.7	)
Dividends to policyholders ratio	0.3			0.4	(0.1	)		0.4			0.3	0.1
Combined ratio	92.1			97.3	(5.2	)		96.2			97.5	(1.3	)
Statutory Ratios:
Loss and loss expense ratio	56.9			63.3	(6.4	)		62.5			63.2	(0.7	)
Underwriting expense ratio	33.7			31.9	1.8			32.6			32.7	(0.1	)
Dividends to policyholders ratio	0.3			0.4	(0.1	)		0.4			0.3	0.1
Combined ratio	90.9		%	95.6	(4.7	)	pts	95.5		%	96.2	(0.7	)	pts

The increase in NPW in Third Quarter 2014 and Nine Months 2014 compared to the same periods last year was driven by renewal pure price increases and strong retention, which were partially offset by the NPW impact of the sale of the SIG renewal rights. Quantitative data on retention and pricing is as follows:

	Quarter ended September 30,			Nine Months ended September 30,
($ in millions)	2014		2013	2014		2013
Retention	83	%	83	82	%	82
Renewal pure price increases	5.3		7.9	5.8		7.6

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

The GAAP loss and loss expense ratio decreased 6.2 points in Third Quarter 2014 compared to Third Quarter 2013 driven by: (i) renewal pure price increases that averaged 5.8% in Nine Months 2014 and 7.6% in full-year 2013, the earning of which exceeds our projected loss inflation trend by approximately 3 points; and (ii) favorable prior year casualty reserve development. Quantitative information regarding property losses and reserve development is as follows:

	Quarter ended September 30, 2014						Quarter ended September 30, 2013
($ in millions)	Losses Incurred			Impact on Loss Ratio			Losses Incurred			Impact on  Loss Ratio			Change in Ratio
Catastrophe losses	$	3.3		0.9		pts	$	2.2		0.7		pts	0.2		pts
Non-catastrophe property losses	35.3			10.0			34.9			10.5			(0.5	)
Favorable prior year casualty reserve development	(10.0		)	(2.7	)		(1.5		)	(0.4	)		(2.3	)

34

On a year-to-date basis, earned pricing that is exceeding loss inflation trends by approximately 4 points and favorable prior year development are significantly offset by higher catastrophe and non-catastrophe property losses. Quantitative information regarding property losses and reserve development are as follows:

	Nine Months ended September 30, 2014						Nine Months ended September 30, 2013
($ in millions)	Losses Incurred			Impact on Loss Ratio			Losses Incurred			Impact on Loss Ratio			Change in Ratio
Catastrophe losses	$	41.9		4.0		pts	$	12.1		1.2		pts	2.8		pts
Non-catastrophe property losses	137.7			13.0			99.7			10.3			2.7
Favorable prior year casualty reserve development	(37.5		)	(3.5	)		(6.0		)	(0.6	)		(2.9	)

The GAAP underwriting expense ratio increased 1.1 points in Third Quarter 2014 compared to Third Quarter 2013 partially due to: (i) higher supplemental commissions to agents; and (ii) expenses that outpaced premium growth in the quarter.

The improvement in the GAAP underwriting expense ratio in Nine Months 2014 compared to Nine Months 2013 was primarily driven by the income generated from the sale of our SIG renewal rights for $8 million, or 0.8 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 following is a discussion of our most significant standard Commercial Lines of business and their respective statutory results:

General Liability
	Quarter ended September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	117,731		115,866	2		%	$	355,411		335,503	6		%
Direct new business	20,738			20,169	3			60,412			60,809	(1	)
Retention	83		%	82	1		pts	82		%	81	1		pts
Renewal pure price increases	6.1		%	9.3	(3.2	)		7.0		%	8.8	(1.8	)
Statutory NPE	$	110,894		100,925	10		%	$	331,303		298,394	11		%
Statutory combined ratio	84.2		%	96.2	(12.0	)	pts	81.8		%	95.7	(13.9	)	pts
% of total statutory standard Commercial Lines NPW	31		%	31				32		%	31

The growth in NPW and NPE for our general liability business in Third Quarter 2014 and Nine Months 2014 reflects renewal pure price increases and strong retention. Partially offsetting this growth was the reduction in NPW as a result of the SIG renewal rights sale. SIG NPW was approximately $14 million in both Third Quarter 2013 and Nine Months 2013. 

The statutory combined ratio improvement for Third Quarter 2014 and Nine Months 2014 was driven by renewal pure price increases of 6.1% and 7.0%, respectively, that continue to outpace loss inflation trends on this line as well as the following:

	Quarter ended September 30, 2014						Quarter ended September 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense			Impact on Combined Ratio			Change Points
Favorable prior year casualty reserve development	$	(11.0	)	(9.9	)	pts	$	(3.0	)	(3.0	)	pts	(6.9	)	pts

	Nine Months ended September 30, 2014						Nine Months ended September 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense			Impact on Combined Ratio			Change Points
Favorable prior year casualty reserve development	$	(36.0	)	(10.9	)	pts	$	(12.0	)	(4.0	)	pts	(6.9	)	pts
Gain from SIG renewal rights sale	(2.1		)	(0.6	)		—			—			(0.6	)

35

Favorable prior year casualty reserve development in Third Quarter 2014 and Nine Months 2014 was driven by improving claim trends for the 2013 and prior accident years. Favorable prior year casualty reserve development in Third Quarter 2013 and Nine Months 2013 was driven by accident years 2011 and prior.

Commercial Automobile
	Quarter ended September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	90,599		91,715	(1	)	%	$	267,134		257,841	4		%
Direct new business	14,275			16,420	(13	)		42,760			47,490	(10	)
Retention	83		%	83	—		pts	82		%	82	—		pts
Renewal pure price increases	5.1		%	8.0	(2.9	)		5.8		%	7.4	(1.6	)
Statutory NPE	$	83,536		79,138	6		%	$	249,224		230,191	8		%
Statutory combined ratio	92.8		%	97.1	(4.3	)	pts	93.7		%	96.8	(3.1	)	pts
% of total statutory standard Commercial Lines NPW	24		%	24				24		%	24

The fluctuation in Third Quarter 2014 and Nine Months 2014 NPW was impacted by the following: (i) renewal pure price increases; (ii) strong retention; and (iii) lower premiums due to the sale of the SIG renewal rights. SIG NPW was approximately $5 million in both Third Quarter 2013 and Nine Months 2013.

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

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

	Quarter ended September 30, 2014				Quarter ended September 30, 2013
($ in millions)	(Benefit) Expense		Impact on Combined Ratio		(Benefit) Expense		Impact on Combined Ratio		Change Points
Catastrophe losses	$	0.2	0.2	pts	$	0.1	0.1	pts	0.1		pts
Non-catastrophe property losses	10.0		11.9		13.3		16.8		(4.9	)

	Nine Months ended September 30, 2014						Nine Months ended September 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense			Impact on Combined Ratio			Change Points
Catastrophe losses	$	1.7		0.7		pts	$	(0.9	)	(0.4	)	pts	1.1		pts
Non-catastrophe property losses	34.0			13.6			36.9			16.0			(2.4	)
Favorable prior year casualty reserve development	(4.0		)	(1.6	)		—			—			(1.6	)
Gain from SIG renewal rights sale	(1.5		)	(0.6	)		—			—			(0.6	)

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

36

Workers Compensation
	Quarter ended September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	65,740		70,461	(7	)	%	$	206,921		214,455	(4	)	%
Direct new business	12,512			14,459	(13	)		37,239			43,151	(14	)
Retention	81		%	82	(1	)	pts	81		%	82	(1	)	pts
Renewal pure price increases	5.1		%	7.9	(2.8	)		5.2		%	7.8	(2.6	)
Statutory NPE	$	66,732		66,510	—		%	$	205,137		197,449	4		%
Statutory combined ratio	111.2		%	118.2	(7.0	)	pts	109.6		%	118.4	(8.8	)	pts
% of total statutory standard Commercial Lines NPW	17		%	19				18		%	20

Third Quarter 2014 and Nine Months 2014 NPW decreased compared to Third Quarter 2013 and Nine Months 2013 due to a decrease in direct new business. In addition, premiums for this line are down year over year as a result of the SIG renewal rights sale. SIG NPW was approximately $4 million in both Third Quarter 2013 and Nine Months 2013.

NPE increases in Third Quarter 2014 and Nine Months 2014 were consistent with the fluctuations in NPW for the twelve-month period ended September 30, 2014 compared to the twelve-month period ended September 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 5.1% in Third Quarter 2014 and 5.2% in Nine 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 all workers compensation claims alongside our strategic case management unit to facilitate our 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 practitioners and a physician consultant.

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

	Quarter ended September 30, 2014				Quarter ended September 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	5.3	pts	(5.3	)	pts

	Nine Months ended September 30, 2014						Nine Months ended September 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	$	14.0	7.2	pts	(7.2	)	pts
Gain from SIG renewal rights sale	(1.5		)	(0.7	)		—		—		(0.7	)

Third Quarter 2013 and Nine Months 2013 unfavorable prior year casualty reserve development was primarily driven by adverse development in several accident years from 2008 and prior. Nine Months 2013 was also adversely impacted by the 2012 accident year.

37

Commercial Property
	Quarter ended September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
Statutory NPW	$	71,463		69,578	3		%	$	198,189		186,531	6		%
Direct new business	16,783			16,966	(1	)		44,549			45,747	(3	)
Retention	82		%	82	—		pts	81		%	81	—		pts
Renewal pure price increases	4.2		%	5.8	(1.6	)		4.6		%	5.6	(1.0	)
Statutory NPE	$	61,304		57,004	8		%	$	182,716		165,356	10		%
Statutory combined ratio	79.9		%	67.0	12.9		pts	104.1		%	77.8	26.3		pts
% of total statutory standard Commercial Lines NPW	19		%	18				18		%	17

NPW and NPE increased in Third Quarter 2014 and Nine Months 2014 compared to Third Quarter 2013 and Nine Months 2013 primarily due to renewal pure price increases and strong retention, partially offset by the reduction in NPW as a result of the SIG renewal rights sale. SIG NPW was approximately $5 million in both Third Quarter 2013 and Nine Months 2013.

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

	Quarter ended September 30, 2014				Quarter ended September 30, 2013
($ in millions)	(Benefit) Expense		Impact on Combined Ratio		(Benefit) Expense		Impact on Combined Ratio		Change % or Points
Catastrophe losses	$	2.7	4.4	pts	$	0.9	1.6	pts	2.8	pts
Non-catastrophe property losses	20.8		34.0		14.8		25.9		8.1

	Nine Months ended September 30, 2014						Nine Months ended September 30, 2013
($ in millions)	(Benefit) Expense			Impact on Combined Ratio			(Benefit) Expense		Impact on Combined Ratio		Change % or Points
Catastrophe losses	$	31.7		17.4		pts	$	10.4	6.3	pts	11.1		pts
Non-catastrophe property losses	83.4			45.6			48.7		29.5		16.1
Gain from SIG renewal rights sale	(1.4		)	(0.7	)		—		—		(0.7	)

38

Standard Personal Lines
	Quarter ended September 30,							Nine Months ended September 30,
($ in thousands)	2014			2013	Change % or Points			2014			2013	Change % or Points
GAAP Insurance Operations Results:
NPW	$	79,048		80,800	(2	)	%	$	224,567		228,215	(2	)	%
NPE	74,377			74,714	—			223,739			221,298	1
Less:
Loss and loss expense incurred	45,137			52,926	(15	)		162,027			157,722	3
Net underwriting expenses incurred	21,203			20,426	4			61,617			59,216	4
Underwriting gain	$	8,037		1,362	490		%	$	95		4,360	(98	)	%
GAAP Ratios:
Loss and loss expense ratio	60.7		%	70.8	(10.1	)	pts	72.4		%	71.3	1.1		pts
Underwriting expense ratio	28.5			27.4	1.1			27.6			26.7	0.9
Combined ratio	89.2			98.2	(9.0	)		100.0			98.0	2.0
Statutory Ratios:
Loss and loss expense ratio	60.7			70.9	(10.2	)		72.4			71.4	1.0
Underwriting expense ratio	28.2			26.7	1.5			27.5			26.2	1.3
Combined ratio	88.9		%	97.6	(8.7	)	pts	99.9		%	97.6	2.3		pts

The decreases in NPW for both the quarter and year-to-date periods were primarily driven by lower retention compared to the same periods a year ago. The decrease in the year-to-date period was also driven by a 10% decrease in new business. Partially offsetting these decreases were renewal pure price increases. Quantitative information regarding these items is as follows:

	Quarter ended September 30,			Nine Months ended September 30,
($ in millions)	2014		2013	2014		2013
Retention	81	%	86	81	%	86
Renewal pure price increase	6.8		7.5	6.5		8.0

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 Third Quarter and Nine Months 2014 compared to Third Quarter and Nine Months 2013 are consistent with the fluctuations in NPW for the twelve-month period ended September 30, 2014 compared to the twelve-month period ended September 30, 2013.

The improvement in the GAAP loss and loss expense ratio of 10.1 points in Third Quarter 2014 compared to Third Quarter 2013 was driven by: (i) a decrease in catastrophe losses; and (ii) renewal pure price increases of 6.5% for Nine Months 2014 and 7.8% for full-year 2013, the earning of which exceeds our projected loss inflation trend for the casualty component of our Personal Lines. Partially offsetting these benefits were higher non-catastrophe property losses. Quantitative information regarding property losses and reserve development are as follows:

	Quarter ended September 30, 2014						Quarter ended September 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	$	1.6		2.2		pts	$	8.7		11.7		pts	(9.5	)	pts
Non-catastrophe property losses	21.7			29.2			19.9			26.6			2.6
Favorable prior year casualty development	(2.0		)	(2.7	)		(2.0		)	(2.7	)		—

39

The increase in the GAAP loss and loss expense ratio of 1.1 points in Nine Months 2014 compared to Nine Months 2013 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 was the earning of renewal pure price increases that exceeded our projected loss inflation trend for the casualty component of our Personal Lines and favorable prior year casualty reserve development. Quantitative information regarding property losses and reserve development is as follows:

	Nine Months ended September 30, 2014						Nine Months ended September 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	$	22.6		10.1		pts	$	17.1		7.7		pts	2.4		pts
Non-catastrophe property losses	73.0			32.6			66.0			29.8			2.8
Favorable prior year casualty development	(6.0		)	(2.7	)		(3.5		)	(1.7	)		(1.0	)

Favorable prior year casualty reserve development in Third Quarter 2014 and Nine Months 2014 was driven by the 2010 through 2012 accident years on our personal auto line of business.

The increase in the underwriting expense ratios for each of the periods mentioned above were driven by higher supplemental commissions to agents.

E&S Insurance Operations

Our E&S Insurance Operations segment, which represents 8% 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 September 30,								Nine Months ended September 30,
($ in thousands)	2014				2013	Change % or Points			2014				2013		Change % or Points
GAAP Insurance Operations Results:
NPW	$	39,635			35,575	11		%	$	107,479			96,621		11		%
NPE	36,119				31,892	13			102,929				91,998		12
Less:
Loss and loss expense incurred	24,443				20,620	19			66,723				60,812		10
Net underwriting expenses incurred	13,047				11,259	16			36,639				33,372		10
Underwriting gain (loss)	$	(1,371	)		13	(10,646	)	%	$	(433	)		(2,186	)	80		%
GAAP Ratios:
Loss and loss expense ratio	67.7			%	64.7	3.0		pts	64.8			%	66.1		(1.3	)	pts
Underwriting expense ratio	36.1				35.3	0.8			35.6				36.3		(0.7	)
Combined ratio	103.8				100.0	3.8			100.4				102.4		(2.0	)
Statutory Ratios:
Loss and loss expense ratio	67.6				64.7	2.9			64.9				66.2		(1.3	)
Underwriting expense ratio	35.3				35.8	(0.5	)		35.4				35.7		(0.3	)
Combined ratio	102.9			%	100.5	2.4		pts	100.3			%	101.9		(1.6	)	pts

The increase in the combined ratio in Third Quarter 2014 compared to Third Quarter 2013 was driven by unfavorable prior year casualty reserve development in Third Quarter 2014 of $4.0 million, or 11.0 points, compared to no prior year casualty reserve development in Third Quarter 2013. Partially offsetting this increase was the following:

• Significant underwriting actions that we have implemented to increase premiums and improve profitability, including achieving renewal pure price increases of 2.8% in Third Quarter 2014; and

• Catastrophe losses of 1.4 points in Third Quarter 2014 compared to 3.1 points in Third Quarter 2013.

40

The improvement in the combined ratio in Nine Months 2014 compared to Nine Months 2013 was driven by the following:

• Significant underwriting actions mentioned above, including achieving renewal pure price increases of 3.8% in Nine Months 2014; and

• Catastrophe losses of 2.3 points in Nine Months 2014 compared to 4.2 points in Nine Months 2013.

These year-to-date benefits were partially offset by unfavorable prior year casualty reserve development of $4.0 million, or 3.8 points, in Nine Months 2014 compared to $2.5 million, or 2.7 points, in Nine Months 2013.

Reinsurance: Standard Insurance Operations

Reinsurance Treaties and Arrangements

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.

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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)	September 30, 2014		December 31, 2013	Change %
Total invested assets	$	4,803,127	4,583,312	5	%
Unrealized gain – before tax	115,439		79,236	46
Unrealized gain – after tax	75,035		51,504	46

The increase in our investment portfolio compared to year-end 2013 was primarily due to: (i) cash flows provided by operating activities of $158.1 million; and (ii) an increase in pre-tax unrealized gains of $36.2 million. These gains were driven by increases in the market value of our fixed income securities portfolio as interest rates decreased during Nine Months 2014.

During Nine Months 2014, interest rates on the 10-year U.S. Treasury Note fell by 54 basis points. This decline in interest rates increased the unrealized gain position on our fixed income securities portfolio. While the low interest rate environment presents a challenge to us in generating after-tax return, we believe the after-tax yield on our fixed income securities portfolio has stabilized at around 2.25%, as new purchase yields are approximating the average yield on bonds that are currently being disposed.

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:

	September 30, 2014		December 31, 2013
U.S. government obligations	3	%	4
Foreign government obligations	1		1
State and municipal obligations	32		28
Corporate securities	37		39
Mortgage-backed securities (“MBS”)	14		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 September 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 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 September 30, 2014. The following table presents the credit ratings of this portfolio:

Fixed Income Security Rating	September 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 September 30, 2014 and December 31, 2013:

	September 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	$	151.7	7.9		AA+	173.4	10.1		AA+
Foreign government obligations	27.9		0.8		AA-	30.6	0.8		AA-
State and municipal obligations	1,229.2		32.8		AA	951.6	5.2		AA
Corporate securities	1,763.1		38.0		A-	1,734.9	27.0		A
ABS	147.0		0.4		AAA	140.9	0.5		AAA
MBS	648.7		3.5		AA+	684.1	(4.0	)	AA+
Total AFS fixed income portfolio	$	3,967.6	83.4		AA-	3,715.5	39.6		AA-
State and Municipal Obligations:
General obligations	$	564.5	14.6		AA+	472.0	2.6		AA+
Special revenue obligations	664.7		18.2		AA	479.6	2.6		AA
Total state and municipal obligations	$	1,229.2	32.8		AA	951.6	5.2		AA
Corporate Securities:
Financial	$	541.7	11.5		A	534.1	11.7		A
Industrials	141.1		4.3		A-	135.1	3.7		A-
Utilities	150.2		2.4		BBB+	146.5	(0.3	)	A-
Consumer discretionary	204.1		5.4		A-	190.6	2.7		A-
Consumer staples	176.9		3.6		A-	171.9	3.0		A
Healthcare	169.5		4.3		A	168.5	3.1		A
Materials	109.8		2.4		BBB+	101.2	1.4		A-
Energy	105.9		1.5		A-	93.7	0.9		A-
Information technology	111.9		1.2		A+	121.2	(0.6	)	A+
Telecommunications services	49.2		1.1		BBB+	64.7	1.0		BBB+
Other	2.8		0.3		AA	7.4	0.4		AA+
Total corporate securities	$	1,763.1	38.0		A-	1,734.9	27.0		A
ABS:
ABS	$	146.6	0.3		AAA	140.4	0.4		AAA
Sub-prime ABS1	0.4		0.1		D	0.5	0.1		D
Total ABS	147.0		0.4		AAA	140.9	0.5		AAA
MBS:
Government guaranteed agency commercial mortgage-backed securities ("CMBS")	$	17.6	0.3		AA+	30.0	0.9		AA+
Other agency CMBS	10.6		(0.2	)	AA+	9.1	(0.3	)	AA+
Non-agency CMBS	137.3		0.4		AA+	132.2	(1.5	)	AA+
Government guaranteed agency residential MBS ("RMBS")	35.9		1.0		AA+	55.2	1.4		AA+
Other agency RMBS	406.3		1.3		AA+	411.5	(5.1	)	AA+
Non-agency RMBS	37.1		0.6		A-	41.4	0.6		A-
Alternative-A (“Alt-A”) RMBS	3.9		0.1		A	4.7	—		A
Total MBS	$	648.7	3.5		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 September 30, 2014 and December 31, 2013:

September 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	$	5.4	5.4	—	0.1		0.1	AA+
State and municipal obligations	317.6		303.6	14.0	2.4		16.4	AA
Corporate securities	22.8		20.0	2.8	(0.3	)	2.5	A+
ABS	3.1		2.6	0.5	(0.5	)	—	AAA
MBS	5.3		4.5	0.8	(0.5	)	0.3	AAA
Total HTM fixed income portfolio	$	354.2	336.1	18.1	1.2		19.3	AA
State and Municipal Obligations:
General obligations	$	107.0	103.0	4.0	1.2		5.2	AA
Special revenue obligations	210.6		200.6	10.0	1.2		11.2	AA
Total state and municipal obligations	$	317.6	303.6	14.0	2.4		16.4	AA
Corporate Securities:
Financial	$	2.3	1.9	0.4	(0.1	)	0.3	A-
Industrials	6.7		5.7	1.0	(0.1	)	0.9	A+
Utilities	13.5		12.1	1.4	(0.1	)	1.3	A+
Consumer staples	0.3		0.3	—	—		—	AA
Total corporate securities	$	22.8	20.0	2.8	(0.3	)	2.5	A+
ABS:
ABS	$	0.7	0.7	—	—		—	AA
Alt-A ABS	2.4		1.9	0.5	(0.5	)	—	AAA
Total ABS	$	3.1	2.6	0.5	(0.5	)	—	AAA
MBS:
Non-agency CMBS	$	5.3	4.5	0.8	(0.5	)	0.3	AAA
Total MBS	$	5.3	4.5	0.8	(0.5	)	0.3	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 September 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	$	15,874		—		115,374		131,248		9%	AA+
Texas1	61,698			5,890		62,726		130,314		9%	AA+
Washington	39,316			6,972		50,346		96,634		6%	AA
California	15,281			7,964		59,371		82,616		5%	AA
Florida	—			15,511		50,086		65,597		4%	AA
Arizona	11,734			999		43,924		56,657		4%	AA
Colorado	31,654			—		20,999		52,653		3%	AA-
Oregon	21,015			—		26,599		47,614		3%	AA+
Missouri	15,835			10,114		21,540		47,489		3%	AA+
Ohio	8,419			19,109		18,359		45,887		3%	AA+
Other	160,045			152,487		335,366		647,898		42%	AA
	380,871			219,046		804,690		1,404,607		91%	AA
Pre-refunded/escrowed to maturity bonds	53,972			17,592		70,672		142,236		9%	AA+
Total	$	434,843		236,638		875,362		1,546,843		100%	AA
% of Total Municipal Portfolio	28		%	15	%	57	%	100	%

¹ Of the $62 million in local Texas general obligation bonds, $27 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 September 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.	$	162,893	AA-	AA-
Assured Guaranty	131,341		AA	AA-
Ambac Financial Group, Inc.	51,292		AA	AA-
Other	10,486		AA	AA-
Total	$	356,012	AA	AA-

Equity Securities

Our equity securities portfolio was 4% of invested assets as of both September 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 Nine Months 2014, we rebalanced our high dividend yield strategy holdings within this portfolio, generating purchases of $185.4 million and sales of securities that had an original cost of $159.1 million.

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Unrealized/Unrecognized Losses

Our net unrealized/unrecognized loss positions improved by $32.8 million, to $19.3 million, as of September 30, 2014 compared to December 31, 2013. The majority of this improvement was in our fixed income securities portfolio, reflecting declining interest rates in the marketplace during Nine Months 2014.

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

($ in thousands)	Amortized Cost		Fair Value	Unrealized Loss
One year or less	$	9,092	8,984	108
Due after one year through five years	486,229		481,165	5,064
Due after five years through ten years	511,727		501,707	10,020
Due after ten years	11,008		10,908	100
Total	$	1,018,056	1,002,764	15,292

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 September 30, 2014 by contractual maturity:

($ in thousands)	Amortized Cost		Fair Value	Unrecognized/Unrealized Loss
One year or less	$	461	460	1
Due after one year through five years	2,442		2,428	14
Total	$	2,903	2,888	15

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 September 30, 2014. 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 September 30, 2014, other investments of $106.5 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 $50.3 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 September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Fixed income securities	$	30,706		30,569		95,515		90,956
Equity securities	1,909			1,341		5,094		4,422
Short-term investments	15			21		48		102
Other investments	3,906			2,639		12,677		10,110
Investment expenses	(2,244		)	(2,113	)	(6,734	)	(6,260	)
Net investment income earned – before tax	34,292			32,457		106,600		99,330
Net investment income tax expense	(8,527		)	(7,947	)	(26,928	)	(24,281	)
Net investment income earned – after tax	$	25,765		24,510		79,672		75,049
Effective tax rate	24.9		%	24.5		25.3		24.4
Annualized after-tax yield on fixed income securities	2.2			2.3		2.3		2.3
Annualized after-tax yield on investment portfolio	2.2			2.2		2.3		2.3

Net investment income before tax increased in Third Quarter 2014 and Nine Months 2014 compared to the same prior year periods. Both the quarter and year-to-date periods were positively impacted by higher income from the alternative investments within our other investments portfolio. In addition, in Nine Months 2014, higher income from our fixed income securities was 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 $15.2 million in Third Quarter 2014 and $27.0 million in Nine Months 2014, compared to $13.4 million and $21.9 million in the same periods a year ago. These amounts included OTTI charges of $1.4 million in Nine Months 2014, $0.7 million in Third Quarter 2013, and $3.2 million in Nine Months 2013. There were no OTTI charges in Third Quarter 2014.

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 September 30,				Nine Months ended September 30,
($ in million)	2014			2013	2014	2013
Federal income tax expense from continuing operations	$	22.2		11.8	39.5	27.5
Effective tax rate	29		%	27	28	25

The increase in federal income tax expense in Third Quarter 2014 and Nine Months 2014 compared to the same prior year periods was primarily due to an improvement in underwriting results compared to last year. For a discussion of our underwriting results, see the "Results of Operations and Related Information by Segment" section above.

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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 $184.1 million at September 30, 2014 was comprised of $44.9 million at Selective Insurance Group, Inc. (the "Parent") and $139.2 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 $52 million at September 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 $43.1 million were paid in Nine 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 Nine Months 2014 and there were no borrowings under its $30 million line of credit ("Line of Credit") at September 30, 2014 or at any time during Nine 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 September 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. On October 29, 2014, our Board of Directors declared, for stockholders of record as of November 14, 2014, a $0.14 per share dividend to be paid on December 1, 2014. This is an 8% increase compared to the dividend declared on July 30, 2014.

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 September 30, 2014 or at any time during Nine 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 September 30, 2014	Actual as of September 30, 2014
Consolidated net worth	$857 million	$1.3 billion
Statutory surplus	Not less than $750 million	$1.3 billion
Debt-to-capitalization ratio1	Not to exceed 35%	23.9%
A.M. Best financial strength rating	Minimum of 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 September 30, 2014, we had statutory surplus of $1.3 billion, GAAP stockholders’ equity of $1.3 billion, and total debt of $392.3 million, which equates to a debt-to-capital ratio of approximately 23.6%.

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 $22.45 as of September 30, 2014, from $20.63 as of December 31, 2013, due to $1.78 in net income coupled with a $0.42 increase in unrealized gains on our investment portfolio. These items were partially offset by $0.40 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 the second quarter of 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 the second quarter of 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.

• Standard & Poor's Ratings Services ("S&P") – On October 8, 2014, S&P reaffirmed our financial strength rating of “A-” and revised our outlook to positive from stable. The rating reflects our strong business risk profile, strong competitive position and very strong capital and earnings. The positive outlook for the rating reflects S&P's view of ongoing efforts to improve the geographic and product diversification and reduce risk concentrations in catastrophe prone areas. In addition, the positive outlook reflects S&P's expectation that we will steadily improve our operating performance and that our capital adequacy will remain redundant at a very strong level.

• Moody's Investor Service ("Moody's") – Our "A2" financial strength rating was reaffirmed in Third Quarter 2014 by Moody's, which cited our solid regional franchise with established independent agency support, solid risk adjusted capitalization, strong invested asset quality, and recently improving underwriting profitability. Our outlook remains negative, reflecting challenges in achieving further reductions in segment concentrations and maintaining the pace and consistency of profitability.

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 September 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 in Internal Control - Integrated Framework ("COSO Framework")in 2013, transitioning from the 1992 COSO Framework in Third Quarter 2014. 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 Nine 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. As of September 30, 2014, the expense allowance was 30.7% of direct premiums written. Also, as of September 30, 2014, the servicing fee was 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.

We are subject to the risk that legislation will be passed significantly changing insurance regulation and adversely impacting our business, our financial condition, and our results of operations.

Changes in rules for Department of Housing and Urban Development ("HUD"). In 2013, HUD finalized a new "Disparate Impact" regulation that may adversely impact insurers' ability to differentiate pricing for homeowners policies using traditional risk selection analysis.  Three insurance industry trade associations are challenging the regulation in two separate Federal lawsuits, one by the American Insurance Association (“AIA”) and the National Association of Mutual Insurance Companies (“NAMIC”) in the District of Columbia and the other by Property Casualty Insurers Association of America (“PCI”) in Chicago. No substantive decisions have yet been made in the AIA and NAMIC case. In the PCI case, the court ruled that HUD acted arbitrarily in considering comments regarding the application of the McCarran-Ferguson Act and has remanded the regulation back to HUD for review and reconsideration. It is uncertain to what extent the application of this regulation will impact the property and casualty industry and underwriting practices, but it could increase litigation costs, force changes in underwriting practices, and impair our ability to write homeowners business profitably.  The outcome of the litigations and potential rulemaking cannot be predicted at this time.

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

The following table provides information regarding our purchases of our common stock in Third 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
July 1 – 31, 2014	—	$	—	—	—
August 1 - 31, 2014	5,159	23.16		—	—
September 1 – 30, 2014	595	23.75		—	—
Total	5,754	$	23.22	—	—

¹During Third Quarter 2014, 5,754 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	October 30, 2014
Gregory E. Murphy
Chairman of the Board and Chief Executive Officer
By: /s/ Dale A. Thatcher	October 30, 2014
Dale A. Thatcher
Executive Vice President and Chief Financial Officer
(principal accounting officer and principal financial officer)

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EX-11

Exhibit 11

SELECTIVE INSURANCE GROUP, INC. AND CONSOLIDATED SUBSIDIARIES

COMPUTATION OF EARNINGS PER SHARE

Third Quarter 2014	Income		Shares	Per Share
(in thousands, except per share amounts)	(Numerator)		(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	53,162	56,382	$	0.94
Effect of dilutive securities:
Stock compensation plans	—		1,024
Diluted EPS:
Net income available to common stockholders	$	53,162	57,406	$	0.93

Third Quarter 2013	Income		Shares	Per Share
(in thousands, except per share amounts)	(Numerator)		(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	32,653	55,746	$	0.59
Effect of dilutive securities:
Stock compensation plans	—		1,154
Diluted EPS:
Net income available to common stockholders	$	32,653	56,900	$	0.57

Nine Months ended September 30, 2014	Income		Shares	Per Share
(in thousands, except per share amounts)	(Numerator)		(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	100,477	56,250	$	1.79
Effect of dilutive securities:
Stock compensation plans	—		1,036
Diluted EPS:
Net income available to common stockholders	$	100,477	57,286	$	1.75

Nine Months ended September 30, 2013	Income			Shares	Per Share
(in thousands, except per share amounts)	(Numerator)			(Denominator)	Amount
Basic EPS:
Net income available to common stockholders	$	82,080		55,577	$	1.48
Net loss from discontinued operations	(997		)	55,577	(0.02		)
Net income available to common stockholders	$	81,083		55,577	$	1.46
Effect of dilutive securities:
Stock compensation plans	—			1,142
Diluted EPS:
Net income from continuing operations	$	82,080		56,719	$	1.45
Net loss from discontinued operations	(997		)	56,719	(0.02		)
Net income available to common stockholders	$	81,083		56,719	$	1.43

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:	October 30, 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:	October 30, 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 September 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:	October 30, 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 September 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:	October 30, 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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net Investment Income [Line Items]
Net investment income earned	$ 34,292	$ 32,457	$ 106,600	$ 99,330
Fixed Income Securities [Member]
Net Investment Income [Line Items]
Net investment income earned	30,706	30,569	95,515	90,956
Equity Securities [Member]
Net Investment Income [Line Items]
Net investment income earned	1,909	1,341	5,094	4,422
Short-Term Investments [Member]
Net Investment Income [Line Items]
Net investment income earned	15	21	48	102
Other Investments [Member]
Net Investment Income [Line Items]
Net investment income earned	3,906	2,639	12,677	10,110
Investment Expenses [Member]
Net Investment Income [Line Items]
Net investment income earned	$ (2,244)	$ (2,113)	$ (6,734)	$ (6,260)

XML

Retirement Plans (Weighted-Average Expense Assumptions) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 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%
Contributions by Employer	$ 8.0
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	$ 10.4

XML

Reinsurance (Ceded Premiums and Losses Related to Flood Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Ceded premiums written	$ (103,517)	$ (100,154)	$ (290,836)	$ (280,719)
Ceded premiums earned	(92,884)	(91,805)	(274,947)	(264,174)
Ceded loss and loss expense incurred	(38,955)	(74,595)	(126,526)	(245,246)
National Flood Insurance Program [Member]
Ceded premiums written	(69,922)	(64,196)	(193,000)	(183,364)
Ceded premiums earned	(60,761)	(57,920)	(178,260)	(169,697)
Ceded loss and loss expense incurred	$ (14,008)	$ (34,879)	$ (48,099)	$ (162,780)

XML

Comprehensive Income (Components of Comprehensive Income-Gross and Net of Tax) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net income, Gross	$ 75,326	$ 44,485	$ 139,931	$ 108,019
Unrealized holding gains during the period, Gross	(13,831)	9,820	64,255	(77,810)
Non-credit OTTI recognized in OCI, Gross				77
Amounts reclassified into net income: HTM securities, Gross	(373)	(472)	(1,050)	(1,803)
Amounts reclassified into net income: non-credit OTTI	1,200	1	1,669	14
Realized gains on AFS securities, Gross	(16,435)	(13,516)	(28,672)	(24,780)
Net unrealized (losses) gains, Gross	(29,439)	(4,167)	36,202	(104,302)
Net actuarial gain, Gross				44,000
Amount reclassified into Net Income: Net actuarial loss, Gross	381	790	1,142	3,419
Amount reclassified into Net Income: Prior service cost, Gross				10
Amount reclassified into Net Income: Curtailment expense				16
Defined pension and other post-retirement benefit plans, gross	381	790	1,142	47,445
Other comprehensive (loss) income, Gross	(29,058)	(3,377)	37,344	(56,857)
Comprehensive income (loss), Gross	46,268	41,108	177,275	51,162
Net income, Tax	22,164	11,832	39,454	26,936
Unrealized holding (losses) gains during the period, Tax	(4,843)	3,437	22,488	(27,234)
Non-credit OTTI recognized in OCI, Tax				27
HTM securities, Tax	(130)	(165)	(367)	(631)
Non-credit OTTI, Tax	420	0	584	5
Realized gains on AFS securities, Tax	(5,752)	(4,731)	(10,035)	(8,673)
Net unrealized gains (losses), Tax	(10,305)	(1,459)	12,670	(36,506)
Net actuarial gain, Tax				15,400
Amount reclassified into Net Income: Net actuarial loss, Tax	134	277	400	1,197
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	134	277	400	16,606
Other comprehensive income (loss), Tax	(10,171)	(1,182)	13,070	(19,900)
Comprehensive income (loss), Tax	11,993	10,650	52,524	7,036
Net income	53,162	32,653	100,477	81,083
Unrealized holding gains (losses) arising during period	(8,988)	6,383	41,767	(50,576)
Non-credit OTTI recognized in OCI	0	0	0	50
HTM Securities	(243)	(307)	(683)	(1,172)
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	780	1	1,085	9
Realized gains on available for sale securities	(10,683)	(8,785)	(18,637)	(16,107)
Total unrealized (losses) gains on investment securities	(19,134)	(2,708)	23,532	(67,796)
Net actuarial gain	0	0	0	28,600
Amount reclassified into Net Income: Net actuarial loss	247	513	742	2,222
Amount reclassified into Net Income: Prior service cost	0	0	0	6
Other Comprehensive Income Loss Amortization Pension And Other Post Retirement Benefit Plans Curtailment Expense Recognized In Net Periodic Benefit Cost Net of Tax	0	0	0	11
Total defined benefit pension and post-retirement plans	247	513	742	30,839
Other comprehensive (loss) income	(18,887)	(2,195)	24,274	(36,957)
Comprehensive income	$ 34,275	$ 30,458	$ 124,751	$ 44,126

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	Sep. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	$ 336,082	$ 392,879
Notes payable	392,294	392,414
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held-to-maturity Securities	354,190	416,981
Notes payable	405,183	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	179,598	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	354,190	416,981
Notes payable	225,585	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	5,407	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	5,407	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	317,609	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	317,609	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	22,726	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	22,726	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	3,124	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	3,124	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	5,324	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	5,324	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	13,085	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	13,085	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	45,220	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	45,220	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	56,970	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	56,970	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	110,310	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	110,310	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	179,598	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	179,598	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 $)													9 Months Ended
	Sep. 30, 2014 Securities	Dec. 31, 2013 Securities	Sep. 30, 2014 Eighty Percent to Ninety-Nine Percent [Member] Securities	Dec. 31, 2013 Eighty Percent to Ninety-Nine Percent [Member] Securities	Sep. 30, 2014 Sixty Percent to Seventy-Nine Percent [Member] Securities	Dec. 31, 2013 Sixty Percent to Seventy-Nine Percent [Member] Securities	Sep. 30, 2014 Forty Percent to Fifty-Nine Percent [Member] Securities	Dec. 31, 2013 Forty Percent to Fifty-Nine Percent [Member] Securities	Sep. 30, 2014 Twenty Percent to Thirty-Nine Percent [Member] Securities	Dec. 31, 2013 Twenty Percent to Thirty-Nine Percent [Member] Securities	Sep. 30, 2014 Zero Percent to Nineteen Percent [Member] Securities	Dec. 31, 2013 Zero Percent to Nineteen Percent [Member] Securities	Sep. 30, 2014 10 year U.S. Treasury Note [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In An Unrealized/Unrecognized Loss Position	406	557	404	556	2	1	0	0	0	0	0	0
Unrealized Unrecognized Loss	$ 19,257,000	$ 52,011,000	$ 16,417,000	$ 51,835,000	$ 2,840,000	$ 176,000	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0
Decrease of Yield on 10-year U.S. Treasury Note													54
Securities In Unrealized Unrecognized Loss Position For More Than Twelve Months Unrealized Unrecognized Loss	$ 13,200,000	$ 2,900,000
Percentage Decline in Fair Value Percentage	3.00%	6.00%

XML

Comprehensive Income (Reclassification out of AOCI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Amounts reclassified into net income: non-credit OTTI	$ 1,200	$ 1	$ 1,669	$ 14
Non-credit OTTI, Tax	(420)	0	(584)	(5)
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	780	1	1,085	9
Total HTM Related, Tax	130	165	367	631
Amounts reclassified from AOCI, HTM Related	(243)	(307)	(683)	(1,172)
Realized gains on AFS disposals and OTTI	(16,435)	(13,516)	(28,672)	(24,780)
Total realized gains on AFS disposals and OTTI	5,752	4,731	10,035	8,673
Amounts reclassified into net income: realized gains on available for sale securities	(10,683)	(8,785)	(18,637)	(16,107)
Amount reclassified into Net Income: Net actuarial loss, Gross	381	790	1,142	3,419
Defined pension and other post-retirement benefit plans, tax	(134)	(277)	(400)	(16,606)
Amount reclassified into Net Income: Prior service cost, Gross				10
Amount reclassified into Net Income: Curtailment expense				16
Defined pension and other post-retirement benefit plans, gross	381	790	1,142	47,445
Total defined benefit pension and post-retirement plans	247	513	742	30,839
Net Investment Income Earned [Member]
Amortization of net unrealized gains on HTM securities	(385)	(453)	(1,137)	(1,633)
Net Investment Income Earned [Member] | Amortization Of Non Credit OTTI Losses On HTM Securities [Member]
Amounts reclassified into net income: non-credit OTTI	0	1	0	14
Income From Continuing Operations Before Federal Income Tax [Member]
Amounts reclassified into net income: non-credit OTTI	1,200	1	1,669	14
Amortization of net unrealized gains on HTM securities	(373)	(472)	(1,050)	(1,803)
Realized gains on AFS disposals and OTTI	(16,435)	(13,516)	(28,672)	(24,780)
Amount reclassified into Net Income: Net actuarial loss, Gross	381	790	1,142	3,419
Amount reclassified into Net Income: Prior service cost, Gross	0	0	0	10
Amount reclassified into Net Income: Curtailment expense	0	0	0	16
Defined pension and other post-retirement benefit plans, gross	381	790	1,142	3,445
Total Federal Income Tax Expense [Member]
Non-credit OTTI, Tax	(420)	0	(584)	(5)
Total HTM Related, Tax	130	165	367	631
Total realized gains on AFS disposals and OTTI	5,752	4,731	10,035	8,673
Defined pension and other post-retirement benefit plans, tax	(134)	(277)	(400)	(1,206)
Net Income Financial Statement Line Item [Member]
Amounts reclassified into Net Income: Non-credit other-than-temporary impairments	780	1	1,085	9
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(9,899)	(8,578)	(17,493)	(15,031)
Amounts reclassified from AOCI, HTM Related	(243)	(307)	(683)	(1,172)
Amounts reclassified into net income: realized gains on available for sale securities	(10,683)	(8,785)	(18,637)	(16,107)
Total defined benefit pension and post-retirement plans	247	513	742	2,239
Net Realized Investment Gains [Member]
Unrealized gains and losses on HTM disposals	12	(19)	87	(170)
Realized gains on AFS disposals and OTTI	(16,435)	(13,516)	(28,672)	(24,780)
Net Realized Investment Gains [Member] | Non-credit OTTI on Disposed Securities [Member]
Amounts reclassified into net income: non-credit OTTI	1,200	0	1,669	0
Loss And Loss Expense Incurred [Member]
Amount reclassified into Net Income: Net actuarial loss, Gross	88	159	263	717
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	879	2,702
Amount reclassified into Net Income: Prior service cost, Gross	0	0	0	3
Amount reclassified into Net Income: Curtailment expense	$ 0	$ 0	$ 0	$ 16

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule Of Revenue From Continuing Operations By Segment

Revenue by Segment	Quarter ended September 30,			Nine Months ended September 30,
($ in thousands)	2014		2013	2014	2013
Standard Insurance Operations:
Net premiums earned:
Commercial automobile	$	83,536	79,138	249,224	230,191
Workers compensation	66,732		66,510	205,137	197,449
General liability	110,894		100,925	331,303	298,394
Commercial property	61,304		57,004	182,716	165,356
Businessowners’ policies	21,649		19,629	63,797	56,794
Bonds	4,791		4,705	14,281	14,244
Other	3,237		3,051	9,633	9,036
Total Standard Commercial Lines	352,143		330,962	1,056,091	971,464
Personal automobile	37,695		38,513	113,943	115,432
Homeowners	33,957		32,374	100,831	95,211
Other	2,725		3,827	8,965	10,655
Total Standard Personal Lines	74,377		74,714	223,739	221,298
Total Standard Insurance Operations net premiums earned	426,520		405,676	1,279,830	1,192,762
Miscellaneous income	3,196		3,342	14,923	9,590
Total Standard Insurance Operations revenue	429,716		409,018	1,294,753	1,202,352
E&S Insurance Operations:
Net premiums earned	36,119		31,892	102,929	91,998
Investments:
Net investment income	34,292		32,457	106,600	99,330
Net realized investment gains	15,231		13,431	26,988	21,940
Total investment revenues	49,523		45,888	133,588	121,270
Total all segments	515,358		486,798	1,531,270	1,415,620
Other income	—		15	8	87
Total revenues from continuing operations	$	515,358	486,813	1,531,278	1,415,707

Schedule of Income from Continuing Operations Before Federal Income Tax

Income from Continuing Operations before Federal Income Tax	Quarter ended September 30,				Nine Months ended September 30,
($ in thousands)	2014			2013	2014			2013
Standard Insurance Operations:
Commercial Lines underwriting gain	$	27,771		8,776	$	39,844		24,621
Personal Lines underwriting gain	8,037			1,362	95			4,360
Total Standard Insurance Operations underwriting gain, before federal income tax	35,808			10,138	39,939			28,981
GAAP combined ratio	91.6		%	97.5	96.9		%	97.6
Statutory combined ratio	90.5		%	96.0	96.3		%	96.6
E&S Insurance Operations:
Underwriting (loss) gain	(1,371		)	13	(433		)	(2,186	)
GAAP combined ratio	103.8		%	100.0	100.4		%	102.4
Statutory combined ratio	102.9		%	100.5	100.3		%	101.9
Investments:
Net investment income	34,292			32,457	106,600			99,330
Net realized investment gains	15,231			13,431	26,988			21,940
Total investment income, before federal income tax	49,523			45,888	133,588			121,270
Tax on investment income	13,858			12,648	36,374			31,960
Total investment income, after federal income tax	35,665			33,240	97,214			89,310

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 September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations underwriting gain, before federal income tax	$	35,808		10,138		$	39,939		28,981
E&S Insurance Operations underwriting (loss) gain, before federal income tax	(1,371		)	13		(433		)	(2,186	)
Investment income, before federal income tax	49,523			45,888		133,588			121,270
Total all segments	83,960			56,039		173,094			148,065
Interest expense	(5,558		)	(5,570	)	(16,544		)	(16,971	)
General corporate and other expenses	(3,076		)	(5,984	)	(16,619		)	(21,540	)
Income from continuing operations, before federal income tax	$	75,326		44,485		$	139,931		109,554

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Segment Information (Revenue From Continuing Operations by Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting Information [Line Items]
Total net premiums earned	$ 462,639	$ 437,568	$ 1,382,759	$ 1,284,760
Other income	3,196	3,357	14,931	9,677
Net investment income earned	34,292	32,457	106,600	99,330
Net realized investment gains	15,231	13,431	26,988	21,940
Total investment revenues	49,523	45,888	133,588	121,270
Total revenues from continuing operations	515,358	486,813	1,531,278	1,415,707
Commercial Automobile [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	83,536	79,138	249,224	230,191
Workers Compensation [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	66,732	66,510	205,137	197,449
General Liability [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	110,894	100,925	331,303	298,394
Commercial Property [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	61,304	57,004	182,716	165,356
Business Owners' Policies [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	21,649	19,629	63,797	56,794
Bonds Segment [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	4,791	4,705	14,281	14,244
Other Commercial [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	3,237	3,051	9,633	9,036
Total Standard Commercial Lines [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	352,143	330,962	1,056,091	971,464
Personal Automobile [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	37,695	38,513	113,943	115,432
Homeowners [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	33,957	32,374	100,831	95,211
Other Personal [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	2,725	3,827	8,965	10,655
Total Standard Personal Lines [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	74,377	74,714	223,739	221,298
Total Standard Insurance Operations [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	426,520	405,676	1,279,830	1,192,762
Total Standard insurance Operations revenues	429,716	409,018	1,294,753	1,202,352
Miscellaneous Income [Member]
Segment Reporting Information [Line Items]
Other income	3,196	3,342	14,923	9,590
Excess And Surplus Operations [Member]
Segment Reporting Information [Line Items]
Total net premiums earned	36,119	31,892	102,929	91,998
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total revenues from continuing operations	515,358	486,798	1,531,270	1,415,620
Other Income [Member]
Segment Reporting Information [Line Items]
Other income	$ 0	$ 15	$ 8	$ 87

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Investments (Components Of Net Realized Gains, Excluding OTTI Charges) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
HTM fixed income securities Gains	$ 0	$ 32,000	$ 3,000	$ 35,000
HTM fixed income securities Losses	(4,000)	(37,000)	(18,000)	(86,000)
Other investments Gains	1,000	0	1,000	0
Other Investments Losses	0	(80,000)	0	(940,000)
Total other net realized investment gains	15,231,000	14,111,000	28,370,000	25,124,000
Total OTTI charges recognized in earnings	0	(680,000)	(1,382,000)	(3,184,000)
Total net realized gains	15,231,000	13,431,000	26,988,000	21,940,000
Proceeds From Sale Of Available For Sale Securities	89,900,000	67,200,000	221,500,000	116,300,000
Realized Gain On The Sale Of Private Equity [Member]
Schedule of Available-for-sale Securities [Line Items]
Total net realized gains				4,700,000
Fixed Income Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
AFS securities Gains	695,000	662,000	1,633,000	2,580,000
AFS securities Losses	(29,000)	(31,000)	(172,000)	(330,000)
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
AFS securities Gains	14,576,000	13,801,000	27,255,000	24,272,000
AFS securities Losses	(8,000)	(236,000)	(332,000)	(407,000)
Proceeds Due To Rebalancing Of Equity Securities Portfolio [Member]
Schedule of Available-for-sale Securities [Line Items]
Total net realized gains		$ 13,500,000		$ 19,100,000

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Investments (Aggregated Income Statement Summarized Financial Information for Partnerhips in our Alternative Investment Portfolio) (Details) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Schedule of Equity Method Investments [Line Items]
Net investment income earned	$ 34,292,000		$ 32,457,000		$ 106,600,000		$ 99,330,000
Alternative Investments [Member]
Schedule of Equity Method Investments [Line Items]
Net investment income earned	3,900,000	[1]	2,600,000	[1]	12,700,000	[2]	10,100,000	[2]
Investments accounted for under the equity method [Member]
Schedule of Equity Method Investments [Line Items]
Net Investment Income	81,300,000	[1]	97,800,000	[1]	167,000,000	[2]	352,800,000	[2]
Realized gains	(26,100,000)	[1]	162,800,000	[1]	171,500,000	[2]	762,500,000	[2]
Net change in unrealized appreciation (depreciation)	628,600,000	[1]	104,800,000	[1]	1,471,000,000	[2]	85,900,000	[2]
Net income	$ 683,800,000	[1]	$ 365,400,000	[1]	$ 1,809,500,000	[2]	$ 1,201,200,000	[2]

[1] The majority of these results are for the second quarter of each respective year.

[2] The majority of these results are for the nine months ended June 30 of each respective year.

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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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Investment income, before federal income tax	$ 49,523	$ 45,888	$ 133,588	$ 121,270
Total all segments	83,960	56,039	173,094	148,065
Interest expense	(5,558)	(5,570)	(16,544)	(16,971)
General corporate and other expenses	(3,076)	(5,984)	(16,619)	(21,540)
Income from continuing operations, before federal income tax	75,326	44,485	139,931	109,554
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	35,808	10,138	39,939	28,981
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	$ (1,371)	$ 13	$ (433)	$ (2,186)

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Reinsurance (List of Direct, Assumed, and Ceded Reinsurance Amounts) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Effects of Reinsurance [Line Items]
Decrease in direct loss and loss expense incurred	$ 46,100,000
Premiums written:
Direct	592,858,000	570,849,000	1,723,063,000	1,650,855,000
Assumed	5,780,000	22,053,000	19,467,000	34,913,000
Ceded premiums written	(103,517,000)	(100,154,000)	(290,836,000)	(280,719,000)
Net	495,121,000	492,748,000	1,451,694,000	1,405,049,000
Premiums earned:
Direct	548,734,000	518,307,000	1,630,347,000	1,516,454,000
Assumed	6,789,000	11,066,000	27,359,000	32,480,000
Ceded premiums earned	(92,884,000)	(91,805,000)	(274,947,000)	(264,174,000)
Net	462,639,000	437,568,000	1,382,759,000	1,284,760,000
Loss and loss expense incurred:
Direct	304,525,000	350,648,000	995,581,000	1,055,248,000
Assumed	5,362,000	7,264,000	20,218,000	22,758,000
Ceded loss and loss expense incurred	(38,955,000)	(74,595,000)	(126,526,000)	(245,246,000)
Net	270,932,000	283,317,000	889,273,000	832,760,000
Percentage of NFIP claims ceded by federal government			100.00%
Hurricane Sandy [Member]
Effects of Reinsurance [Line Items]
Reduction in estimated ultimate exposure	4,000,000
Hurricane Sandy [Member] | Catastrophe excess of loss treaty [Member]
Effects of Reinsurance [Line Items]
Reduction in estimated ultimate exposure	$ 3,600,000

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Consolidated Statements of Cash Flow (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating Activities
Net income	$ 100,477	$ 81,083
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	31,059	32,861
Sale of renewal rights	(8,000)	0
Loss on disposal of discontinued operations	0	997
Stock-based compensation expense	7,421	7,428
Undistributed (gains) losses of equity method investments	(131)	248
Net realized gains	(26,988)	(21,940)
Retirement income plan curtailment expense	0	16
Changes in assets and liabilities:
Increase in reserve for loss and loss expenses, net of reinsurance recoverables	86,887	112,876
Increase in unearned premiums, net of prepaid reinsurance	68,935	120,288
Decrease in net federal income taxes	33,596	8,990
Increase in premiums receivable	(66,816)	(84,826)
Increase in deferred policy acquisition costs	(16,700)	(21,688)
Increase in interest and dividends due or accrued	(82)	(45)
(Decrease) increase in accrued salaries and benefits	(13,958)	8,286
(Decrease) increase in accrued insurance expenses	(12,545)	6,895
Other-net	(25,036)	(13,480)
Net adjustments	57,642	156,906
Net cash provided by operating activities	158,119	237,989
Investing Activities
Purchase of fixed income securities, available-for-sale	(560,493)	(838,634)
Purchase of equity securities, available-for-sale	(185,529)	(112,742)
Purchase of other investments	(8,498)	(7,864)
Purchase of short-term investments	(1,082,192)	(1,619,948)
Sale of subsidiary	0	1,225
Sale of fixed income securities, available-for-sale	35,499	6,851
Sale of short-term investments	1,074,850	1,662,340
Redemption and maturities of fixed income securities, held-to-maturity	56,375	87,952
Redemption and maturities of fixed income securities, available-for-sale	336,939	413,722
Sale of equity securities, available-for-sale	186,001	109,399
Distributions from other investments	13,514	10,546
Purchase of property and equipment	(9,178)	(10,493)
Sale of renewal rights	8,000	0
Net cash used in investing activities	(134,712)	(297,646)
Financing Activities
Dividends to stockholders	(20,899)	(20,532)
Acquisition of treasury stock	(2,920)	(3,295)
Net proceeds from stock purchase and compensation plans	3,554	4,305
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	1,024	1,479
Repayments of capital lease obligations	(1,858)	(768)
Net cash (used in) provided by financing activities	(21,099)	59,624
Net increase (decrease) in cash	2,308	(33)
Cash, beginning of year	193	210
Cash, end of period	$ 2,501	$ 177

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Fair Value Measurements (Carrying Value and Estimated Fair Value of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Held-to-maturity Securities	$ 336,082	$ 392,879
Available-for-sale Securities	3,967,638	3,715,536
Equity securities, AFS	211,266	192,771
Short-term investments	181,593	174,251
Notes payable	392,294	392,414
Carrying Amount [Member]
Held-to-maturity Securities	336,082	392,879
Available-for-sale Securities	3,967,638	3,715,536
Equity securities, AFS	211,266	192,771
Short-term investments	181,593	174,251
Notes payable	392,294	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	49,896	49,916
Carrying Amount [Member] | Six Point Seventy Percent Senior Notes [Member]
Notes payable	99,398	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	354,190	416,981
Available-for-sale Securities	3,967,638	3,715,536
Equity securities, AFS	211,266	192,771
Short-term investments	181,593	174,251
Notes payable	405,183	354,010
Fair Value [Member] | Two Point Ninety Percent Borrowing From Federal Home Loan Bank [Member]
Notes payable	13,085	13,319
Fair Value [Member] | One Point Twenty Five Percent Borrowing From Federal Home Loan Bank [Member]
Notes payable	45,220	45,259
Fair Value [Member] | Seven Point Twenty Five Percent Senior Notes [Member]
Notes payable	56,970	50,887
Fair Value [Member] | Six Point Seventy Percent Senior Notes [Member]
Notes payable	110,310	98,247
Fair Value [Member] | Five Point Eight Hundred Seventy Five Senior Notes [Member]
Notes payable	$ 179,598	$ 146,298

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Statements of Cash Flow (Cash Flow Supplemental Disclosures) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Interest	$ 14,089,000	$ 13,325,000
Federal income tax	4,699,000	17,000,000
Stock Split Related To Equity Securities, AFS	334,000	0
Assets acquired under capital lease arrangements	4,853,000	2,290,000
AFS Fixed Maturity Securities [Member]
Tax-free exchange of fixed maturity security	14,954,000	23,733,000
Held-to-maturity Securities [Member]
Tax-free exchange of fixed maturity security	4,288,000	15,820,000
National Flood Insurance Program [Member]
Restricted Cash	$ 8,100,000

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Organization (Narrative) (Details)	9 Months Ended
	Sep. 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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 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	780	1	1,085	9
OCI before reclassifications, Defined Benefit Pension and Post Retirement Plans	0	0	0	28,600
Amounts reclassified from AOCI, HTM Related	(243)	(307)	(683)	(1,172)
Amounts reclassified from AOCI, All Other	(10,683)	(8,785)	(18,637)	(16,107)
Other comprehensive income (loss)	(18,887)	(2,195)	24,274	(36,957)
Other Comprehensive Income, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	247	513	742	30,839
Ending Balance, September 30, 2014	49,125		49,125
Available-for-sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			51,635
OCI before reclassifications			41,767
Other comprehensive income (loss)			23,130
Ending Balance, September 30, 2014	74,765		74,765
Investments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			51,503
OCI before reclassifications			41,767
Amounts reclassified from AOCI			(18,235)
Other comprehensive income (loss)			23,532
Ending Balance, September 30, 2014	75,035		75,035
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)			1,085
Ending Balance, September 30, 2014	(514)		(514)
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Held-to-maturity Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			1,467
OCI before reclassifications			0
Other comprehensive income (loss)			(683)
Ending Balance, September 30, 2014	784		784
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			742
Ending Balance, September 30, 2014	(25,910)		(25,910)
Accumulated other comprehensive income [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance,December 31, 2013			24,851
OCI before reclassifications			41,767
Amounts reclassified from AOCI			(17,493)
Other comprehensive income (loss)			24,274	(36,957)
Ending Balance, September 30, 2014	$ 49,125		$ 49,125

XML

Fair Value Measurements (Quantitative Disclosures of Fair Value Assets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Available-for-sale Securities, Debt Securities	$ 3,967,638		$ 3,715,536
Equity securities, AFS	211,266		192,771
Total AFS securities	4,178,904		3,908,307
Short-term investments	181,593		174,251
Fair Value [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	3,967,638		3,715,536
Equity securities, AFS	211,266		192,771
Total AFS securities	4,178,904		3,908,307
Short-term investments	181,593		174,251
Total assets measured at fair value	4,360,497		4,082,558
Fair Value [Member] | U.S. Government and Government Agencies [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	151,689		173,375
Fair Value [Member] | Foreign Government [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	27,867		30,615
Fair Value [Member] | Obligations of States and Political Subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	1,229,234		951,624
Fair Value [Member] | Corporate Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	1,763,230		1,734,883
Fair Value [Member] | Asset-Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	146,966		140,896
Fair Value [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	165,518		171,284
Fair Value [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available-for-sale Securities, Debt Securities	483,134		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	51,467	[1]	52,153	[1]
Equity securities, AFS	208,366	[1]	189,871	[1]
Total AFS securities	259,833	[1]	242,024	[1]
Short-term investments	181,593	[1]	174,251	[1]
Total assets measured at fair value	441,426	[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	51,467	[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	3,916,171	[1]	3,663,383	[1]
Equity securities, AFS	0	[1]	0	[1]
Total AFS securities	3,916,171	[1]	3,663,383	[1]
Short-term investments	0	[1]	0	[1]
Total assets measured at fair value	3,916,171	[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	100,222	[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	27,867	[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	1,229,234	[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	1,763,230	[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	146,966	[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	165,518	[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	483,134	[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.

XML

Investments (Held-To-Maturity Securities Disclosure) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 334,875	$ 390,622
Net Unrealized Gains (Losses)	1,207	2,257
Carrying Value	336,082	392,879
Unrecognized Holding Gains	18,109	24,102
Unrecognized Holding Losses	(1)	0
HTM, Fair Value	354,190	416,981
Held To Maturity securities average duration	2 years 0 months 0 days
Foreign Government [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	5,292	5,292
Net Unrealized Gains (Losses)	68	131
Carrying Value	5,360	5,423
Unrecognized Holding Gains	47	168
Unrecognized Holding Losses	0	0
HTM, Fair Value	5,407	5,591
Obligations of States and Political Subdivisions [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	301,216	348,109
Net Unrealized Gains (Losses)	2,472	4,013
Carrying Value	303,688	352,122
Unrecognized Holding Gains	13,921	17,634
Unrecognized Holding Losses	0	0
HTM, Fair Value	317,609	369,756
Corporate Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	20,303	28,174
Net Unrealized Gains (Losses)	(325)	(346)
Carrying Value	19,978	27,828
Unrecognized Holding Gains	2,749	2,446
Unrecognized Holding Losses	(1)	0
HTM, Fair Value	22,726	30,274
Asset-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	3,111	3,413
Net Unrealized Gains (Losses)	(530)	(655)
Carrying Value	2,581	2,758
Unrecognized Holding Gains	543	657
Unrecognized Holding Losses	0	0
HTM, Fair Value	3,124	3,415
Commercial Mortgage Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	4,953	5,634
Net Unrealized Gains (Losses)	(478)	(886)
Carrying Value	4,475	4,748
Unrecognized Holding Gains	849	3,197
Unrecognized Holding Losses	0	0
HTM, Fair Value	$ 5,324	$ 7,945

XML

Investments (Available-For-Sale Securities Disclosure) (Details) (USD $)	Sep. 30, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	$ 4,064,671,000		$ 3,831,327,000
Unrealized Gains	133,475,000		128,951,000
Unrealized Losses	(19,242,000)		(51,971,000)
Total AFS securities	4,178,904,000		3,908,307,000
AFS Fixed Income Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	3,884,252,000		3,675,977,000
Unrealized Gains	98,678,000		91,434,000
Unrealized Losses	(15,292,000)		(51,875,000)
Total AFS securities	3,967,638,000		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	143,742,000		163,218,000
Unrealized Gains	8,210,000		10,661,000
Unrealized Losses	(263,000)		(504,000)
Total AFS securities	151,689,000		173,375,000
AFS Fixed Income Securities [Member] | Foreign Government [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	27,041,000		29,781,000
Unrealized Gains	832,000		906,000
Unrealized Losses	(6,000)		(72,000)
Total AFS securities	27,867,000		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	1,196,478,000		946,455,000
Unrealized Gains	34,533,000		25,194,000
Unrealized Losses	(1,777,000)		(20,025,000)
Total AFS securities	1,229,234,000		951,624,000
AFS Fixed Income Securities [Member] | Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	1,725,290,000		1,707,928,000
Unrealized Gains	44,571,000		44,004,000
Unrealized Losses	(6,631,000)		(17,049,000)
Total AFS securities	1,763,230,000		1,734,883,000
AFS Fixed Income Securities [Member] | Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	146,557,000		140,430,000
Unrealized Gains	791,000		934,000
Unrealized Losses	(382,000)		(468,000)
Total AFS securities	146,966,000		140,896,000
AFS Fixed Income Securities [Member] | Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	164,934,000	[1]	172,288,000	[1]
Unrealized Gains	2,077,000	[1]	2,462,000	[1]
Unrealized Losses	(1,493,000)	[1]	(3,466,000)	[1]
Total AFS securities	165,518,000	[1]	171,284,000	[1]
Government guaranteed agency securities fair value	17,600,000		30,000,000
AFS Fixed Income Securities [Member] | Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	480,210,000	[2]	515,877,000	[2]
Unrealized Gains	7,664,000	[2]	7,273,000	[2]
Unrealized Losses	(4,740,000)	[2]	(10,291,000)	[2]
Total AFS securities	483,134,000	[2]	512,859,000	[2]
Government guaranteed agency securities fair value	35,900,000		55,200,000
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	180,419,000		155,350,000
Unrealized Gains	34,797,000		37,517,000
Unrealized Losses	(3,950,000)		(96,000)
Total AFS securities	$ 211,266,000		$ 192,771,000

[1] CMBS includes government guaranteed agency securities with a fair value of $17.6 million at September 30, 2014 and $30.0 million at December 31, 2013.

[2] RMBS includes government guaranteed agency securities with a fair value of $35.9 million at September 30, 2014 and $55.2 million at December 31, 2013.

XML

Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Dividend reinvestment plan, shares			44,322	49,964
Stock purchase and compensation plans, shares			588,858	712,994
Dividends to stockholders, per share	$ 0.13	$ 0.13	$ 0.39	$ 0.39
Acquisition of treasury stock, shares			130,573	151,555
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	Sep. 30, 2014		Dec. 31, 2013
AFS Fair Value, Less than 12 months	$ 532,683		$ 1,411,803
AFS Unrealized Losses, Less than 12 months	(6,101)	[1]	(49,106)	[1]
AFS Fair Value, 12 months or longer	505,310		40,731
AFS Unrealized Losses, 12 months or longer	(13,141)	[1]	(2,865)	[1]
HTM Fair Value, Less than 12 months	460		65
HTM Unrealized Losses, Less than 12 months	(9)	[1]	(5)	[1]
HTM Unrecognized Gains, Less than 12 months	8	[2]	5	[2]
HTM Fair Value, 12 months or longer	2,428		2,931
HTM Unrealized Losses, 12 months or longer	(530)	[1]	(675)	[1]
HTM Unrecognized Gains, 12 months or longer	516	[2]	635	[2]
Total AFS and HTM Fair Value, Less than 12 months	533,143		1,411,868
Total AFS and HTM Unrealized Losses, Less than 12 months	(6,110)	[1]	(49,111)	[1]
Total AFS and HTM Securities Unrecognized Gains, Less Than 12 Months	8	[2]	5	[2]
Total AFS and HTM Fair Value, 12 months or longer	507,738		43,662
Total AFS and HTM Unrealized Losses, 12 months or longer	(13,671)	[1]	(3,540)	[1]
Total AFS and HTM Securities Unrecognized Gains, 12 months or longer	516	[2]	635	[2]
Obligations of States and Political Subdivisions [Member]
HTM Fair Value, Less than 12 months	460		65
HTM Unrealized Losses, Less than 12 months	(9)	[1]	(5)	[1]
HTM Unrecognized Gains, Less than 12 months	8	[2]	5	[2]
HTM Fair Value, 12 months or longer	0		441
HTM Unrealized Losses, 12 months or longer	0	[1]	(20)	[1]
HTM Unrecognized Gains, 12 months or longer	0	[2]	14	[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	2,428		2,490
HTM Unrealized Losses, 12 months or longer	(530)	[1]	(655)	[1]
HTM Unrecognized Gains, 12 months or longer	516	[2]	621	[2]
AFS Fixed Income Securities [Member]
AFS Fair Value, Less than 12 months	497,454		1,410,679
AFS Unrealized Losses, Less than 12 months	(2,151)	[1]	(49,010)	[1]
AFS Fair Value, 12 months or longer	505,310		40,731
AFS Unrealized Losses, 12 months or longer	(13,141)	[1]	(2,865)	[1]
AFS Fixed Income Securities [Member] | U.S. Government and Government Agencies [Member]
AFS Fair Value, Less than 12 months	1,001		16,955
AFS Unrealized Losses, Less than 12 months	0	[1]	(500)	[1]
AFS Fair Value, 12 months or longer	13,219		507
AFS Unrealized Losses, 12 months or longer	(263)	[1]	(4)	[1]
AFS Fixed Income Securities [Member] | Foreign Government [Member]
AFS Fair Value, Less than 12 months	4,755		2,029
AFS Unrealized Losses, Less than 12 months	(6)	[1]	(30)	[1]
AFS Fair Value, 12 months or longer	0		2,955
AFS Unrealized Losses, 12 months or longer	0	[1]	(42)	[1]
AFS Fixed Income Securities [Member] | Obligations of States and Political Subdivisions [Member]
AFS Fair Value, Less than 12 months	121,728		442,531
AFS Unrealized Losses, Less than 12 months	(292)	[1]	(19,120)	[1]
AFS Fair Value, 12 months or longer	98,944		13,530
AFS Unrealized Losses, 12 months or longer	(1,485)	[1]	(905)	[1]
AFS Fixed Income Securities [Member] | Corporate Debt Securities [Member]
AFS Fair Value, Less than 12 months	274,501		511,100
AFS Unrealized Losses, Less than 12 months	(1,529)	[1]	(15,911)	[1]
AFS Fair Value, 12 months or longer	158,127		14,771
AFS Unrealized Losses, 12 months or longer	(5,102)	[1]	(1,138)	[1]
AFS Fixed Income Securities [Member] | Asset-Backed Securities [Member]
AFS Fair Value, Less than 12 months	47,542		68,725
AFS Unrealized Losses, Less than 12 months	(134)	[1]	(468)	[1]
AFS Fair Value, 12 months or longer	14,149		0
AFS Unrealized Losses, 12 months or longer	(248)	[1]	0	[1]
AFS Fixed Income Securities [Member] | Commercial Mortgage Backed Securities [Member]
AFS Fair Value, Less than 12 months	16,969		100,396
AFS Unrealized Losses, Less than 12 months	(89)	[1]	(2,950)	[1]
AFS Fair Value, 12 months or longer	57,634		6,298
AFS Unrealized Losses, 12 months or longer	(1,404)	[1]	(516)	[1]
AFS Fixed Income Securities [Member] | Residential Mortgage Backed Securities [Member]
AFS Fair Value, Less than 12 months	30,958		268,943
AFS Unrealized Losses, Less than 12 months	(101)	[1]	(10,031)	[1]
AFS Fair Value, 12 months or longer	163,237		2,670
AFS Unrealized Losses, 12 months or longer	(4,639)	[1]	(260)	[1]
Equity Securities [Member]
AFS Fair Value, Less than 12 months	35,229		1,124
AFS Unrealized Losses, Less than 12 months	(3,950)	[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.

XML

Investments (OTTI by Asset Type) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
OTTI Losses Gross	$ 0	$ 680	$ 1,382	$ 3,107
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income	0	0	0	(77)
OTTI Losses Recognized in Earnings	0	680	1,382	3,184
Other Investments [Member]
OTTI Losses Gross				1,847
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income				0
OTTI Losses Recognized in Earnings				1,847
Held-to-maturity Securities [Member]
OTTI Losses Gross				(44)
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income				(47)
OTTI Losses Recognized in Earnings				3
Held-to-maturity Securities [Member] | Asset-Backed Securities [Member]
OTTI Losses Gross				(44)
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income				(47)
OTTI Losses Recognized in Earnings				3
AFS Fixed Income Securities [Member]
OTTI Losses Gross				(22)
Other-than-temporary impairments on fixed income 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 income securities recognized in other comprehensive income				(30)
OTTI Losses Recognized in Earnings				8
Total AFS Securities [Member]
OTTI Losses Gross				1,304
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income				(30)
OTTI Losses Recognized in Earnings				1,334
Total AFS Securities [Member] | Equity Securities [Member]
OTTI Losses Gross		680	1,382	1,326
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income		0	0	0
OTTI Losses Recognized in Earnings		$ 680	$ 1,382	$ 1,326

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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 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	1,627	1,857	4,880	6,163
Interest cost	3,253	3,053	9,760	9,407
Expected return on plan assets	(3,919)	(3,986)	(11,756)	(11,819)
Amortization of unrecognized prior service cost			0	10
Amortization of unrecognized net actuarial loss	367	772	1,102	3,366
Curtailment expense			0	16
Total net periodic cost	1,328	1,696	3,986	7,143
Retirement Life Plan [Member]
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items]
Service cost	0	0	0	0
Interest cost	73	69	219	208
Expected return on plan assets	0	0	0	0
Amortization of unrecognized prior service cost			0	0
Amortization of unrecognized net actuarial loss	14	18	40	53
Curtailment expense			0	0
Total net periodic cost	$ 87	$ 87	$ 259	$ 261

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
ASSETS
Fixed income securities, held-to-maturity – at carrying value (fair value: $354,190 – 2014; $416,981 – 2013)	$ 336,082	$ 392,879
Fixed income securities, available-for-sale – at fair value (amortized cost: $3,884,252– 2014; $3,675,977 – 2013)	3,967,638	3,715,536
Equity securities, available-for-sale – at fair value (cost: $180,419 – 2014; $155,350 – 2013)	211,266	192,771
Short-term investments (at cost which approximates fair value)	181,593	174,251
Other investments	106,548	107,875
Total investments	4,803,127	4,583,312
Cash	2,501	193
Interest and dividends due or accrued	37,563	37,382
Premiums receivable, net of allowance for uncollectible accounts of: $3,860 – 2014; $4,442 – 2013	591,686	524,870
Reinsurance recoverables, net	559,946	550,897
Prepaid reinsurance premiums	158,889	143,000
Current federal income tax	0	512
Deferred federal income tax	92,780	122,613
Property and equipment – at cost, net of accumulated depreciation and amortization of: $188,175 – 2014; $179,192 – 2013	55,532	50,834
Deferred policy acquisition costs	189,681	172,981
Goodwill	7,849	7,849
Other assets	77,865	75,727
Total assets	6,577,419	6,270,170
Liabilities And Stockholders' Equity
Reserve for loss and loss expenses	3,445,706	3,349,770
Unearned premiums	1,143,979	1,059,155
Notes payable	392,294	392,414
Current federal income tax	16,322	0
Accrued salaries and benefits	97,469	111,427
Other liabilities	214,724	203,476
Total liabilities	5,310,494	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: 99,753,415 – 2014; 99,120,235 – 2013	199,507	198,240
Additional paid-in capital	300,425	288,182
Retained earnings	1,280,148	1,202,015
Accumulated other comprehensive income	49,125	24,851
Treasury stock - at cost (shares: 43,329,195 – 2014; 43,198,622 – 2013)	(562,280)	(559,360)
Total stockholders' equity	1,266,925	1,153,928
Commitments and contingencies
Total liabilities and stockholders' equity	$ 6,577,419	$ 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]		Sep. 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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net income	$ 53,162	$ 32,653	$ 100,477	$ 81,083
Unrealized holding (losses) gains arising during period	(8,988)	6,383	41,767	(50,576)
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income	0	0	0	50
Amount reclassified into net income: Held-to-maturity securities	(243)	(307)	(683)	(1,172)
Amount reclassified into net income: Non-credit other-than-temporary impairments	780	1	1,085	9
Amount reclassified into net income: Realized gains on available for sale securities	(10,683)	(8,785)	(18,637)	(16,107)
Total unrealized (losses) gains on investment securities	(19,134)	(2,708)	23,532	(67,796)
Net actuarial gain	0	0	0	28,600
Amount reclassified into net income: Net actuarial loss	247	513	742	2,222
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	247	513	742	30,839
Other comprehensive (loss) income	(18,887)	(2,195)	24,274	(36,957)
Comprehensive income	$ 34,275	$ 30,458	$ 124,751	$ 44,126

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Investments (AFS Fixed Income securities by Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Investments [Abstract]
Due in one year or less fair value	$ 435,053
Due after one year through five years fair value	1,915,327
Due after five years through 10 years fair value	1,507,315
Due after 10 years fair value	109,943
Total AFS fixed income securities	$ 3,967,638	$ 3,715,536

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Investments (Tables)

9 Months Ended

Sep. 30, 2014

Investments [Line Items]

Schedule of Held-to-maturity Securities

September 30, 2014
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses		Fair Value
Foreign government	$	5,292	68		5,360	47	—		5,407
Obligations of state and political subdivisions	301,216		2,472		303,688	13,921	—		317,609
Corporate securities	20,303		(325	)	19,978	2,749	(1	)	22,726
Asset-backed securities (“ABS”)	3,111		(530	)	2,581	543	—		3,124
Commercial mortgage-backed securities (“CMBS”)	4,953		(478	)	4,475	849	—		5,324
Total HTM fixed income securities	$	334,875	1,207		336,082	18,109	(1	)	354,190

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

September 30, 2014
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	143,742	8,210	(263	)	151,689
Foreign government	27,041		832	(6	)	27,867
Obligations of states and political subdivisions	1,196,478		34,533	(1,777	)	1,229,234
Corporate securities	1,725,290		44,571	(6,631	)	1,763,230
ABS	146,557		791	(382	)	146,966
CMBS1	164,934		2,077	(1,493	)	165,518
Residential mortgage-backed securities (“RMBS”)2	480,210		7,664	(4,740	)	483,134
AFS fixed income securities	3,884,252		98,678	(15,292	)	3,967,638
AFS equity securities	180,419		34,797	(3,950	)	211,266
Total AFS securities	$	4,064,671	133,475	(19,242	)	4,178,904

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 $17.6 million at September 30, 2014 and $30.0 million at December 31, 2013.

² RMBS includes government guaranteed agency securities with a fair value of $35.9 million at September 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

September 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	$	1,001	—		13,219	(263	)
Foreign government	4,755		(6	)	—	—
Obligations of states and political subdivisions	121,728		(292	)	98,944	(1,485	)
Corporate securities	274,501		(1,529	)	158,127	(5,102	)
ABS	47,542		(134	)	14,149	(248	)
CMBS	16,969		(89	)	57,634	(1,404	)
RMBS	30,958		(101	)	163,237	(4,639	)
Total fixed income securities	497,454		(2,151	)	505,310	(13,141	)
Equity securities	35,229		(3,950	)	—	—
Subtotal	$	532,683	(6,101	)	505,310	(13,141	)

	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	460		(9	)	8	—	—		—
ABS	—		—		—	2,428	(530	)	516
Subtotal	$	460	(9	)	8	2,428	(530	)	516
Total AFS and HTM	$	533,143	(6,110	)	8	507,738	(13,671	)	516

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)
September 30, 2014				December 31, 2013
Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss		Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss
404	80% - 99%	$	16,417	556	80% - 99%	$	51,835
2	60% - 79%	2,840		1	60% - 79%	176
—	40% - 59%	—		—	40% - 59%	—
—	20% - 39%	—		—	20% - 39%	—
—	0% - 19%	—		—	0% - 19%	—
		$	19,257			$	52,011

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

Other Investments	Carrying Value			September 30, 2014
($ in thousands)	September 30, 2014		December 31, 2013	Remaining Commitment
Alternative Investments
Secondary private equity	$	23,064	25,618	6,978
Private equity	21,569		20,192	9,181
Energy/power generation	16,659		17,361	6,984
Mezzanine financing	11,273		12,738	13,774
Real estate	11,212		11,698	10,061
Distressed debt	9,205		11,579	2,981
Venture capital	7,115		7,025	350
Total alternative investments	100,097		106,211	50,309
Other securities	6,451		1,664	—
Total other investments	$	106,548	107,875	50,309

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

Income Statement Information	Quarter ended September 30,1				Nine Months ended September 30,2
($ in millions)	2014			2013	2014		2013
Net investment income	$	81.3		97.8	$	167.0	352.8
Realized (losses) gains	(26.1		)	162.8	171.5		762.5
Net change in unrealized appreciation	628.6			104.8	1,471.0		85.9
Net income	$	683.8		365.4	$	1,809.5	1,201.2
Selective’s insurance subsidiaries’ other investments income	$	3.9		2.6	$	12.7	10.1

¹ The majority of these results are for the second quarter of each respective year.

² The majority of these results are for the nine months ended June 30 of each respective year.

Schedule Of Securities Pledged As Collateral

($ in millions)	FHLBI Collateral		Reinsurance Collateral	State and Regulatory Deposits	Total
U.S. government and government agencies	$	22.8	—	25.6	48.4
Obligations of states and political subdivisions	—		5.7	—	5.7
Corporate securities	—		5.3	—	5.3
ABS	—		2.0	—	2.0
CMBS	1.2		—	—	1.2
RMBS	37.6		2.3	—	39.9
Total pledged as collateral	$	61.6	15.3	25.6	102.5

Schedule of Net Investment Income Earned

	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014			2013
Fixed income securities	$	30,706		30,569		$	95,515		$	90,956
Equity securities	1,909			1,341		5,094			4,422
Short-term investments	15			21		48			102
Other investments	3,906			2,639		12,677			10,110
Investment expenses	(2,244		)	(2,113	)	(6,734		)	(6,260		)
Net investment income earned	$	34,292		32,457		106,600			99,330

Schedule of OTTI By Asset Type

Third Quarter 2013	Gross		Included in Other Comprehensive Income ("OCI")	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	680	—	680
OTTI losses	$	680	—	680

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

Nine 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	1,326			—		1,326
Total AFS securities	1,304			(30	)	1,334
Other investments	1,847			—		1,847
OTTI losses	$	3,107		(77	)	3,184

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

	Quarter ended September 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	5,534		7,488
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(90		)	—
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	—			—
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,444		7,488

	Nine Months ended September 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	(2,044		)	—
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	$	5,444		7,488

Schedule of Components of Net Realized Gains Excluding OTTI Charges

	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
HTM fixed income securities
Gains	$	—		32		3		35
Losses	(4		)	(37	)	(18	)	(86	)
AFS fixed income securities
Gains	695			662		1,633		2,580
Losses	(29		)	(31	)	(172	)	(330	)
AFS equity securities
Gains	14,576			13,801		27,255		24,272
Losses	(8		)	(236	)	(332	)	(407	)
Other investments
Gains	1			—		1		—
Losses	—			(80	)	—		(940	)
Total other net realized investment gains	15,231			14,111		28,370		25,124
Total OTTI charges recognized in earnings	—			(680	)	(1,382	)	(3,184	)
Total net realized gains	$	15,231		13,431		26,988		21,940

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	$	99,364	100,786
Due after one year through five years	220,937		235,038
Due after five years through 10 years	15,781		18,366
Total HTM fixed income securities	$	336,082	354,190

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	$	435,053
Due after one year through five years	1,915,327
Due after five years through 10 years	1,507,315
Due after 10 years	109,943
Total AFS fixed income securities	$	3,967,638

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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	Sep. 30, 2014	Dec. 31, 2013
Carrying Value	$ 106,548	$ 107,875
Other Investments [Member]
Carrying Value	106,548	107,875
Remaining Commitment	50,309
Alternative Investments [Member]
Carrying Value	100,097	106,211
Remaining Commitment	50,309
Secondary Private Equity Member | Alternative Investments [Member]
Carrying Value	23,064	25,618
Remaining Commitment	6,978
Private Equity [Member] | Alternative Investments [Member]
Carrying Value	21,569	20,192
Remaining Commitment	9,181
Energy Power Generation [Member] | Alternative Investments [Member]
Carrying Value	16,659	17,361
Remaining Commitment	6,984
Mezzanine Financing [Member] | Alternative Investments [Member]
Carrying Value	11,273	12,738
Remaining Commitment	13,774
Real estate [Member] | Alternative Investments [Member]
Carrying Value	11,212	11,698
Remaining Commitment	10,061
Distressed debt [Member] | Alternative Investments [Member]
Carrying Value	9,205	11,579
Remaining Commitment	2,981
Venture Capital [Member] | Alternative Investments [Member]
Carrying Value	7,115	7,025
Remaining Commitment	350
Other Securities [Member]
Carrying Value	6,451	1,664
Remaining Commitment	$ 0

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Reinsurance (Tables)

9 Months Ended

Sep. 30, 2014

Reinsurance Disclosures [Abstract]

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

	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Premiums written:
Direct	$	592,858		570,849		1,723,063		1,650,855
Assumed	5,780			22,053		19,467		34,913
Ceded	(103,517		)	(100,154	)	(290,836	)	(280,719	)
Net	$	495,121		492,748		1,451,694		1,405,049
Premiums earned:
Direct	$	548,734		518,307		1,630,347		1,516,454
Assumed	6,789			11,066		27,359		32,480
Ceded	(92,884		)	(91,805	)	(274,947	)	(264,174	)
Net	$	462,639		437,568		1,382,759		1,284,760
Loss and loss expense incurred:
Direct	$	304,525		350,648		995,581		1,055,248
Assumed	5,362			7,264		20,218		22,758
Ceded	(38,955		)	(74,595	)	(126,526	)	(245,246	)
Net	$	270,932		283,317		889,273		832,760

Schedule of Ceded Premiums and Losses Related to Flood Operations

Ceded to NFIP	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Ceded premiums written	$	(69,922	)	(64,196	)	(193,000	)	(183,364	)
Ceded premiums earned	(60,761		)	(57,920	)	(178,260	)	(169,697	)
Ceded loss and loss expense incurred	(14,008		)	(34,879	)	(48,099	)	(162,780	)

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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: 44,322 – 2014; 49,964 - 2013)		100	1,052
Stock purchase and compensation plans (shares: 588,858 - 2014; 712,994 - 2013)		1,426	12,361
Net income	81,083			81,083
Dividends to stockholders ($0.39 per share - 2014 and 2013)				(22,153)
Other comprehensive income (loss)	(36,957)				(36,957)
Acquisition of treasury stock (shares: 130,573 - 2014; 151,555 - 2013)						(3,295)
End of period at Sep. 30, 2013	1,124,209	197,914	284,067	1,184,084	17,083	(558,939)
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: 44,322 – 2014; 49,964 - 2013)		89	957
Stock purchase and compensation plans (shares: 588,858 - 2014; 712,994 - 2013)		1,178	11,286
Net income	100,477			100,477
Dividends to stockholders ($0.39 per share - 2014 and 2013)				(22,344)
Other comprehensive income (loss)	24,274				24,274
Acquisition of treasury stock (shares: 130,573 - 2014; 151,555 - 2013)						(2,920)
End of period at Sep. 30, 2014	$ 1,266,925	$ 199,507	$ 300,425	$ 1,280,148	$ 49,125	$ (562,280)

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Fixed income securities, held-to-maturity, fair value	$ 354,190	$ 416,981
Fixed income securities, available-for-sale, amortized cost	3,884,252	3,675,977
Equity securities, available-for-sale, cost	180,419	155,350
Premiums receivable, allowance for uncollectible accounts	3,860	4,442
Property and equipment, accumulated depreciation and amortization	$ 188,175	$ 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	99,753,415	99,120,235
Treasury stock, shares	43,329,195	43,198,622

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Segment Information

9 Months Ended

Sep. 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 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 September 30,			Nine Months ended September 30,
($ in thousands)	2014		2013	2014	2013
Standard Insurance Operations:
Net premiums earned:
Commercial automobile	$	83,536	79,138	249,224	230,191
Workers compensation	66,732		66,510	205,137	197,449
General liability	110,894		100,925	331,303	298,394
Commercial property	61,304		57,004	182,716	165,356
Businessowners’ policies	21,649		19,629	63,797	56,794
Bonds	4,791		4,705	14,281	14,244
Other	3,237		3,051	9,633	9,036
Total Standard Commercial Lines	352,143		330,962	1,056,091	971,464
Personal automobile	37,695		38,513	113,943	115,432
Homeowners	33,957		32,374	100,831	95,211
Other	2,725		3,827	8,965	10,655
Total Standard Personal Lines	74,377		74,714	223,739	221,298
Total Standard Insurance Operations net premiums earned	426,520		405,676	1,279,830	1,192,762
Miscellaneous income	3,196		3,342	14,923	9,590
Total Standard Insurance Operations revenue	429,716		409,018	1,294,753	1,202,352
E&S Insurance Operations:
Net premiums earned	36,119		31,892	102,929	91,998
Investments:
Net investment income	34,292		32,457	106,600	99,330
Net realized investment gains	15,231		13,431	26,988	21,940
Total investment revenues	49,523		45,888	133,588	121,270
Total all segments	515,358		486,798	1,531,270	1,415,620
Other income	—		15	8	87
Total revenues from continuing operations	$	515,358	486,813	1,531,278	1,415,707

Income from Continuing Operations before Federal Income Tax	Quarter ended September 30,				Nine Months ended September 30,
($ in thousands)	2014			2013	2014			2013
Standard Insurance Operations:
Commercial Lines underwriting gain	$	27,771		8,776	$	39,844		24,621
Personal Lines underwriting gain	8,037			1,362	95			4,360
Total Standard Insurance Operations underwriting gain, before federal income tax	35,808			10,138	39,939			28,981
GAAP combined ratio	91.6		%	97.5	96.9		%	97.6
Statutory combined ratio	90.5		%	96.0	96.3		%	96.6
E&S Insurance Operations:
Underwriting (loss) gain	(1,371		)	13	(433		)	(2,186	)
GAAP combined ratio	103.8		%	100.0	100.4		%	102.4
Statutory combined ratio	102.9		%	100.5	100.3		%	101.9
Investments:
Net investment income	34,292			32,457	106,600			99,330
Net realized investment gains	15,231			13,431	26,988			21,940
Total investment income, before federal income tax	49,523			45,888	133,588			121,270
Tax on investment income	13,858			12,648	36,374			31,960
Total investment income, after federal income tax	35,665			33,240	97,214			89,310

Reconciliation of Segment Results to Income from Continuing Operations, before Federal Income Tax	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014			2013
Standard Insurance Operations underwriting gain, before federal income tax	$	35,808		10,138		$	39,939		28,981
E&S Insurance Operations underwriting (loss) gain, before federal income tax	(1,371		)	13		(433		)	(2,186	)
Investment income, before federal income tax	49,523			45,888		133,588			121,270
Total all segments	83,960			56,039		173,094			148,065
Interest expense	(5,558		)	(5,570	)	(16,544		)	(16,971	)
General corporate and other expenses	(3,076		)	(5,984	)	(16,619		)	(21,540	)
Income from continuing operations, before federal income tax	$	75,326		44,485		$	139,931		109,554

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
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	56,424,220

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Retirement Plans

9 Months Ended

Sep. 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 September 30,					Retirement Life Plan Quarter ended September 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	1,627		1,857		—	—
Interest cost	3,253			3,053		73	69
Expected return on plan assets	(3,919		)	(3,986	)	—	—
Amortization of unrecognized net actuarial loss	367			772		14	18
Total net periodic cost	$	1,328		1,696		87	87

	Retirement Income Plan Nine Months ended September 30,					Retirement Life Plan Nine Months ended September 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	4,880		6,163		—	—
Interest cost	9,760			9,407		219	208
Expected return on plan assets	(11,756		)	(11,819	)	—	—
Amortization of unrecognized prior service	—			10		—	—
Amortization of unrecognized net actuarial loss	1,102			3,366		40	53
Curtailment expense	—			16		—	—
Total net periodic cost	$	3,986		7,143		259	261

	Retirement Income Plan Nine Months ended September 30,			Retirement Life Plan Nine Months ended September 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 $10.4 million to the Retirement Income Plan in 2014, $8.0 million of which has been funded as of September 30, 2014.

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues:
Net premiums earned	$ 462,639	$ 437,568	$ 1,382,759	$ 1,284,760
Net investment income earned	34,292	32,457	106,600	99,330
Net realized gains:
Net realized investment gains	15,231	14,111	28,370	25,124
Other-than-temporary impairments	0	(680)	(1,382)	(3,107)
Other-than-temporary impairments on fixed income securities recognized in other comprehensive income	0	0	0	(77)
Total net realized gains	15,231	13,431	26,988	21,940
Other income	3,196	3,357	14,931	9,677
Total revenues	515,358	486,813	1,531,278	1,415,707
Expenses:
Loss and loss expense incurred	270,932	283,317	889,273	832,760
Policy acquisition costs	158,101	145,314	462,540	428,570
Interest expense	5,558	5,570	16,544	16,971
Other expenses	5,441	8,127	22,990	27,852
Total expenses	440,032	442,328	1,391,347	1,306,153
Income from continuing operations, before federal income tax	75,326	44,485	139,931	109,554
Federal income tax expense:
Current	7,373	6,367	22,692	20,041
Deferred	14,791	5,465	16,762	7,433
Total federal income tax expense	22,164	11,832	39,454	27,474
Net income from continuing operations	53,162	32,653	100,477	82,080
Loss on disposal of discontinued operations, net of tax of $(538) - 2013	0	0	0	(997)
Net income	$ 53,162	$ 32,653	$ 100,477	$ 81,083
Earnings per share:
Basic net income from continuing operations	$ 0.94	$ 0.59	$ 1.79	$ 1.48
Basic net loss from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ (0.02)
Basic net income	$ 0.94	$ 0.59	$ 1.79	$ 1.46
Diluted net income from continuing operations	$ 0.93	$ 0.57	$ 1.75	$ 1.45
Diluted net loss from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ (0.02)
Diluted net income	$ 0.93	$ 0.57	$ 1.75	$ 1.43
Dividends to stockholders	$ 0.13	$ 0.13	$ 0.39	$ 0.39

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Adoption of Accounting Pronouncements

9 Months Ended

Sep. 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 exist, 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.

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. This policy election is required to be applied consistently to all qualifying investments, rather than a decision to be applied to individual investments. 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).  When a company does not make a policy election to account for investments in qualified affordable housing projects using the proportional amortization method, these investments are 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, with early adoption being permitted. During Third Quarter 2014, we adopted this guidance and have made a policy election to use the proportional amortization method. The adoption of this guidance did not materially impact our financial condition or results of operation.

Pronouncements to be effective in the future

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

9 Months Ended

Sep. 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.

Certain amounts in our prior years' Financial Statements and related notes have been reclassified to conform to the 2014 presentation. Such reclassifications had no effect on our net income, stockholders' equity, or cash flows.

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 third quarters ended September 30, 2014 (“Third Quarter 2014”) and September 30, 2013 (“Third Quarter 2013”) and the nine-month periods ended September 30, 2014 ("Nine Months 2014") and September 30, 2013 ("Nine 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)

9 Months Ended

Sep. 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

	September 30, 2014			December 31, 2013
($ in thousands)	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial Assets
Fixed income securities:
HTM	$	336,082	354,190	392,879	416,981
AFS	3,967,638		3,967,638	3,715,536	3,715,536
Equity securities, AFS	211,266		211,266	192,771	192,771
Short-term investments	181,593		181,593	174,251	174,251
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	13,000		13,085	13,000	13,319
1.25% borrowings from FHLBI	45,000		45,220	45,000	45,259
7.25% Senior Notes	49,896		56,970	49,916	50,887
6.70% Senior Notes	99,398		110,310	99,498	98,247
5.875% Senior Notes	185,000		179,598	185,000	146,298
Total notes payable	$	392,294	405,183	392,414	354,010

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

September 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets  Measured at  Fair Value  at 9/30/2014		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	$	151,689	51,467	100,222	—
Foreign government	27,867		—	27,867	—
Obligations of states and political subdivisions	1,229,234		—	1,229,234	—
Corporate securities	1,763,230		—	1,763,230	—
ABS	146,966		—	146,966	—
CMBS	165,518		—	165,518	—
RMBS	483,134		—	483,134	—
Total AFS fixed income securities	3,967,638		51,467	3,916,171	—
Equity securities	211,266		208,366	—	2,900
Total AFS Securities	4,178,904		259,833	3,916,171	2,900
Short-term investments	181,593		181,593	—	—
Total assets measured at fair value	$	4,360,497	441,426	3,916,171	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

:

September 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 9/30/2014		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	$	5,407	—	5,407	—
Obligations of states and political subdivisions	317,609		—	317,609	—
Corporate securities	22,726		—	22,726	—
ABS	3,124		—	3,124	—
CMBS	5,324		—	5,324	—
Total HTM fixed income securities	$	354,190	—	354,190	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,085	—	13,085	—
1.25% borrowings from FHLBI	45,220		—	45,220	—
7.25% Senior Notes	56,970		—	56,970	—
6.70% Senior Notes	110,310		—	110,310	—
5.875% Senior Notes	179,598		179,598	—	—
Total notes payable	$	405,183	179,598	225,585	—

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

9 Months Ended

Sep. 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 Third Quarter and Nine Months 2014 and 2013 are as follows:

Third Quarter 2014
($ in thousands)	Gross			Tax		Net
Net income	$	75,326		22,164		53,162
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(13,831		)	(4,843	)	(8,988	)
Amounts reclassified into net income:
HTM securities	(373		)	(130	)	(243	)
Non-credit OTTI	1,200			420		780
Realized gains on AFS securities	(16,435		)	(5,752	)	(10,683	)
Net unrealized losses	(29,439		)	(10,305	)	(19,134	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	381			134		247
Defined benefit pension and post-retirement plans	381			134		247
Other comprehensive loss	(29,058		)	(10,171	)	(18,887	)
Comprehensive income	$	46,268		11,993		34,275

Third Quarter 2013
($ in thousands)	Gross			Tax		Net
Net income	$	44,485		11,832		32,653
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding gains during the period	9,820			3,437		6,383
Amounts reclassified into net income:
HTM securities	(472		)	(165	)	(307	)
Non-credit OTTI	1			—		1
Realized gains on AFS securities	(13,516		)	(4,731	)	(8,785	)
Net unrealized losses	(4,167		)	(1,459	)	(2,708	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	790			277		513
Defined benefit pension and post-retirement plans	790			277		513
Other comprehensive loss	(3,377		)	(1,182	)	(2,195	)
Comprehensive loss	$	41,108		10,650		30,458

Nine Months 2014
($ in thousands)	Gross			Tax		Net
Net income	$	139,931		39,454		100,477
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	64,255			22,488		41,767
Amounts reclassified into net income:
HTM securities	(1,050		)	(367	)	(683	)
Non-credit OTTI	1,669			584		1,085
Realized gains on AFS securities	(28,672		)	(10,035	)	(18,637	)
Net unrealized gains	36,202			12,670		23,532
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	1,142			400		742
Defined benefit pension and post-retirement plans	1,142			400		742
Other comprehensive income	37,344			13,070		24,274
Comprehensive income	$	177,275		52,524		124,751

Nine Months 2013
($ in thousands)	Gross			Tax		Net
Net income	$	108,019		26,936		81,083
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(77,810		)	(27,234	)	(50,576	)
Non-credit OTTI recognized in OCI	77			27		50
Amounts reclassified into net income:
HTM securities	(1,803		)	(631	)	(1,172	)
Non-credit OTTI	14			5		9
Realized gains on AFS securities	(24,780		)	(8,673	)	(16,107	)
Net unrealized losses	(104,302		)	(36,506	)	(67,796	)
Defined benefit pension and post-retirement plans:
Net actuarial gains	44,000			15,400		28,600
Amounts reclassified into net income:
Net actuarial loss	3,419			1,197		2,222
Prior service cost	10			4		6
Curtailment expense	16			5		11
Defined benefit pension and post-retirement plans	47,445			16,606		30,839
Other comprehensive loss	(56,857		)	(19,900	)	(36,957	)
Comprehensive income	$	51,162		7,036		44,126

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

September 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	—			—		41,767		41,767		—		41,767
Amounts reclassified from AOCI	1,085			(683	)	(18,637	)	(18,235	)	742		(17,493	)
Net current period OCI	1,085			(683	)	23,130		23,532		742		24,274
Balance, September 30, 2014	$	(514	)	784		74,765		75,035		(25,910	)	49,125

The reclassifications out of AOCI are as follows:

	Quarter ended September 30,				Nine Months ended September 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	—		1		—		14		Net investment income earned
Non-credit OTTI on disposed securities	1,200		—		1,669		—		Net realized gains
	1,200		1		1,669		14		Income from continuing operations, before federal income tax
	(420	)	—		(584	)	(5	)	Total federal income tax expense
	780		1		1,085		9		Net income
HTM related
Unrealized losses (gains) on HTM disposals	12		(19	)	87		(170	)	Net realized gains
Amortization of net unrealized gains on HTM securities	(385	)	(453	)	(1,137	)	(1,633	)	Net investment income earned
	(373	)	(472	)	(1,050	)	(1,803	)	Income from continuing operations, before federal income tax
	130		165		367		631		Total federal income tax expense
	(243	)	(307	)	(683	)	(1,172	)	Net income
Realized gains and losses on AFS and OTTI
Realized gains on AFS disposals and OTTI	(16,435	)	(13,516	)	(28,672	)	(24,780	)	Net realized gains
	(16,435	)	(13,516	)	(28,672	)	(24,780	)	Income from continuing operations, before federal income tax
	5,752		4,731		10,035		8,673		Total federal income tax expense
	(10,683	)	(8,785	)	(18,637	)	(16,107	)	Net income
Defined benefit pension and post-retirement life plans
Net actuarial loss	88		159		263		717		Loss and loss expense incurred
	293		631		879		2,702		Policy acquisition costs
	381		790		1,142		3,419		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		790		1,142		3,445		Income from continuing operations, before federal income tax
	(134	)	(277	)	(400	)	(1,206	)	Total federal income tax expense
	247		513		742		2,239		Net income
Total reclassifications for the period	(9,899	)	(8,578	)	(17,493	)	(15,031	)	Net income

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Fair Value Measurements

9 Months Ended

Sep. 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 September 30, 2014 and December 31, 2013:

	September 30, 2014			December 31, 2013
($ in thousands)	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Financial Assets
Fixed income securities:
HTM	$	336,082	354,190	392,879	416,981
AFS	3,967,638		3,967,638	3,715,536	3,715,536
Equity securities, AFS	211,266		211,266	192,771	192,771
Short-term investments	181,593		181,593	174,251	174,251
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	13,000		13,085	13,000	13,319
1.25% borrowings from FHLBI	45,000		45,220	45,000	45,259
7.25% Senior Notes	49,896		56,970	49,916	50,887
6.70% Senior Notes	99,398		110,310	99,498	98,247
5.875% Senior Notes	185,000		179,598	185,000	146,298
Total notes payable	$	392,294	405,183	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 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 September 30, 2014 and December 31, 2013:

September 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets  Measured at  Fair Value  at 9/30/2014		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	$	151,689	51,467	100,222	—
Foreign government	27,867		—	27,867	—
Obligations of states and political subdivisions	1,229,234		—	1,229,234	—
Corporate securities	1,763,230		—	1,763,230	—
ABS	146,966		—	146,966	—
CMBS	165,518		—	165,518	—
RMBS	483,134		—	483,134	—
Total AFS fixed income securities	3,967,638		51,467	3,916,171	—
Equity securities	211,266		208,366	—	2,900
Total AFS Securities	4,178,904		259,833	3,916,171	2,900
Short-term investments	181,593		181,593	—	—
Total assets measured at fair value	$	4,360,497	441,426	3,916,171	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 were no changes in the fair value of securities measured using Level 3 prices during Nine Months 2014. The following table provides a summary of these changes during full year 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 September 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 a fair value of $2.9 million were measured using Level 3 inputs at September 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 September 30, 2014 and December 31, 2013:

September 30, 2014			Fair Value Measurements Using
($ in thousands)	Assets/ Liabilities Disclosed at Fair Value at 9/30/2014		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	$	5,407	—	5,407	—
Obligations of states and political subdivisions	317,609		—	317,609	—
Corporate securities	22,726		—	22,726	—
ABS	3,124		—	3,124	—
CMBS	5,324		—	5,324	—
Total HTM fixed income securities	$	354,190	—	354,190	—
Financial Liabilities
Notes payable:
2.90% borrowings from FHLBI	$	13,085	—	13,085	—
1.25% borrowings from FHLBI	45,220		—	45,220	—
7.25% Senior Notes	56,970		—	56,970	—
6.70% Senior Notes	110,310		—	110,310	—
5.875% Senior Notes	179,598		179,598	—	—
Total notes payable	$	405,183	179,598	225,585	—

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

9 Months Ended

Sep. 30, 2014

Supplemental Cash Flow Information [Abstract]

Statements of Cash Flow

Statements of Cash Flow

Supplemental cash flow information for Nine Months 2014 and 2013 is as follows:

	Nine Months ended September 30,
($ in thousands)	2014		2013
Cash paid during the period for:
Interest	$	14,089	13,325
Federal income tax	4,699		17,000
Non-cash items:
Tax-free exchange of fixed income securities, available-for-sale ("AFS")	14,954		23,733
Tax-free exchange of fixed income securities, held-to-maturity ("HTM")	4,288		15,820
Stock split related to equity securities, AFS	334		—
Assets acquired under capital lease arrangements	4,853		2,290

At September 30, 2014, included in "Other assets" on the Consolidated Balance Sheets was $8.1 million of cash received from the NFIP, which is restricted to pay flood claims under the WYO program.

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Investments

9 Months Ended

Sep. 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 September 30, 2014 and December 31, 2013 were as follows:

September 30, 2014
($ in thousands)	Amortized Cost		Net  Unrealized Gains  (Losses)		Carrying Value	Unrecognized  Holding Gains	Unrecognized Holding  Losses		Fair Value
Foreign government	$	5,292	68		5,360	47	—		5,407
Obligations of state and political subdivisions	301,216		2,472		303,688	13,921	—		317,609
Corporate securities	20,303		(325	)	19,978	2,749	(1	)	22,726
Asset-backed securities (“ABS”)	3,111		(530	)	2,581	543	—		3,124
Commercial mortgage-backed securities (“CMBS”)	4,953		(478	)	4,475	849	—		5,324
Total HTM fixed income securities	$	334,875	1,207		336,082	18,109	(1	)	354,190

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 2.0 years as of September 30, 2014.

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

September 30, 2014
($ in thousands)	Cost/ Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
U.S. government and government agencies	$	143,742	8,210	(263	)	151,689
Foreign government	27,041		832	(6	)	27,867
Obligations of states and political subdivisions	1,196,478		34,533	(1,777	)	1,229,234
Corporate securities	1,725,290		44,571	(6,631	)	1,763,230
ABS	146,557		791	(382	)	146,966
CMBS1	164,934		2,077	(1,493	)	165,518
Residential mortgage-backed securities (“RMBS”)2	480,210		7,664	(4,740	)	483,134
AFS fixed income securities	3,884,252		98,678	(15,292	)	3,967,638
AFS equity securities	180,419		34,797	(3,950	)	211,266
Total AFS securities	$	4,064,671	133,475	(19,242	)	4,178,904

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 $17.6 million at September 30, 2014 and $30.0 million at December 31, 2013.

² RMBS includes government guaranteed agency securities with a fair value of $35.9 million at September 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 September 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:

September 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	$	1,001	—		13,219	(263	)
Foreign government	4,755		(6	)	—	—
Obligations of states and political subdivisions	121,728		(292	)	98,944	(1,485	)
Corporate securities	274,501		(1,529	)	158,127	(5,102	)
ABS	47,542		(134	)	14,149	(248	)
CMBS	16,969		(89	)	57,634	(1,404	)
RMBS	30,958		(101	)	163,237	(4,639	)
Total fixed income securities	497,454		(2,151	)	505,310	(13,141	)
Equity securities	35,229		(3,950	)	—	—
Subtotal	$	532,683	(6,101	)	505,310	(13,141	)

	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	460		(9	)	8	—	—		—
ABS	—		—		—	2,428	(530	)	516
Subtotal	$	460	(9	)	8	2,428	(530	)	516
Total AFS and HTM	$	533,143	(6,110	)	8	507,738	(13,671	)	516

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.

The table below provides our net unrealized/unrecognized loss positions by impairment severity as of September 30, 2014 compared to December 31, 2013:

($ in thousands)
September 30, 2014				December 31, 2013
Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss		Number of Issues	% of Market/Book	Unrealized/ Unrecognized Loss
404	80% - 99%	$	16,417	556	80% - 99%	$	51,835
2	60% - 79%	2,840		1	60% - 79%	176
—	40% - 59%	—		—	40% - 59%	—
—	20% - 39%	—		—	20% - 39%	—
—	0% - 19%	—		—	0% - 19%	—
		$	19,257			$	52,011

At September 30, 2014, we had 406 securities in an aggregate unrealized/unrecognized loss position of $19.3 million, compared to 557 securities in an aggregate unrealized/unrecognized loss position of $52.0 million at December 31, 2013. This improvement was mainly driven by a lower interest rate environment. Fixed income security pricing in the marketplace has improved reflecting the 54 basis point decrease in 10-year U.S. Treasury Note yields during Nine Months 2014.

At September 30, 2014, $13.2 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 $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 amortized cost at year end to an average of 3% of amortized cost at the end of the third 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 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.

In addition, 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 September 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 September 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 September 30, 2014:

($ in thousands)	Carrying Value		Fair Value
Due in one year or less	$	99,364	100,786
Due after one year through five years	220,937		235,038
Due after five years through 10 years	15,781		18,366
Total HTM fixed income securities	$	336,082	354,190

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

($ in thousands)	Fair Value
Due in one year or less	$	435,053
Due after one year through five years	1,915,327
Due after five years through 10 years	1,507,315
Due after 10 years	109,943
Total AFS fixed income securities	$	3,967,638

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

Other Investments	Carrying Value			September 30, 2014
($ in thousands)	September 30, 2014		December 31, 2013	Remaining Commitment
Alternative Investments
Secondary private equity	$	23,064	25,618	6,978
Private equity	21,569		20,192	9,181
Energy/power generation	16,659		17,361	6,984
Mezzanine financing	11,273		12,738	13,774
Real estate	11,212		11,698	10,061
Distressed debt	9,205		11,579	2,981
Venture capital	7,115		7,025	350
Total alternative investments	100,097		106,211	50,309
Other securities	6,451		1,664	—
Total other investments	$	106,548	107,875	50,309

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 nine-month periods ended September 30 is based on the investments' results through June 30 and is as follows:

Income Statement Information	Quarter ended September 30,1				Nine Months ended September 30,2
($ in millions)	2014			2013	2014		2013
Net investment income	$	81.3		97.8	$	167.0	352.8
Realized (losses) gains	(26.1		)	162.8	171.5		762.5
Net change in unrealized appreciation	628.6			104.8	1,471.0		85.9
Net income	$	683.8		365.4	$	1,809.5	1,201.2
Selective’s insurance subsidiaries’ other investments income	$	3.9		2.6	$	12.7	10.1

¹ The majority of these results are for the second quarter of each respective year.

² The majority of these results are for the nine months ended June 30 of each respective year.

(f) We have pledged certain AFS fixed income securities 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 September 30, 2014:

($ in millions)	FHLBI Collateral		Reinsurance Collateral	State and Regulatory Deposits	Total
U.S. government and government agencies	$	22.8	—	25.6	48.4
Obligations of states and political subdivisions	—		5.7	—	5.7
Corporate securities	—		5.3	—	5.3
ABS	—		2.0	—	2.0
CMBS	1.2		—	—	1.2
RMBS	37.6		2.3	—	39.9
Total pledged as collateral	$	61.6	15.3	25.6	102.5

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

	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014			2013
Fixed income securities	$	30,706		30,569		$	95,515		$	90,956
Equity securities	1,909			1,341		5,094			4,422
Short-term investments	15			21		48			102
Other investments	3,906			2,639		12,677			10,110
Investment expenses	(2,244		)	(2,113	)	(6,734		)	(6,260		)
Net investment income earned	$	34,292		32,457		106,600			99,330

(h) The following tables summarize OTTI by asset type for the periods indicated. We had no OTTI charges in Third Quarter 2014:

Third Quarter 2013	Gross		Included in Other Comprehensive Income ("OCI")	Recognized in Earnings
($ in thousands)
AFS securities
Equity securities	$	680	—	680
OTTI losses	$	680	—	680

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

Nine 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	1,326			—		1,326
Total AFS securities	1,304			(30	)	1,334
Other investments	1,847			—		1,847
OTTI losses	$	3,107		(77	)	3,184

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 portionof the OTTI charge was recognized in OCI, and the corresponding changes in such amounts:

	Quarter ended September 30,
($ in thousands)	2014			2013
Balance, beginning of period	$	5,534		7,488
Addition for the amount related to credit loss for which an OTTI was not previously recognized	—			—
Reductions for securities sold during the period	(90		)	—
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	—			—
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	—			—
Balance, end of period	$	5,444		7,488

	Nine Months ended September 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	(2,044		)	—
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	$	5,444		7,488

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

	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
HTM fixed income securities
Gains	$	—		32		3		35
Losses	(4		)	(37	)	(18	)	(86	)
AFS fixed income securities
Gains	695			662		1,633		2,580
Losses	(29		)	(31	)	(172	)	(330	)
AFS equity securities
Gains	14,576			13,801		27,255		24,272
Losses	(8		)	(236	)	(332	)	(407	)
Other investments
Gains	1			—		1		—
Losses	—			(80	)	—		(940	)
Total other net realized investment gains	15,231			14,111		28,370		25,124
Total OTTI charges recognized in earnings	—			(680	)	(1,382	)	(3,184	)
Total net realized gains	$	15,231		13,431		26,988		21,940

Realized gains and losses on the sale of investments are determined on the basis of the cost of the specific investments sold. The $15.2 million and $28.4 million in net realized gains in Third Quarter and Nine 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 $14.1 million and $25.1 million in net realized gains in Third Quarter and Nine Months 2013, $13.5 million and $19.1 million, respectively, were related to the sale of AFS equity securities due to the rebalancing of our high dividend yield strategy holdings within our equity portfolio. In addition, $4.7 million in net realized gains in Nine Months 2013, was related to the sale of a private equity security due to the acquisition of this investment by a third party.

Proceeds from the sale of AFS securities were $89.9 million in Third Quarter 2014 and $221.5 million in Nine Months 2014, and $67.2 million and $116.3 million in the same periods a year ago.

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Reinsurance

9 Months Ended

Sep. 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 September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Premiums written:
Direct	$	592,858		570,849		1,723,063		1,650,855
Assumed	5,780			22,053		19,467		34,913
Ceded	(103,517		)	(100,154	)	(290,836	)	(280,719	)
Net	$	495,121		492,748		1,451,694		1,405,049
Premiums earned:
Direct	$	548,734		518,307		1,630,347		1,516,454
Assumed	6,789			11,066		27,359		32,480
Ceded	(92,884		)	(91,805	)	(274,947	)	(264,174	)
Net	$	462,639		437,568		1,382,759		1,284,760
Loss and loss expense incurred:
Direct	$	304,525		350,648		995,581		1,055,248
Assumed	5,362			7,264		20,218		22,758
Ceded	(38,955		)	(74,595	)	(126,526	)	(245,246	)
Net	$	270,932		283,317		889,273		832,760

Direct premiums earned increases in Third Quarter 2014 and Nine Months 2014 compared to Third Quarter 2013 and Nine Months 2013 reflect pure price increases coupled with stable retention that we have achieved in our Standard Insurance Operations. These increases were consistent with the fluctuation in DPW for the twelve-month period ended September 30, 2014 compared to the twelve-month period ended September 30, 2013.

Assumed premiums written and earned decreased in Third Quarter 2014 and Nine Months 2014 compared to the same periods last year as a result of the March 2014 sale of the renewal rights to our self-insured group, or "SIG," book of pooled public entity business.

Direct loss and loss expense incurred decreased by $46.1 million in Third Quarter 2014 compared to Third Quarter 2013 driven by: (i) lower catastrophe losses; (ii) favorable prior year casualty reserve development; and (iii) a $4.0 million reduction in our estimated ultimate exposure related to Hurricane Sandy, $3.6 million of which is ceded under our catastrophe excess of loss treaty.

In addition, 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 September 30,					Nine Months ended September 30,
($ in thousands)	2014			2013		2014		2013
Ceded premiums written	$	(69,922	)	(64,196	)	(193,000	)	(183,364	)
Ceded premiums earned	(60,761		)	(57,920	)	(178,260	)	(169,697	)
Ceded loss and loss expense incurred	(14,008		)	(34,879	)	(48,099	)	(162,780	)

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Investments (HTM Fixed Income Securities by Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Investments [Abstract]
Due in one year or less carrying value	$ 99,364
Due after one year through five years carrying value	220,937
Due after five years through 10 years carrying value	15,781
Carrying Value	336,082	392,879
Due in one year or less fair value	100,786
Due after one year through five years fair value	235,038
Due after five years through 10 years fair value	18,366
HTM, Fair Value	$ 354,190	$ 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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting Information [Line Items]
Net investment income earned	$ 34,292	$ 32,457	$ 106,600	$ 99,330
Net realized investment gains	15,231	13,431	26,988	21,940
Total investment revenues	49,523	45,888	133,588	121,270
Tax on investment income	13,858	12,648	36,374	31,960
Total investment income after federal income tax	35,665	33,240	97,214	89,310
Total Standard Commercial Lines [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	27,771	8,776	39,844	24,621
Total Standard Personal Lines [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	8,037	1,362	95	4,360
Total Standard Insurance Operations [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	35,808	10,138	39,939	28,981
GAAP combined ratio	91.60%	97.50%	96.90%	97.60%
Statutory combined ratio	90.50%	96.00%	96.30%	96.60%
Excess And Surplus Operations [Member]
Segment Reporting Information [Line Items]
Underwriting gain (loss), before federal income tax	$ (1,371)	$ 13	$ (433)	$ (2,186)
GAAP combined ratio	103.80%	100.00%	100.40%	102.40%
Statutory combined ratio	102.90%	100.50%	100.30%	101.90%

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Statements of Cash Flow (Tables)

9 Months Ended

Sep. 30, 2014

Supplemental Cash Flow Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures

	Nine Months ended September 30,
($ in thousands)	2014		2013
Cash paid during the period for:
Interest	$	14,089	13,325
Federal income tax	4,699		17,000
Non-cash items:
Tax-free exchange of fixed income securities, available-for-sale ("AFS")	14,954		23,733
Tax-free exchange of fixed income securities, held-to-maturity ("HTM")	4,288		15,820
Stock split related to equity securities, AFS	334		—
Assets acquired under capital lease arrangements	4,853		2,290

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Retirement Plans (Table)

9 Months Ended

Sep. 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 September 30,					Retirement Life Plan Quarter ended September 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	1,627		1,857		—	—
Interest cost	3,253			3,053		73	69
Expected return on plan assets	(3,919		)	(3,986	)	—	—
Amortization of unrecognized net actuarial loss	367			772		14	18
Total net periodic cost	$	1,328		1,696		87	87

	Retirement Income Plan Nine Months ended September 30,					Retirement Life Plan Nine Months ended September 30,
($ in thousands)	2014			2013		2014	2013
Components of Net Periodic Benefit Cost:
Net Periodic Benefit Cost:
Service cost	$	4,880		6,163		—	—
Interest cost	9,760			9,407		219	208
Expected return on plan assets	(11,756		)	(11,819	)	—	—
Amortization of unrecognized prior service	—			10		—	—
Amortization of unrecognized net actuarial loss	1,102			3,366		40	53
Curtailment expense	—			16		—	—
Total net periodic cost	$	3,986		7,143		259	261

Schedule Of Weighted-Average Expense Assumptions

	Retirement Income Plan Nine Months ended September 30,			Retirement Life Plan Nine Months ended September 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	9 Months Ended
	Mar. 31, 2014	Sep. 30, 2014	Sep. 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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Investments [Abstract]
Balance, beginning of period	$ 5,534	$ 7,488	$ 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	(90)	0	(2,044)	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	0	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	$ 5,444	$ 7,488	$ 5,444	$ 7,488

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Consolidated Statements of Income Parenthetical (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Tax effect of loss on disposal of discontinued operations	$ (538)

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Organization

9 Months Ended

Sep. 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 ("NFIP") 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)

9 Months Ended

Sep. 30, 2014

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

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

Third Quarter 2014
($ in thousands)	Gross			Tax		Net
Net income	$	75,326		22,164		53,162
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(13,831		)	(4,843	)	(8,988	)
Amounts reclassified into net income:
HTM securities	(373		)	(130	)	(243	)
Non-credit OTTI	1,200			420		780
Realized gains on AFS securities	(16,435		)	(5,752	)	(10,683	)
Net unrealized losses	(29,439		)	(10,305	)	(19,134	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	381			134		247
Defined benefit pension and post-retirement plans	381			134		247
Other comprehensive loss	(29,058		)	(10,171	)	(18,887	)
Comprehensive income	$	46,268		11,993		34,275

Third Quarter 2013
($ in thousands)	Gross			Tax		Net
Net income	$	44,485		11,832		32,653
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding gains during the period	9,820			3,437		6,383
Amounts reclassified into net income:
HTM securities	(472		)	(165	)	(307	)
Non-credit OTTI	1			—		1
Realized gains on AFS securities	(13,516		)	(4,731	)	(8,785	)
Net unrealized losses	(4,167		)	(1,459	)	(2,708	)
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	790			277		513
Defined benefit pension and post-retirement plans	790			277		513
Other comprehensive loss	(3,377		)	(1,182	)	(2,195	)
Comprehensive loss	$	41,108		10,650		30,458

Nine Months 2014
($ in thousands)	Gross			Tax		Net
Net income	$	139,931		39,454		100,477
Components of OCI:
Unrealized gains on investment securities:
Unrealized holding gains during the period	64,255			22,488		41,767
Amounts reclassified into net income:
HTM securities	(1,050		)	(367	)	(683	)
Non-credit OTTI	1,669			584		1,085
Realized gains on AFS securities	(28,672		)	(10,035	)	(18,637	)
Net unrealized gains	36,202			12,670		23,532
Defined benefit pension and post-retirement plans:
Amounts reclassified into net income:
Net actuarial loss	1,142			400		742
Defined benefit pension and post-retirement plans	1,142			400		742
Other comprehensive income	37,344			13,070		24,274
Comprehensive income	$	177,275		52,524		124,751

Nine Months 2013
($ in thousands)	Gross			Tax		Net
Net income	$	108,019		26,936		81,083
Components of OCI:
Unrealized losses on investment securities:
Unrealized holding losses during the period	(77,810		)	(27,234	)	(50,576	)
Non-credit OTTI recognized in OCI	77			27		50
Amounts reclassified into net income:
HTM securities	(1,803		)	(631	)	(1,172	)
Non-credit OTTI	14			5		9
Realized gains on AFS securities	(24,780		)	(8,673	)	(16,107	)
Net unrealized losses	(104,302		)	(36,506	)	(67,796	)
Defined benefit pension and post-retirement plans:
Net actuarial gains	44,000			15,400		28,600
Amounts reclassified into net income:
Net actuarial loss	3,419			1,197		2,222
Prior service cost	10			4		6
Curtailment expense	16			5		11
Defined benefit pension and post-retirement plans	47,445			16,606		30,839
Other comprehensive loss	(56,857		)	(19,900	)	(36,957	)
Comprehensive income	$	51,162		7,036		44,126

Schedule of Components of Accumulated Other Comprehensive Income

September 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	—			—		41,767		41,767		—		41,767
Amounts reclassified from AOCI	1,085			(683	)	(18,637	)	(18,235	)	742		(17,493	)
Net current period OCI	1,085			(683	)	23,130		23,532		742		24,274
Balance, September 30, 2014	$	(514	)	784		74,765		75,035		(25,910	)	49,125

Schedule of Reclassifications Out Of Accumulated Other Comprehensive Income

	Quarter ended September 30,				Nine Months ended September 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	—		1		—		14		Net investment income earned
Non-credit OTTI on disposed securities	1,200		—		1,669		—		Net realized gains
	1,200		1		1,669		14		Income from continuing operations, before federal income tax
	(420	)	—		(584	)	(5	)	Total federal income tax expense
	780		1		1,085		9		Net income
HTM related
Unrealized losses (gains) on HTM disposals	12		(19	)	87		(170	)	Net realized gains
Amortization of net unrealized gains on HTM securities	(385	)	(453	)	(1,137	)	(1,633	)	Net investment income earned
	(373	)	(472	)	(1,050	)	(1,803	)	Income from continuing operations, before federal income tax
	130		165		367		631		Total federal income tax expense
	(243	)	(307	)	(683	)	(1,172	)	Net income
Realized gains and losses on AFS and OTTI
Realized gains on AFS disposals and OTTI	(16,435	)	(13,516	)	(28,672	)	(24,780	)	Net realized gains
	(16,435	)	(13,516	)	(28,672	)	(24,780	)	Income from continuing operations, before federal income tax
	5,752		4,731		10,035		8,673		Total federal income tax expense
	(10,683	)	(8,785	)	(18,637	)	(16,107	)	Net income
Defined benefit pension and post-retirement life plans
Net actuarial loss	88		159		263		717		Loss and loss expense incurred
	293		631		879		2,702		Policy acquisition costs
	381		790		1,142		3,419		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		790		1,142		3,445		Income from continuing operations, before federal income tax
	(134	)	(277	)	(400	)	(1,206	)	Total federal income tax expense
	247		513		742		2,239		Net income
Total reclassifications for the period	(9,899	)	(8,578	)	(17,493	)	(15,031	)	Net income

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Investments (Investments Pledged as Collateral) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities Pledged For FHLBI Collateral	$ 61.6
Securities Pledged As Collateral For Reinsurance Obligations	15.3
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	25.6
Securities Pledged As Collateral	102.5
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 Pledged For FHLBI Collateral	22.8
Securities Pledged As Collateral For Reinsurance Obligations	0
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	25.6
Securities Pledged As Collateral	48.4
Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities Pledged For 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 Pledged For 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 Pledged For 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 Pledged For FHLBI Collateral	1.2
Securities Pledged As Collateral For Reinsurance Obligations	0
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	1.2
Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed Income Securities Pledged For FHLBI Collateral	37.6
Securities Pledged As Collateral For Reinsurance Obligations	2.3
Carrying Value Bonds On Deposit With Various State And Regulatory Agencies	0
Securities Pledged As Collateral	$ 39.9

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Litigation

9 Months Ended

Sep. 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.