Segment Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

Selective Insurance Group, Inc., through its Insurance Subsidiaries, offers property and casualty insurance products in the standard and E&S marketplaces. We classify our business into four reportable segments, which are as follows:

• Standard Commercial Lines - comprised of insurance products and services provided in the standard marketplace to

commercial enterprises, which are typically businesses, non-profit organizations, and local government agencies.

• Standard Personal Lines - comprised of insurance products and services, including flood insurance coverage, provided primarily to individuals acquiring coverage in the standard marketplace.

• E&S Lines - comprised of insurance products and services provided to customers who have not obtained coverage in

the standard marketplace.

• Investments - invests the premiums collected by our Standard Commercial Lines, Standard Personal Lines, and E&S

Lines, as well as our earnings and amounts generated through our capital management strategies, which may include the issuance of debt and equity securities.

In the fourth quarter of 2014, we revised our reporting segments from our previously-reported Standard Insurance Operations segment to Standard Commercial Lines and Standard Personal Lines. For information regarding this change, see Note 11. "Segment Information" in Item 8. "Financial Statements and Supplementary Data." of our 2014 Annual Report.

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 $37 million self-insured group, or "SIG," book of business within the Standard Commercial Lines 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 continued 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 Standard Commercial Lines revenue for Nine Months 2014.

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

Revenue by Segment	Quarter ended September 30,			Nine Months ended September 30,
($ in thousands)	2015		2014	2015	2014
Standard Commercial Lines:
Net premiums earned:
Commercial automobile	$	90,758	83,536	265,771	249,224
Workers compensation	74,560		66,732	213,991	205,137
General liability	123,252		110,894	357,430	331,303
Commercial property	68,587		61,304	199,699	182,716
Businessowners’ policies	23,726		21,649	69,603	63,797
Bonds	5,031		4,791	15,137	14,281
Other	3,628		3,237	10,649	9,633
Miscellaneous income	448		2,830	4,680	13,315
Total Standard Commercial Lines revenue	389,990		354,973	1,136,960	1,069,406
Standard Personal Lines:
Net premiums earned:
Personal automobile	36,623		37,695	110,373	113,943
Homeowners	33,670		33,957	101,122	100,831
Other	1,795		2,725	5,143	8,965
Miscellaneous income	250		366	841	1,608
Total Standard Personal Lines revenue	72,338		74,743	217,479	225,347
E&S Lines:
Net premiums earned:
General liability	32,395		24,659	87,914	70,526
Commercial property	11,309		10,048	31,428	28,544
Commercial automobile	2,056		1,412	5,562	3,859
Total E&S Lines revenue	45,760		36,119	124,904	102,929
Investments:
Net investment income	32,061		34,292	91,208	106,600
Net realized investment gains	308		15,231	15,771	26,988
Total Investments revenue	32,369		49,523	106,979	133,588
Total segments revenue	540,457		515,358	1,586,322	1,531,270
Other income	—		—	—	8
Total revenues	$	540,457	515,358	1,586,322	1,531,278

Income Before Federal Income Tax	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2015			2014		2015		2014
Standard Commercial Lines:
Underwriting gain	$	44,027		27,771		109,304		39,844
GAAP combined ratio	88.7		%	92.1		90.3		96.2
Statutory combined ratio	88.4			90.9		89.4		95.5
Standard Personal Lines:
Underwriting gain (loss)	$	2,826		8,037		(4,295	)	95
GAAP combined ratio	96.1		%	89.2		102.0		100.0
Statutory combined ratio	95.0			88.9		101.7		99.9
E&S Insurance Operations:
Underwriting loss	$	(2,022	)	(1,371	)	(5,033	)	(433	)
GAAP combined ratio	104.4		%	103.8		104.0		100.4
Statutory combined ratio	101.1			102.9		101.8		100.3
Investments:
Net investment income	$	32,061		34,292		91,208		106,600
Net realized investment gains	308			15,231		15,771		26,988
Total investment income, before federal income tax	32,369			49,523		106,979		133,588
Tax on investment income	7,614			13,858		26,186		36,374
Total investment income, after federal income tax	$	24,755		35,665		80,793		97,214

Reconciliation of Segment Results to Income Before Federal Income Tax	Quarter ended September 30,					Nine Months ended September 30,
($ in thousands)	2015			2014		2015		2014
Underwriting gain (loss), before federal income tax
Standard Commercial Lines	$	44,027		27,771		109,304		39,844
Standard Personal Lines	2,826			8,037		(4,295	)	95
E&S Lines	(2,022		)	(1,371	)	(5,033	)	(433	)
Investment income, before federal income tax	32,369			49,523		106,979		133,588
Total all segments	77,200			83,960		206,955		173,094
Interest expense	(5,489		)	(5,558	)	(16,458	)	(16,544	)
General corporate and other expenses	(5,872		)	(3,076	)	(21,603	)	(16,619	)
Income before federal income tax	$	65,839		75,326		168,894		139,931