8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)October 28, 2009

SELECTIVE INSURANCE GROUP, INC.

(Exact name of registrant as specified in its charter)

New Jersey	001-33067	22-2168890
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
40 Wantage Avenue, Branchville, New Jersey		07890
(Address of principal executive offices)		(Zip Code)
Registrant's telephone number, including area code		(973) 948-3000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02. Results of Operations and Financial Condition.

On October 28, 2009, Selective Insurance Group, Inc. (the “Company”) issued a press release announcing results for the third quarter ended September 30, 2009.  The press release is attached hereto as Exhibit 99.1.

Section 7 – Regulation FD

Item 7.01. Regulation FD Disclosure.

Attached as Exhibit 99.2 is supplemental financial information about the Company.

The information contained in this report on Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.  The Company makes no admission as to the materiality of any information in this report or the exhibits attached hereto.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(d)  Exhibits

99.1  Press Release of Selective Insurance Group, Inc. dated October 28, 2009

99.2  Supplemental Investor Package, Third Quarter 2009

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 hereunto duly authorized.

	SELECTIVE INSURANCE GROUP, INC.
Date: October 28, 2009	By:	/s/ Michael H. Lanza
		Michael H. Lanza
		Executive Vice President and General Counsel

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of Selective Insurance Group, Inc. dated October 28, 2009
99.2	Supplemental Investor Package, Third Quarter 2009

EX-99.1

40 Wantage Avenue Branchville, New Jersey 07890 www.selective.com

For release at 4:30 p.m. (ET) on October 28, 2009

Investor Contact: Jennifer DiBerardino

973-948-1364, jennifer.diberardino@selective.com

Media Contact: Gail Petersen

973-948-1307, gail.petersen@selective.com

Selective Insurance Group Reports

Third Quarter 2009 Earnings

Branchville, NJ – October 28, 2009 - Selective Insurance Group, Inc. (NASDAQ: SIGI), today reported its financial results for the third quarter ended September 30, 2009.  Net income for the quarter was $0.24 per diluted share and operating income1 for the quarter was $0.44 per diluted share.  Book value was up 4% for the quarter to $18.58 per share.  Net investment income, after tax, was $28.4 million, compared to $28.5 million a year ago.

“I am pleased with our third quarter results given the difficult economy and competitive marketplace.  The recovery in the financial markets has led to a gain in our alternative investments this quarter,” said Selective Chairman, President and CEO Gregory E. Murphy.  “We are seeing improvement in our personal lines and continue to drive Commercial Lines renewal pure price increases, which were up 1.5% for the quarter; a strong increase over the second quarter result of 0.6%.  Our statutory combined ratio remains strong at 99.8% due in part to very profitable property results coupled with favorable casualty loss development of approximately $8 million.”

Selective’s third quarter 2009 highlights, compared to third quarter 2008:

· Net income was up 45% to $13.0 million, or $0.24 per diluted share, compared to $9.0 million, or $0.17 per diluted share;

· Net realized losses on investments were $3.2 million, after tax, or $0.06 per diluted share, including non-cash other–than-temporary impairments of $2.8 million, after tax, compared to a loss of $14.7 million, or $0.28 per diluted share, including non-cash other-than-temporary impairments of $22.7 million, after tax;

· Operating income1 increased 4% to $23.8 million, or $0.44 per diluted share, compared to $22.9 million, or $0.44 per diluted share;

· Combined ratio: GAAP: 100.0% vs. 100.3%; Statutory: 99.8% vs. 97.6%;

· Total net premiums written (NPW) were down 6% to $376.7 million;

o Commercial lines NPW were down 9% to $314.4 million;

o Personal lines NPW were up 11% to $62.3 million;

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· Catastrophe losses were $1.3 million, after tax, vs. $8.3 million, after tax; and

· Net investment income, after tax, decreased 1% to $28.4 million.

Selective also announced that it has entered into an agreement to sell Selective HR Solutions, Inc. which comprises the HR Outsourcing segment, for approximately $13 million to AlphaStaff Group, Inc., a Florida-based human resources outsourcing company.  The transaction is subject to Florida regulatory approval and is expected to close on or around January 1, 2010.  In connection with the discontinued operation, a goodwill impairment charge of $7.9 million, after tax, was recorded.

“While we strongly believe HR outsourcing services are a natural complement to our distribution force and business model, we felt it made sense at this time to find a quality partner who could focus on those efforts, while we devote all our resources to profitable organic growth in our 22-state footprint of insurance operations,” said Murphy.  “We built a strong foundation for Selective HR, and Selective will continue to support AlphaStaff’s business growth through our agency plant as part of the agreement.  Our mutual commitment to the independent insurance agency and their growth strategy fit well together.”

Selective’s alternative investment portfolio experienced a gain during the third quarter of 2009 of approximately $1.7 million, after tax, compared to a gain of $2.1 million, after tax, during the same period in 2008.  Results for these investments are generally received on a one quarter lag.

For the nine months ended September 30, 2009, compared to the first nine months of 2008:

· Net income was $15.8 million, or $0.30 per diluted share, compared to net income of $58.1 million, or $1.09 per diluted share;

· Net realized losses on investments were $26.2 million, after tax, or $0.49 per diluted share, including non-cash other-than-temporary impairments of $28.5 million, after tax, compared to a loss of $12.4 million, or $0.23 per diluted share, including non-cash other-than-temporary impairments of $29.0 million, after tax;

· Operating income was $49.2 million, or $0.92 per diluted share compared to operating income of $68.7 million, or $1.29 per diluted share;

· GAAP combined ratio: 99.7% vs. 99.9%; Statutory combined ratio: 99.6% vs. 98.2%;

· Total NPW were down 6% to $1.1 billion for the nine months ended September 30, 2009;

o Commercial lines NPW were down 7% to $946.5 million;

o Personal lines NPW were up 6% to $171.3 million; and

· Catastrophe losses were $5.5 million, after-tax, compared to $20.1 million, after-tax.

Balance Sheet and Guidance

At September 30, 2009, Selective’s assets reached $5.2 billion, including $3.8 billion in the company’s investment portfolio.

The company’s Board declared a $0.13 per share quarterly cash dividend on Selective’s common stock, payable December 1, 2009 to stockholders of record as of November 13, 2009.

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Guidance for the year is being positively revised based on better than expected results year to date to a GAAP and statutory combined ratio of approximately 101%.  This includes assumptions of catastrophe losses of approximately one point for the fourth quarter and no reserve development, favorable or unfavorable.

The supplemental investor packet, including financial information that is not part of this press release, is available on the Investors’ page of Selective’s public website at www.selective.com.  Selective’s quarterly analyst conference call will be simulcast at 8:30 a.m. ET, on October 29, 2009 at www.selective.com. The webcast will be available for rebroadcast until the close of business on November 30, 2009.

About Selective Insurance Group, Inc.

Selective Insurance Group, Inc. is a holding company for seven property and casualty insurance companies rated “A+” (Superior) by A.M. Best. Through independent agents, the insurance companies offer primary and alternative market insurance for commercial and personal risks, and flood insurance underwritten by the National Flood Insurance Program.  Other subsidiaries of the company provide human resource administration outsourcing. Selective maintains a website at www.selective.com.

Forward-Looking Statements

In this press release, Selective and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections regarding Selective's future operations and performance.

Certain statements in this report, including information incorporated by reference, are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 ("PSLRA").  The PSLRA provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements.  These statements relate to our intentions, beliefs, projections, estimations or forecasts of future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, or performance to be materially different from those expressed or implied by the forward-looking statements.  In some cases, you can identify forward-looking statements by use of words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely” or “continue” or other comparable terminology.  These statements are only predictions, and we can give no assurance that such expectations will prove to be correct.  We undertake no obligation, other than as may be required under the federal securities laws, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Factors that could cause our actual results to differ materially from those projected, forecasted or estimated by us in forward-looking statements, include, but are not limited to:

· difficult conditions in global capital markets and the economy;

· continued deterioration in the public debt and equity markets and private investment marketplace that could lead to investment losses and fluctuations in interest rates;

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· ratings downgrades could affect investment values and therefore statutory surplus;

· the adequacy of our loss reserves and loss expense reserves;

· the frequency and severity of natural and man-made catastrophic events, including, but not limited to, hurricanes, tornadoes, windstorms, earthquakes, hail, terrorism, explosions, severe winter weather, floods and fires;

· adverse market, governmental, regulatory, legal or judicial conditions or actions;

· the concentration of our business in the Eastern Region;

· the cost and availability of reinsurance;

· our ability to collect on reinsurance and the solvency of our reinsurers;

· uncertainties related to insurance premium rate increases and business retention;

· changes in insurance regulations that impact our ability to write and/or cease writing insurance policies in one or more states, particularly changes in New Jersey automobile insurance laws and regulations;

· recent federal financial regulatory reform provisions that could pose certain risks to our operations;

· our ability to maintain favorable ratings from rating agencies, including A.M. Best, Standard & Poor’s, Moody’s and Fitch;

· our entry into new markets and businesses; and

· other risks and uncertainties we identify in filings with the United States Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K and other periodic reports.

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.

Selective’s SEC filings can be accessed through the Investors and Corporate Governance sections of Selective’s website, www.selective.com, or through the SEC’s EDGAR Database at www.sec.gov (Selective EDGAR CIK No. 0000230557).

1Operating income differs from net income by the exclusion of realized gains or losses on investments and the results of discontinued operations. It is used as an important financial measure by management, 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 investment gains and losses, as well as other-than-temporary investment impairments that are charged to earnings and the results of discontinued operations, could distort the analysis of trends. Operating income is not intended as a substitute for net income prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). A reconciliation of operating income to net income is provided in the GAAP Highlights and Reconciliation of Non-GAAP Measures to Comparable GAAP Measures. Statutory data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners Accounting Practices and Procedures Manual and, therefore, is not reconciled to GAAP.

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Selective Insurance Group, Inc. (Nasdaq: SIGI) *

GAAP Highlights and Reconciliation of Non-GAAP Measures to Comparable

GAAP Measures

(in thousands, except per share data)
3 months ended September 30:	2009			2008
Net premiums written	$	376,718			402,739
Net premiums earned		355,906			374,708
Net investment income earned		36,585			36,134
Net realized losses		(4,983	)		(22,577	)
Total revenues		390,175			389,211
Operating income		23,845			22,916
Net realized losses, net of tax		(3,239	)		(14,676	)
(Loss) income from discontinued operations, net of tax		(7,599	)		752
Net income	$	13,007			8,992
Statutory combined ratio		99.8	%		97.6	%
GAAP combined ratio		100.0	%		100.3	%
Operating income per diluted share	$	0.44			0.44
Net income per diluted share		0.24			0.17
Weighted average diluted shares		53,548			52,994
Book value per share	$	18.58			18.53
9 months ended September 30:	2009			2008
Net premiums written	$	1,117,764			1,184,087
Net premiums earned		1,078,090			1,135,349
Net investment income earned		78,670			112,515
Net realized losses		(40,302	)		(19,139	)
Total revenues		1,124,216			1,232,995
Operating income		49,211			68,721
Net realized losses, net of tax		(26,197	)		(12,441	)
(Loss) income from discontinued operations, net of tax		(7,196	)		1,866
Net income	$	15,818			58,146
Statutory combined ratio		99.6	%		98.2	%
GAAP combined ratio		99.7	%		99.9	%
Operating income per diluted share	$	0.92			1.29
Net income per diluted share		0.30			1.09
Weighted average diluted shares		53,312			53,397
Book value per share	$	18.58			18.53

*All amounts included in this release exclude inter-company transactions.

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EX-99.2

SELECTIVE INSURANCE GROUP, INC.

THIRD QUARTER 2009 INVESTOR PACKET

TABLE OF CONTENTS

Earnings Press Release	1
Selected Balance Sheet Data	6
Selected Income Statement Data	7
Quarterly Investment Income	8
Statutory Combined Ratio Summary by LOB Quarter	9
Statutory Combined Ratio Summary by LOB YTD September	10
Consolidated Balance Sheets	11
Consolidated Statements of Income	12
Consolidated Statements of Stockholder’s Equity	13
Consolidated Statements of Cash Flow	14
Statutory Balance Sheets	15
Statutory Statements of Income	16
Investment Portfolio – Appendix
Alternative Investments Exhibit	17
Municipal Bond Portfolio Exhibit	18
Structured Securities Exhibit	19
RMBS & RABS Exhibit	20
RMBS & RABS by Vintage Year Exhibit	21
RMBS and RABS by Type Exhibit	22
Alt-A by Vintage Year Exhibit	23
CMBS Exhibit	24
CMBS by Vintage Year Exhibit	25
CMBS by Type Exhibit	26
Fixed Maturities Severity & Duration of Unrealized/Unrecognized Losses Exhibit	27
Credit Quality of AFS Securities Exhibit	28
Credit Quality of HTM Securities Exhibit	29