Supplemental Investor Package

Second Quarter 2010

Investor Contact:

Jennifer DiBerardino

Senior Vice President, Investor Relations and Treasurer

Tel:  973-948-1364

jennifer.diberardino@selective.com

Selective Insurance Group, Inc.

Selected Balance Sheet Data (unaudited)

($ in thousands, except per share amounts)

	June 30,								June 30,								December 31,
	2010								2009								2009
						Unrealized/								Unrecognized/								Unrecognized/
	Balance			Market		Unrecognized			Balance			Market		Unrealized			Balance			Market		Unrealized
	Sheet			Value		Gain/(Loss)			Sheet			Value		(Loss)/Gain			Sheet			Value		(Loss)/Gain
Invested Assets:
Corporate bonds1	$	1,300,205			1,321,160		43,381		$	1,076,043			1,073,982		(65,100	)	$	1,144,692			1,163,973		(13,031	)
Gov't\ Municipal bonds		2,032,060			2,060,094		94,038			2,120,497			2,104,282		48,216			2,201,580			2,212,107		72,101
Total bonds		3,332,265			3,381,254		137,419			3,196,540			3,178,264		(16,884	)		3,346,272			3,376,080		59,070
Equities		60,988			60,988		1,129			81,687			81,687		3,345			80,264			80,264		15,874
Short-term investments		343,900			343,900		-			195,033			195,033		-			213,848			213,848		-
Other investments		153,475			153,475		(20,949	)		145,727			145,727		(22,103	)		140,667			140,667		(25,774	)
Total invested assets		3,890,628			3,939,617		117,599			3,618,987			3,600,711		(35,642	)		3,781,051			3,810,859		49,170
Invested assets per $ of stockholders' equity		3.71								3.82								3.77
Total assets		5,226,934								5,030,875								5,114,827
Liabilities:
Reserve for losses and loss expenses		2,805,841								2,677,880								2,745,799
Unearned premium reserve		856,931								867,977								844,847
Total liabilities		4,177,430								4,084,500								4,112,452
Stockholders' equity		1,049,504								946,375								1,002,375
Total debt to capitalization ratio		20.0	%							21.7	%							21.5	%
Adjusted total debt to capitalization  ratio2		14.3	%							15.4	%							15.6	%
Book value per share		19.65								17.85								18.83
Book value per share excluding
unrealized gain or loss on bond portfolio		18.57								17.88								18.47
NPW per insurance segment employee		754								767								766
Statutory premiums to surplus ratio		1.4	x							1.7	x							1.5	x
Statutory surplus		1,008,534								873,382								981,955

1 Includes mortgage-backed and asset-backed securities.

2 The adjusted debt to capitalization ratio reflects a reduction in debt for an estimated equity treatment of 75% applied to our $100 million Junior Subordinated Notes issued September 25, 2006.

Selective Insurance Group, Inc.
Selected Income Statement Data (unaudited)
June 2010		THREE MONTHS ENDED June 30,												SIX MONTHS ENDED June 30,
($ in thousands, except per share amounts)		2010						2009						2010						2009
					Per diluted share						Per diluted share						Per diluted share						Per diluted share
Consolidated
Revenue		$	387,718					$	377,195					$	780,830					$	734,041
Operating income			22,212			0.41			22,700			0.42			28,847			0.53			25,366			0.47
Net realized losses, after tax			(2,121	)		(0.04	)		(7,342	)		(0.14	)		(2,163	)		(0.04	)		(22,958	)		(0.43	)
Income from continuing operations			20,091			0.37			15,358			0.28			26,684			0.49			2,408			0.04
(Loss) income on discontinued operations, after tax			(1,325	)		(0.02	)		330			0.01			(2,115	)		(0.04	)		403			0.01
Net income			18,766			0.35			15,688			0.29			24,569			0.45			2,811			0.05
Operating return on equity			8.6	%					9.8	%					5.6	%					5.5	%
Insurance Operations
Gross premiums written			415,860						429,770						848,938						866,211
Net premiums written			353,524						365,263						721,615						741,046
Net premiums earned			352,190						358,311						708,392						722,184
Underwriting (loss) income	- before tax		(3,161	)					6,032						(17,766	)					3,069
	- after tax		(2,055	)		(0.04	)		3,921			0.07			(11,548	)		(0.21	)		1,995			0.04
GAAP combined ratio			100.9	%					98.3	%					102.5	%					99.6	%
Commercial lines
Net premiums earned			293,001						305,245						590,909						616,790
GAAP combined ratio			98.9	%					97.3	%					101.3	%					98.7	%
Personal lines
Net premiums earned			59,189						53,066						117,483						105,394
GAAP combined ratio			110.9	%					104.1	%					108.6	%					104.7	%
Investments
Net investment income	- before tax		36,545						26,368						71,251						42,085
	- after tax		27,928			0.51			21,869			0.41			54,753			1.01			37,010			0.70
Effective tax rate			23.6	%					17.1	%					23.2	%					12.1	%
Annual after-tax yield on investment portfolio															2.9	%					2.1	%
Annual after-tax, after-interest expense yield															2.5	%					1.7	%
Invested assets per $ of stockholders' equity															3.71						3.82
Other expenses (net of other income)
Interest expense	- before tax		(4,655	)					(4,843	)					(9,497	)					(9,867	)
	- after tax		(3,026	)		(0.06	)		(3,147	)		(0.06	)		(6,173	)		(0.11	)		(6,413	)		(0.12	)
Other - after tax		$	(635	)		-		$	57			-			(8,185	)		(0.16	)	$	(7,226	)		(0.15	)
Diluted weighted avg shares outstanding			54,361						53,234						54,289						53,181

Selective Insurance Group, Inc. and Consolidated Subsidiaries

GAAP Investment Income

(unaudited)

($ in thousands)

	For the three months ended						%			Year to Date						%
	June			June			Increase			June			June			Increase
	2010			2009			(Decrease)			2010			2009			(Decrease)
Investment Income:
Interest:
Fixed Maturity Securities	$	32,977			35,972			(8	)	$	66,173			72,233			(8	)
Short-term		133			312			(57	)		233			924			(75	)
Alternative Investments		4,868			(8,855	)		155			8,763			(29,404	)		130
Dividends		480			496			(3	)		932			1,011			(8	)
Changes in Fair Value		-			-			N/M			-			262			(100	)
Miscellaneous		16			68			(76	)		53			240			(78	)
		38,474			27,993			37			76,154			45,266			68
Investment Expense		1,929			1,625			19			4,903			3,181			54
Net Investment Income Before Tax		36,545			26,368			39			71,251			42,085			69
Tax		8,617			4,499			92			16,498			5,075			225
Net Investment Income After Tax	$	27,928			21,869			28		$	54,753			37,010			48
Net Investment Income per Share		0.51			0.41			24			1.01			0.70			44
Effective Tax Rate		23.6	%		17.1	%					23.2	%		12.1	%
Average Yields:
Fixed Maturity Securities
Pre Tax											3.7	%		4.3	%
After Tax											2.9	%		3.4	%
Portfolio
Pre Tax											3.7	%		2.4	%
After Tax											2.9	%		2.1	%

	For the three months ended						Year to Date
	June			June			June			June
Net Realized Gains (Losses)	2010			2009			2010			2009
Fixed Maturities		(12,586	)		(9,811	)		(16,597	)		(33,646	)
Equity Securities		9,322			(294	)		13,269			(484	)
Other		-			(1,189	)		-			(1,189	)
Total		(3,264	)		(11,294	)		(3,328	)		(35,319	)
Net of Tax		(2,121	)		(7,342	)		(2,163	)		(22,958	)

Selective Insurance Group, Inc.

2010 Statutory Results by Line of Business

2nd Qtr 2010 (unaudited)

($ in thousands)

	Net					Net											Underwriting			Dividends to
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Combined Ratio			Combined Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2010			2009			Gain/(Loss)
Personal Lines:
Homeowners	$	25,115		20.3	%	$	21,126		19.9	%		69.2	%		7.7	%		31.4	%		0.0	%		108.3	%		94.5	%	$	(3,015	)
Auto		38,489		10.0	%		35,243		6.7	%		70.6	%		12.7	%		29.2	%		0.0	%		112.5	%		113.5	%		(5,338	)
Other (including flood)		3,038		10.1	%		2,820		16.9	%		67.5	%		(13.1	)%		(15.4	)%		0.0	%		39.0	%		1.5	%		1,754
Total	$	66,642		13.7	%	$	59,189		11.5	%		70.0	%		9.6	%		28.0	%		0.0	%		107.6	%		102.1	%	$	(6,599	)
Commercial Lines:
Fire/IM	$	49,502		(1.4	)%	$	50,295		2.7	%		47.4	%		4.7	%		38.3	%		(0.1	)%		90.3	%		78.6	%	$	5,188
Workers' compensation		57,360		(11.3	)%		62,069		(6.8	)%		80.5	%		16.1	%		29.7	%		1.1	%		127.4	%		100.9	%		(15,588	)
General liability		83,513		(9.6	)%		83,967		(8.6	)%		41.8	%		16.7	%		35.0	%		0.0	%		93.5	%		103.7	%		5,593
Auto		72,770		(4.5	)%		73,176		(2.9	)%		49.5	%		8.2	%		30.2	%		0.0	%		87.9	%		99.0	%		8,990
BOP		16,111		2.1	%		16,152		3.9	%		75.8	%		14.2	%		35.0	%		0.0	%		125.0	%		119.9	%		(4,029	)
Bonds		5,144		6.0	%		4,828		5.9	%		11.8	%		3.2	%		61.0	%		0.0	%		76.0	%		97.0	%		968
Other		2,481		0.4	%		2,515		5.6	%		0.2	%		0.5	%		45.1	%		0.0	%		45.8	%		48.2	%		1,379
Total	$	286,882		(6.4	)%	$	293,001		(4.0	)%		53.9	%		11.9	%		33.9	%		0.2	%		99.9	%		98.3	%	$	2,501
Grand Total	$	353,524		(3.2	)%	$	352,190		(1.7	)%		56.6	%		11.5	%		32.7	%		0.2	%		101.0	%		98.8	%	$	(4,098	)
Note: Some amounts may not foot due to rounding.
			2010			2009
	Losses Paid		$	187,347		$	198,478
	LAE Paid			38,508			40,822
	Total Paid		$	225,855		$	239,300

Selective Insurance Group, Inc.

2010 Statutory Results by Line of Business

June 2010 YTD (unaudited)

($ in thousands)

	Net					Net											Underwriting			Dividends to
	Premiums		Percent			Premiums		Percent			Loss			LAE			Expense			Policyholders			Combined Ratio			Combined Ratio			Underwriting
	Written		Change			Earned		Change			Ratio			Ratio			Ratio			Ratio			2010			2009			Gain/(Loss)
Personal Lines:
Homeowners	$	43,395		19.8	%	$	41,619		19.9	%		70.4	%		7.5	%		33.3	%		0.0	%		111.2	%		111.8	%	$	(5,251	)
Auto		73,833		9.2	%		69,563		5.6	%		72.9	%		11.5	%		29.6	%		0.0	%		114.0	%		107.1	%	$	(10,977	)
Other (including flood)		5,596		9.5	%		6,301		31.7	%		49.7	%		(18.4	)%		(31.6	)%		0.0	%		(0.3	)%		17.2	%		6,098
Total	$	122,824		12.7	%	$	117,483		11.5	%		70.7	%		8.5	%		28.1	%		0.0	%		107.3	%		104.5	%	$	(10,130	)
Commercial Lines:
Fire/IM	$	99,641		(0.8	)%	$	100,630		2.8	%		57.3	%		4.0	%		38.1	%		(0.1	)%		99.3	%		89.8	%	$	1,032
Workers' compensation		129,543		(5.4	)%		126,710		(7.5	)%		77.0	%		15.9	%		26.7	%		2.1	%		121.7	%		96.6	%		(28,235	)
General liability		173,047		(10.0	)%		169,188		(9.1	)%		42.2	%		16.9	%		34.2	%		(0.1	)%		93.2	%		104.0	%		10,262
Auto		148,255		(5.0	)%		147,492		(2.4	)%		52.1	%		7.8	%		29.6	%		(0.1	)%		89.4	%		97.6	%		15,432
BOP		33,255		3.4	%		32,438		5.5	%		81.3	%		13.8	%		34.4	%		0.0	%		129.5	%		118.9	%		(9,864	)
Bonds		9,841		7.1	%		9,431		2.7	%		16.8	%		5.6	%		61.6	%		0.0	%		84.0	%		92.2	%		1,256
Other		5,208		1.6	%		5,020		5.4	%		2.5	%		0.4	%		43.7	%		0.0	%		46.6	%		45.0	%		2,597
Total	$	598,791		(5.3	)%	$	590,909		(4.2	)%		56.1	%		11.7	%		32.6	%		0.4	%		100.8	%		98.7	%	$	(7,521	)
Grand Total	$	721,615		(2.6	)%	$	708,392		(1.9	)%		58.5	%		11.2	%		31.9	%		0.3	%		101.9	%		99.5	%	$	(17,651	)
Note: Some amounts may not foot due to rounding.
			2010			2009
	Losses Paid		$	369,570		$	394,270
	LAE Paid			74,602			77,507
	Total Paid		$	444,172		$	471,777

SELECTIVE INSURANCE GROUP, INC.	Unaudited
CONSOLIDATED BALANCE SHEETS	June 30,			December 31,
($ in thousands, except share amounts)	2010			2009
ASSETS
Investments:
Fixed maturity securities, held-to-maturity – at carry value (fair value:  $1,510,871 – 2010; $1,740,211 – 2009)	$	1,461,882			1,710,403
Fixed maturity securities, available-for-sale – at fair value (amortized cost:  $1,798,996 – 2010; $1,616,456 – 2009)		1,870,383			1,635,869
Equity securities, available-for-sale – at fair value (cost of:  $59,859– 2010; $64,390 – 2009)		60,988			80,264
Short-term investments (at cost which approximates fair value)		343,900			213,848
Other investments		153,475			140,667
Total investments		3,890,628			3,781,051
Cash		591			811
Interest and dividends due or accrued		34,865			34,651
Premiums receivable, net of allowance for uncollectible accounts of:  $5,327 – 2010; $5,880 – 2009		469,096			446,577
Reinsurance recoverables, net		287,191			276,018
Prepaid reinsurance premiums		104,383			105,522
Current federal income tax		21,826			17,662
Deferred federal income tax		101,085			111,038
Property and equipment – at cost, net of accumulated depreciation and amortization of:  $146,998 – 2010; $141,251 – 2009		43,014			46,287
Deferred policy acquisition costs		218,200			218,601
Goodwill		7,849			7,849
Other assets		48,206			68,760
Total assets	$	5,226,934			5,114,827
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserve for losses and loss expenses	$	2,805,841			2,745,799
Unearned premiums		856,931			844,847
Notes payable		262,319			274,606
Accrued salaries and benefits		101,908			103,802
Other liabilities		150,431			143,398
Total liabilities	$	4,177,430			4,112,452
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:  96,094,756 – 2010; 95,822,959 – 2009		192,190			191,646
Additional paid-in capital		239,341			231,933
Retained earnings		1,149,387			1,138,978
Accumulated other comprehensive income (loss)		17,826			(12,460	)
Treasury stock – at cost (shares:  42,676,595 – 2010; 42,578,779 – 2009)		(549,240	)		(547,722	)
Total stockholders’ equity		1,049,504			1,002,375
Commitments and contingencies
Total liabilities and stockholders’ equity	$	5,226,934			5,114,827

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME	Quarter ended						Six Months ended
	June 30,						June 30,
($ in thousands, except per share amounts)	2010			2009			2010			2009
Revenues:
Net premiums earned	$	352,190			358,311			708,392			722,184
Net investment income earned		36,545			26,368			71,251			42,085
Net realized (losses) gains:
Net realized investment gains		2,920			1,181			11,096			4,256
Other-than-temporary impairments		(6,162	)		(12,534	)		(12,235	)		(39,634	)
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income		(22	)		59			(2,189	)		59
Total net realized losses		(3,264	)		(11,294	)		(3,328	)		(35,319	)
Other income		2,247			3,810			4,515			5,091
Total revenues		387,718			377,195			780,830			734,041
Expenses:
Losses and loss expenses incurred		239,980			239,049			494,123			491,243
Policy acquisition costs		116,099			114,522			232,101			227,628
Interest expense		4,655			4,843			9,497			9,867
Other expenses		4,136			6,533			14,614			14,038
Total expenses		364,870			364,947			750,335			742,776
Income (loss) from continuing operations, before federal income tax		22,848			12,248			30,495			(8,735	)
Federal income tax expense (benefit):
Current		1,322			(1,631	)		10,166			4,244
Deferred		1,435			(1,479	)		(6,355	)		(15,387	)
Total federal income tax expense (benefit)		2,757			(3,110	)		3,811			(11,143	)
Net income from continuing operations		20,091			15,358			26,684			2,408
Income from discontinued operations, net of tax of $53 for Second
Quarter 2009 and $41 for Six Months 2009		-			330			-			403
Loss on disposal of discontinued operations, net of tax of $(713) for
Second Quarter 2010 and $(1,139) for Six Months 2010		(1,325	)		-			(2,115	)		-
Total discontinued operations, net of tax		(1,325	)		330			(2,115	)		403
Net income	$	18,766			15,688			24,569			2,811
Earnings per share:
Basic net income from continuing operations		0.37			0.29			0.50			0.04
Basic net (loss) income from disposal of discontinued operations		(0.02	)		0.01			(0.04	)		0.01
Basic net income	$	0.35			0.30			0.46			0.05
Diluted net income from continuing operations		0.37			0.28			0.49			0.04
Diluted net (loss) income from disposal of discontinued operations		(0.02	)		0.01			(0.04	)		0.01
Diluted net income	$	0.35			0.29			0.45			0.05
Dividends to stockholders	$	0.13			0.13			0.26			0.26

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY
	Six Months ended June 30,
($ in thousands, except per share amounts)	2010				2009
Common stock:
Beginning of year	$	191,646				190,527
Dividend reinvestment plan
(shares:  53,272 – 2010; 70,839 – 2009)		107				141
Stock purchase and compensation plans
(shares:  218,525 – 2010; 233,878 – 2009)		437				468
End of period		192,190				191,136
Additional paid-in capital:
Beginning of year		231,933				217,195
Dividend reinvestment plan		733				751
Stock purchase and compensation plans		6,675				7,447
End of period		239,341				225,393
Retained earnings:
Beginning of year		1,138,978				1,128,149
Cumulative effect adjustment due to adoption of other-than-temporary
impairment guidance under ASC 320, net of deferred income tax		-				2,380
Net income		24,569		24,569		2,811		2,811
Cash dividends to stockholders ($0.26 per share – 2010;
$0.26 per share – 2009)		(14,160	)			(13,924	)
End of period		1,149,387				1,119,416
Accumulated other comprehensive income (loss):
Beginning of year		(12,460	)			(100,666	)
Cumulative-effect adjustment due to adoption of other-than-temporary
impairment guidance under ASC 320, net of deferred income tax		-				(2,380	)
Other comprehensive income (loss), increase (decrease) in:
Unrealized gains on investment securities:
Non-credit portion of other-than-temporary impairment losses
recognized in other comprehensive income, net of deferred income tax		3,830				(18	)
Other net unrealized gains on investment securities, net of
deferred income tax		25,044				60,306
Total unrealized gains on investment securities		28,874		28,874		60,288		60,288
Defined benefit pension plans, net of deferred income tax		1,412		1,412		571		571
End of period		17,826				(42,187	)
Comprehensive income				54,855				63,670
Treasury stock:
Beginning of year		(547,722	)			(544,712	)
Acquisition of treasury stock
(shares:  97,816 – 2010; 170,540 – 2009)		(1,518	)			(2,671	)
End of period		(549,240	)			(547,383	)
Total stockholders’ equity	$	1,049,504				946,375

SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW	Six Months ended
	June 30,
($ in thousands)	2010			2009
Operating Activities
Net Income	$	24,569			2,811
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,805			13,910
Loss on disposal of discontinued operations		2,115			-
Stock-based compensation expense		7,964			5,599
Undistributed (income) losses of equity method investments		(4,841	)		29,404
Net realized losses		3,328			35,319
Postretirement life curtailment benefit		-			(4,217	)
Unrealized gain on trading securities		-			(262	)
Deferred tax benefit		(6,355	)		(15,093	)
Changes in assets and liabilities:
Increase in reserves for losses and loss expenses, net of reinsurance recoverables		48,870			21,742
Increase in unearned premiums, net of prepaid reinsurance and advance premiums		13,252			18,894
(Increase) decrease in net federal income tax recoverable		(3,025	)		15,639
Increase in premiums receivable		(22,519	)		(17,697	)
Decrease (increase) in deferred policy acquisition costs		401			(5,697	)
(Increase) decrease in interest and dividends due or accrued		(206	)		1,086
Decrease in accrued salaries and benefits		(2,282	)		(14,573	)
Decrease in accrued insurance expenses		(10,003	)		(7,703	)
Sale of trading securities		-			2,831
Other-net		(7,862	)		(8,002	)
Net adjustments		33,642			71,180
Net cash provided by operating activities		58,211			73,991
Investing Activities
Purchase of fixed maturity securities, held-to-maturity		-			(157,752	)
Purchase of fixed maturity securities, available-for-sale		(396,076	)		(512,726	)
Purchase of equity securities, available-for-sale		(30,974	)		(75,609	)
Purchase of other investments		(11,150	)		(10,595	)
Purchase of short-term investments		(956,904	)		(1,160,667	)
Sale of subsidiary		788			-
Sale of fixed maturity securities, held-to-maturity		-			5,622
Sale of fixed maturity securities, available-for-sale		128,110			371,667
Sale of short-term investments		826,853			1,163,746
Redemption and maturities of fixed maturity securities, held-to-maturity		171,900			123,213
Redemption and maturities of fixed maturity securities, available-for-sale		165,513			63,897
Sale of equity securities, available-for-sale		56,247			123,269
Proceeds from other investments		15,152			15,498
Purchase of property and equipment		(2,570	)		(2,986	)
Net cash used in investment activities		(33,111	)		(53,423	)
Financing Activities
Dividends to stockholders		(12,999	)		(13,378	)
Acquisition of treasury stock		(1,518	)		(2,671	)
Principal payment of notes payable		(12,300	)		(12,300	)
Net proceeds from stock purchase and compensation plans		2,310			2,402
Excess tax benefits from share-based payment arrangements		(813	)		(1,158	)
Net cash used in financing activities		(25,320	)		(27,105	)
Net decrease in cash and cash equivalents		(220	)		(6,537	)
Net decrease in cash and cash equivalents from discontinued operations		-			(3,654	)
Net decrease in cash from continuing operations		(220	)		(2,883	)
Cash from continuing operations, beginning of year		811			3,606
Cash from continuing operations, end of period	$	591			723

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Unaudited Statutory Balance Sheets

($ in thousands)

	Jun-30			Jun-30			Dec-31
	2010			2009			2009
ASSETS
Bonds	$	3,236,928			3,156,050			3,289,336
Common stocks		60,988			81,687			80,264
Affiliated mortgage loan		39,100			39,708			39,408
Other investments		189,732			156,033			176,983
Short-term investments		298,333			167,906			165,957
Total investments		3,825,081			3,601,384			3,751,948
Cash on hand and in banks*		(26,759	)		(29,273	)		(29,110	)
Interest and dividends due and accrued		35,023			35,263			34,808
Premiums receivable		465,844			495,320			443,223
Reinsurance recoverable on paid losses and expenses		5,617			5,125			4,408
Federal income tax recoverable		12,297			-			1,608
Deferred tax recoverable		125,759			89,673			119,377
EDP equipment		1,418			2,748			2,134
Equities and deposits in pools and associations		7,195			7,287			4,886
Receivable for sold securities		226			26,378			19,655
Other assets		28,796			24,585			29,747
Total assets	$	4,480,497			4,258,490			4,382,684
LIABILITIES
Reserve for losses	$	2,117,435			2,041,117			2,072,376
Reinsurance payable on paid loss and loss expense		1,000			627			1,011
Reserve for loss expenses		404,130			392,937			399,457
Unearned premiums		752,547			766,579			739,325
Reserve for commissions payable		38,555			40,438			49,237
Ceded balances payable		11,064			10,003			9,856
Federal income tax payable		-			1,778			-
Premium and other taxes payable		22,968			21,139			22,283
Borrowed money		13,017			-			13,016
Reserve for dividends to policyholders		3,307			4,073			3,718
Reserves for unauthorized reinsurance		1,013			1,416			1,013
Payable for securities		21,774			22,723			-
Funds withheld on account of others		4,433			4,649			6,261
Accrued salaries and benefits		65,003			64,952			66,847
Other liabilities		15,717			12,677			16,329
Total liabilities		3,471,963			3,385,108			3,400,729
POLICYHOLDERS' SURPLUS
Capital		28,325			28,325			28,325
Aggregate write-ins for special surplus funds		36,418			-			33,951
Paid in surplus		255,792			255,792			255,792
Unassigned surplus*		687,999			589,265			663,887
Total policyholders' surplus		1,008,534			873,382			981,955
Total liabilities and policyholders' surplus	$	4,480,497			4,258,490			4,382,684

* Prior year balances have been adjusted for $17K elimination entry

Selective Insurance Group, Inc.

Combined Insurance Company Subsidiaries

Unaudited Statutory Statements Of Income

($ in thousands)

	Three Months Ended										Six Months Ended
	June										June
UNDERWRITING	2010					2009					2010					2009
Net premiums written	$	353,524					365,263					721,615					741,046
Net premiums earned		352,190					358,311					708,392					722,184
Net losses paid		187,347					198,478					369,570					394,270
Change in reserve for losses		12,012					(3,891	)				45,059					9,171
Net losses incurred		199,359		56.6	%		194,587		54.3	%		414,629		58.5	%		403,441		55.9	%
Net loss expenses paid		38,508					40,822					74,602					77,507
Change in reserve for loss expenses		2,090					3,691					4,673					10,142
Net loss expenses incurred		40,598		11.5	%		44,513		12.4	%		79,275		11.2	%		87,649		12.1	%
Net underwriting expenses incurred		116,681		33.0	%		119,042		32.7	%		231,832		32.1	%		234,855		31.7	%
Total deductions		356,638					358,142					725,736					725,945
Statutory underwriting (loss) / income		(4,448	)				169					(17,344	)				(3,761	)
Net loss from premium balances charged off		(1,325	)				(1,034	)				(2,846	)				(2,368	)
Finance charges and other income		2,319					3,798					4,678					5,064
Total other income		994		-0.3	%		2,764		-0.8	%		1,832		-0.2	%		2,696		-0.4	%
Policyholders' dividends incurred		(644	)	0.2	%		(812	)	0.2	%		(2,139	)	0.3	%		(1,277	)	0.2	%
Total underwriting (loss) / income		(4,098	)	101.0	%		2,121		98.8	%		(17,651	)	101.9	%		(2,342	)	99.5	%
INVESTMENT
Net investment income earned		33,708					34,445					66,909					60,499
Net realized loss		(3,217	)				(11,536	)				(3,265	)				(36,514	)
Total income before income tax		26,393					25,030					45,993					21,643
Federal income tax expense		4,816					4,509					16,314					14,093
Net income	$	21,577					20,521					29,679					7,550
Policyholders' Surplus
Surplus, beginning of period	$	993,981					849,985					981,955					884,431
Net income		21,577					20,521					29,679					7,550
Change in deferred tax		(124	)				505					8,059					15,557
Change in unrealized losses		(197	)				366					6,921					(21,695	)
Dividends to stockholders		(12,002	)				-					(24,005	)				(12,003	)
Paid in surplus		-					-					-					20,000
Change in non-admitted assets		3,822					1,946					3,835					(20,517	)
Change in additional admitted deferred tax		1,853					-					2,466					-
Surplus adjustments		(376	)				59					(376	)				59
Net change in surplus for period		14,553					23,397					26,579					(11,049	)
Surplus, end of period	$	1,008,534					873,382					1,008,534					873,382
Statutory underwriting (loss) / income:	$	(4,098	)				2,121					(17,651	)				(2,342	)
Adjustments under GAAP:
Deferred policy acquisition costs		623					4,347					(401	)				5,698
Other, net		314					(436	)				286					(287	)
GAAP underwriting (loss) / income	$	(3,161	)				6,032					(17,766	)				3,069

Note: Some amounts or ratios may not foot due to rounding

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Alternative Investments

as of June 30, 2010

(unaudited)

	Inception	Original		Paid in Contributed		Remaining				Current		YTD			DPI (1)		TVPI (2)
Fund	Year	Commitment		Capital		Commitment		Distributions		Market Value		Income			Ratio		Ratio
Real Estate
LEH RE II	2005	$	20,000,000	$	17,334,028	$	2,665,972	$	7,097,800	$	9,936,955	$	(727,256	)		0.41		0.98
GS Whitehall 2007	2007	$	15,000,000	$	14,250,000	$	750,000	$	-	$	2,801,137	$	(1,349,748	)		-		0.20
LEH RE III	2008	$	15,000,000	$	6,227,933	$	8,772,067	$	-	$	3,041,358	$	(282,167	)		-		0.49
Total - Real Estate		$	50,000,000	$	37,811,961	$	12,188,039	$	7,097,800	$	15,779,450	$	(2,359,171	)		0.19		0.61
Mezzanine Financing
GS Mezz III	2003	$	10,000,000	$	4,362,674	$	5,637,326	$	7,596,979	$	3,459,818	$	(65,734	)		1.74		2.53
LEH Euro Mezz	2004	$	9,000,000	$	9,000,000	$	-	$	12,355,149	$	2,188,195	$	(151,719	)		1.37		1.62
GS Mezz 2006	2006	$	15,000,000	$	9,771,217	$	5,228,783	$	1,875,410	$	7,794,870	$	2,060,521			0.19		0.99
GS Mezz V	2007	$	25,000,000	$	9,747,331	$	15,252,669	$	3,104,720	$	9,590,138	$	786,408			0.32		1.30
Total - Mezz. Financing		$	59,000,000	$	32,881,222	$	26,118,778	$	24,932,258	$	23,033,021	$	2,629,476			0.76		1.46
Distressed Debt
Varde LP	1997	$	4,000,000	$	4,000,000	$	-	$	12,146,213	$	-	$	16,619			3.04		3.04
Varde VIII	2006	$	10,000,000	$	10,000,000	$	-	$	-	$	11,483,903	$	(293,223	)		-		1.15
GS Distressed Opp III	2007	$	15,000,000	$	10,389,138	$	4,610,862	$	512,894	$	8,423,868	$	1,000,002			0.05		0.86
Total - Distressed Debt		$	29,000,000	$	24,389,138	$	4,610,862	$	12,659,107	$	19,907,771	$	723,398			0.52		1.34
Private Equity
Prospector	1997	$	5,000,000	$	5,000,000	$	-	$	13,054,539	$	1,427,520	$	22,670			2.61		2.90
Trilantic Capital Partners III	2004	$	10,000,000	$	8,973,674	$	1,026,326	$	5,796,232	$	6,898,927	$	(146,227	)		0.65		1.41
NB Co-Invest	2006	$	15,000,000	$	11,190,692	$	3,809,308	$	3,685,797	$	8,267,952	$	495,199			0.33		1.07
GS PEP Asia	2007	$	7,000,000	$	1,866,233	$	5,133,767	$	19,141	$	1,606,657	$	73,169			0.01		0.87
Trilantic Capital Pa rtners IV	2007	$	11,098,351	$	5,104,390	$	5,993,961	$	13,611	$	4,970,960	$	362,930			0.00		0.98
Total - Private Equity		$	48,098,351	$	32,134,989	$	15,963,362	$	22,569,319	$	23,172,016	$	807,742			0.70		1.42
Private Equity, Secondary Market
NB SOF	2005	$	12,000,000	$	11,100,506	$	899,494	$	4,876,866	$	7,556,943	$	575,446			0.44		1.12
GS Vintage IV	2007	$	20,000,000	$	14,414,450	$	5,585,550	$	2,064,628	$	13,655,086	$	2,389,767			0.14		1.09
NB SOF II	2008	$	12,000,000	$	3,252,476	$	8,747,524	$	274,984	$	3,741,170	$	467,943			0.08		1.23
GS Vintage V	2008	$	10,000,000	$	3,010,280	$	6,989,720	$	132,819	$	2,995,626	$	249,512			0.04		1.04
Total - Pvt. Eq. Sec. Mkt.		$	54,000,000	$	31,777,712	$	22,222,288	$	7,349,297	$	27,948,825	$	3,682,668			0.23		1.11
Energy/Power Generation
ArcLight I	2002	$	15,000,000	$	13,344,495	$	1,655,505	$	27,358,382	$	2,009,273	$	883,546			2.05		2.20
ArcLight II	2003	$	15,000,000	$	12,704,508	$	2,295,492	$	16,610,425	$	6,013,728	$	416,480			1.31		1.78
ArcLight III	2006	$	15,000,000	$	12,962,206	$	2,037,794	$	3,998,052	$	13,033,619	$	579,816			0.31		1.31
Quintana Energy	2006	$	10,000,000	$	7,558,234	$	2,441,766	$	-	$	6,774,001	$	250,140			-		0.90
ArcLight IV	2007	$	10,000,000	$	6,113,919	$	3,886,081	$	2,133,862	$	6,462,911	$	900,951			0.35		1.41
Total - Energy/Power Generation		$	65,000,000	$	52,683,362	$	12,316,638	$	50,100,721	$	34,293,532	$	3,030,933			0.95		1.60
Venture Capital
Venture V	2001	$	10,000,000	$	8,600,000	$	1,400,000	$	1,904,105	$	6,421,996	$	247,770			0.22		0.97
Total - Venture Capital		$	10,000,000	$	8,600,000	$	1,400,000	$	1,904,105	$	6,421,996	$	247,770			0.22		0.97
TOTAL - ALTERNATIVE INVESTMENTS		$	315,098,351	$	220,278,384	$	94,819,967	$	126,612,607	$	150,556,610	$	8,762,816			0.57		1.26

(1) Distributed to paid in ratio

(2) Total value to paid in ratio

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Municipal Bond Portfolio

State and Repayment Source Composition

June 30, 2010

($s in thousands)

(unaudited)

Exposure = 70% Held-to-Maturity; 30% Available-for-Sale

Repayment Source Composition by State %s

Market Values

State	Revenue		% of State			General Obligation (GO)-Local		% of State			General Obligation (GO)-State		% of State			Pre- refunded	% of State			TX - Permanent School Fund (PSF)	% of State			Total		% of Total
TX		76,390		54	%		56,340		40	%		9,122		6	%	-		0	%	-		0	%		141,852		9	%
TX-PSF		-		0	%		-		0	%		-		0	%	-		0	%	47,919		100	%		47,919		3	%
WA		47,100		50	%		47,994		50	%		-		0	%	-		0	%	-		0	%		95,094		6	%
FL		89,228		99	%		-		0	%		521		1	%	-		0	%	-		0	%		89,748		6	%
AZ		73,734		91	%		6,911		9	%		-		0	%	-		0	%	-		0	%		80,645		5	%
NC		30,325		42	%		41,290		58	%		-		0	%	-		0	%	-		0	%		71,615		5	%
NY		69,066		100	%		-		0	%		-		0	%	-		0	%	-		0	%		69,066		4	%
IL		43,651		68	%		20,667		32	%		-		0	%	-		0	%	-		0	%		64,318		4	%
CO		22,999		39	%		33,646		58	%		1,654		3	%	-		0	%	-		0	%		58,299		4	%
OH		34,960		62	%		13,984		25	%		7,491		13	%	-		0	%	-		0	%		56,435		4	%
MN		13,030		24	%		5,373		10	%		35,927		66	%	-		0	%	-		0	%		54,330		3	%
Pre-refunded		-		0	%		-		0	%		-		0	%	60,191		100	%	-		0	%		60,191		4	%
Other		453,390		68	%		140,268		21	%		77,675		12	%	-		0	%	-		0	%		671,333		43	%
Grand Total		953,872		61	%		366,474		23	%		132,390		8	%	60,191		4	%	47,919		3	%		1,560,845		100	%

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Structured Securities

June 30, 2010

($ in thousands)

(unaudited)

• Market Value = $573,978 ; Unrealized Gain/(Loss) = $6,627

• Held to Maturity (HTM) 37%; Available for Sale (AFS) 63%

• Structured Security Portfolio Average Rating =   AA+

'• Structured Securities = 15% of the Total Portfolio

 

Selective Insurance Group, Inc. and Consolidated Subsidiaries

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

 June 30, 2010

 ($ in thousands)

  (unaudited)

• Market Value = $374,481; Unrealized Gain/(Loss) = $9,644

• Held to Maturity (HTM) 33%; Available for Sale (AFS) 67%

• RMBS & RABS Portfolio Average Rating = AA+

'• RMBS & RABS Securities = 9.6% of the Total Portfolio

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Commercial Mortgage Backed (CMBS) Securities

June 30, 2010

($ in thousands)

(unaudited)

• Market Value = $150,538; Unrealized Gain/(Loss) = ($3,853)

• Held to Maturity (HTM) 45%; Available for Sale (AFS) 55%

• CMBS Portfolio Average Rating = AA+

• CMBS Securities = 3.9% of the Total Portfolio

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Credit Quality of Available-for-Sale Securities

June 30, 2010

($ in millions)

(unaudited)

	June 30, 2010
	Fair Value		Unrealized Gain (Loss)			Average Credit Quality
AFS Fixed Maturity Portfolio:
U.S. government obligations1	$	392.6		9.5		AAA
State and municipal obligations		465.6		24.3		AA+
Corporate securities		647.7		31.7		A+
Mortgage-backed securities		331.8		5.0		AA+
Asset-backed securities ("ABS")		32.7		0.9		AA+
Total AFS portfolio	$	1,870.4		71.4		AA+
State and Municipal Obligations:
Government obligations	$	271.0		12.9		AAA
Special revenue obligations		194.6		11.4		AA+
Total state and municipal obligations	$	465.6		24.3		AA+
Corporate Securities:
Financial	$	177.7		5.6		A+
Industrials		70.8		5.2		A
Utilities		22.6		1.5		BBB+
Consumer discretion		46.2		2.6		A
Consumer staples		66.7		3.9		A-
Health care		110.3		6.4		AA-
Materials		21.7		1.8		A-
Energy		55.0		0.5		AA-
Information technology		24.7		1.1		A+
Telecommunications services		20.4		1.0		A
Other		31.6		2.1		A
Total corporate securities	$	647.7		31.7		A+
Mortgage-backed securities:
Gov't Guaranteed Agency CMBS	$	73.7		4.0		AAA
Non-agency CMBS		9.3		(4.2	)	B+
Gov't Guaranteed Agency RMBS		95.6		3.6		AAA
Other Agency RMBS		116.7		4.8		AAA
Non-agency RMBS		25.6		(2.5	)	BBB-
Alternative-A ("Alt-A") RMBS		10.9		(0.7	)	AAA
Total MBS	$	331.8		5.0		AA+
Asset-backed securities:
ABS	$	31.8		1.2		AA+
Sub-prime ABS2,3		0.9		(0.3	)	D
Total ABS	$	32.7		0.9		AA+

1 U.S. Government includes coporate securities fully guaranteed by the FDIC.

2 We define sub-prime exposure as exposure to direct and indirect investments in non-agency residential mortgages with average FICO® scores below 650.

3 Subprime ABS includes one security which is currently expected to defualt on its obligations according to the rating agencies.

Selective Insurance Group, Inc. and Consolidated Subsidiaries

Credit Quality of Held-to-Maturity Securities

June 30, 2010

($ in millions)

(unaudited)

	Fair Value		Carry Value		Unrecognized Holding Gain (Loss)			Unrealized Gain (Loss) in Accumulated Other Comprehensive Income			Total Unrealized / Unrecognized Gain (Loss)			Average Credit Quality
HTM Fixed Maturity Portfolio:
U.S. government obligations1	$	106.6		101.7		4.9			5.1			10.0		AAA
State and municipal obligations		1,095.3		1,072.2		23.1			27.2			50.3		AA+
Corporate securities		99.5		89.8		9.7			(4.6	)		5.1		A
Mortgage-backed securities		190.1		181.3		8.8			(7.7	)		1.1		AAA
Asset-backed securities ("ABS")		19.4		16.9		2.5			(3.0	)		(0.5	)	A
Total HTM portfolio	$	1,510.9		1,461.9		49.0			17.0			66.0		AA+
State and Municipal Obligations:
Government obligations	$	295.1		289.9		5.2			12.6			17.8		AA+
Special revenue obligations		800.2		782.3		17.9			14.6			32.5		AA
Total state and municipal obligations	$	1,095.3		1,072.2		23.1			27.2			50.3		AA+
Corporate Securities:
Financial	$	34.0		30.2		3.8			(2.6	)		1.2		A
Industrials		24.5		20.6		3.9			(1.8	)		2.1		A
Utilities		17.2		16.3		0.9			(0.1	)		0.8		A-
Consumer discretion		12.6		12.7		(0.1	)		0.3			0.2		A+
Consumer staples		5.4		4.9		0.5			(0.1	)		0.4		A
Materials		2.2		1.9		0.3			(0.1	)		0.2		BBB-
Energy		3.6		3.2		0.4			(0.2	)		0.2		BB+
Total corporate securities	$	99.5		89.8		9.7			(4.6	)		5.1		A
Mortgage-backed securities:
Gov't guaranteed agency CMBS	$	10.6		10.3		0.3			-			0.3		AAA
Other agency CMBS		3.7		3.7		-			-			-		AAA
Non-agency CMBS		53.3		48.0		5.3			(9.3	)		(4.0	)	AA+
Gov't guaranteed agency RMBS		4.4		4.0		0.4			-			0.4		AAA
Other agency RMBS		112.1		109.2		2.9			1.8			4.7		AAA
Non-agency RMBS		6.0		6.1		(0.1	)		(0.2	)		(0.3	)	AAA
Total mortgage-backed securities	$	190.1		181.3		8.8			(7.7	)		1.1		AAA
Asset-backed securities:
ABS	$	17.8		16.0		1.8			(2.4	)		(0.6	)	AA-
Alt-A ABS		1.6		0.9		0.7			(0.6	)		0.1		CC
Total ABS	$	19.4		16.9		2.5			(3.0	)		(0.5	)	A

1 U.S. Government includes coporate securities fully guaranteed by the FDIC.