![]() Supplemental Investor Package
_______________________________________________
Fourth Quarter and
Full Year 2011
Investor Contact:
Jennifer DiBerardino
Senior Vice President, Investor Relations and Treasurer
Tel: 973-948-1364
jennifer.diberardino@selective.com
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Selective Insurance Group, Inc.
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Selected Balance Sheet Data (unaudited)
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($ in thousands, except per share amounts)
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December 31,
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December 31,
|
|||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Unrecognized/
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Unrecognized/
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|||||||||||||||||||||||
Balance
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Market
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Unrealized
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Balance
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Market
|
Unrealized
|
|||||||||||||||||||
Sheet
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Value
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Gain/(Loss)
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Sheet
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Value
|
Gain/(Loss)
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|||||||||||||||||||
Invested Assets:
|
||||||||||||||||||||||||
Corporate bonds1
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$ | 1,967,498 | 1,981,909 | 73,085 | 1,683,336 | 1,704,600 | 35,334 | |||||||||||||||||
Gov't\ Municipal bonds
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1,642,223 | 1,673,508 | 108,694 | 1,873,730 | 1,894,436 | 77,913 | ||||||||||||||||||
Total bonds
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3,609,721 | 3,655,417 | 181,779 | 3,557,066 | 3,599,036 | 113,247 | ||||||||||||||||||
Equities
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157,355 | 157,355 | 13,529 | 69,636 | 69,636 | 11,597 | ||||||||||||||||||
Short-term investments
|
217,044 | 217,044 | - | 161,155 | 161,155 | - | ||||||||||||||||||
Other investments
|
128,301 | 128,301 | (4,520 | ) | 137,865 | 137,865 | (4,982 | ) | ||||||||||||||||
Total invested assets
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4,112,421 | 4,158,117 | 190,788 | 3,925,722 | 3,967,692 | 119,862 | ||||||||||||||||||
Invested assets per $ of stockholders' equity
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3.71 | 3.67 | ||||||||||||||||||||||
Total assets
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5,736,369 | 5,231,772 | ||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||
Reserve for losses and loss expenses
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3,144,924 | 2,830,058 | ||||||||||||||||||||||
Unearned premium reserve
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906,991 | 823,596 | ||||||||||||||||||||||
Total liabilities
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4,627,141 | 4,160,663 | ||||||||||||||||||||||
Stockholders' equity
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1,109,228 | 1,071,109 | ||||||||||||||||||||||
Total debt to capitalization ratio
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21.7 | % | 19.7 | % | ||||||||||||||||||||
Adjusted total debt to capitalization ratio 2
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15.3 | % | 12.9 | % | ||||||||||||||||||||
Book value per share
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20.39 | 19.95 | ||||||||||||||||||||||
Book value per share excluding unrealized gain or loss on bond portfolio
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18.76 | 19.09 | ||||||||||||||||||||||
NPW per insurance segment employee (excludes E&S)
|
791 | 761 | ||||||||||||||||||||||
Statutory premiums to surplus ratio
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1.4 | x | 1.3 | x | ||||||||||||||||||||
Statutory surplus3
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1,062,707 | 1,073,025 |
1 Includes mortgage-backed and asset-backed securities.
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2 The adjusted debt to capitalization ratio reflects an estimated equity treatment of 90% applied to our $100 million Junior Subordinated Notes issued September 25, 2006 as applied by A.M. Best.
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3 Statutory surplus for 2011 includes the December 31, 2011 acquisition of Montpelier U.S. Insurance Company.
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Selective Insurance Group, Inc.
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Selected Income Statement Data (unaudited)
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December 2011
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THREE MONTHS ENDED December 31,
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TWELVE MONTHS ENDED December 31,
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($ in thousands, except per share amounts)
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2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||||||||||
Per diluted share
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Per diluted share
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Per diluted share
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Per diluted share
|
||||||||||||||||||||||||||||||
Consolidated
|
|||||||||||||||||||||||||||||||||
Revenue
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$ | 400,380 | $ | 394,089 | $ | 1,597,475 | $ | 1,564,621 | |||||||||||||||||||||||||
Operating income
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18,487 | 0.33 | 26,284 | 0.48 | 19,059 | 0.34 | 73,925 | 1.35 | |||||||||||||||||||||||||
Net realized (losses) gains, after tax
|
(2,354 | ) | (0.04 | ) | (2,478 | ) | (0.05 | ) | 1,456 | 0.03 | (4,604 | ) | (0.08 | ) | |||||||||||||||||||
Income from continuing operations
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16,133 | 0.29 | 23,806 | 0.43 | 20,515 | 0.37 | 69,321 | 1.27 | |||||||||||||||||||||||||
Loss on discontinued operations, after tax
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- | - | (31 | ) | - | (650 | ) | (0.01 | ) | (3,780 | ) | (0.07 | ) | ||||||||||||||||||||
Net income
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16,133 | 0.29 | 23,775 | 0.43 | 19,865 | 0.36 | 65,541 | 1.20 | |||||||||||||||||||||||||
Operating return on equity
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6.7 | % | 9.7 | % | 1.7 | % | 7.1 | % | |||||||||||||||||||||||||
Insurance Operations
|
|||||||||||||||||||||||||||||||||
Gross premiums written
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422,438 | 364,047 | 1,776,908 | 1,659,669 | |||||||||||||||||||||||||||||
Net premiums written
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352,179 | 301,812 | 1,485,349 | 1,390,541 | |||||||||||||||||||||||||||||
Net premiums earned
|
373,427 | 353,497 | 1,439,313 | 1,416,598 | |||||||||||||||||||||||||||||
Underwriting income (loss)
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- before tax
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4,971 | (468 | ) | (106,919 | ) | (22,167 | ) | |||||||||||||||||||||||||
- after tax
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3,231 | 0.06 | (305 | ) | (0.01 | ) | (69,497 | ) | (1.26 | ) | (14,409 | ) | (0.26 | ) | |||||||||||||||||||
GAAP combined ratio
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98.7 | % | 100.1 | % | 107.4 | % | 101.6 | % | |||||||||||||||||||||||||
Commercial lines
|
|||||||||||||||||||||||||||||||||
Net premiums earned
|
305,440 | 290,148 | 1,174,861 | 1,174,282 | |||||||||||||||||||||||||||||
GAAP combined ratio
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97.7 | % | 97.9 | % | 105.1 | % | 100.1 | % | |||||||||||||||||||||||||
Personal lines
|
|||||||||||||||||||||||||||||||||
Net premiums earned
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67,987 | 63,349 | 264,452 | 242,316 | |||||||||||||||||||||||||||||
GAAP combined ratio
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103.1 | % | 110.2 | % | 118.0 | % | 108.5 | % | |||||||||||||||||||||||||
Investments
|
|||||||||||||||||||||||||||||||||
Net investment income
|
- before tax
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28,839 | 41,471 | 147,443 | 145,708 | ||||||||||||||||||||||||||||
- after tax
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22,567 | 0.41 | 31,001 | 0.56 | 111,088 | 2.01 | 111,059 | 2.04 | |||||||||||||||||||||||||
Effective tax rate
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21.7 | % | 25.2 | % | 24.7 | % | 23.8 | % | |||||||||||||||||||||||||
Annual after-tax yield on investment portfolio
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2.8 | % | 2.9 | % | |||||||||||||||||||||||||||||
Annual after-tax, after-interest expense yield
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2.5 | % | 2.6 | % | |||||||||||||||||||||||||||||
Invested assets per $ of stockholders' equity
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3.71 | 3.67 | |||||||||||||||||||||||||||||||
Other expenses (net of other income)
|
|||||||||||||||||||||||||||||||||
Interest expense
|
- before tax
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(4,584 | ) | (4,560 | ) | (18,259 | ) | (18,616 | ) | ||||||||||||||||||||||||
- after tax
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(2,980 | ) | (0.05 | ) | (2,964 | ) | (0.05 | ) | (11,868 | ) | (0.21 | ) | (12,100 | ) | (0.22 | ) | |||||||||||||||||
Other Expense - after tax
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$ | (4,331 | ) | (0.09 | ) | $ | (1,448 | ) | (0.02 | ) | $ | (10,664 | ) | (0.20 | ) | $ | (10,625 | ) | (0.21 | ) | |||||||||||||
Diluted weighted avg shares outstanding
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55,437 | 54,894 | 55,221 | 54,504 |
Selective Insurance Group, Inc.
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Estimated Impact of Change in Deferred Policy Acquisition Costs and Restatements
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December 31, 2011 (unaudited)
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($ in thousands, except per share data)
|
||||||||||||||||||||||||||||||||
2011
|
2010
|
2009
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2008
|
|||||||||||||||||||||||||||||
Reported
|
Restated
|
Reported
|
Restated
|
Reported
|
Restated
|
Reported
|
Restated
|
|||||||||||||||||||||||||
Balance Sheet Data:
|
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Deferred policy acquisition costs
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214,069 | 135,761 | 209,627 | 127,984 | 218,601 | 134,765 | 212,319 | 128,756 | ||||||||||||||||||||||||
Total assets
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5,736,369 | 5,685,469 | 5,231,772 | 5,178,704 | 5,114,827 | 5,060,333 | 4,945,556 | 4,891,240 | ||||||||||||||||||||||||
Stockholders' equity
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1,109,228 | 1,058,328 | 1,071,109 | 1,018,041 | 1,002,375 | 947,881 | 890,493 | 836,177 | ||||||||||||||||||||||||
Book value per share
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20.39 | 19.45 | 19.95 | 18.97 | 18.83 | 17.80 | 16.84 | 15.81 | ||||||||||||||||||||||||
Income Statement Data:
|
||||||||||||||||||||||||||||||||
Net income
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19,865 | 22,033 | 65,541 | 66,966 | 36,398 | 36,220 | 43,758 | 43,658 | ||||||||||||||||||||||||
Underwriting (loss) profit
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(106,919 | ) | (103,584 | ) | (22,167 | ) | (19,974 | ) | 2,385 | 2,111 | 132 | (21 | ) | |||||||||||||||||||
Combined ratio
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107.4 | % | 107.2 | % | 101.6 | % | 101.4 | % | 99.8 | % | 99.9 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Net income per share:
|
||||||||||||||||||||||||||||||||
Basic
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0.37 | 0.41 | 1.23 | 1.26 | 0.69 | 0.69 | 0.84 | 0.84 | ||||||||||||||||||||||||
Diluted
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0.36 | 0.40 | 1.20 | 1.23 | 0.68 | 0.68 | 0.82 | 0.82 | ||||||||||||||||||||||||
Non-GAAP Measures*:
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Operating income
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19,059 | 21,227 | 73,925 | 75,350 | 74,538 | 74,360 | 76,245 | 76,145 | ||||||||||||||||||||||||
Operating income per diluted share
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0.34 | 0.38 | 1.35 | 1.38 | 1.39 | 1.39 | 1.43 | 1.43 | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Measures to GAAP Measures:
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||||||||||||||||||||||||||||||||
Operating income
|
19,059 | 21,227 | 73,925 | 75,350 | 74,538 | 74,360 | 76,245 | 76,145 | ||||||||||||||||||||||||
Capital gains (losses), net of tax
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1,456 | 1,456 | (4,604 | ) | (4,604 | ) | (29,880 | ) | (29,880 | ) | (32,144 | ) | (32,144 | ) | ||||||||||||||||||
Discontinued operations, net of tax
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(650 | ) | (650 | ) | (3,780 | ) | (3,780 | ) | (8,260 | ) | (8,260 | ) | (343 | ) | (343 | ) | ||||||||||||||||
Net income
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19,865 | 22,033 | 65,541 | 66,966 | 36,398 | 36,220 | 43,758 | 43,658 |
Selective Insurance Group, Inc. and Consolidated Subsidiaries
|
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GAAP Investment Income
|
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(unaudited)
|
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($ in thousands)
|
||||||||||||||||||||||||||
For the three months ended
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%
|
Year to Date
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%
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December
|
December
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Increase
|
December
|
December
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Increase
|
|||||||||||||||||||||
2011
|
2010
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(Decrease)
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2011
|
2010
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(Decrease)
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Investment Income:
|
||||||||||||||||||||||||||
Interest:
|
||||||||||||||||||||||||||
Fixed Maturity Securities
|
$ | 31,875 | 33,076 | (4 | ) | $ | 129,710 | 130,990 | (1 | ) | ||||||||||||||||
Short-term
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37 | 70 | (47 | ) | 160 | 437 | (63 | ) | ||||||||||||||||||
Other Investments:
|
||||||||||||||||||||||||||
Alternative Investments
|
(3,316 | ) | 9,191 | (136 | ) | 20,678 | 20,313 | 2 | ||||||||||||||||||
Other
|
(139 | ) | - | N/A | (139 | ) | - | N/A | ||||||||||||||||||
Dividends
|
2,236 | 959 | 133 | 4,535 | 2,238 | 103 | ||||||||||||||||||||
Miscellaneous
|
45 | 45 | - | 133 | 139 | (4 | ) | |||||||||||||||||||
30,738 | 43,341 | (29 | ) | 155,077 | 154,117 | 1 | ||||||||||||||||||||
Investment Expense
|
1,899 | 1,870 | 2 | 7,634 | 8,409 | (9 | ) | |||||||||||||||||||
Net Investment Income Before Tax
|
28,839 | 41,471 | (30 | ) | 147,443 | 145,708 | 1 | |||||||||||||||||||
Tax
|
6,272 | 10,470 | (40 | ) | 36,355 | 34,649 | 5 | |||||||||||||||||||
Net Investment Income After Tax
|
$ | 22,567 | 31,001 | (27 | ) | $ | 111,088 | 111,059 | - | |||||||||||||||||
Net Investment Income per Share
|
$ | 0.41 | 0.56 | (27 | ) | $ | 2.01 | 2.04 | (1 | ) | ||||||||||||||||
Effective Tax Rate
|
21.7 | % | 25.2 | % | 24.7 | % | 23.8 | % | ||||||||||||||||||
Average Yields :
|
||||||||||||||||||||||||||
Fixed Maturity Securities:
|
||||||||||||||||||||||||||
Pre Tax
|
3.62 | % | 3.80 | % | ||||||||||||||||||||||
After Tax
|
2.75 | % | 2.93 | % | ||||||||||||||||||||||
Portfolio:
|
||||||||||||||||||||||||||
Pre Tax
|
3.67 | % | 3.78 | % | ||||||||||||||||||||||
After Tax
|
2.76 | % | 2.88 | % | ||||||||||||||||||||||
For the three months ended
|
Year to date
|
|||||||||||||||||||||||||
December
|
December
|
December
|
December
|
|||||||||||||||||||||||
Net Realized Gains(Losses)
|
2011 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
Fixed Maturities
|
5,436 | (92 | ) | 6,933 | (14,898 | ) | ||||||||||||||||||||
Equity Securities
|
(9,057 | ) | 1,464 | (4,693 | ) | 12,999 | ||||||||||||||||||||
Other Investments
|
- | (5,184 | ) | - | (5,184 | ) | ||||||||||||||||||||
Total
|
(3,621 | ) | (3,812 | ) | 2,240 | (7,083 | ) | |||||||||||||||||||
Net of Tax
|
(2,354 | ) | (2,478 | ) | 1,456 | (4,604 | ) |
Selective Insurance Group, Inc.
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2011 Statutory Results by Line of Business
|
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4th Qtr 2011 (unaudited)
|
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($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Net
|
Net
|
Underwriting
|
Dividends to
|
Combined | Combined | |||||||||||||||||||||||||||||||||||||||
Premiums
|
Percent
|
Premiums
|
Percent
|
Loss
|
LAE
|
Expense
|
Policyholders
|
Ratio
|
Ratio
|
Underwriting
|
||||||||||||||||||||||||||||||||||
Written
|
Change
|
Earned
|
Change
|
Ratio
|
Ratio
|
Ratio
|
Ratio
|
2011
|
2010
|
Gain/(Loss)
|
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Personal Lines:
|
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Homeowners
|
$ | 28,040 | 11.6 | % | $ | 27,226 | 14.9 | % | 55.2 | % | 10.4 | % | 29.8 | % | 0.0 | % | 95.4 | % | 104.6 | % | $ | 1,007 | ||||||||||||||||||||||
Auto
|
35,744 | 1.5 | % | 37,302 | 2.3 | % | 73.6 | % | 11.0 | % | 30.9 | % | 0.0 | % | 115.5 | % | 117.4 | % | (5,291 | ) | ||||||||||||||||||||||||
Other (including flood)
|
3,593 | 6.4 | % | 3,459 | 8.8 | % | 61.7 | % | (9.1 | )% | (49.2 | )% | 0.0 | % | 3.4 | % | 29.7 | % | 3,409 | |||||||||||||||||||||||||
Total
|
$ | 67,376 | 5.7 | % | $ | 67,987 | 7.3 | % | 65.6 | % | 9.7 | % | 26.2 | % | 0.0 | % | 101.5 | % | 108.1 | % | $ | (876 | ) | |||||||||||||||||||||
Commercial Lines:
|
||||||||||||||||||||||||||||||||||||||||||||
Commerical property
|
$ | 42,821 | 4.5 | % | $ | 48,869 | (0.4 | )% | 29.8 | % | 6.0 | % | 39.1 | % | 0.1 | % | 75.0 | % | 86.3 | % | $ | 14,572 | ||||||||||||||||||||||
Workers compensation
|
62,605 | 25.5 | % | 69,476 | 11.0 | % | 69.9 | % | 15.6 | % | 24.6 | % | 1.8 | % | 111.9 | % | 123.8 | % | (6,582 | ) | ||||||||||||||||||||||||
General liability
|
77,139 | 16.7 | % | 88,965 | 5.9 | % | 51.2 | % | 17.4 | % | 35.4 | % | 0.1 | % | 104.1 | % | 101.0 | % | 557 | |||||||||||||||||||||||||
Auto
|
62,325 | 8.0 | % | 70,568 | 0.0 | % | 55.2 | % | 8.3 | % | 32.7 | % | 0.1 | % | 96.3 | % | 99.2 | % | 5,318 | |||||||||||||||||||||||||
Business owners policies
|
17,922 | 4.3 | % | 16,670 | 1.5 | % | 29.8 | % | 13.4 | % | 37.5 | % | 0.0 | % | 80.7 | % | 99.5 | % | 2,753 | |||||||||||||||||||||||||
Bonds
|
3,998 | (0.2 | )% | 4,691 | (4.8 | )% | 19.2 | % | 7.7 | % | 66.9 | % | 0.0 | % | 93.8 | % | 74.0 | % | 753 | |||||||||||||||||||||||||
Other
|
17,991 | 694.8 | % | 6,201 | 141.6 | % | 36.5 | % | 6.4 | % | 46.3 | % | 0.0 | % | 89.2 | % | 45.5 | % | (4,772 | ) | ||||||||||||||||||||||||
Total
|
$ | 284,802 | 19.6 | % | $ | 305,440 | 5.3 | % | 51.0 | % | 12.5 | % | 34.2 | % | 0.5 | % | 98.2 | % | 101.9 | % | $ | 12,599 | ||||||||||||||||||||||
Grand Total
|
$ | 352,179 | 16.7 | % | $ | 373,427 | 5.6 | % | 53.7 | % | 12.0 | % | 32.6 | % | 0.4 | % | 98.7 | % | 102.8 | % | $ | 11,723 | ||||||||||||||||||||||
Note: Some amounts may not foot due to rounding.
|
||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||
Losses Paid
|
$ | 245,778 | $ | 195,666 | ||||||||||||||||||||||||||||||||||||||||
LAE Paid
|
39,804 | 39,958 | ||||||||||||||||||||||||||||||||||||||||||
Total Paid
|
$ | 285,582 | $ | 235,624 | ||||||||||||||||||||||||||||||||||||||||
Selective Insurance Group, Inc.
|
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2011 Statutory Results by Line of Business
|
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December 2011 YTD (unaudited)
|
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($ in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Net
|
Net
|
Underwriting
|
Dividends to
|
Combined | Combined | |||||||||||||||||||||||||||||||||||||||
Premiums
|
Percent
|
Premiums
|
Percent
|
Loss
|
LAE
|
Expense
|
Policyholders
|
Ratio
|
Ratio
|
Underwriting
|
||||||||||||||||||||||||||||||||||
Written
|
Change
|
Earned
|
Change
|
Ratio
|
Ratio
|
Ratio
|
Ratio
|
2011
|
2010
|
Gain/(Loss)
|
||||||||||||||||||||||||||||||||||
Personal Lines:
|
||||||||||||||||||||||||||||||||||||||||||||
Homeowners
|
$ | 110,002 | 13.6 | % | $ | 102,764 | 17.0 | % | 95.3 | % | 9.2 | % | 30.7 | % | 0.0 | % | 135.2 | % | 108.6 | % | $ | (38,356 | ) | |||||||||||||||||||||
Auto
|
149,767 | 1.5 | % | 148,824 | 4.8 | % | 74.8 | % | 10.9 | % | 30.7 | % | 0.0 | % | 116.4 | % | 113.6 | % | (24,730 | ) | ||||||||||||||||||||||||
Other (including flood)
|
13,442 | 8.6 | % | 12,864 | 3.0 | % | 81.0 | % | (46.8 | )% | (47.6 | )% | 0.0 | % | (13.4 | )% | 5.2 | % | 14,865 | |||||||||||||||||||||||||
Total
|
$ | 273,211 | 6.4 | % | $ | 264,452 | 9.1 | % | 83.1 | % | 7.4 | % | 26.8 | % | 0.0 | % | 117.3 | % | 106.4 | % | $ | (48,221 | ) | |||||||||||||||||||||
Commercial Lines:
|
||||||||||||||||||||||||||||||||||||||||||||
Commerical property
|
$ | 195,927 | 0.8 | % | $ | 192,989 | (3.1 | )% | 67.0 | % | 5.8 | % | 37.0 | % | 0.1 | % | 109.9 | % | 93.7 | % | $ | (20,112 | ) | |||||||||||||||||||||
Workers compensation
|
261,348 | 10.1 | % | 259,354 | 3.6 | % | 73.3 | % | 15.9 | % | 25.2 | % | 1.8 | % | 116.2 | % | 124.2 | % | (42,473 | ) | ||||||||||||||||||||||||
General liability
|
351,561 | 8.7 | % | 344,682 | 2.4 | % | 49.7 | % | 17.7 | % | 33.3 | % | 0.0 | % | 100.7 | % | 96.4 | % | (4,726 | ) | ||||||||||||||||||||||||
Auto
|
282,825 | 0.5 | % | 279,610 | (4.1 | )% | 55.7 | % | 7.3 | % | 31.1 | % | 0.1 | % | 94.2 | % | 90.2 | % | 15,330 | |||||||||||||||||||||||||
Business owners policies
|
67,580 | 2.3 | % | 66,225 | 1.5 | % | 57.9 | % | 13.3 | % | 38.6 | % | 0.0 | % | 109.8 | % | 116.0 | % | (6,984 | ) | ||||||||||||||||||||||||
Bonds
|
18,653 | (2.6 | )% | 18,910 | (1.7 | )% | 16.0 | % | 8.0 | % | 61.7 | % | 0.0 | % | 85.7 | % | 79.1 | % | 2,864 | |||||||||||||||||||||||||
Other
|
34,245 | 234.6 | % | 13,091 | 29.4 | % | 20.4 | % | 4.4 | % | 49.2 | % | 0.0 | % | 74.0 | % | 46.6 | % | (6,987 | ) | ||||||||||||||||||||||||
Total
|
$ | 1,212,137 | 7.1 | % | $ | 1,174,861 | 0.2 | % | 58.8 | % | 12.3 | % | 32.8 | % | 0.4 | % | 104.3 | % | 100.8 | % | $ | (63,088 | ) | |||||||||||||||||||||
Grand Total
|
$ | 1,485,349 | 7.0 | % | $ | 1,439,313 | 1.7 | % | 63.2 | % | 11.4 | % | 31.7 | % | 0.4 | % | 106.7 | % | 101.6 | % | $ | (111,309 | ) | |||||||||||||||||||||
Note: Some amounts may not foot due to rounding.
|
||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||
Losses Paid
|
$ | 857,844 | $ | 784,641 | ||||||||||||||||||||||||||||||||||||||||
LAE Paid
|
152,955 | 154,661 | ||||||||||||||||||||||||||||||||||||||||||
Total Paid
|
$ | 1,010,799 | $ | 939,302 | ||||||||||||||||||||||||||||||||||||||||
Consolidated Balance Sheets
|
||||||||
December 31,
|
Unaudited
|
|||||||
($ in thousands, except share amounts)
|
2011
|
2010
|
||||||
ASSETS
|
||||||||
Investments:
|
||||||||
Fixed maturity securities, held-to-maturity – at carrying value
|
||||||||
(fair value: $758,043 – 2011; $1,256,294 – 2010)
|
$ | 712,348 | 1,214,324 | |||||
Fixed maturity securities, available-for-sale – at fair value
|
||||||||
(amortized cost: $2,766,856 – 2011; $2,285,988 – 2010)
|
2,897,373 | 2,342,742 | ||||||
Equity securities, available-for-sale – at fair value
|
||||||||
(cost of: $143,826 – 2011; $58,039 – 2010)
|
157,355 | 69,636 | ||||||
Short-term investments (at cost which approximates fair value)
|
217,044 | 161,155 | ||||||
Other investments
|
128,301 | 137,865 | ||||||
Total investments
|
4,112,421 | 3,925,722 | ||||||
Cash
|
762 | 645 | ||||||
Interest and dividends due or accrued
|
35,842 | 37,007 | ||||||
Premiums receivable, net of allowance for uncollectible
|
||||||||
accounts of: $3,768 – 2011; $4,691 – 2010
|
466,294 | 414,105 | ||||||
Reinsurance recoverable, net
|
561,855 | 318,752 | ||||||
Prepaid reinsurance premiums
|
147,686 | 110,327 | ||||||
Current federal income tax
|
731 | 11,200 | ||||||
Deferred federal income tax
|
92,686 | 93,234 | ||||||
Property and equipment – at cost, net of accumulated
|
||||||||
depreciation and amortization of: $160,294 – 2011; $151,704 – 2010
|
43,947 | 41,775 | ||||||
Deferred policy acquisition costs
|
214,069 | 209,627 | ||||||
Goodwill
|
7,849 | 7,849 | ||||||
Other assets
|
52,227 | 61,529 | ||||||
Total assets
|
$ | 5,736,369 | 5,231,772 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities:
|
||||||||
Reserve for losses and loss expenses
|
$ | 3,144,924 | 2,830,058 | |||||
Unearned premiums
|
906,991 | 823,596 | ||||||
Notes payable
|
307,360 | 262,333 | ||||||
Accrued salaries and benefits
|
119,297 | 100,933 | ||||||
Other liabilities
|
148,569 | 143,743 | ||||||
Total liabilities
|
$ | 4,627,141 | 4,160,663 | |||||
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: 97,246,711 – 2011; 96,362,667 – 2010
|
194,494 | 192,725 | ||||||
Additional paid-in capital
|
257,370 | 244,613 | ||||||
Retained earnings
|
1,167,219 | 1,176,155 | ||||||
Accumulated other comprehensive income
|
42,294 | 7,024 | ||||||
Treasury stock – at cost (shares: 42,836,201 – 2011; 42,686,204 – 2010)
|
(552,149 | ) | (549,408 | ) | ||||
Total stockholders’ equity
|
1,109,228 | 1,071,109 | ||||||
Commitments and contingencies
|
||||||||
Total liabilities and stockholders’ equity
|
$ | 5,736,369 | 5,231,772 |
SELECTIVE INSURANCE GROUP, INC.
|
Unaudited
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
Quarter ended
|
Year ended
|
||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
Unaudited
|
||||||||||||||||
($ in thousands, except per share amounts)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Revenues:
|
||||||||||||||||
Net premiums earned
|
$ | 373,427 | 353,497 | 1,439,313 | 1,416,598 | |||||||||||
Net investment income earned
|
28,839 | 41,471 | 147,443 | 145,708 | ||||||||||||
Net realized gains (losses):
|
||||||||||||||||
Net realized investment gains (losses)
|
6,223 | (3,385 | ) | 15,426 | 10,575 | |||||||||||
Other-than-temporary impairments
|
(8,936 | ) | 101 | (11,998 | ) | (16,225 | ) | |||||||||
Other-than-temporary impairments on fixed maturity securities recognized in
|
||||||||||||||||
other comprehensive income
|
(908 | ) | (528 | ) | (1,188 | ) | (1,433 | ) | ||||||||
Total net realized (losses) gains
|
(3,621 | ) | (3,812 | ) | 2,240 | (7,083 | ) | |||||||||
Other income
|
1,735 | 2,933 | 8,479 | 9,398 | ||||||||||||
Total revenues
|
400,380 | 394,089 | 1,597,475 | 1,564,621 | ||||||||||||
Expenses:
|
||||||||||||||||
Losses and loss expenses incurred
|
245,268 | 242,976 | 1,074,987 | 982,118 | ||||||||||||
Policy acquisition costs
|
123,010 | 111,902 | 469,739 | 458,045 | ||||||||||||
Interest expense
|
4,584 | 4,560 | 18,259 | 18,616 | ||||||||||||
Other expenses
|
7,618 | 5,250 | 26,425 | 23,886 | ||||||||||||
Total expenses
|
380,480 | 364,688 | 1,589,410 | 1,482,665 | ||||||||||||
Income from continuing operations, before federal income tax
|
19,900 | 29,401 | 8,065 | 81,956 | ||||||||||||
Federal income tax expense (benefit):
|
||||||||||||||||
Current
|
12,386 | (3,152 | ) | (228 | ) | 5,323 | ||||||||||
Deferred
|
(8,619 | ) | 8,747 | (12,222 | ) | 7,312 | ||||||||||
Total federal income tax expense (benefit)
|
3,767 | 5,595 | (12,450 | ) | 12,635 | |||||||||||
Net income from continuing operations
|
16,133 | 23,806 | 20,515 | 69,321 | ||||||||||||
Loss on disposal of discontinued operations, net of tax of $(16) for Fourth
|
||||||||||||||||
Quarter 2010 and $(350) and $(2,035) for Twelve Months 2011 and 2010
|
- | (31 | ) | (650 | ) | (3,780 | ) | |||||||||
Net income
|
$ | 16,133 | 23,775 | 19,865 | 65,541 | |||||||||||
Earnings per share:
|
||||||||||||||||
Basic net income from continuing operations
|
$ | 0.30 | 0.44 | 0.38 | 1.30 | |||||||||||
Basic net loss from discontinued operations
|
- | - | (0.01 | ) | (0.07 | ) | ||||||||||
Basic net income
|
0.30 | 0.44 | 0.37 | 1.23 | ||||||||||||
Diluted net income from continuing operations
|
0.29 | 0.43 | 0.37 | 1.27 | ||||||||||||
Diluted net loss from discontinued operations
|
- | - | (0.01 | ) | (0.07 | ) | ||||||||||
Diluted net income
|
$ | 0.29 | 0.43 | 0.36 | 1.20 | |||||||||||
Dividends to stockholders
|
$ | 0.13 | 0.13 | 0.52 | 0.52 |
Consolidated Statements of Stockholders’ Equity
|
||||||||||||||||||||||||
December 31,
|
Unaudited
|
|||||||||||||||||||||||
($ in thousands, except share amounts)
|
2011
|
2010
|
2009
|
|||||||||||||||||||||
Common stock:
|
||||||||||||||||||||||||
Beginning of year
|
$ | 192,725 | 191,646 | 190,527 | ||||||||||||||||||||
Dividend reinvestment plan
|
||||||||||||||||||||||||
(shares: 100,383 – 2011; 106,437 – 2010; 123,880 – 2009)
|
201 | 213 | 248 | |||||||||||||||||||||
Stock purchase and compensation plans
|
||||||||||||||||||||||||
(shares: 783,661 – 2011; 433,271 – 2010; 435,571 – 2009)
|
1,568 | 866 | 871 | |||||||||||||||||||||
End of year
|
194,494 | 192,725 | 191,646 | |||||||||||||||||||||
Additional paid-in capital:
|
||||||||||||||||||||||||
Beginning of year
|
244,613 | 231,933 | 217,195 | |||||||||||||||||||||
Dividend reinvestment plan
|
1,417 | 1,465 | 1,514 | |||||||||||||||||||||
Stock purchase and compensation plans
|
11,340 | 11,215 | 13,224 | |||||||||||||||||||||
End of year
|
257,370 | 244,613 | 231,933 | |||||||||||||||||||||
Retained earnings:
|
||||||||||||||||||||||||
Beginning of year
|
1,176,155 | 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
|
19,865 | 19,865 | 65,541 | 65,541 | 36,398 | 36,398 | ||||||||||||||||||
Cash dividends to stockholders ($0.52 per share – 2011,
|
||||||||||||||||||||||||
2010, and 2009)
|
(28,801 | ) | (28,364 | ) | (27,949 | ) | ||||||||||||||||||
End of year
|
1,167,219 | 1,176,155 | 1,138,978 | |||||||||||||||||||||
Accumulated other comprehensive income (loss):
|
||||||||||||||||||||||||
Beginning of year
|
7,024 | (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 (losses) on investment securities:
|
||||||||||||||||||||||||
Non-credit portion of other-than-temporary
|
||||||||||||||||||||||||
impairment losses recognized in other
|
||||||||||||||||||||||||
comprehensive income, net of deferred income tax
|
1,093 | 3,416 | (5,629 | ) | ||||||||||||||||||||
Other net unrealized gains on investment
|
||||||||||||||||||||||||
securities, net of deferred income tax
|
42,287 | 21,113 | 92,183 | |||||||||||||||||||||
Total unrealized gains on investment securities
|
43,380 | 43,380 | 24,529 | 24,529 | 86,554 | 86,554 | ||||||||||||||||||
Defined benefit pension plans, net of deferred income tax
|
(8,110 | ) | (8,110 | ) | (5,045 | ) | (5,045 | ) | 4,032 | 4,032 | ||||||||||||||
End of year
|
42,294 | 7,024 | (12,460 | ) | ||||||||||||||||||||
Comprehensive income
|
55,135 | 85,025 | 126,984 | |||||||||||||||||||||
Treasury stock:
|
||||||||||||||||||||||||
Beginning of year
|
(549,408 | ) | (547,722 | ) | (544,712 | ) | ||||||||||||||||||
Acquisition of treasury stock
|
||||||||||||||||||||||||
(shares: 149,997 – 2011; 107,425 – 2010; 191,858 – 2009)
|
(2,741 | ) | (1,686 | ) | (3,010 | ) | ||||||||||||||||||
End of year
|
(552,149 | ) | (549,408 | ) | (547,722 | ) | ||||||||||||||||||
Total stockholders’ equity
|
$ | 1,109,228 | 1,071,109 | 1,002,375 |
Consolidated Statements of Cash Flows
|
||||||||||||
December 31,
|
Unaudited
|
|||||||||||
($ in thousands, except share amounts)
|
2011
|
2010
|
2009
|
|||||||||
Operating Activities
|
||||||||||||
Net Income
|
$ | 19,865 | 65,541 | 36,398 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
34,645 | 31,770 | 28,593 | |||||||||
Loss on disposal of discontinued operations
|
650 | 3,780 | 1,174 | |||||||||
Stock-based compensation expense
|
7,422 | 8,017 | 11,256 | |||||||||
Undistributed (income) loss of equity method investments
|
(323 | ) | (8,712 | ) | 21,726 | |||||||
Net realized (gains) losses
|
(2,240 | ) | 7,083 | 45,970 | ||||||||
Postretirement life curtailment benefit
|
- | - | (4,217 | ) | ||||||||
Unrealized gain on trading securities
|
- | - | (262 | ) | ||||||||
Goodwill impairment on discontinued operations
|
- | - | 12,214 | |||||||||
Changes in assets and liabilities:
|
||||||||||||
Increase in reserves for losses and loss expenses, net of reinsurance recoverables
|
56,905 | 41,526 | 60,619 | |||||||||
Increase (decrease) in unearned premiums, net of prepaid reinsurance and advance
|
||||||||||||
premiums
|
46,334 | (26,661 | ) | (8,028 | ) | |||||||
(Increase) decrease in net federal income taxes
|
(1,403 | ) | 15,809 | (3,718 | ) | |||||||
(Increase) decrease in premiums receivable
|
(45,116 | ) | 32,472 | 34,317 | ||||||||
(Increase) decrease in deferred policy acquisition costs
|
(4,442 | ) | 8,974 | (6,282 | ) | |||||||
Decrease (increase) in interest and dividends due or accrued
|
633 | (2,361 | ) | 1,918 | ||||||||
Increase (decrease) in accrued salaries and benefits
|
1,521 | (14,913 | ) | (15,240 | ) | |||||||
(Decrease) increase in accrued insurance expenses
|
(636 | ) | (4,470 | ) | 2,240 | |||||||
Sale of trading securities
|
- | - | 2,831 | |||||||||
Other-net
|
9,142 | 1,330 | 6,050 | |||||||||
Net adjustments
|
103,092 | 93,644 | 191,161 | |||||||||
Net cash provided by operating activities
|
122,957 | 159,185 | 227,559 | |||||||||
Investing Activities
|
||||||||||||
Purchase of fixed maturity securities, held-to-maturity
|
- | - | (158,827 | ) | ||||||||
Purchase of fixed maturity securities, available-for-sale
|
(487,813 | ) | (1,007,679 | ) | (1,041,277 | ) | ||||||
Purchase of equity securities, available-for-sale
|
(150,551 | ) | (71,192 | ) | (79,455 | ) | ||||||
Purchase of other investments
|
(16,033 | ) | (20,673 | ) | (16,298 | ) | ||||||
Purchase of short-term investments
|
(1,448,782 | ) | (1,741,738 | ) | (1,956,164 | ) | ||||||
Purchase of subsidiary, net of cash acquired
|
(51,728 | ) | - | - | ||||||||
Sale of subsidiary
|
1,152 | 978 | (12,538 | ) | ||||||||
Sale of fixed maturity securities, held-to-maturity
|
- | - | 5,820 | |||||||||
Sale of fixed maturity securities, available-for-sale
|
146,435 | 190,438 | 538,769 | |||||||||
Sale of short-term investments
|
1,433,441 | 1,794,434 | 1,940,427 | |||||||||
Redemption and maturities of fixed maturity securities, held-to-maturity
|
177,350 | 319,835 | 282,310 | |||||||||
Redemption and maturities of fixed maturity securities, available-for-sale
|
162,796 | 298,171 | 122,403 | |||||||||
Sale of equity securities, available-for-sale
|
60,071 | 98,015 | 137,244 | |||||||||
Distributions from other investments
|
25,622 | 22,406 | 25,596 | |||||||||
Sale of other investments
|
16,357 | - | - | |||||||||
Purchase of property, equipment, and other assets
|
(11,824 | ) | (6,522 | ) | (8,207 | ) | ||||||
Net cash used in investing activities
|
(143,507 | ) | (123,527 | ) | (220,197 | ) | ||||||
Financing Activities
|
||||||||||||
Dividends to stockholders
|
(26,513 | ) | (26,056 | ) | (26,296 | ) | ||||||
Acquisition of treasury stock
|
(2,741 | ) | (1,686 | ) | (3,010 | ) | ||||||
Principal payment of notes payable
|
- | (12,300 | ) | (12,300 | ) | |||||||
Proceeds from borrowings
|
45,000 | - | 13,000 | |||||||||
Net proceeds from stock purchase and compensation plans
|
5,011 | 4,962 | 4,612 | |||||||||
Excess tax benefits from share-based payment arrangements
|
(90 | ) | (744 | ) | (1,200 | ) | ||||||
Net cash provided by (used in) financing activities
|
20,667 | (35,824 | ) | (25,194 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
117 | (166 | ) | (17,832 | ) | |||||||
Net decrease in cash and cash equivalents from discontinued operations
|
- | - | (15,037 | ) | ||||||||
Net increase (decrease) in cash from continuing operations
|
117 | (166 | ) | (2,795 | ) | |||||||
Cash from continuing operations, beginning of year
|
645 | 811 | 3,606 | |||||||||
Cash from continuing operations, end of year
|
$ | 762 | 645 | 811 |
Selective Insurance Group, Inc.
|
||||||||
Combined Insurance Company Subsidiaries
|
||||||||
Unaudited Statutory Balance Sheets
|
||||||||
($ in thousands)
|
||||||||
Dec-31 *
|
Dec-31
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Bonds
|
$ | 3,452,204 | 3,482,204 | |||||
Common stocks
|
157,355 | 69,636 | ||||||
Affiliated mortgage loan
|
38,131 | 38,785 | ||||||
Other investments
|
197,409 | 174,067 | ||||||
Short-term investments
|
183,070 | 111,021 | ||||||
Total investments
|
4,028,169 | 3,875,713 | ||||||
Cash on hand and in banks
|
(20,701 | ) | (30,343 | ) | ||||
Interest and dividends due and accrued
|
35,880 | 37,172 | ||||||
Premiums receivable
|
461,482 | 410,809 | ||||||
Reinsurance recoverable on paid losses and expenses
|
12,365 | 5,013 | ||||||
Deferred tax recoverable
|
137,659 | 133,100 | ||||||
EDP equipment
|
1,804 | 1,409 | ||||||
Equities and deposits in pools and associations
|
4,837 | 6,681 | ||||||
Receivable for sold securities
|
644 | 16,738 | ||||||
Other assets
|
27,964 | 30,164 | ||||||
Total assets
|
$ | 4,690,103 | 4,486,456 | |||||
LIABILITIES
|
||||||||
Reserve for losses
|
$ | 2,173,028 | 2,111,557 | |||||
Reinsurance payable on paid loss and loss expense
|
1,285 | 1,030 | ||||||
Reserve for loss expenses
|
418,542 | 401,508 | ||||||
Unearned premiums
|
759,304 | 713,268 | ||||||
Reserve for commissions payable
|
44,488 | 43,590 | ||||||
Ceded balances payable
|
21,871 | 12,835 | ||||||
Federal income tax payable
|
12,176 | 1,645 | ||||||
Premium and other taxes payable
|
23,588 | 23,466 | ||||||
Borrowed money
|
58,043 | 13,018 | ||||||
Reserve for dividends to policyholders
|
3,470 | 2,390 | ||||||
Reserves for unauthorized reinsurance
|
1,785 | 1,811 | ||||||
Payable for securities
|
- | 5,028 | ||||||
Funds withheld on account of others
|
6,523 | 7,015 | ||||||
Accrued salaries and benefits
|
80,601 | 61,353 | ||||||
Other liabilities
|
22,692 | 13,917 | ||||||
Total liabilities
|
3,627,396 | 3,413,431 | ||||||
POLICYHOLDERS' SURPLUS
|
||||||||
Capital
|
32,325 | 28,325 | ||||||
Aggregate write-ins for special surplus funds
|
44,296 | 40,521 | ||||||
Paid in surplus
|
307,022 | 255,792 | ||||||
Unassigned surplus
|
679,064 | 748,387 | ||||||
Total policyholders' surplus
|
1,062,707 | 1,073,025 | ||||||
Total liabilities and policyholders' surplus
|
$ | 4,690,103 | 4,486,456 |
Selective Insurance Group, Inc.
|
||||||||||||||||||||||||||||||||
Combined Insurance Company Subsidiaries
|
||||||||||||||||||||||||||||||||
Unaudited Statutory Statements Of Income
|
||||||||||||||||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||||||||||
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||||||||||||||||||
December
|
December
|
|||||||||||||||||||||||||||||||
UNDERWRITING
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||||||||||||||
Net premiums written
|
$ | 352,179 | 301,812 | 1,485,349 | 1,388,556 | |||||||||||||||||||||||||||
Net premiums earned
|
373,427 | 353,497 | 1,439,313 | 1,414,612 | ||||||||||||||||||||||||||||
Net losses paid
|
245,778 | 195,666 | 857,844 | 784,641 | ||||||||||||||||||||||||||||
Change in reserve for losses
|
(45,368 | ) | 10,910 | 52,252 | 39,181 | |||||||||||||||||||||||||||
Net losses incurred
|
200,410 | 53.7 | % | 206,576 | 58.4 | % | 910,096 | 63.2 | % | 823,822 | 58.2 | % | ||||||||||||||||||||
Net loss expenses paid
|
39,804 | 39,958 | 152,955 | 154,661 | ||||||||||||||||||||||||||||
Change in reserve for loss expenses
|
4,879 | (3,230 | ) | 11,395 | 2,051 | |||||||||||||||||||||||||||
Net loss expenses incurred
|
44,683 | 12.0 | % | 36,728 | 10.4 | % | 164,350 | 11.4 | % | 156,712 | 11.1 | % | ||||||||||||||||||||
Net underwriting expenses incurred
|
115,692 | 32.8 | % | 103,578 | 34.3 | % | 474,139 | 31.9 | % | 449,620 | 32.3 | % | ||||||||||||||||||||
Total deductions
|
360,785 | 346,882 | 1,548,585 | 1,430,154 | ||||||||||||||||||||||||||||
Statutory underwriting (loss) / gain
|
12,642 | 6,615 | (109,272 | ) | (15,542 | ) | ||||||||||||||||||||||||||
Net loss from premium balances charged off
|
(1,210 | ) | (1,057 | ) | (5,213 | ) | (5,142 | ) | ||||||||||||||||||||||||
Finance charges and other income
|
1,772 | 2,907 | 8,460 | 9,590 | ||||||||||||||||||||||||||||
Total other income
|
562 | -0.2 | % | 1,850 | -0.6 | % | 3,247 | -0.2 | % | 4,448 | -0.3 | % | ||||||||||||||||||||
Policyholders' dividends incurred
|
(1,481 | ) | 0.4 | % | (1,011 | ) | 0.3 | % | (5,284 | ) | 0.4 | % | (3,878 | ) | 0.3 | % | ||||||||||||||||
Total underwriting (loss) / gain
|
11,723 | 98.7 | % | 7,454 | 102.8 | % | (111,309 | ) | 106.7 | % | (14,972 | ) | 101.6 | % | ||||||||||||||||||
INVESTMENT
|
||||||||||||||||||||||||||||||||
Net investment income earned
|
30,459 | 39,362 | 148,005 | 138,021 | ||||||||||||||||||||||||||||
Net realized gain / (loss)
|
(3,621 | ) | (15,909 | ) | 2,195 | (19,282 | ) | |||||||||||||||||||||||||
Total income before income tax
|
38,561 | 30,907 | 38,891 | 103,767 | ||||||||||||||||||||||||||||
Federal income tax expense / (income)
|
14,674 | (456 | ) | 12,433 | 16,848 | |||||||||||||||||||||||||||
Net income
|
$ | 23,887 | 31,363 | 26,458 | 86,919 | |||||||||||||||||||||||||||
Policyholders' Surplus
|
||||||||||||||||||||||||||||||||
Surplus, beginning of period
|
$ | 1,010,144 | 1,034,321 | 1,073,025 | 981,955 | |||||||||||||||||||||||||||
Net income
|
23,887 | 31,363 | 26,458 | 86,919 | ||||||||||||||||||||||||||||
Change in deferred taxes
|
11,749 | 2,941 | 17,220 | 2,169 | ||||||||||||||||||||||||||||
Change in unrealized gains
|
15,801 | 12,506 | 2,355 | 26,198 | ||||||||||||||||||||||||||||
Dividends to stockholders
|
(17,007 | ) | (12,002 | ) | (63,025 | ) | (48,010 | ) | ||||||||||||||||||||||||
Paid in surplus *
|
51,230 | - | 51,230 | - | ||||||||||||||||||||||||||||
Paid in common stock *
|
4,000 | - | 4,000 | - | ||||||||||||||||||||||||||||
Change in reserve for unauthorized
|
26 | (798 | ) | 26 | (798 | ) | ||||||||||||||||||||||||||
Change in non-admitted assets
|
(12,666 | ) | (4,263 | ) | (21,378 | ) | 14,851 | |||||||||||||||||||||||||
Change in additional admitted deferred taxes
|
5,241 | 5,550 | 3,775 | 6,570 | ||||||||||||||||||||||||||||
Change in minimum pension liability
|
(15,090 | ) | 3,407 | (15,090 | ) | 3,407 | ||||||||||||||||||||||||||
Surplus adjustments *
|
(14,608 | ) | - | (15,889 | ) | (236 | ) | |||||||||||||||||||||||||
Net change in surplus for period
|
52,563 | 38,704 | (10,318 | ) | 91,070 | |||||||||||||||||||||||||||
Surplus, end of period
|
$ | 1,062,707 | 1,073,025 | 1,062,707 | 1,073,025 | |||||||||||||||||||||||||||
Statutory underwriting (loss) / gain
|
$ | 11,723 | 7,454 | (111,309 | ) | (14,972 | ) | |||||||||||||||||||||||||
Adjustments under GAAP:
|
||||||||||||||||||||||||||||||||
Deferred policy acquisition costs
|
(5,975 | ) | (8,963 | ) | 4,442 | (8,974 | ) | |||||||||||||||||||||||||
Pension costs
|
(1,618 | ) | 755 | 250 | 2,045 | |||||||||||||||||||||||||||
Other, net
|
841 | 286 | (302 | ) | (266 | ) | ||||||||||||||||||||||||||
GAAP underwriting (loss) / gain
|
$ | 4,971 | (468 | ) | (106,919 | ) | (22,167 | ) | ||||||||||||||||||||||||
Selective Insurance Group, Inc. and Consolidated Subsidiaries
|
|||||||||||||||||||||||||
Alternative Investments
|
|||||||||||||||||||||||||
as of December 31, 2011
|
|||||||||||||||||||||||||
(unaudited)
|
|||||||||||||||||||||||||
Inception
|
Original
|
Remaining
|
Current
|
YTD
|
DPI(1)
|
TVPI(2)
|
|||||||||||||||||||
Fund
|
Year
|
Commitment
|
Commitment
|
Market Value
|
Income
|
Ratio
|
Ratio
|
||||||||||||||||||
Real Estate
|
|||||||||||||||||||||||||
Silverpeak RE II
|
2005
|
20,000,000 | 2,473,976 | 10,390,153 | 1,276,202 | 0.45 | 0.96 | ||||||||||||||||||
Silverpeak RE III
|
2008
|
15,000,000 | 8,095,585 | 3,377,382 | (56,701 | ) | 0.02 | 0.51 | |||||||||||||||||
Total - Real Estate
|
35,000,000 | 10,569,561 | 13,767,535 | 1,219,501 | 0.34 | 0.84 | |||||||||||||||||||
Mezzanine Financing
|
|||||||||||||||||||||||||
Neovara Euro Mezz
|
2004
|
9,000,000 | - | 1,072,293 | (836,617 | ) | 0.95 | 1.03 | |||||||||||||||||
GS Mezz V
|
2007
|
25,000,000 | 15,255,707 | 7,744,362 | 728,712 | 0.60 | 1.17 | ||||||||||||||||||
Total - Mezz. Financing
|
34,000,000 | 15,255,707 | 8,816,655 | (107,905 | ) | 0.77 | 1.10 | ||||||||||||||||||
Distressed Debt
|
|||||||||||||||||||||||||
Varde VIII
|
2006
|
10,000,000 | - | 7,372,134 | (322,617 | ) | 0.38 | 1.12 | |||||||||||||||||
GS Distressed Opp III
|
2007
|
15,000,000 | 3,135,660 | 9,580,421 | 934,885 | 0.24 | 0.99 | ||||||||||||||||||
Total - Distressed Debt
|
25,000,000 | 3,135,660 | 16,952,555 | 612,268 | 0.30 | 1.05 | |||||||||||||||||||
Private Equity
|
|||||||||||||||||||||||||
Prospector
|
1997
|
5,000,000 | - | 411,121 | (323 | ) | 2.79 | 2.88 | |||||||||||||||||
Trilantic Capital Partners III
|
2004
|
10,000,000 | 1,219,343 | 4,022,140 | 1,446,577 | 1.27 | 1.70 | ||||||||||||||||||
NB Co-Invest
|
2006
|
15,000,000 | 1,847,495 | 9,730,334 | 1,729,882 | 0.53 | 1.22 | ||||||||||||||||||
Trilantic Capital Partners IV
|
2007
|
11,098,351 | 2,301,528 | 7,572,404 | 1,651,122 | 0.41 | 1.24 | ||||||||||||||||||
Total - Private Equity
|
41,098,351 | 5,368,366 | 21,735,999 | 4,827,258 | 0.99 | 1.56 | |||||||||||||||||||
Private Equity, Secondary Market
|
|||||||||||||||||||||||||
NB SOF
|
2005
|
12,000,000 | 899,494 | 6,601,877 | 1,059,842 | 0.64 | 1.24 | ||||||||||||||||||
GS Vintage IV
|
2007
|
20,000,000 | 5,280,941 | 15,101,646 | 3,464,691 | 0.37 | 1.21 | ||||||||||||||||||
NB SOF II
|
2008
|
12,000,000 | 3,326,196 | 8,410,797 | 1,605,660 | 0.36 | 1.31 | ||||||||||||||||||
Total - Pvt. Eq. Sec. Mkt.
|
44,000,000 | 9,506,631 | 30,114,320 | 6,130,193 | 0.45 | 1.24 | |||||||||||||||||||
Energy/Power Generation
|
|||||||||||||||||||||||||
ArcLight I
|
2002
|
15,000,000 | 1,655,505 | 234,045 | 1,061,616 | 1.80 | 1.81 | ||||||||||||||||||
ArcLight II
|
2003
|
15,000,000 | 2,295,492 | 2,972,783 | 1,721,227 | 1.23 | 1.39 | ||||||||||||||||||
ArcLight III
|
2006
|
15,000,000 | 2,037,794 | 10,235,790 | 1,709,439 | 0.60 | 1.25 | ||||||||||||||||||
Quintana Energy
|
2006
|
10,000,000 | 1,902,067 | 8,006,160 | 713,808 | 0.09 | 1.07 | ||||||||||||||||||
ArcLight IV
|
2007
|
10,000,000 | 2,717,373 | 4,464,089 | 1,751,975 | 0.86 | 1.31 | ||||||||||||||||||
Total - Energy/Power Generation
|
65,000,000 | 10,608,231 | 25,912,867 | 6,958,065 | 1.03 | 1.41 | |||||||||||||||||||
Venture Capital
|
|||||||||||||||||||||||||
Venture V
|
2001
|
10,000,000 | 900,000 | 7,248,497 | 1,038,166 | 0.30 | 1.10 | ||||||||||||||||||
Total - Venture Capital
|
10,000,000 | 900,000 | 7,248,497 | 1,038,166 | 0.30 | 1.10 | |||||||||||||||||||
TOTAL - ALTERNATIVE INVESTMENTS
|
$ | 254,098,351 | 55,344,156 | 124,548,428 | 20,677,546 | 0.72 | 1.25 | ||||||||||||||||||
(1) Distributed to paid in ratio
|
|||||||||||||||||||||||||
(2) Total value to paid in ratio
|
|||||||||||||||||||||||||
Note: Some amounts may not foot due to rounding
|
Repayment Source Composition by State
|
||||||||||
Market Values
|
||||||||||
State
|
Revenue
|
% of
State
|
General
Obligation
(GO)-Local
|
% of
State
|
General
Obligation
(GO)-State
|
% of
State
|
TX -
Permanent
School
Fund (PSF)
|
% of
State
|
Total
|
% of
Total
|
TX
|
55,930
|
55%
|
44,289
|
44%
|
1,101
|
1%
|
-
|
0%
|
101,320
|
8%
|
TX-PSF
|
-
|
0%
|
-
|
0%
|
-
|
0%
|
41,190
|
100%
|
41,190
|
3%
|
WA
|
38,133
|
45%
|
46,238
|
55%
|
-
|
0%
|
-
|
0%
|
84,371
|
7%
|
AZ
|
60,795
|
90%
|
7,083
|
10%
|
-
|
0%
|
-
|
0%
|
67,878
|
5%
|
NY
|
66,291
|
100%
|
-
|
0%
|
-
|
0%
|
-
|
0%
|
66,291
|
5%
|
FL
|
53,587
|
100%
|
-
|
0%
|
-
|
0%
|
-
|
0%
|
53,587
|
4%
|
OH
|
30,408
|
59%
|
13,611
|
27%
|
7,255
|
14%
|
-
|
0%
|
51,274
|
4%
|
IL
|
28,386
|
58%
|
20,356
|
42%
|
-
|
0%
|
-
|
0%
|
48,742
|
4%
|
CO
|
17,241
|
36%
|
29,319
|
60%
|
1,812
|
4%
|
-
|
0%
|
48,372
|
4%
|
MN
|
6,390
|
13%
|
5,038
|
11%
|
36,926
|
76%
|
-
|
0%
|
48,354
|
4%
|
NC
|
24,169
|
58%
|
14,032
|
33%
|
3,775
|
9%
|
-
|
0%
|
41,976
|
3%
|
Pre-refunded
|
41,319
|
50%
|
25,517
|
31%
|
12,405
|
15%
|
3,658
|
4%
|
82,899
|
7%
|
Other
|
360,074
|
66%
|
115,455
|
21%
|
68,261
|
13%
|
-
|
0%
|
543,790
|
42%
|
Grand Total
|
782,723
|
61%
|
320,938
|
25%
|
131,535
|
10%
|
44,848
|
4%
|
1,280,044
|
100%
|
Selective Insurance Group, Inc. and Consolidated Subsidiaries
|
||||||||||||
Credit Quality of Available-for-Sale Fixed Maturity Securities
|
||||||||||||
December 31, 2011
|
||||||||||||
($ in millions)
|
||||||||||||
(unaudited)
|
||||||||||||
Fair
Value
|
Unrealized
Gain (Loss)
|
Average
Credit
Quality
|
||||||||||
AFS Fixed Maturity Portfolio:
|
||||||||||||
U.S. government obligations1
|
$ | 353.8 | 20.3 |
AA+
|
||||||||
Foreign government obligations
|
34.2 | 0.5 |
AA
|
|||||||||
State and municipal obligations
|
622.7 | 44.4 |
AA
|
|||||||||
Corporate securities
|
1,213.3 | 44.9 | A | |||||||||
Mortgage-backed securities ("MBS")
|
594.5 | 19.2 |
AA
|
|||||||||
Asset-backed securities ("ABS")
|
78.9 | 1.2 |
AAA
|
|||||||||
Total AFS fixed maturity portfolio
|
$ | 2,897.4 | 130.5 |
AA-
|
||||||||
State and Municipal Obligations:
|
||||||||||||
Government obligations
|
$ | 282.6 | 22.1 |
AA+
|
||||||||
Special revenue obligations
|
340.1 | 22.3 |
AA
|
|||||||||
Total state and municipal obligations
|
$ | 622.7 | 44.4 |
AA
|
||||||||
Corporate Securities:
|
||||||||||||
Financial
|
$ | 379.0 | 3.7 | A | ||||||||
Industrials
|
86.9 | 6.1 | A- | |||||||||
Utilities
|
75.6 | 3.5 |
BBB+
|
|||||||||
Consumer discretion
|
104.3 | 4.9 |
BBB+
|
|||||||||
Consumer staples
|
137.3 | 6.9 | A | |||||||||
Healthcare
|
145.0 | 8.3 |
AA-
|
|||||||||
Materials
|
66.5 | 2.5 | A- | |||||||||
Energy
|
77.9 | 3.3 | A- | |||||||||
Information technology
|
74.3 | 2.6 | A | |||||||||
Telecommunications services
|
50.9 | 1.5 |
BBB+
|
|||||||||
Other
|
15.6 | 1.6 |
AA+
|
|||||||||
Total corporate securities
|
$ | 1,213.3 | 44.9 | A | ||||||||
MBS:
|
||||||||||||
Government Guaranteed Agency commercial mortgage-backed securities ("CMBS")
|
$ | 72.9 | 5.0 |
AA+
|
||||||||
Non-agency CMBS
|
39.7 | (0.3 | ) | A- | ||||||||
Government Guaranteed Agency residential mortgage-backed securities ("RMBS")
|
98.2 | 4.7 |
AA+
|
|||||||||
Other Agency RMBS
|
339.1 | 10.8 |
AA+
|
|||||||||
Non-agency RMBS
|
37.1 | (1.0 | ) |
BBB
|
||||||||
Alternative-A ("Alt-A") RMBS
|
7.5 | - |
AA+
|
|||||||||
Total MBS
|
$ | 594.5 | 19.2 |
AA
|
||||||||
ABS:
|
||||||||||||
ABS
|
$ | 77.5 | 1.3 |
AAA
|
||||||||
Alt-A ABS3
|
0.7 | - | D | |||||||||
Sub-prime ABS2,3
|
0.7 | (0.1 | ) | D | ||||||||
Total ABS
|
$ | 78.9 | 1.2 |
AAA
|
||||||||
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 Alt-A ABS and sub-prime ABS each consist of one security that is currently expected by rating agencies to default on its obligations.
|
Selective Insurance Group, Inc. and Consolidated Subsidiaries
|
||||||||||||||||||||||||
Credit Quality of Held-to-Maturity Securities
|
||||||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||||||
($ 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:
|
||||||||||||||||||||||||
Foreign government obligations
|
$ | 5.5 | 5.6 | (0.1 | ) | 0.3 | 0.2 |
AA+
|
||||||||||||||||
State and municipal obligations
|
657.4 | 626.0 | 31.4 | 11.9 | 43.3 |
AA
|
||||||||||||||||||
Corporate securities
|
69.5 | 62.6 | 6.9 | (2.2 | ) | 4.7 | A | |||||||||||||||||
Mortgage-backed securities
|
17.7 | 11.5 | 6.2 | (3.0 | ) | 3.2 |
AA-
|
|||||||||||||||||
Asset-backed securities
|
7.9 | 6.6 | 1.3 | (1.4 | ) | (0.1 | ) | A | ||||||||||||||||
Total HTM fixed maturity portfolio
|
$ | 758.0 | 712.3 | 45.7 | 5.6 | 51.3 |
AA
|
|||||||||||||||||
State and Municipal Obligations:
|
||||||||||||||||||||||||
Government obligations
|
$ | 214.8 | 205.3 | 9.5 | 6.3 | 15.8 |
AA
|
|||||||||||||||||
Special revenue obligations
|
442.6 | 420.7 | 21.9 | 5.6 | 27.5 |
AA
|
||||||||||||||||||
Total state and municipal obligations
|
$ | 657.4 | 626.0 | 31.4 | 11.9 | 43.3 |
AA
|
|||||||||||||||||
Corporate Securities:
|
||||||||||||||||||||||||
Financial
|
$ | 20.7 | 18.5 | 2.2 | (1.5 | ) | 0.7 | A- | ||||||||||||||||
Industrials
|
20.3 | 17.8 | 2.5 | (0.7 | ) | 1.8 | A | |||||||||||||||||
Utilities
|
15.4 | 13.7 | 1.7 | (0.1 | ) | 1.6 | A+ | |||||||||||||||||
Consumer discretion
|
5.9 | 5.6 | 0.3 | 0.1 | 0.4 |
AA-
|
||||||||||||||||||
Consumer staples
|
5.1 | 5.0 | 0.1 | - | 0.1 | A | ||||||||||||||||||
Materials
|
2.1 | 2.0 | 0.1 | - | 0.1 |
BBB
|
||||||||||||||||||
Total corporate securities
|
$ | 69.5 | 62.6 | 6.9 | (2.2 | ) | 4.7 | A | ||||||||||||||||
MBS:
|
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Non-agency CMBS
|
17.7 | 11.5 | 6.2 | (3.0 | ) | 3.2 |
AA-
|
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Total MBS
|
$ | 17.7 | 11.5 | 6.2 | (3.0 | ) | 3.2 |
AA-
|
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ABS:
|
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ABS
|
$ | 5.6 | 5.0 | 0.6 | (0.5 | ) | 0.1 |
BBB+
|
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Alt-A ABS
|
2.3 | 1.6 | 0.7 | (0.9 | ) | (0.2 | ) |
AAA
|
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Total ABS
|
$ | 7.9 | 6.6 | 1.3 | (1.4 | ) | (0.1 | ) | A |