Date of Report (Date of earliest event reported)
|
July 25, 2012
|
||
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.)
|
Item 2.02.
|
Results of Operations and Financial Condition.
|
Item 7.01.
|
Regulation FD Disclosure.
|
Item 9.01.
|
Financial Statements and Exhibits.
|
99.1
|
Press Release of Selective Insurance Group, Inc. dated July 25, 2012
|
99.2
|
Supplemental Investor Package, Second Quarter 2012
|
SELECTIVE INSURANCE GROUP, INC.
|
|||
Date: July 25, 2012
|
By: | /s/ Michael H. Lanza | |
Michael H. Lanza
Executive Vice President and General Counsel
|
|||
Exhibit No.
|
Description
|
99.1
|
Press Release of Selective Insurance Group, Inc. dated July 25, 2012
|
99.2
|
Supplemental Investor Package, Second Quarter 2012
|
Selective Insurance Group, Inc.
|
|
40 Wantage Avenue
Branchville, New Jersey 07890
www.selective.com
|
-
|
Net income was $0.3 million, or $0.01 per diluted share, compared to $1.5 million, or $0.03 per diluted share;
|
-
|
Operating income1 was $0.2 million, or $0.01 per diluted share, compared to $0.1 million, or $0.00 per diluted share;
|
-
|
Combined ratio: GAAP: 106.9% compared to 109.6%; Statutory: 106.2% compared to 109.5%;
|
-
|
Total net premiums written (NPW) were up 14% to $425.6 million:
|
o
|
Commercial Lines NPW were up 15% to $348.8 million, including $28.3 million from excess and surplus (E&S) lines;
|
o
|
Personal Lines NPW were up 8% to $76.8 million;
|
-
|
Catastrophe losses were $30.2 million, pre-tax, compared to $38.1 million;
|
-
|
Favorable prior year statutory reserve development on our casualty lines totaled $5 million, pre-tax, in both periods;
|
-
|
Net investment income, after tax, decreased 13% to $25.7 million; and
|
-
|
Total revenue was $428.9 million compared to $399.6 million.
|
-
|
Net income was $18.4 million, or $0.33 per diluted share, compared to $22.0 million, or $0.40 per diluted share;
|
-
|
Operating income1 was $15.4 million, or $0.28 per diluted share, compared to $16.8 million, or $0.31 per diluted share;
|
-
|
Combined ratio: GAAP: 103.7% compared to 106.6%; Statutory: 102.7% compared to 106.1%;
|
-
|
Total NPW were up 15% to $845.7 million:
|
o
|
Commercial Lines NPW were up 17% to $703.4 million, including $54.1 million from E&S lines;
|
o
|
Personal Lines NPW were up 7% to $142.4 million;
|
-
|
Catastrophe losses were $37.1 million, pre-tax, versus $44.9 million;
|
-
|
Favorable prior year statutory reserve development on our casualty lines totaled $8 million pre-tax versus $9 million;
|
-
|
Net investment income, after tax, decreased 18% to $50.5 million; and
|
-
|
Total revenue was $848.3 million compared to $803.0 million.
|
·
|
difficult conditions in global capital markets and the economy;
|
·
|
deterioration in the public debt and equity markets and private investment marketplace that could lead to investment losses and fluctuations in interest rates;
|
·
|
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.
|
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 June 30:
|
2012
|
20111 | ||||||
Net premiums written
|
$ | 425,563 | 374,503 | |||||
Net premiums earned
|
392,212 | 355,580 | ||||||
Net investment income earned
|
34,006 | 39,345 | ||||||
Net realized gains
|
178 | 2,146 | ||||||
Total revenues
|
428,907 | 399,570 | ||||||
Operating income
|
172 | 72 | ||||||
Capital gains, net of tax
|
116 | 1,395 | ||||||
Net income
|
$ | 288 | 1,467 | |||||
Statutory combined ratio
|
106.2 | % | 109.5 | % | ||||
Statutory combined ratio, excluding catastrophe losses
|
98.5 | % | 98.8 | % | ||||
GAAP combined ratio
|
106.9 | % | 109.6 | % | ||||
Operating income per diluted share
|
$ | 0.01 | 0.00 | |||||
Net income per diluted share
|
0.01 | 0.03 | ||||||
Weighted average diluted shares
|
55,681 | 55,135 | ||||||
Book value per share
|
$ | 19.75 | 19.31 | |||||
6 months ended June 30:
|
2012 | 20111 | ||||||
Net premiums written
|
$ | 845,735 | 736,338 | |||||
Net premiums earned
|
771,041 | 706,923 | ||||||
Net investment income earned
|
66,634 | 82,818 | ||||||
Net realized gains
|
4,536 | 7,906 | ||||||
Total revenues
|
848,255 | 803,026 | ||||||
Operating income
|
15,432 | 16,828 | ||||||
Capital gains, net of tax
|
2,949 | 5,139 | ||||||
Net income
|
$ | 18,381 | 21,967 | |||||
Statutory combined ratio
|
102.7 | % | 106.1 | % | ||||
Statutory combined ratio, excluding catastrophe losses
|
97.9 | % | 99.7 | % | ||||
GAAP combined ratio
|
103.7 | % | 106.6 | % | ||||
Operating income per diluted share
|
$ | 0.28 | 0.31 | |||||
Net income per diluted share
|
0.33 | 0.40 | ||||||
Weighted average diluted shares
|
55,642 | 55,092 | ||||||
Book value per share
|
$ | 19.75 | 19.31 |
1 |
Prior year data has been restated to reflect the adoption of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.”
|
Supplemental Investor Package
___________________________________________________
Second Quarter 2012
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,
|
||||||||||||||||||||||||||||||||||
2012
|
2011
|
2011
|
||||||||||||||||||||||||||||||||||
Unrecognized/
|
Unrecognized/
|
Unrecognized/
|
||||||||||||||||||||||||||||||||||
Balance
|
Market
|
Unrealized
|
Balance
|
Market
|
Unrealized
|
Balance
|
Market
|
Unrealized
|
||||||||||||||||||||||||||||
Sheet
|
Value
|
Gain/(Loss)
|
Sheet
|
Value
|
Gain/(Loss)
|
Sheet
|
Value
|
Gain/(Loss)
|
||||||||||||||||||||||||||||
Invested Assets:
|
||||||||||||||||||||||||||||||||||||
Corporate bonds1
|
$ | 2,127,036 | 776,480 | 26,312 | $ | 1,833,490 | 1,852,486 | 52,861 | $ | 1,967,498 | 1,981,909 | 73,085 | ||||||||||||||||||||||||
Gov't\ Municipal bonds
|
1,639,471 | 3,034,507 | 172,001 | 1,762,325 | 1,793,729 | 91,461 | 1,642,223 | 1,673,508 | 108,694 | |||||||||||||||||||||||||||
Total bonds
|
3,766,507 | 3,810,987 | 198,313 | 3,595,815 | 3,646,215 | 144,322 | 3,609,721 | 3,655,417 | 181,779 | |||||||||||||||||||||||||||
Equities
|
148,117 | 148,117 | 17,860 | 136,577 | 136,577 | 8,390 | 157,355 | 157,355 | 13,529 | |||||||||||||||||||||||||||
Short-term investments
|
135,823 | 135,823 | - | 142,809 | 142,809 | - | 217,044 | 217,044 | - | |||||||||||||||||||||||||||
Other investments
|
125,540 | 125,540 | (4,517 | ) | 132,137 | 132,137 | (4,255 | ) | 128,301 | 128,301 | (4,520 | ) | ||||||||||||||||||||||||
Total invested assets
|
4,175,987 | 4,220,467 | 211,656 | 4,007,338 | 4,057,738 | 148,457 | 4,112,421 | 4,158,117 | 190,788 | |||||||||||||||||||||||||||
Invested assets per $ of stockholders' equity2
|
3.85 | 3.83 | 3.89 | |||||||||||||||||||||||||||||||||
Total assets2
|
5,687,408 | 5,314,673 | 5,685,469 | |||||||||||||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||||||
Reserve for losses and loss expenses
|
3,044,363 | 2,898,592 | 3,144,924 | |||||||||||||||||||||||||||||||||
Unearned premium reserve
|
970,806 | 858,627 | 906,991 | |||||||||||||||||||||||||||||||||
Total liabilities
|
4,602,362 | 4,268,614 | 4,627,141 | |||||||||||||||||||||||||||||||||
Stockholders' equity2
|
1,085,046 | 1,046,059 | 1,058,328 | |||||||||||||||||||||||||||||||||
Total debt to capitalization ratio2
|
22.1 | % | 20.1 | % | 22.5 | % | ||||||||||||||||||||||||||||||
Adjusted total debt to capitalization ratio 2, 3
|
15.6 | % | 13.2 | % | 15.9 | % | ||||||||||||||||||||||||||||||
Book value per share2
|
19.75 | 19.31 | 19.45 | |||||||||||||||||||||||||||||||||
Book value per share excluding
|
||||||||||||||||||||||||||||||||||||
unrealized gain or loss on bond portfolio2
|
17.93 | 18.19 | 17.82 | |||||||||||||||||||||||||||||||||
NPW per insurance segment employee (excludes E&S)
|
807 | 760 | 791 | |||||||||||||||||||||||||||||||||
Statutory premiums to surplus ratio
|
1.5 | x | 1.3 | x | 1.4 | x | ||||||||||||||||||||||||||||||
Statutory surplus
|
1,067,881 | 1,070,297 | 1,062,707 |
1 Includes mortgage-backed and asset-backed securities.
|
2 Prior year results have been restated to reflect the adoption of ASU 2010-26, "Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts."
|
3 The adjusted debt to capitalization ratio reflects an estimated equity treatment of 90% applied to our $100 million Junior Subordinated Notes issued September 25, 2006 as applied by A.M. Best.
|
Selective Insurance Group, Inc.
|
|||||||||||||||||||||||||||||||||
Selected Income Statement Data (unaudited)
|
|||||||||||||||||||||||||||||||||
June 2012
|
THREE MONTHS ENDED June 30,
|
SIX MONTHS ENDED June 30,
|
|||||||||||||||||||||||||||||||
($ in thousands, except per share amounts)
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||||||||||||||||||
Per diluted share
|
Per diluted share
|
Per diluted share
|
Per diluted share
|
||||||||||||||||||||||||||||||
Consolidated
|
|||||||||||||||||||||||||||||||||
Revenue
|
$ | 428,907 | $ | 399,570 | $ | 848,255 | $ | 803,026 | |||||||||||||||||||||||||
Operating income1
|
172 | 0.01 | 72 | - | 15,432 | 0.28 | 16,828 | 0.31 | |||||||||||||||||||||||||
Net realized gains, after tax
|
116 | - | 1,395 | 0.03 | 2,949 | 0.05 | 5,139 | 0.09 | |||||||||||||||||||||||||
Net income1
|
288 | 0.01 | 1,467 | 0.03 | 18,381 | 0.33 | 21,967 | 0.40 | |||||||||||||||||||||||||
Operating return on equity1
|
0.1 | % | 0.0 | % | 2.9 | % | 3.3 | % | |||||||||||||||||||||||||
Insurance Operations
|
|||||||||||||||||||||||||||||||||
Gross premiums written
|
512,267 | 449,132 | 1,010,222 | 878,127 | |||||||||||||||||||||||||||||
Net premiums written
|
425,563 | 374,503 | 845,735 | 736,338 | |||||||||||||||||||||||||||||
Net premiums earned
|
392,212 | 355,580 | 771,041 | 706,923 | |||||||||||||||||||||||||||||
Underwriting loss1
|
- before tax
|
(26,962 | ) | (34,002 | ) | (28,325 | ) | (46,700 | ) | ||||||||||||||||||||||||
- after tax
|
(17,525 | ) | (0.31 | ) | (22,101 | ) | (0.40 | ) | (18,411 | ) | (0.33 | ) | (30,355 | ) | (0.55 | ) | |||||||||||||||||
GAAP combined ratio1
|
106.9 | % | 109.6 | % | 103.7 | % | 106.6 | % | |||||||||||||||||||||||||
Commercial lines
|
|||||||||||||||||||||||||||||||||
Net premiums earned
|
322,256 | 290,295 | 632,476 | 577,058 | |||||||||||||||||||||||||||||
GAAP combined ratio1
|
106.1 | % | 108.1 | % | 103.8 | % | 105.1 | % | |||||||||||||||||||||||||
Personal lines
|
|||||||||||||||||||||||||||||||||
Net premiums earned
|
69,956 | 65,285 | 138,565 | 129,865 | |||||||||||||||||||||||||||||
GAAP combined ratio1
|
110.6 | % | 116.2 | % | 103.1 | % | 113.1 | % | |||||||||||||||||||||||||
Investments
|
|||||||||||||||||||||||||||||||||
Net investment income
|
- before tax
|
34,006 | 39,345 | 66,634 | 82,818 | ||||||||||||||||||||||||||||
- after tax
|
25,710 | 0.46 | 29,420 | 0.53 | 50,485 | 0.91 | 61,545 | 1.12 | |||||||||||||||||||||||||
Effective tax rate
|
24.4 | % | 25.2 | % | 24.2 | % | 25.7 | % | |||||||||||||||||||||||||
Annual after-tax yield on investment portfolio
|
2.4 | % | 3.1 | % | |||||||||||||||||||||||||||||
Annual after-tax, after-interest expense yield
|
2.1 | % | 2.8 | % | |||||||||||||||||||||||||||||
Invested assets per $ of stockholders' equity
|
3.85 | 3.83 | |||||||||||||||||||||||||||||||
Other expenses (net of other income)
|
|||||||||||||||||||||||||||||||||
Interest expense
|
- before tax
|
(4,723 | ) | (4,559 | ) | (9,423 | ) | (9,116 | ) | ||||||||||||||||||||||||
- after tax
|
(3,070 | ) | (0.06 | ) | (2,963 | ) | (0.05 | ) | (6,125 | ) | (0.11 | ) | (5,925 | ) | (0.11 | ) | |||||||||||||||||
Other Expense - after tax
|
$ | (4,944 | ) | (0.08 | ) | $ | (4,284 | ) | (0.08 | ) | $ | (10,517 | ) | (0.19 | ) | $ | (8,437 | ) | (0.15 | ) | |||||||||||||
Diluted weighted avg shares outstanding
|
55,681 | 55,135 | 55,642 | 55,092 |
1 Prior year results have been restated to reflect the adoption of ASU 2010-26, "Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts."
|
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
|
||||||||||||||||||||
2012
|
2011
|
(Decrease)
|
2012
|
2011
|
(Decrease)
|
||||||||||||||||||||
Investment Income:
|
|||||||||||||||||||||||||
Interest:
|
|||||||||||||||||||||||||
Fixed Maturity Securities
|
$ | 31,759 | 32,752 | (3.0 | ) | $ | 63,109 | 65,875 | (4.2 | ) | |||||||||||||||
Short-term
|
29 | 33 | (12.1 | ) | 67 | 95 | (29.5 | ) | |||||||||||||||||
Other Investments:
|
|||||||||||||||||||||||||
Alternative Investments
|
3,166 | 7,900 | (59.9 | ) | 5,461 | 19,541 | (72.1 | ) | |||||||||||||||||
Other
|
(203 | ) | - | N/M | (498 | ) | - | N/M | |||||||||||||||||
Dividends
|
1,280 | 785 | 63.1 | 2,517 | 1,102 | 128.4 | |||||||||||||||||||
Miscellaneous
|
25 | 22 | 13.6 | 64 | 47 | 36.2 | |||||||||||||||||||
36,056 | 41,492 | (13.1 | ) | 70,720 | 86,660 | (18.4 | ) | ||||||||||||||||||
Investment Expense
|
2,050 | 2,147 | (4.5 | ) | 4,086 | 3,842 | 6.4 | ||||||||||||||||||
Net Investment Income Before Tax
|
34,006 | 39,345 | (13.6 | ) | 66,634 | 82,818 | (19.5 | ) | |||||||||||||||||
Tax
|
8,296 | 9,925 | (16.4 | ) | 16,149 | 21,273 | (24.1 | ) | |||||||||||||||||
Net Investment Income After Tax
|
$ | 25,710 | 29,420 | (12.6 | ) | $ | 50,485 | 61,545 | (18.0 | ) | |||||||||||||||
Net Investment Income per Share
|
$ | 0.46 | 0.53 | (13.2 | ) | $ | 0.91 | 1.12 | (18.8 | ) | |||||||||||||||
Effective Tax Rate
|
24.4 | % | 25.2 | % | 24.2 | % | 25.7 | % | |||||||||||||||||
Average Yields :
|
|||||||||||||||||||||||||
Fixed Maturity Securities:
|
|||||||||||||||||||||||||
Pre Tax
|
3.42 | % | 3.68 | % | |||||||||||||||||||||
After Tax
|
2.59 | % | 2.81 | % | |||||||||||||||||||||
Portfolio:
|
|||||||||||||||||||||||||
Pre Tax
|
3.22 | % | 4.18 | % | |||||||||||||||||||||
After Tax
|
2.44 | % | 3.10 | % | |||||||||||||||||||||
For the three months ended
|
Year to date:
|
||||||||||||||||||||||||
June
|
June
|
June
|
June
|
||||||||||||||||||||||
Net Realized Gains(Losses)
|
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||
Fixed Maturities
|
177 | 1,678 | 361 | 1,235 | |||||||||||||||||||||
Equity Securities
|
- | 468 | 4,176 | 6,671 | |||||||||||||||||||||
Short Term
|
- | - | (2 | ) | - | ||||||||||||||||||||
Other Investments
|
1 | - | 1 | - | |||||||||||||||||||||
Total
|
178 | 2,146 | 4,536 | 7,906 | |||||||||||||||||||||
Net of Tax
|
116 | 1,395 | 2,949 | 5,139 |
Selective Insurance Group, Inc.
|
||||||||||||||||||||||||||||||||||||||||||||
2012 Statutory Results by Line of Business
|
||||||||||||||||||||||||||||||||||||||||||||
2nd Qtr 2012 (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
|
2012
|
2011
|
Gain/(Loss)
|
||||||||||||||||||||||||||||||||||
Personal Lines:
|
||||||||||||||||||||||||||||||||||||||||||||
Homeowners
|
$ | 32,964 | 14.8 | % | $ | 28,808 | 15.0 | % | 80.9 | % | 7.6 | % | 31.2 | % | 0.0 | % | 119.7 | % | 127.0 | % | $ | (6,981 | ) | |||||||||||||||||||||
Auto
|
40,166 | 2.4 | % | 37,897 | 1.9 | % | 68.7 | % | 11.8 | % | 30.0 | % | 0.0 | % | 110.5 | % | 114.8 | % | (4,639 | ) | ||||||||||||||||||||||||
Other (including flood)
|
3,675 | 12.6 | % | 3,251 | 7.1 | % | 72.7 | % | (11.8 | )% | (56.5 | )% | 0.0 | % | 4.4 | % | 23.2 | % | 3,349 | |||||||||||||||||||||||||
Total
|
$ | 76,805 | 7.9 | % | $ | 69,956 | 7.2 | % | 74.0 | % | 8.9 | % | 26.3 | % | 0.0 | % | 109.2 | % | 115.3 | % | $ | (8,271 | ) | |||||||||||||||||||||
Commercial Lines:
|
||||||||||||||||||||||||||||||||||||||||||||
Commerical property
|
$ | 53,194 | 8.4 | % | $ | 50,377 | 5.2 | % | 72.9 | % | 5.8 | % | 37.5 | % | 0.1 | % | 116.3 | % | 130.9 | % | $ | (9,291 | ) | |||||||||||||||||||||
Workers compensation
|
66,764 | 0.1 | % | 66,661 | 4.4 | % | 68.4 | % | 16.4 | % | 26.4 | % | 1.5 | % | 112.7 | % | 116.3 | % | (8,519 | ) | ||||||||||||||||||||||||
General liability
|
99,222 | 9.7 | % | 92,632 | 8.1 | % | 51.0 | % | 18.0 | % | 33.3 | % | 0.0 | % | 102.3 | % | 103.0 | % | (4,361 | ) | ||||||||||||||||||||||||
Auto
|
74,912 | 3.0 | % | 71,540 | 3.4 | % | 55.7 | % | 8.3 | % | 31.8 | % | 0.2 | % | 96.0 | % | 92.5 | % | 1,751 | |||||||||||||||||||||||||
Business owners policies
|
17,956 | 7.7 | % | 17,266 | 5.2 | % | 48.8 | % | 14.3 | % | 40.2 | % | 0.0 | % | 103.3 | % | 120.3 | % | (841 | ) | ||||||||||||||||||||||||
Bonds
|
5,531 | 8.1 | % | 4,700 | (0.5 | )% | 17.5 | % | 9.7 | % | 57.1 | % | 0.0 | % | 84.3 | % | 88.9 | % | 265 | |||||||||||||||||||||||||
Other
|
31,179 | N/M | 19,080 | N/M | 45.2 | % | 17.6 | % | 41.6 | % | 0.0 | % | 104.4 | % | 44.1 | % | (5,861 | ) | ||||||||||||||||||||||||||
Total
|
$ | 348,758 | 15.0 | % | $ | 322,256 | 11.0 | % | 58.1 | % | 13.2 | % | 33.9 | % | 0.4 | % | 105.6 | % | 108.2 | % | $ | (26,858 | ) | |||||||||||||||||||||
Grand Total
|
$ | 425,563 | 13.6 | % | $ | 392,212 | 10.3 | % | 60.9 | % | 12.5 | % | 32.5 | % | 0.3 | % | 106.2 | % | 109.5 | % | $ | (35,129 | ) | |||||||||||||||||||||
Note: Some amounts may not foot due to rounding.
|
||||||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||||
Losses Paid
|
$ | 232,122 | $ | 208,085 | ||||||||||||||||||||||||||||||||||||||||
LAE Paid
|
41,031 | 39,894 | ||||||||||||||||||||||||||||||||||||||||||
Total Paid
|
$ | 273,153 | $ | 247,979 |
Selective Insurance Group, Inc.
|
||||||||||||||||||||||||||||||||||||||||||||
2012 Statutory Results by Line of Business
|
||||||||||||||||||||||||||||||||||||||||||||
June 2012 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
|
2012
|
2011
|
Gain/(Loss)
|
||||||||||||||||||||||||||||||||||
Personal Lines:
|
||||||||||||||||||||||||||||||||||||||||||||
Homeowners
|
$ | 58,171 | 14.3 | % | $ | 56,766 | 14.4 | % | 63.4 | % | 9.8 | % | 32.6 | % | 0.0 | % | 105.8 | % | 119.3 | % | $ | (3,769 | ) | |||||||||||||||||||||
Auto
|
77,441 | 2.4 | % | 75,353 | 1.6 | % | 68.1 | % | 12.0 | % | 30.0 | % | 0.0 | % | 110.1 | % | 116.8 | % | (8,264 | ) | ||||||||||||||||||||||||
Other (including flood)
|
6,738 | 9.2 | % | 6,446 | 5.7 | % | 61.5 | % | (3.9 | )% | (51.8 | )% | 0.0 | % | 5.8 | % | 20.9 | % | 6,224 | |||||||||||||||||||||||||
Total
|
$ | 142,351 | 7.3 | % | $ | 138,565 | 6.7 | % | 65.9 | % | 10.3 | % | 27.2 | % | 0.0 | % | 103.4 | % | 113.3 | % | $ | (5,809 | ) | |||||||||||||||||||||
Commercial Lines:
|
||||||||||||||||||||||||||||||||||||||||||||
Commerical property
|
$ | 106,222 | 9.1 | % | $ | 99,748 | 3.8 | % | 56.8 | % | 6.0 | % | 37.5 | % | 0.0 | % | 100.3 | % | 108.8 | % | $ | (2,711 | ) | |||||||||||||||||||||
Workers compensation
|
139,952 | 4.1 | % | 132,472 | 4.8 | % | 68.3 | % | 16.3 | % | 25.6 | % | 1.6 | % | 111.8 | % | 119.5 | % | (17,510 | ) | ||||||||||||||||||||||||
General liability
|
199,850 | 11.5 | % | 182,775 | 8.6 | % | 50.9 | % | 17.7 | % | 32.7 | % | 0.0 | % | 101.3 | % | 101.7 | % | (7,891 | ) | ||||||||||||||||||||||||
Auto
|
150,750 | 4.3 | % | 142,024 | 2.3 | % | 56.8 | % | 8.3 | % | 31.2 | % | 0.0 | % | 96.3 | % | 92.4 | % | 2,474 | |||||||||||||||||||||||||
Business owners policies
|
36,187 | 9.2 | % | 34,123 | 3.7 | % | 46.3 | % | 14.2 | % | 40.9 | % | 0.0 | % | 101.4 | % | 116.1 | % | (1,307 | ) | ||||||||||||||||||||||||
Bonds
|
10,175 | 5.6 | % | 9,363 | (1.4 | )% | 17.5 | % | 8.7 | % | 59.7 | % | 0.0 | % | 85.9 | % | 81.0 | % | 833 | |||||||||||||||||||||||||
Other
|
60,248 | N/M | 31,971 | N/M | 43.4 | % | 17.5 | % | 42.1 | % | 0.0 | % | 103.0 | % | 45.6 | % | (12,879 | ) | ||||||||||||||||||||||||||
Total
|
$ | 703,384 | 16.5 | % | $ | 632,476 | 9.6 | % | 55.7 | % | 13.1 | % | 33.3 | % | 0.3 | % | 102.4 | % | 104.4 | % | $ | (38,991 | ) | |||||||||||||||||||||
Grand Total
|
$ | 845,735 | 14.9 | % | $ | 771,041 | 9.1 | % | 57.5 | % | 12.6 | % | 32.3 | % | 0.3 | % | 102.7 | % | 106.1 | % | $ | (44,800 | ) | |||||||||||||||||||||
Note: Some amounts may not foot due to rounding.
|
||||||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||||
Losses Paid
|
$ | 439,015 | $ | 396,926 | ||||||||||||||||||||||||||||||||||||||||
LAE Paid
|
84,567 | 77,908 | ||||||||||||||||||||||||||||||||||||||||||
Total Paid
|
$ | 523,582 | $ | 474,834 |
SELECTIVE INSURANCE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
|||||||
($ in thousands, except share amounts)
|
June 30,
2012
|
December 31,
2011
|
||||||
ASSETS
|
||||||||
Investments:
|
||||||||
Fixed maturity securities, held-to-maturity – at carrying value (fair value: $687,981 – 2012; $758,043 – 2011)
|
$
|
643,501
|
712,348
|
|||||
Fixed maturity securities, available-for-sale – at fair value (amortized cost: $2,974,819 – 2012; $2,766,856 – 2011)
|
3,123,006
|
2,897,373
|
||||||
Equity securities, available-for-sale – at fair value (cost: $130,257 – 2012; $143,826 – 2011)
|
148,117
|
157,355
|
||||||
Short-term investments (at cost which approximates fair value)
|
135,823
|
217,044
|
||||||
Other investments
|
125,540
|
128,301
|
||||||
Total investments
|
4,175,987
|
4,112,421
|
||||||
Cash
|
141
|
762
|
||||||
Interest and dividends due or accrued
|
36,110
|
35,842
|
||||||
Premiums receivable, net of allowance for uncollectible accounts of: $3,470 – 2012; $3,768 – 2011
|
523,588
|
466,294
|
||||||
Reinsurance recoverables, net
|
441,492
|
561,855
|
||||||
Prepaid reinsurance premiums
|
136,808
|
147,686
|
||||||
Current federal income tax
|
1,230
|
731
|
||||||
Deferred federal income tax
|
113,925
|
120,094
|
||||||
Property and equipment – at cost, net of accumulated depreciation and amortization of: | ||||||||
$164,835 – 2012; $160,294 – 2011
|
45,689
|
43,947
|
||||||
Deferred policy acquisition costs
|
152,399
|
135,761
|
||||||
Goodwill
|
7,849
|
7,849
|
||||||
Other assets
|
52,190
|
52,227
|
||||||
Total assets
|
$
|
5,687,408
|
|
5,685,469
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities:
|
||||||||
Reserve for losses and loss expenses
|
$
|
3,044,363
|
3,144,924
|
|||||
Unearned premiums
|
970,806
|
906,991
|
||||||
Notes payable
|
307,373
|
307,360
|
||||||
Accrued salaries and benefits
|
113,598
|
119,297
|
||||||
Other liabilities
|
166,222
|
148,569
|
||||||
Total liabilities
|
$
|
4,602,362
|
|
4,627,141
|
||||
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: 97,960,814 – 2012; 97,246,711 – 2011
|
195,921
|
194,494
|
||||||
Additional paid-in capital
|
265,729
|
257,370
|
||||||
Retained earnings
|
1,120,143
|
1,116,319
|
||||||
Accumulated other comprehensive income
|
58,504
|
42,294
|
||||||
Treasury stock – at cost (shares: 43,009,821 – 2012; 42,836,201 – 2011)
|
(555,251
|
)
|
(552,149
|
)
|
||||
Total stockholders’ equity
|
1,085,046
|
1,058,328
|
||||||
Commitments and contingencies
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
5,687,408
|
|
5,685,469
|
SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
|
Quarter ended
June 30,
|
Six Months ended
June 30,
|
||||||||||||||
($ in thousands, except per share amounts)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Revenues:
|
||||||||||||||||
Net premiums earned
|
$
|
392,212
|
355,580
|
$
|
771,041
|
706,923
|
||||||||||
Net investment income earned
|
34,006
|
39,345
|
66,634
|
82,818
|
||||||||||||
Net realized gains (losses):
|
||||||||||||||||
Net realized investment gains
|
272
|
2,315
|
5,051
|
8,705
|
||||||||||||
Other-than-temporary impairments
|
(40
|
)
|
163
|
(297
|
)
|
(369
|
)
|
|||||||||
Other-than-temporary impairments on fixed maturity securities recognized in other comprehensive income
|
(54
|
)
|
(332
|
)
|
(218
|
)
|
(430
|
)
|
||||||||
Total net realized gains (losses)
|
178
|
2,146
|
4,536
|
7,906
|
||||||||||||
Other income
|
2,511
|
2,499
|
6,044
|
5,379
|
||||||||||||
Total revenues
|
428,907
|
399,570
|
848,255
|
803,026
|
||||||||||||
Expenses:
|
||||||||||||||||
Losses and loss expenses incurred
|
287,903
|
274,555
|
540,809
|
523,761
|
||||||||||||
Policy acquisition costs
|
131,219
|
115,163
|
259,177
|
230,207
|
||||||||||||
Interest expense
|
4,723
|
4,559
|
9,423
|
9,116
|
||||||||||||
Other expenses
|
5,754
|
5,392
|
16,347
|
13,883
|
||||||||||||
Total expenses
|
429,599
|
399,669
|
825,756
|
776,967
|
||||||||||||
(Loss) income before federal income tax
|
(692
|
)
|
(99
|
)
|
22,499
|
26,059
|
||||||||||
Federal income tax expense (benefit):
|
||||||||||||||||
Current
|
(500
|
)
|
3,111
|
6,678
|
7,387
|
|||||||||||
Deferred
|
(480
|
)
|
(4,677
|
)
|
(2,560
|
)
|
(3,295
|
)
|
||||||||
Total federal income tax expense (benefit)
|
(980
|
)
|
(1,566
|
)
|
4,118
|
4,092
|
||||||||||
Net income
|
$
|
288
|
1,467
|
$
|
18,381
|
|
21,967
|
|||||||||
Earnings per share:
|
||||||||||||||||
Basic net income
|
$
|
0.01
|
0.03
|
$
|
0.34
|
0.41
|
||||||||||
Diluted net income
|
$
|
0.01
|
0.03
|
$
|
0.33
|
0.40
|
||||||||||
Dividends to stockholders
|
$
|
0.13
|
0.13
|
$
|
0.26
|
0.26
|
SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
|
||||||||||||||||
Quarter ended
June 30,
|
Six Months ended
June 30,
|
|||||||||||||||
($ in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net income
|
$
|
288
|
1,467
|
18,381
|
21,967
|
|||||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Unrealized gains on investment securities:
|
||||||||||||||||
Unrealized holding gains arising during period
|
5,101
|
19,563
|
17,974
|
18,957
|
||||||||||||
Non-credit portion of other-than-temporary impairments recognized in other comprehensive income
|
75
|
272
|
313
|
389
|
||||||||||||
Amortization of net unrealized gains on held-to-maturity securities
|
(443
|
)
|
(817
|
)
|
(959
|
)
|
(1,581
|
)
|
||||||||
Less: reclassification adjustment for gains included in net income
|
(142
|
)
|
(1,393
|
)
|
(2,975
|
)
|
(5,130
|
)
|
||||||||
Total unrealized gains on investment securities
|
4,591
|
17,625
|
14,353
|
12,635
|
||||||||||||
Defined benefit pension plans:
|
||||||||||||||||
Amortization of net actuarial loss included in net income
|
905
|
718
|
1,808
|
1,436
|
||||||||||||
Amortization of prior service cost included in net income
|
24
|
25
|
49
|
49
|
||||||||||||
Total defined benefit pension plans
|
929
|
743
|
1,857
|
1,485
|
||||||||||||
Other comprehensive income
|
5,520
|
18,368
|
16,210
|
14,120
|
||||||||||||
Comprehensive income
|
$
|
5,808
|
|
19,835
|
$
|
34,591
|
|
36,087
|
SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
|
||||||||
Six Months ended June 30,
|
||||||||
($ in thousands)
|
2012
|
2011
|
||||||
Common stock:
|
||||||||
Beginning of year
|
$
|
194,494
|
192,725
|
|||||
Dividend reinvestment plan (shares: 46,603 – 2012; 47,488 – 2011)
|
93
|
95
|
||||||
Stock purchase and compensation plans (shares: 667,500 – 2012; 577,745 – 2011)
|
1,334
|
1,156
|
||||||
End of period
|
195,921
|
193,976
|
||||||
Additional paid-in capital:
|
||||||||
Beginning of year
|
257,370
|
244,613
|
||||||
Dividend reinvestment plan
|
712
|
716
|
||||||
Stock purchase and compensation plans
|
7,647
|
6,860
|
||||||
End of period
|
265,729
|
252,189
|
||||||
Retained earnings:
|
||||||||
Beginning of year, as previously reported
|
1,116,319
|
1,176,155
|
||||||
Add: Adjustment for the cumulative effect on prior years of applying retroactively the new method of accounting for deferred policy acquisition costs
|
—
|
(53,068
|
)
|
|||||
Balance at beginning of year, as adjusted
|
1,116,319
|
1,123,087
|
||||||
Net income
|
18,381
|
21,967
|
||||||
Dividends to stockholders ($0.26 per share – 2012 and 2011)
|
(14,557
|
)
|
(14,370
|
)
|
||||
End of period
|
1,120,143
|
1,130,684
|
||||||
Accumulated other comprehensive income:
|
||||||||
Beginning of year
|
42,294
|
7,024
|
||||||
Other comprehensive income
|
16,210
|
14,120
|
||||||
End of period
|
58,504
|
21,144
|
||||||
Treasury stock:
|
||||||||
Beginning of year
|
(552,149
|
)
|
(549,408
|
)
|
||||
Acquisition of treasury stock (shares: 173,620 – 2012; 136,904 – 2011)
|
(3,102
|
)
|
(2,526
|
)
|
||||
End of period
|
(555,251
|
)
|
(551,934
|
)
|
||||
Total stockholders’ equity
|
$
|
1,085,046
|
|
1,046,059
|
SELECTIVE INSURANCE GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW
|
Six Months ended
June 30,
|
|||||||
($ in thousands)
|
2012
|
2011
|
||||||
Operating Activities
|
||||||||
Net income
|
$ | 18,381 | 21,967 | |||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
19,550 | 16,261 | ||||||
Stock-based compensation expense
|
5,160 | 5,286 | ||||||
Undistributed losses (income) of equity method investments
|
496 | (726 | ) | |||||
Net realized gains
|
(4,536 | ) | (7,906 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Increase in reserves for losses and loss expenses, net of reinsurance recoverables
|
19,802 | 49,164 | ||||||
Increase in unearned premiums, net of prepaid reinsurance and advance premiums
|
75,172 | 30,183 | ||||||
(Decrease) increase in net federal income taxes
|
(3,058 | ) | 601 | |||||
Increase in premiums receivable
|
(57,294 | ) | (53,017 | ) | ||||
Increase in deferred policy acquisition costs
|
(16,638 | ) | (3,624 | ) | ||||
(Increase) decrease in interest and dividends due or accrued
|
(500 | ) | 514 | |||||
Decrease in accrued salaries and benefits
|
(5,699 | ) | (555 | ) | ||||
Decrease in accrued insurance expenses
|
(4,500 | ) | (7,045 | ) | ||||
Other-net
|
5,823 | 8,694 | ||||||
Net adjustments
|
33,778 | 37,830 | ||||||
Net cash provided by operating activities
|
52,159 | 59,797 | ||||||
Investing Activities
|
||||||||
Purchase of fixed maturity securities, available-for-sale
|
(426,346 | ) | (252,529 | ) | ||||
Purchase of equity securities, available-for-sale
|
(40,430 | ) | (123,141 | ) | ||||
Purchase of other investments
|
(6,355 | ) | (7,715 | ) | ||||
Purchase of short-term investments
|
(795,707 | ) | (694,764 | ) | ||||
Purchase of subsidiary
|
255 | — | ||||||
Sale of subsidiary
|
445 | 670 | ||||||
Sale of fixed maturity securities, available-for-sale
|
37,699 | 64,104 | ||||||
Sale of short-term investments
|
876,928 | 713,111 | ||||||
Redemption and maturities of fixed maturity securities, held-to-maturity
|
57,152 | 99,560 | ||||||
Redemption and maturities of fixed maturity securities, available-for-sale
|
197,199 | 66,805 | ||||||
Sale of equity securities, available-for-sale
|
58,176 | 59,663 | ||||||
Distributions from other investments
|
8,442 | 14,046 | ||||||
Sale of other investments
|
1 | 16,357 | ||||||
Purchase of property and equipment
|
(6,793 | ) | (2,843 | ) | ||||
Net cash used in investing activities
|
(39,334 | ) | (46,676 | ) | ||||
Financing Activities
|
||||||||
Dividends to stockholders
|
(13,442 | ) | (13,225 | ) | ||||
Acquisition of treasury stock
|
(3,102 | ) | (2,526 | ) | ||||
Net proceeds from stock purchase and compensation plans
|
2,225 | 2,355 | ||||||
Excess tax benefits from share-based payment arrangements
|
873 | (185 | ) | |||||
Net cash used in financing activities
|
(13,446 | ) | (13,581 | ) | ||||
Net decrease in cash
|
(621 | ) | (460 | ) | ||||
Cash, beginning of year
|
762 | 645 | ||||||
Cash, end of period
|
$ | 141 | 185 |
Selective Insurance Group, Inc.
|
||||||||||||
Combined Insurance Company Subsidiaries
|
||||||||||||
Unaudited Statutory Balance Sheets
|
||||||||||||
($ in thousands)
|
||||||||||||
Jun-30
|
Jun-30
|
Dec-31 *
|
||||||||||
2012
|
2011
|
2011
|
||||||||||
ASSETS
|
||||||||||||
Bonds
|
$ | 3,569,892 | 3,488,872 | 3,452,204 | ||||||||
Common stocks
|
148,117 | 136,577 | 157,355 | |||||||||
Affiliated mortgage loan
|
37,791 | 38,462 | 38,131 | |||||||||
Other investments
|
191,608 | 162,290 | 197,409 | |||||||||
Short-term investments
|
113,584 | 102,166 | 183,070 | |||||||||
Total investments
|
4,060,992 | 3,928,367 | 4,028,169 | |||||||||
Cash on hand and in banks
|
(29,939 | ) | (38,996 | ) | (20,701 | ) | ||||||
Interest and dividends due and accrued
|
36,069 | 36,703 | 35,880 | |||||||||
Premiums receivable
|
521,684 | 465,437 | 461,482 | |||||||||
Reinsurance recoverable on paid losses and expenses
|
9,852 | 5,204 | 12,365 | |||||||||
Deferred tax recoverable
|
148,848 | 131,197 | 137,659 | |||||||||
EDP equipment
|
1,527 | 1,097 | 1,804 | |||||||||
Equities and deposits in pools and associations
|
6,168 | 5,814 | 4,837 | |||||||||
Receivable for sold securities
|
1,154 | 14 | 644 | |||||||||
Other assets
|
27,065 | 29,475 | 27,964 | |||||||||
Total assets
|
$ | 4,783,420 | 4,564,312 | 4,690,103 | ||||||||
LIABILITIES
|
||||||||||||
Reserve for losses
|
$ | 2,177,438 | 2,158,586 | 2,173,028 | ||||||||
Reinsurance payable on paid loss and loss expense
|
1,282 | 886 | 1,285 | |||||||||
Reserve for loss expenses
|
431,272 | 403,575 | 418,542 | |||||||||
Unearned premiums
|
833,998 | 742,684 | 759,304 | |||||||||
Reserve for commissions payable
|
43,046 | 40,309 | 44,488 | |||||||||
Ceded balances payable
|
17,516 | 11,885 | 21,871 | |||||||||
Federal income tax payable
|
6,563 | 4,884 | 12,176 | |||||||||
Premium and other taxes payable
|
20,531 | 19,696 | 23,588 | |||||||||
Borrowed money
|
58,042 | 13,017 | 58,043 | |||||||||
Reserve for dividends to policyholders
|
3,670 | 3,197 | 3,470 | |||||||||
Reserves for unauthorized reinsurance
|
1,785 | 1,811 | 1,785 | |||||||||
Payable for securities
|
17,171 | 9,026 | - | |||||||||
Funds withheld on account of others
|
7,136 | 5,156 | 6,538 | |||||||||
Accrued salaries and benefits
|
76,876 | 63,729 | 80,601 | |||||||||
Other liabilities
|
19,213 | 15,574 | 22,677 | |||||||||
Total liabilities
|
3,715,539 | 3,494,015 | 3,627,396 | |||||||||
POLICYHOLDERS' SURPLUS
|
||||||||||||
Capital
|
34,225 | 28,325 | 32,325 | |||||||||
Aggregate write-ins for special surplus funds
|
- | 38,940 | 44,296 | |||||||||
Paid in surplus
|
305,122 | 255,792 | 307,022 | |||||||||
Unassigned surplus
|
728,534 | 747,240 | 679,064 | |||||||||
Total policyholders' surplus
|
1,067,881 | 1,070,297 | 1,062,707 | |||||||||
Total liabilities and policyholders' surplus
|
$ | 4,783,420 | 4,564,312 | 4,690,103 |
Selective Insurance Group, Inc.
|
||||||||||||||||||||||||||||||||
Combined Insurance Company Subsidiaries
|
||||||||||||||||||||||||||||||||
Unaudited Statutory Statements Of Income
|
||||||||||||||||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||||||||||
June
|
June
|
|||||||||||||||||||||||||||||||
UNDERWRITING
|
2012
|
2011
|
2012
|
2011
|
||||||||||||||||||||||||||||
Net premiums written
|
$ | 425,563 | 374,503 | 845,735 | 736,338 | |||||||||||||||||||||||||||
Net premiums earned
|
392,212 | 355,580 | 771,041 | 706,923 | ||||||||||||||||||||||||||||
Net losses paid
|
232,122 | 208,085 | 439,015 | 396,926 | ||||||||||||||||||||||||||||
Change in reserve for losses
|
6,841 | 25,695 | 4,411 | 47,029 | ||||||||||||||||||||||||||||
Net losses incurred
|
238,963 | 60.9 | % | 233,780 | 65.7 | % | 443,426 | 57.5 | % | 443,955 | 62.8 | % | ||||||||||||||||||||
Net loss expenses paid
|
41,031 | 39,894 | 84,567 | 77,908 | ||||||||||||||||||||||||||||
Change in reserve for loss expenses
|
7,942 | 975 | 12,730 | 2,067 | ||||||||||||||||||||||||||||
Net loss expenses incurred
|
48,973 | 12.5 | % | 40,869 | 11.5 | % | 97,297 | 12.6 | % | 79,975 | 11.3 | % | ||||||||||||||||||||
Net underwriting expenses incurred
|
139,245 | 32.8 | % | 120,322 | 32.2 | % | 275,764 | 32.6 | % | 235,131 | 32.0 | % | ||||||||||||||||||||
Total deductions
|
427,181 | 394,971 | 816,487 | 759,061 | ||||||||||||||||||||||||||||
Statutory underwriting loss
|
(34,969 | ) | (39,391 | ) | (45,446 | ) | (52,138 | ) | ||||||||||||||||||||||||
Net loss from premium balances charged off
|
(864 | ) | (1,345 | ) | (2,105 | ) | (2,703 | ) | ||||||||||||||||||||||||
Finance charges and other income
|
1,934 | 2,481 | 4,895 | 5,339 | ||||||||||||||||||||||||||||
Total other income
|
1,070 | -0.3 | % | 1,136 | -0.3 | % | 2,790 | -0.3 | % | 2,636 | -0.4 | % | ||||||||||||||||||||
Policyholders' dividends incurred
|
(1,230 | ) | 0.3 | % | (1,461 | ) | 0.4 | % | (2,144 | ) | 0.3 | % | (2,747 | ) | 0.4 | % | ||||||||||||||||
Total underwriting loss
|
(35,129 | ) | 106.2 | % | (39,716 | ) | 109.5 | % | (44,800 | ) | 102.7 | % | (52,249 | ) | 106.1 | % | ||||||||||||||||
INVESTMENT
|
||||||||||||||||||||||||||||||||
Net investment income earned
|
33,793 | 41,321 | 67,272 | 82,579 | ||||||||||||||||||||||||||||
Net realized gain
|
175 | 2,117 | 4,533 | 7,877 | ||||||||||||||||||||||||||||
Total income before income tax
|
(1,161 | ) | 3,722 | 27,005 | 38,207 | |||||||||||||||||||||||||||
Federal income tax expense
|
1,529 | 3,014 | 11,122 | 12,284 | ||||||||||||||||||||||||||||
Net income / (loss)
|
$ | (2,690 | ) | 708 | 15,883 | 25,923 | ||||||||||||||||||||||||||
Policyholders' Surplus
|
||||||||||||||||||||||||||||||||
Surplus, beginning of period
|
$ | 1,083,174 | 1,083,848 | 1,062,707 | 1,073,025 | |||||||||||||||||||||||||||
Net income / (loss)
|
(2,690 | ) | 708 | 15,883 | 25,923 | |||||||||||||||||||||||||||
Change in deferred taxes
|
5,578 | 473 | 7,664 | 920 | ||||||||||||||||||||||||||||
Change in unrealized gains
|
(2,917 | ) | (1,211 | ) | 2,041 | (1,160 | ) | |||||||||||||||||||||||||
Dividends to stockholders
|
(12,709 | ) | (14,506 | ) | (28,474 | ) | (29,012 | ) | ||||||||||||||||||||||||
Change in cum. effect of acctg principle
|
- | - | 44,296 | - | ||||||||||||||||||||||||||||
Surplus - transferred to capital
|
(1,900 | ) | - | (1,900 | ) | - | ||||||||||||||||||||||||||
Paid in common stock
|
1,900 | - | 1,900 | - | ||||||||||||||||||||||||||||
Change in non-admitted assets
|
(2,524 | ) | (602 | ) | 8,035 | 2,182 | ||||||||||||||||||||||||||
Change in additional admitted deferred taxes
|
- | 1,587 | (44,296 | ) | (1,581 | ) | ||||||||||||||||||||||||||
Surplus adjustments
|
(31 | ) | - | 25 | - | |||||||||||||||||||||||||||
Net change in surplus for period
|
(15,293 | ) | (13,551 | ) | 5,174 | (2,728 | ) | |||||||||||||||||||||||||
Surplus, end of period
|
$ | 1,067,881 | 1,070,297 | 1,067,881 | 1,070,297 | |||||||||||||||||||||||||||
Statutory underwriting loss
|
$ | (35,129 | ) | (39,716 | ) | (44,800 | ) | (52,249 | ) | |||||||||||||||||||||||
Adjustments under GAAP:
|
||||||||||||||||||||||||||||||||
Deferred policy acquisition costs1
|
8,068 | 4,620 | 16,638 | 3,624 | ||||||||||||||||||||||||||||
Pension costs
|
70 | 902 | 140 | 1,805 | ||||||||||||||||||||||||||||
Other, net
|
29 | 192 | (303 | ) | 120 | |||||||||||||||||||||||||||
GAAP underwriting loss
|
$ | (26,962 | ) | (34,002 | ) | (28,325 | ) | (46,700 | ) | |||||||||||||||||||||||
Selective Insurance Group, Inc. and Consolidated Subsidiaries
|
|||||||||||||||||||||||||
Alternative Investments
|
|||||||||||||||||||||||||
as of June 30, 2012
|
|||||||||||||||||||||||||
(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 | 2,409,941 | 9,766,552 | 218,730 | 0.49 | 0.97 | ||||||||||||||||||
Silverpeak RE III
|
2008
|
15,000,000 | 8,063,280 | 3,194,035 | (183,347 | ) | 0.02 | 0.48 | |||||||||||||||||
Total - Real Estate
|
35,000,000 | 10,473,221 | 12,960,587 | 35,383 | 0.38 | 0.85 | |||||||||||||||||||
Mezzanine Financing
|
|||||||||||||||||||||||||
Neovara Euro Mezz
|
2004
|
9,000,000 | - | 788,057 | (284,236 | ) | 0.95 | 1.01 | |||||||||||||||||
GS Mezz V
|
2007
|
25,000,000 | 15,255,707 | 8,537,660 | 1,201,962 | 0.63 | 1.25 | ||||||||||||||||||
New Canaan V
|
2012
|
7,000,000 | 5,179,212 | 1,820,787 | - | - | 1.00 | ||||||||||||||||||
Centerfield Capital
|
2012
|
3,000,000 | 3,000,000 | - | - | - | - | ||||||||||||||||||
Total - Mezz. Financing
|
44,000,000 | 23,434,919 | 11,146,504 | 917,726 | 1.58 | 1.12 | |||||||||||||||||||
Distressed Debt
|
|||||||||||||||||||||||||
Varde VIII
|
2006
|
10,000,000 | - | 6,001,370 | 67,487 | 0.53 | 1.13 | ||||||||||||||||||
GS Distressed Opp III
|
2007
|
15,000,000 | 2,985,812 | 8,700,642 | (32,915 | ) | 0.32 | 0.99 | |||||||||||||||||
Total - Distressed Debt
|
25,000,000 | 2,985,812 | 14,702,012 | 34,572 | 0.41 | 1.05 | |||||||||||||||||||
Private Equity
|
|||||||||||||||||||||||||
Prospector
|
1997
|
5,000,000 | - | 410,981 | (140 | ) | 2.79 | 2.88 | |||||||||||||||||
Trilantic Capital Partners III
|
2004
|
10,000,000 | 1,242,835 | 4,005,128 | 193,363 | 1.29 | 1.72 | ||||||||||||||||||
NB Co-Invest
|
2006
|
15,000,000 | 1,818,701 | 9,899,339 | 992,858 | 0.59 | 1.29 | ||||||||||||||||||
Trilantic Capital Partners IV
|
2007
|
11,098,351 | 922,808 | 9,423,717 | 679,353 | 0.36 | 1.22 | ||||||||||||||||||
Total - Private Equity
|
41,098,351 | 3,984,344 | 23,739,165 | 1,865,434 | 0.97 | 1.57 | |||||||||||||||||||
Private Equity, Secondary Market
|
|||||||||||||||||||||||||
NB SOF
|
2005
|
12,000,000 | 899,494 | 6,476,281 | 262,569 | 0.68 | 1.26 | ||||||||||||||||||
GS Vintage IV
|
2007
|
20,000,000 | 4,544,079 | 14,570,906 | 62,247 | 0.43 | 1.20 | ||||||||||||||||||
NB SOF II
|
2008
|
12,000,000 | 3,207,509 | 8,548,882 | 510,837 | 0.43 | 1.35 | ||||||||||||||||||
Total - Pvt. Eq. Sec. Mkt.
|
44,000,000 | 8,651,082 | 29,596,069 | 835,653 | 0.50 | 1.25 | |||||||||||||||||||
Energy/Power Generation
|
|||||||||||||||||||||||||
ArcLight I
|
2002
|
15,000,000 | 1,655,505 | 130,689 | (56,510 | ) | 1.80 | 1.81 | |||||||||||||||||
ArcLight II
|
2003
|
15,000,000 | 2,295,492 | 2,789,988 | (182,795 | ) | 1.23 | 1.38 | |||||||||||||||||
ArcLight III
|
2006
|
15,000,000 | 2,037,794 | 8,135,801 | (341,699 | ) | 0.71 | 1.23 | |||||||||||||||||
Quintana Energy
|
2006
|
10,000,000 | 1,676,467 | 7,236,789 | 1,343,626 | 0.36 | 1.23 | ||||||||||||||||||
ArcLight IV
|
2007
|
10,000,000 | 2,717,373 | 3,284,522 | 132,037 | 0.99 | 1.33 | ||||||||||||||||||
Total - Energy/Power Generation
|
65,000,000 | 10,382,631 | 21,577,789 | 894,659 | 1.11 | 1.42 | |||||||||||||||||||
Venture Capital
|
|||||||||||||||||||||||||
Venture V
|
2001
|
10,000,000 | 800,000 | 7,856,075 | 877,440 | 0.34 | 1.19 | ||||||||||||||||||
Total - Venture Capital
|
10,000,000 | 800,000 | 7,856,075 | 877,440 | 0.34 | 1.19 | |||||||||||||||||||
TOTAL - ALTERNATIVE INVESTMENTS
|
$ | 264,098,351 | 60,712,009 | 121,578,201 | 5,460,867 | 0.76 | 1.27 | ||||||||||||||||||
(1) Distributed to paid in ratio
|
|||||||||||||||||||||||||
(2) Total value to paid in ratio
|
|||||||||||||||||||||||||
Note: Some amounts may not foot due to rounding
|
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
|
54,345 | 54 | % | 44,361 | 45 | % | 1,120 | 1 | % | - | 0 | % | 99,826 | 7 | % | |||||||||||||||||||||||||
TX-PSF
|
- | 0 | % | - | 0 | % | - | 0 | % | 35,072 | 100 | % | 35,072 | 3 | % | |||||||||||||||||||||||||
WA
|
35,592 | 39 | % | 49,282 | 53 | % | 7,084 | 8 | % | - | 0 | % | 91,958 | 7 | % | |||||||||||||||||||||||||
NY
|
81,363 | 96 | % | 3,564 | 4 | % | - | 0 | % | - | 0 | % | 84,927 | 6 | % | |||||||||||||||||||||||||
AZ
|
65,353 | 90 | % | 7,189 | 10 | % | - | 0 | % | - | 0 | % | 72,542 | 5 | % | |||||||||||||||||||||||||
CO
|
21,929 | 38 | % | 34,405 | 59 | % | 1,775 | 3 | % | - | 0 | % | 58,109 | 4 | % | |||||||||||||||||||||||||
FL
|
50,243 | 93 | % | - | 0 | % | 3,619 | 7 | % | - | 0 | % | 53,862 | 4 | % | |||||||||||||||||||||||||
IL
|
27,397 | 57 | % | 20,353 | 43 | % | - | 0 | % | - | 0 | % | 47,750 | 4 | % | |||||||||||||||||||||||||
OH
|
22,818 | 53 | % | 13,398 | 31 | % | 7,133 | 16 | % | - | 0 | % | 43,349 | 3 | % | |||||||||||||||||||||||||
NC
|
24,259 | 58 | % | 13,791 | 33 | % | 3,724 | 9 | % | - | 0 | % | 41,774 | 3 | % | |||||||||||||||||||||||||
MO
|
21,052 | 55 | % | 17,017 | 45 | % | - | 0 | % | - | 0 | % | 38,069 | 3 | % | |||||||||||||||||||||||||
Pre-refunded
|
50,901 | 58 | % | 20,717 | 24 | % | 12,170 | 14 | % | 3,623 | 4 | % | 87,411 | 7 | % | |||||||||||||||||||||||||
Other
|
357,350 | 62 | % | 118,756 | 20 | % | 105,032 | 18 | % | - | 0 | % | 581,138 | 44 | % | |||||||||||||||||||||||||
Grand Total
|
812,602 | 61 | % | 342,833 | 26 | % | 141,657 | 10 | % | 38,695 | 3 | % | 1,335,787 | 100 | % |
Selective Insurance Group, Inc. and Consolidated Subsidiaries
|
|||||||||||
Credit Quality of Available-for-Sale Fixed Maturity Securities
|
|||||||||||
June 30, 2012
|
|||||||||||
($ in millions)
|
|||||||||||
(unaudited)
|
|||||||||||
Fair
Value
|
Unrealized
Gain (Loss)
|
Average
Credit
Quality
|
|||||||||
AFS Fixed Maturity Portfolio:
|
|||||||||||
U.S. government obligations1
|
$ | 288.0 | 19.1 |
AA+
|
|||||||
Foreign government obligations
|
42.8 | 1.2 |
AA
|
||||||||
State and municipal obligations
|
736.5 | 41.3 |
AA
|
||||||||
Corporate securities
|
1,348.7 | 65.6 | A | ||||||||
Mortgage-backed securities ("MBS")
|
612.2 | 19.2 |
AA
|
||||||||
Asset-backed securities ("ABS")
|
94.8 | 1.8 |
AAA
|
||||||||
Total AFS fixed maturity portfolio
|
$ | 3,123.0 | 148.2 |
AA-
|
|||||||
State and Municipal Obligations:
|
|||||||||||
Government obligations
|
$ | 327.2 | 20.3 |
AA+
|
|||||||
Special revenue obligations
|
409.3 | 21.0 |
AA
|
||||||||
Total state and municipal obligations
|
$ | 736.5 | 41.3 |
AA
|
|||||||
Corporate Securities:
|
|||||||||||
Financial
|
$ | 430.3 | 13.9 | A | |||||||
Industrials
|
95.9 | 7.3 | A | ||||||||
Utilities
|
89.8 | 4.8 | A- | ||||||||
Consumer discretion
|
124.6 | 6.9 |
BBB+
|
||||||||
Consumer staples
|
148.8 | 8.2 | A | ||||||||
Healthcare
|
160.3 | 9.7 | A+ | ||||||||
Materials
|
66.7 | 4.0 | A- | ||||||||
Energy
|
88.0 | 3.9 | A- | ||||||||
Information technology
|
81.3 | 3.1 | A | ||||||||
Telecommunications services
|
51.6 | 2.4 |
BBB+
|
||||||||
Other
|
11.4 | 1.4 |
AA+
|
||||||||
Total corporate securities
|
$ | 1,348.7 | 65.6 | A | |||||||
MBS:
|
|||||||||||
Government Guaranteed Agency commercial mortgage-backed securities ("CMBS")
|
$ | 67.0 | 3.5 |
AA+
|
|||||||
Non-agency CMBS
|
51.1 | (1.4 | ) | A+ | |||||||
Government Guaranteed Agency residential mortgage-backed securities ("RMBS")
|
102.6 | 4.8 |
AA+
|
||||||||
Other Agency RMBS
|
340.1 | 11.8 |
AA+
|
||||||||
Non-agency RMBS
|
44.6 | 0.4 |
BBB+
|
||||||||
Alternative-A ("Alt-A") RMBS
|
6.8 | 0.1 |
AA+
|
||||||||
Total MBS
|
$ | 612.2 | 19.2 |
AA
|
|||||||
ABS:
|
|||||||||||
ABS
|
$ | 93.5 | 1.8 |
AAA
|
|||||||
Alt-A ABS3
|
0.7 | - | D | ||||||||
Sub-prime ABS2,3
|
0.6 | - | D | ||||||||
Total ABS
|
$ | 94.8 | 1.8 |
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
|
||||||||||||||||||||||||
June 30, 2012
|
||||||||||||||||||||||||
($ 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
|
$ | 5.4 | 5.5 | (0.1 | ) | 0.2 | 0.1 |
AA+
|
||||||||||||||||
State and municipal obligations
|
599.3 | 566.6 | 32.7 | 9.3 | 42.0 |
AA
|
||||||||||||||||||
Corporate securities
|
62.0 | 56.7 | 5.3 | (1.3 | ) | 4.0 | A | |||||||||||||||||
MBS
|
13.8 | 8.4 | 5.4 | (1.4 | ) | 4.0 |
AA-
|
|||||||||||||||||
ABS
|
7.5 | 6.3 | 1.2 | (1.2 | ) | - | A | |||||||||||||||||
Total HTM fixed maturity portfolio
|
$ | 688.0 | 643.5 | 44.5 | 5.6 | 50.1 |
AA
|
|||||||||||||||||
State and Municipal Obligations:
|
||||||||||||||||||||||||
Government obligations
|
$ | 196.0 | 186.6 | 9.4 | 5.0 | 14.4 |
AA
|
|||||||||||||||||
Special revenue obligations
|
403.3 | 380.0 | 23.3 | 4.3 | 27.6 |
AA
|
||||||||||||||||||
Total state and municipal obligations
|
$ | 599.3 | 566.6 | 32.7 | 9.3 | 42.0 |
AA
|
|||||||||||||||||
Corporate Securities:
|
||||||||||||||||||||||||
Financial
|
$ | 15.6 | 14.0 | 1.6 | (1.0 | ) | 0.6 |
BBB+
|
||||||||||||||||
Industrials
|
19.1 | 17.4 | 1.7 | (0.3 | ) | 1.4 | A | |||||||||||||||||
Utilities
|
15.4 | 13.7 | 1.7 | (0.1 | ) | 1.6 | A | |||||||||||||||||
Consumer discretion
|
4.8 | 4.6 | 0.2 | 0.1 | 0.3 |
AA
|
||||||||||||||||||
Consumer staples
|
5.0 | 5.0 | - | - | - | A | ||||||||||||||||||
Materials
|
2.1 | 2.0 | 0.1 | - | 0.1 |
BBB
|
||||||||||||||||||
Total corporate securities
|
$ | 62.0 | 56.7 | 5.3 | (1.3 | ) | 4.0 | A | ||||||||||||||||
MBS:
|
||||||||||||||||||||||||
Non-agency CMBS
|
13.8 | 8.4 | 5.4 | (1.4 | ) | 4.0 |
AA-
|
|||||||||||||||||
Total MBS
|
$ | 13.8 | 8.4 | 5.4 | (1.4 | ) | 4.0 |
AA-
|
||||||||||||||||
ABS:
|
||||||||||||||||||||||||
ABS
|
$ | 5.2 | 4.6 | 0.6 | (0.4 | ) | 0.2 |
BBB+
|
||||||||||||||||
Alt-A ABS
|
2.3 | 1.7 | 0.6 | (0.8 | ) | (0.2 | ) |
AAA
|
||||||||||||||||
Total ABS
|
$ | 7.5 | 6.3 | 1.2 | (1.2 | ) | - | A |
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