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<SEC-DOCUMENT>0000947871-03-000591.txt : 20030305
<SEC-HEADER>0000947871-03-000591.hdr.sgml : 20030305
<ACCEPTANCE-DATETIME>20030305150333
ACCESSION NUMBER:		0000947871-03-000591
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20030305

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SELECTIVE INSURANCE GROUP INC
		CENTRAL INDEX KEY:			0000230557
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				222168890
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-101489
		FILM NUMBER:		03593072

	BUSINESS ADDRESS:	
		STREET 1:		40 WANTAGE AVENUE
		CITY:			BRANCHVILLE
		STATE:			NJ
		ZIP:			07890
		BUSINESS PHONE:		2019483000

	MAIL ADDRESS:	
		STREET 1:		40 WANTAGE AVE
		STREET 2:		40 WANTAGE AVE
		CITY:			BRANCHVILLE
		STATE:			NJ
		ZIP:			07890

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SRI CORP
		DATE OF NAME CHANGE:	19860508
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>f424b3_022503.txt
<DESCRIPTION>PROSPECTUS SUPPLEMENT
<TEXT>

                                     Filed pursuant to Rule 424(b)(3)
                                                     Registration No. 333-101489

PROSPECTUS SUPPLEMENT
(To prospectus dated February 10, 2003)


                                  $305,000,000
                         SELECTIVE INSURANCE GROUP, INC.
                        Senior Convertible Notes due 2032
                                  Common Stock
                          ----------------------------

                  This document supplements the prospectus dated February 10,
2003 of Selective Insurance Group, Inc. relating to the resale by certain
holders of notes who are named as selling securityholders of up to $305,000,000
aggregate principal amount at maturity of the notes and the shares of common
stock issuable upon conversion of the notes.

                  You should read this prospectus supplement in conjunction with
the prospectus dated February 10, 2003. This prospectus supplement is qualified
by reference to the prospectus dated February 10, 2003, except to the extent
that the information in this prospectus supplement supersedes the information
contained in the February 10, 2003 prospectus.

                  The table of selling securityholders beginning on page 51 of
the prospectus is hereby amended to add the entities named below as selling
securityholders:

<TABLE>
<CAPTION>

                                                  Principal Amount                    Number of       Number of
                                                      of Notes                        Shares of       Shares of
                                                    Beneficially    Percentage of    Common Stock    Common Stock    Percentage of
                    Name of                            Owned            Notes        Beneficially     That May Be     Common Stock
             Selling Securityholder               That May Be Sold   Outstanding        Owned            Sold         Outstanding
- -----------------------------------------------  ------------------ --------------   -------------   -------------   --------------
<S>                                                  <C>                <C>              <C>            <C>                <C>
Arbitex Master Fund                                  16,500,000         5.41%            N/A            214,141            *
Argent Low Lev Convertible Arbitrage Fund LLC           700,000           *              N/A              9,084            *
Grace Convertible Arbitrage Fund Ltd.                 5,000,000         1.64%            N/A             64,891            *
Lyxor Master Fund                                     2,000,000           *              N/A             25,956            *
Lyxor Master Fund Ref: Argent/LowLev CB c/o
Argent                                                1,000,000           *              N/A             12,978            *
Miller Tabak Roberts LLC                              1,500,000           *              N/A             19,467            *
Partners Group Alternative Strategies PCC, Ltd.         200,000           *              N/A              2,595            *
Xavex Convertible Arbitrage 2 Fund                      200,000           *              N/A              2,595            *
Zazove Convertible Arbitrage Fund LP                  7,000,000         2.30%            N/A             90,848            *
Zazove Hedged Convertible Fund LP                     2,500,000           *              N/A             32,445            *
Zazove Income Fund LP                                 1,000,000           *              N/A             12,978            *
Zurich Institutional Benchmarks Master Fund Ltd.      2,500,000           *              N/A             32,445            *
Zurich Institutional Benchmarks Master Fund c/o
Argent                                                  500,000           *              N/A              6,489            *

</TABLE>


                                       1
<PAGE>


                  After giving effect to the addition of the foregoing selling
security holders, the table of selling securityholders reads as follows:

<TABLE>
<CAPTION>


                                                                 Selling Securityholders

                                                   Principal
                                                    Amount
                                                   of Notes                          Number of        Number of
                                                 Beneficially                        Shares of        Shares of
                                                     Owned        Percentage of     Common Stock    Common Stock      Percentage of
                   Name of                        That May Be         Notes         Beneficially     That May Be      Common Stock
          Selling Securityholder(1)                  Sold          Outstanding        Owned(2)       Sold(3)(4)      Outstanding(5)
- -------------------------------------------    ----------------  ---------------   --------------  --------------   ----------------
  <S>                                              <C>                <C>            <C>               <C>              <C>
  AKELA Capital Master Fund Ltd.                   11,000,000         3.61%             N/A            142,761             *
  Allstate Life Insurance                           2,000,000           *            13,200(6)          25,956             *
  Arbitex Master Fund                              16,500,000         5.41%             N/A            214,141             *
  Argent Classic Convertible Arbitrage Fund
  (Bermuda) Ltd.                                    2,000,000           *               N/A             25,956             *
  Argent Low Lev Convertible Arbitrage Fund
  LLC                                                 700,000           *               N/A              9,084             *
  Argent Low Lev Convertible Arbitrage Fund
  Ltd.                                              4,400,000         1.44%             N/A             57,104             *
  BGI Global Investors C/O Forest Investment
  Management L.L.C.                                   536,000           *               N/A              6,956             *
  BNP Paribus Equity Strategies, SNC               20,850,000         6.84%            26,003          270,597           1.02%
  Calamos Convertible Fund - Calamos
  Investment Trust                                 13,300,000         4.36%             N/A            172,611             *
  Calamos Convertible Growth & Income Fund -
  Calamos Investment Trust                         10,900,000         3.57%             N/A            141,463             *
  Calamos Convertible Portfolio - Calamos
  Advisor Trust                                       300,000           *               N/A              3,893             *
  CC Investments LOC                                  250,000           *               N/A              3,244             *
  Chrysler Corporation Master Retirement Trust      2,595,000           *               N/A             33,678             *
  Context Convertible Arbitrage Fund, LP              165,000           *               N/A              2,141             *
  Context Convertible Arbitrage Offshore, LP           85,000           *               N/A              1,103             *
  Cooper Neff Convertible Strategies (Cayman)
  Master Fund L.P.                                 11,189,000         3.67%             N/A            145,214             *
  Deephaven Domestic Convertible Trading Ltd.       3,250,000         1.07%             N/A             42,179             *
  Delta AIR Lines Master Trust
  (c/o Oaktree Capital Management, LLC)               655,000           *               N/A              8,500             *
  Delta Pilots D & S Trust (c/o Oaktree
  Capital Management, LLC)                            360,000           *               N/A              4,672             *
  Forest Fulcrum Fund L.L.P.                        1,383,000           *               N/A             17,948             *
  Forest Global Convertible Fund Series A-5         6,079,000         1.99%             N/A             78,895             *
  Forest Multi-Strategy Master/Fund SPC on
  Behalf of Series F, Multi-Strategy
  Segregated Portfolio                              2,000,000           *               N/A             25,956             *
  GDO Equity Arbitrage Master Fund                  1,000,000           *               N/A             12,978             *
  Grace Convertible Arbitrage Fund Ltd.             5,000,000         1.64%             N/A             64,891             *
  JMG Convertible Investments LP                    1,500,000           *               N/A             19,467             *

</TABLE>


                                       2
<PAGE>


<TABLE>
<CAPTION>

                                                   Principal
                                                    Amount
                                                   of Notes                          Number of        Number of
                                                 Beneficially                        Shares of        Shares of
                                                     Owned        Percentage of     Common Stock    Common Stock      Percentage of
                   Name of                        That May Be         Notes         Beneficially     That May Be      Common Stock
          Selling Securityholder(1)                  Sold          Outstanding        Owned(2)       Sold(3)(4)      Outstanding(5)
- -------------------------------------------    ----------------  ---------------   --------------  --------------   ----------------
  <S>                                              <C>                <C>            <C>               <C>              <C>
  KBC Financial Products USA Inc.                  11,560,000         3.79%             N/A            150,029             *
  LLT Limited                                         498,000           *               N/A              6,463             *
  Lyxor Master Fund                                 2,000,000           *               N/A             25,956             *
  Lyxor Master Fund C/O Forest Investment
  Management L.L.C.                                 2,295,000           *               N/A             29,785             *
  Lyxor Master Fund Ref: Argent/LowLev CB c/o
  Argent                                            1,000,000           *               N/A             12,978             *
  Marathon Global Convertible Master Fund Ltd.      5,000,000         1.64%             N/A             64,891             *
  McMahan Securities Co. L.P.                      12,250,000         4.02%             N/A            158,984             *
  Merrill Lynch, Pierce Fenner and Smith Inc.       2,910,000           *               N/A             37,766             *
  Microsoft Corporation                               935,000           *               N/A             12,134             *
  Miller Tabak Roberts LLC                          1,500,000           *               N/A             19,467             *
  MLQA Convertible Securities Arbitrage Ltd        15,000,000         4.92%             N/A            194,674             *
  Motion Picture Industry Health Plan-Active
  Member Fund                                         170,000           *               N/A              2,206             *
  Motion Picture Industry Health Plan-Retiree
  Member Fund                                         105,000           *               N/A              1,362             *
  OCM Convertible Trust                             1,725,000           *               N/A             22,387             *
  Partner Reinsurance Company, Ltd.                   540,000           *               N/A              7,008             *
  Partners Group Alternative Strategies PCC,
  Ltd.                                                200,000           *               N/A              2,595             *
  Qwest Occupational Health Trust                     200,000           *               N/A              2,595             *
  RBC Alternative Assets LP C/O Forest
  Investment Management L.L.C.                        510,000           *               N/A              6,618             *
  Relay II Holdings C/O Forest Investment
  Management L.L.C.                                   255,000           *               N/A              3,309             *
  Sphinx Convertible Abritrage C/O Forest
  Investment Management L.L.C.                        128,000           *               N/A              1,661             *
  State Employee's Retirement Fund of the
  State of Delaware                                   715,000           *               N/A              9,279             *
  Sturgen Limited                                   2,711,000           *               N/A             35,184             *
  Sunrise Partners Limited Partnership             14,250,000         4.67%             N/A            184,940             *
  SusQuehanna Capital Group                         5,000,000         1.64%             N/A             64,891             *
  Thrivent Financial for Lutherans                  1,000,000           *               N/A             12,978             *
  UFJ Investments Asia Limited                        250,000           *               N/A              3,244             *
  Victus Capital LP                                17,000,000         5.57%             N/A            220,631             *
  Wachovia Securities International LTD            32,000,000        10.49%             N/A            415,305           1.56%
  Xavex Convertible Arbitrage 2 Fund                  200,000           *               N/A              2,595             *
  Zazove Convertible Arbitrage Fund LP              7,000,000         2.30%             N/A             90,848             *
  Zazove Hedged Convertible Fund LP                 2,500,000           *               N/A             32,445             *
  Zazove Income Fund LP                             1,000,000           *               N/A             12,978             *
  Zurich Institutional Benchmarks Master Fund
  Ltd.                                                500,000           *               N/A              6,489             *
  Zurich Institutional Benchmarks Master Fund
  Ltd.                                              2,500,000           *               N/A             32,445             *
</TABLE>



                                       3
<PAGE>


<TABLE>
<CAPTION>

                                                   Principal
                                                    Amount
                                                   of Notes                          Number of        Number of
                                                 Beneficially                        Shares of        Shares of
                                                     Owned        Percentage of     Common Stock    Common Stock      Percentage of
                   Name of                        That May Be         Notes         Beneficially     That May Be      Common Stock
          Selling Securityholder(1)                  Sold          Outstanding        Owned(2)       Sold(3)(4)      Outstanding(5)
- -------------------------------------------    ----------------  ---------------   --------------  --------------   ----------------
  <S>                                              <C>                <C>            <C>               <C>              <C>
  Zurich Institutional Benchmarks Master Fund
  c/o Argent                                          500,000           *               N/A              6,489             *
  Zurich Master Hedge Fund C/O Forest
  Investment Management L.L.C.                        816,000           *               N/A             10,590             *
  Any other holder of notes or future
  transferee, pledgee, donee or successor of
  any holder                                       40,280,000        13.21%             N/A            522,765           1.96%
                                                 ------------       ------             ------        -----------        -----

  Total                                          $305,000,000       100.00%            39,203        3,958,382(7)       14.87%
                                                 ============       ======             ======        ===========        ======
</TABLE>


- ----------
*  Less than 1%

     (1)  Also includes any sale of the notes and the underlying common stock by
          pledgees, donees, transferees or other successors in interest that
          receive such securities by pledge, gift, distribution or other
          non-sale related transfer from the named selling securityholders.
          Information about other selling securityholders will be set forth in
          future prospectus supplements or in other documents that we file from
          time to time with the Securities and Exchange Commission that are
          incorporated by reference in the prospectus, if required. See "Where
          You Can Find More Information" in the prospectus.

     (2)  Excludes common stock issuable upon conversion of the selling
          securityholder's notes.

     (3)  Assumes conversion of all of the selling securityholder's notes at a
          conversion rate of 12.9783 per note and a cash payment in lieu of the
          issuance of any fractional share interest. However, this conversion
          rate is subject to adjustment as described under "Description of the
          Notes -- Conversion Rights" in the prospectus.  As a result, the
          number of shares of common stock issuable upon conversion of the notes
          may increase or decrease in the future.

     (4)  Reflects rounding down of fractional common stock issuable to each
          selling securityholder upon conversion of the notes.

     (5)  Calculated based on Rule 13d-3 of the Securities Exchange Act of 1934
          using 26,611,431 shares of common stock outstanding as of January 31,
          2003. In calculating this amount, we did not treat as outstanding the
          common stock issuable upon conversion of notes.

     (6)  Consists of 9,000 shares held by Allstate Insurance Company, 3,100
          shares held by Allstate Retirement Plan and 1,100 shares held by
          Agents Pension Plan.

     (7)  Column does not add up correctly because the fractional shares to
          which the holders would be entitled have been disregarded.

                  The above table sets forth information as of February 26,
2003, based on information supplied to us by the selling securityholders named
in the table. The selling securityholders listed in the above table may have
sold or transferred, in transactions exempt from the registration requirements
of the Securities Act, some or all of their notes since the date on which the
information was supplied to us and presented in the above table. Information


                                       4
<PAGE>


about the selling securityholders may change over time. Any changed information
supplied to us will be set forth in future prospectus supplements.

                          ----------------------------

                  Investing in the notes involves risks that are described in
the "Risk Factors" section beginning on page 9 of the prospectus.

                          ----------------------------

                  Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus supplement. Any representation
to the contrary is a criminal offense.

                          ----------------------------

          The date of this prospectus supplement is March 5, 2003.



                                       5
<PAGE>



PROSPECTUS
                             Dated February 10, 2003



                     [SELECTIVE INSURANCE GROUP, INC. LOGO]

                        Senior Convertible Notes due 2032
                                  Common Stock
                          ____________________________

                                  The Offering:

          This prospectus relates to $305,000,000 aggregate principal amount at
maturity of Senior Convertible Notes due 2032 of Selective Insurance Group, Inc.
The notes may be sold from time to time by or on behalf of the selling
securityholders named in this prospectus or in supplements to this prospectus.
This prospectus also relates to 3,958,382 shares of our common stock, par value
$2.00 per share, issuable upon conversion of the notes held by certain selling
securityholders, plus such additional indeterminate number of shares as may
become issuable upon conversion of the notes by reason of adjustment to the
conversion price in certain circumstances.

          The selling securityholders may sell all or a portion of the notes in
market transactions, negotiated transactions or otherwise and at prices which
will be determined by the prevailing market price for the notes or in negotiated
transactions. The selling securityholders also may sell all or a portion of the
shares of common stock from time to time on the Nasdaq, in negotiated
transactions or otherwise, and at prices which will be determined by the
prevailing market price for the shares or in negotiated transactions. The
selling securityholders will receive all of the proceeds from the sale of the
notes and the common stock. We will not receive any proceeds from the sale of
notes or common stock by the selling securityholders.

          Interest on the notes at the rate of 1.6155% per year on the principal
amount at maturity is payable semiannually in arrears in cash on March 24 and
September 24 of each year, beginning March 24, 2003, until September 24, 2009.
After that date, we will not pay cash interest on the notes prior to maturity
unless contingent cash interest becomes payable. Instead, on September 24, 2032,
the maturity date of the notes, a holder will receive $1,000 per note. The rate
of accrual of original issue discount represents a yield to maturity of 4.25%
per year, computed on a semiannual bond equivalent basis and calculated from
September 24, 2009. The notes are senior unsecured obligations and rank equally
with our existing and future senior unsecured indebtedness. In addition, the
notes will effectively rank junior to any future secured indebtedness as to the
assets securing such indebtedness and to all indebtedness and other obligations
of our subsidiaries as to the assets of those subsidiaries. The notes are not
listed on any securities exchange or included in any automated quotation system.

                          Convertibility of the Notes:

          Holders may convert each of their notes into 12.9783 shares of our
common stock, subject to adjustment, (1) during any calendar quarter after
December 31, 2002, if the sale price of our common stock reaches specified
thresholds during the preceding calendar quarter, (2) during any period in which
the credit rating of the notes is below a specified level, (3) if the notes are
called for redemption, or (4) if specified corporate transactions have occurred.
Upon conversion, we will have the right to deliver, in lieu of our common stock,
cash or a combination of cash and common stock in an amount described herein.
Our common stock currently trades on the Nasdaq under the symbol "SIGI."
February 7, 2003, the last reported bid price of our common stock on Nasdaq was
$21.95 per share.

                            Contingent Cash Interest:

          We will pay contingent cash interest to the holders of the notes
during any six-month period commencing after September 24, 2009 if the average
market price of a note for a five trading day measurement period preceding the
applicable six-month period equals 120% or more of the sum of the issue price,
accrued original issue discount and accrued cash interest, if any, for such
note. The contingent cash interest payable per note in respect of any quarterly
period within any six-month period will equal the greater of (1) any regular
cash dividends paid by us per share on our common stock during that quarterly
period multiplied by the then applicable conversion rate or (2) $0.15 multiplied
by 12.9783. For United States federal income tax purposes, the notes will
constitute contingent payment debt instruments. You should read the discussion
on "Material United States Federal Income Tax Consequences" relevant to the
notes beginning on page 44.

         Purchase of the Notes by Selective at the Option of the Holder:

          Holders may require us to purchase all or a portion of their notes on
September 24, 2009 at a price of $380.12 per note plus accrued and unpaid cash
interest, if any, on September 24, 2012 at a price of $431.23 per note plus
accrued and unpaid cash interest, if any, on September 24, 2017 at a price of
$532.15 per note plus accrued and unpaid cash interest, if any, on September 24,
2022 at a price of $656.68 per note plus accrued and unpaid cash interest, if
any, and on September 24, 2027 at a price of $810.36 per note plus accrued and
unpaid cash interest, if any. We may choose to pay the purchase price of such
notes in cash or common stock or a combination of cash and common stock. In
addition, if a change in control of Selective occurs on or prior to September
24, 2009, each holder may require us to purchase for cash all or a portion of
such holder's notes at a price equal to the sum of the issue price plus accrued
original issue discount and accrued and unpaid cash interest, if any, to the
date of purchase.

                     Redemption of the Notes at Our Option:

          We may redeem for cash all or a portion of the notes for cash at any
time on or after September 24, 2007, at the prices set forth in the "Description
of Notes -- Redemption of Notes at Our Option."

                          ____________________________

          Investing in the notes involves risks, some of which are described in
the "Risk Factors" section beginning on page 9 of this prospectus.

                          ____________________________

          Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.

                          ____________________________

                The date of this prospectus is February 10, 2003.

<PAGE>


                                TABLE OF CONTENTS

WHERE YOU CAN FIND MORE INFORMATION............................................i
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............................ii
SUMMARY........................................................................1
RISK FACTORS...................................................................9
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES...............................19
USE OF PROCEEDS...............................................................19
PRICE RANGE AND DIVIDEND HISTORY OF OUR COMMON STOCK..........................20
DESCRIPTION OF NOTES..........................................................21
DESCRIPTION OF OUR OTHER INDEBTEDNESS.........................................40
DESCRIPTION OF OUR CAPITAL STOCK..............................................41
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES........................44
SELLING SECURITYHOLDERS.......................................................51
PLAN OF DISTRIBUTION..........................................................54
LEGAL MATTERS.................................................................56
EXPERTS.......................................................................56

___________________________

          You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an offer
to sell these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus
or any documents incorporated by reference is accurate only as of the date on
the front cover of the applicable document. Our business, financial condition,
results of operations and prospects may have changed since that date.

          This prospectus is based on information provided by us and by other
sources that we believe are reliable. We cannot assure you that any information
provided by other sources is accurate or complete. This prospectus summarizes
certain documents and other information and we refer you to them for a more
complete understanding of what we discuss in this prospectus. In making an
investment decision, you must rely on your own examination of our company and
the terms of this offering and the notes, including the merits and risks
involved.

          We are not making any representation to any purchaser of the notes
regarding the legality of an investment in the notes by such purchaser under any
legal investment or similar laws or regulations. You should not consider any
information in this prospectus to be legal, business or tax advice. You should
consult your own attorney, business advisor and tax advisor for legal, business
and tax advice regarding an investment in the notes.

          References in this prospectus to "Selective," "we," "us" and "our"
refer to Selective Insurance Group, Inc., an insurance holding company
incorporated in New Jersey, and its subsidiaries, unless the context otherwise
requires.

                       WHERE YOU CAN FIND MORE INFORMATION

          We are subject to the information and reporting requirements of the
Securities Exchange Act of 1934, as amended, under which we file annual,
quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy this information at
the following locations of the Securities and Exchange Commission:

Public Reference Room    North East Regional Office     Midwest Regional Office
450 Fifth Street, N.W.          233 Broadway            500 West Madison Street
      Room 1024           New York, New York 10279            Suite 1400
Washington, D.C. 20549                                  Chicago, Illinois 60661


                                       i

<PAGE>

          You may also obtain copies of this information by mail from the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Room 1024, Washington, DC 20549, at prescribed rates. Please call the
Securities and Exchange Commission at (800) SEC-0330 for further information
about the Public Reference Room.

          The Securities and Exchange Commission also maintains an internet
website that contains reports, proxy statements and other information about
issuers that file electronically with the Securities and Exchange Commission.
The address of that site is www.sec.gov.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

          We are "incorporating by reference" into this prospectus certain
information that we file with the Securities and Exchange Commission, which
means that we are disclosing important information to you by referring you to
those documents. The information incorporated by reference is deemed to be part
of this prospectus, except for any information superseded by information
contained directly in this prospectus. This prospectus incorporates by reference
the documents set forth below that we have previously filed with the Securities
and Exchange Commission. These documents contain important information about us
and our finances.

Selective SEC Filings (File No. 000-08641)          Period
Annual Report on Form 10-K........................  Year Ended December 31, 2001
Quarterly Reports on Form 10-Q....................  Quarterly Periods Ended
                                                    March 31, 2002, June 30,
                                                    2002 and September 30, 2002
Current Report on Form 8-K .......................  Filed September 17, 2002

          All documents that we file with the Securities and Exchange Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
from the date of this prospectus to the end of the offering under this
prospectus shall also be deemed to be incorporated herein by reference and will
automatically update information included in or previously incorporated by
reference in this prospectus.

          You may request a copy of these filings, at no cost, by writing or
calling us at the following address or telephone number:

                               Corporate Secretary
                         Selective Insurance Group, Inc.
                                40 Wantage Avenue
                          Branchville, New Jersey 07890
                                 (973) 948-3000

          Exhibits to the filings will not be sent, however, unless those
exhibits have specifically been incorporated by reference in that filing.

          Information contained on our website is not intended to be
incorporated by reference in this prospectus and you should not consider that
information a part of this prospectus.

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

          This prospectus and the information incorporated by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements relate to our intentions, beliefs, projections, estimations or
forecasts of future events or our future financial performance and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, or performance to be materially
different from those expressed or implied by the forward-looking statements. In
some cases, you can identify forward-looking statements by use of words such as
"may," "will," "could," "would," "should," "expect," "plan," "anticipate,"
"target," "project," "intend," "believe," "estimate," "predict," "potential,"
"pro forma," "seek," "likely" or "continue" or other comparable terminology.
These statements are only predictions and we can give no assurance that such
expectations will prove to be correct.

                                       ii
<PAGE>

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

          o    the frequency and severity of catastrophic events, including
               hurricanes, windstorms, earthquakes, hail, severe winter weather,
               fires explosions and terrorism;

          o    adverse economic, market or regulatory conditions;

          o    our concentration in a number of east coast and midwestern
               states;

          o    the adequacy of our loss reserves;

          o    the cost and availability of reinsurance;

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

          o    uncertainties related to insurance rate increases and business
               retention;

          o    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;

          o    our ability to maintain favorable ratings from A.M. Best,
               Standard & Poor's and Moody's;

          o    fluctuations in interest rates and the performance of the
               financial markets which may affect our investment income;

          o    our entry into new markets and businesses; and

          o    other risks and uncertainties we identify in this prospectus and
               other documents incorporated by reference.

          We undertake no obligation, other than as may be required under the
federal securities laws, to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
We do not assume responsibility for the accuracy and completeness of the
forward-looking statements. All of the forward-looking statements are qualified
in their entirety by reference to the factors discussed under "Risk Factors."

          We caution you that these risk factors may not be exhaustive. We
operate in a continually changing business environment, and new risk factors
emerge from time to time. We cannot predict such new risk factors, nor can we
assess the impact, if any, of such new risk factors on our businesses or the
extent to which any factor or combination of factors may cause actual results to
differ materially from those expressed or implied by any forward-looking
statements. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus might not occur.

          For these statements, we claim the protection of the safe harbor for
forward-looking statements contained in Section 27A of the Securities Act.

          You should carefully read this prospectus and the documents
incorporated by reference in their entirety. They contain information that you
should consider when making your investment decision.


                                      iii
<PAGE>

                                     SUMMARY

          The following summary is qualified in its entirety by the more
detailed information included elsewhere or incorporated by reference in this
prospectus. Because this is a summary, it may not contain all the information
that may be important to you. You should read the entire prospectus, as well as
the information incorporated by reference, before making an investment decision.

          We are a holding company that, through our subsidiaries, offers
property and casualty insurance products and diversified insurance services
products. Through our five property and casualty insurance subsidiaries,
Selective Insurance Company of America, Selective Way Insurance Company,
Selective Insurance Company of New York, Selective Insurance Company of the
Southeast, and Selective Insurance Company of South Carolina, we offer primary
and alternative market property and casualty insurance for commercial and
personal risks.

          Our property and casualty insurance products are sold through
approximately 800 independent insurance agents in 20 northeastern, southeastern
and midwestern states. We offer a broad range of commercial insurance and
alternative risk management products to small and medium sized businesses and
government entities. Our commercial insurance products represent 80% of the
company's insurance operations. We also provide personal insurance products to
individuals and families in ten states, which represents 20% of our insurance
operations.

          Our diversified insurance services operation offers medical claim
management services to insurance companies and other businesses through Alta
Services LLC, a managed care organization, and Consumer Health Network Plus,
LLC, a preferred provider organization; human resources administration services
and risk management products through Selective HR Solutions, Inc.; and flood
insurance policy, administration and claims services for the National Flood
Insurance Program, through FloodConnect, LLC.

          Our principal executive offices are located at 40 Wantage Avenue,
Branchville, New Jersey 07890. Our telephone number at that address is (973)
948-3000. Our website address is www.selective.com. We do not intend the
information on our website to constitute part of this prospectus.

Corporate Strategy

          Our corporate strategy is to create profitable growth and long-term
shareholder value. Our goal is to establish ourselves as the market of choice
for each of the independent agents who distribute our products and services. We
intend to achieve this goal by focusing on our customers' needs and tailoring
our products and services to meet and exceed those needs.

          We place a high value on the quality of the independent agents selling
our products and services. The strength of our relationships with our agents is
the foundation of our company's success. As insurance counselors, independent
agents help their customers determine the coverages and services they need to
protect their assets and help us analyze potential exposures to loss.

          Our agency management specialists work closely with agents in their
offices. This on-site approach, supported by six regional offices and technology
links to automated systems, enables a quick response to business opportunities.
A parallel program puts claim management specialists in the field working with
agents, insureds and claimants.

          Behind the risk management products and services we offer is a strong
underwriting tradition and knowledge of our regional markets. The field and
regional staffs are backed by customer-focused strategic business units that
quickly develop and market products designed to meet customers' developing
needs.

          Our long-standing service ethic is strengthened by the use of new
technology tools. By using Internet technology to remove friction and redundant
work from both the sales and service processes, we are significantly increasing
both our effectiveness and efficiency. We have taken major steps toward creating
a straight-through processing environment -- empowering agents and employees to
do more customer-related and creative work.

                                       1
<PAGE>
<TABLE>
<CAPTION>
                                                               The Notes
<S>                                           <C>
Notes....................................     $305,000,000 aggregate principal amount at maturity of senior
                                              convertible notes due September 24, 2032.  Each note was issued at a
                                              price of $380.12 per note and has a principal amount at maturity of
                                              $1,000.
Maturity Date............................     September 24, 2032.
Cash Interest............................     1.6155% per year on the principal amount at maturity, payable
                                              semiannually in arrears in cash on March 24 and September 24 of each
                                              year, beginning March 24, 2003, until September 24, 2009.
Contingent Cash Interest.................     We will pay contingent cash interest to holders of the notes during
                                              any six-month period from March 25 to September 24 and from September
                                              25 to March 24, commencing September 25, 2009, if the average market
                                              price of a note for the Applicable Five Trading Day Period equals 120%
                                              or more of the sum of the issue price, accrued original issue discount
                                              and accrued cash interest, if any, for a note to the day immediately
                                              preceding the relevant six-month period.  "Applicable Five Trading Day
                                              Period" means the five trading days ending on the third trading day
                                              immediately preceding the relevant six-month period, unless Selective
                                              declares a dividend for which the record date falls prior to the first
                                              day of a six-month period but the payment date falls within such
                                              six-month period, in which case the "Applicable Five Trading Day
                                              Period" means the five trading days ending on the third trading day
                                              immediately preceding such record date.

                                              The contingent cash interest payable per note in respect of any
                                              quarterly period within any six-month period will equal the greater of
                                              (a) any regular cash dividends per share paid by us on our common
                                              stock during that quarterly period multiplied by the then applicable
                                              conversion rate or (b) $0.15 multiplied by 12.9783.

                                              Contingent cash interest, if any, will accrue and be payable to
                                              holders of notes as of the record date for the related regular cash
                                              dividend or, if we do not pay a regular cash dividend on our common
                                              stock during a quarter within the relevant six-month period, to
                                              holders of notes as of the fifteenth day preceding the last day of the
                                              relevant six-month period.  Such payments will be paid on the payment
                                              date of the related regular cash dividend or, if we do not pay a
                                              regular cash dividend on our common stock during a quarter within the
                                              relevant six-month period, on the last day of the relevant six-month
                                              period.  Original issue discount will continue to accrue at the yield
                                              to maturity whether or not contingent cash interest is paid.
Yield-to-Maturity of Notes...............     4.25% per year, computed on a semiannual bond equivalent basis and
                                              calculated from September 24, 2002, excluding any contingent cash
                                              interest.
Original Issue Discount..................     We offered our notes at an issue price significantly below the
                                              principal amount at maturity of the notes.  As a result, the notes
                                              were issued with original issue discount, which for non-tax purposes
                                              will accrue daily at a rate of 4.25% per year beginning on September
                                              24, 2009, calculated on a semiannual bond equivalent basis using a
                                              360-day year comprised of
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
<S>                                           <C>
                                              twelve 30-day months.
Tax Original Issue Discount..............     The notes are debt instruments subject to the United States federal
                                              income tax contingent payment debt regulations.  You should be aware
                                              that, even if we do not pay any contingent cash interest on the notes,
                                              you will be required to include imputed interest in your gross income
                                              for United States federal income tax purposes.  For United States
                                              federal income tax purposes, interest, also referred to as tax
                                              original issue discount, accrues from September 24, 2002, at a
                                              constant rate of 6.60% per year, calculated on a semiannual bond
                                              equivalent basis, which represents the yield on our comparable
                                              non-contingent, nonconvertible, fixed-rate debt instrument with terms
                                              and conditions otherwise similar to the notes.  U.S. holders are
                                              required to include tax original issue discount (including the portion
                                              of the tax original issue discount represented by cash interest
                                              payments) in their gross income as it accrues regardless of their
                                              method of tax accounting.  The rate at which the tax original issue
                                              discount accrues for United States federal income tax purposes exceeds
                                              payments of cash interest and exceeds the stated yield of 4.25% for
                                              accrued original issue discount.

                                              You also will recognize gain or loss on the sale, purchase by us at
                                              your option, exchange, conversion or redemption of a note in an amount
                                              equal to the difference between the amount realized on the sale,
                                              purchase by us at your option, exchange, conversion or redemption,
                                              including the fair market value of any common stock received upon
                                              conversion or otherwise, and your adjusted tax basis in the note.  Any
                                              gain recognized by you on the sale, purchase by us at your option,
                                              exchange, conversion or redemption of a note generally will be
                                              ordinary interest income; any loss will be ordinary loss to the extent
                                              of the interest previously included in income, and thereafter, capital
                                              loss.  See "Material United States Federal Income Tax Consequences."

Conversion Rights........................     For each $1,000 principal amount of notes surrendered for conversion,
                                              if the conditions for conversion are satisfied, you will receive
                                              12.9783 shares of our common stock.

                                              In lieu of delivering shares of our common stock upon conversion of
                                              all or any portion of the notes, we may elect to pay holders
                                              surrendering notes cash or a combination of cash and shares of our
                                              common stock for the notes surrendered.  If we elect to pay holders
                                              cash for their notes, the payment will be based on the average sale
                                              price of our common stock for the five consecutive trading days
                                              immediately following either:

                                              o   the date of our notice of our election to deliver cash, which
                                                  we must give within two business days after receiving a
                                                  conversion notice, unless we have earlier given notice of
                                                  redemption as described in this prospectus; or

                                              o   the conversion date, if we have given notice of redemption
                                                  specifying that we intend to deliver cash upon conversion
                                                  thereafter.

                                              The conversion rate may be adjusted for certain reasons, but will not
                                              be adjusted for accrued original issue discount, accrued cash
                                              interest, any contingent cash interest or interest payable upon
                                              conversion to a semiannual coupon note upon the occurrence of a tax
                                              event.  Upon conversion, a holder will not receive any cash payment
                                              representing
</TABLE>

                                       3
<PAGE>

<TABLE>
<CAPTION>
<S>                                           <C>
                                              accrued original issue discount, accrued cash interest or contingent cash
                                              interest. Instead, accrued original issue discount, accrued cash interest
                                              or contingent cash interest will be deemed paid by the shares of common
                                              stock received by the holder on conversion.

                                              If, as of the last day of any calendar quarter beginning with the quarter
                                              ending December 31, 2002, the closing sale price of our common stock for
                                              at least 20 trading days in a period of 30 consecutive trading days ending
                                              on the last trading day of such quarter is more than a specified
                                              percentage (120% until and including, September 30, 2009, thereafter
                                              declining approximately 0.11% per quarter to 110% on the last day of the
                                              quarter ending June 30, 2032) of the accreted conversion price per share
                                              of common stock (excluding accrued cash interest, if any) on the last day
                                              of such quarter, then on any business day during the following calendar
                                              quarter holders may surrender notes for conversion into shares of common
                                              stock. The accreted conversion price per share as of any day will equal
                                              the sum of the issue price of the note plus the accrued original issue
                                              discount or accrued cash interest, if any, divided by the number of shares
                                              issuable upon conversion of a note subject to any adjustments to the
                                              conversion rate through that day.

                                              Holders may also surrender notes for conversion during any period in which
                                              the credit rating assigned to the notes is Ba2 or lower by Moody's
                                              Investors Service, Inc. ("Moody's") or BB or lower by Standard & Poor's
                                              Credit Market Services, a division of the McGraw-Hill Companies ("Standard
                                              & Poor's"), the notes are no longer rated by either Moody's or Standard &
                                              Poor's, or the credit rating assigned to the notes has been suspended or
                                              withdrawn by either Moody's or Standard & Poor's.

                                              Notes or portions of notes in integral multiples of $1,000 principal
                                              amount at maturity called for redemption may be surrendered for conversion
                                              until the close of business on the second business day prior to the
                                              redemption date. In addition, if we make a significant distribution to our
                                              stockholders or if we are a party to certain consolidations, mergers or
                                              binding share exchanges, notes may be surrendered for conversion, as
                                              provided in "Description of Notes -- Conversion Rights." The ability to
                                              surrender notes for conversion will expire at the close of business on
                                              September 23, 2032.


Optional Conversion to Semiannual
  Coupon Notes upon Tax Event............     From and after the occurrence of a tax event, as described in this prospectus,
                                              at our option, interest in lieu of future accrued original issue discount
                                              will accrue on each note from the option exercise date at 4.25% per year,
                                              calculated on a semiannual bond equivalent basis, on the restated
                                              principal amount and will be payable semiannually. Any such interest in
                                              lieu of original issue discount will be computed in the same manner and
                                              payable at the same time as the cash interest and will accrue from the
                                              most recent date to which cash interest, if payable, has been paid or
                                              provided for or, if no cash interest is payable or has been paid or
                                              provided for, the option exercise date. In such event, the redemption
                                              price, purchase price and change in control purchase price will be
                                              adjusted, as described herein. However, there will be no change in the
                                              holder's conversion rights. See "Description of Notes-- Optional
                                              Conversion to Semiannual Coupon Notes upon Tax Event."

</TABLE>
                                                           4
<PAGE>

<TABLE>
<CAPTION>
<S>                                           <C>
Redemption of Notes at Our Option........     We may redeem for cash all or a portion of the notes at any time on or
                                              after September 24, 2007, at redemption prices set forth in this
                                              prospectus. See "Description of Notes-- Redemption of Notes at Our
                                              Option."

Purchase of the Notes by Selective at the
  Option of the Holder...................     Holders may require us to purchase all or a portion of their notes on each
                                              of the following dates at the following prices, plus accrued and unpaid
                                              cash interest, if any, to the purchase date:

                                                  o  on September 24, 2009 at a price of $380.12 per note;

                                                  o  on September 24, 2012 at a price of $431.23 per note;

                                                  o  on September 24, 2017 at a price of $532.15 per note;

                                                  o  on September 24, 2022 at a price of $656.68 per note; and

                                                  o  on September 24, 2027 at a price of $810.36 per note.

                                              We may pay the purchase price in cash or shares of our common stock or in
                                              a combination of cash and shares of our common stock. If we elect to pay
                                              the purchase price, in whole or in part, in shares of our common stock,
                                              the number of shares we deliver will be equal to the portion of the
                                              purchase price to be paid in common stock divided by the market price of a
                                              share of common stock. If we elect to pay all or part of the purchase
                                              price in shares of our common stock, we will notify holders not less than
                                              20 business days before the applicable purchase date, specifying the
                                              percentages of cash and common stock.

Change in Control........................     Upon a change in control of Selective on or before September 24, 2009, the
                                              holders may require us to purchase for cash all or a portion of their
                                              notes at a price equal to the sum of the issue price plus accrued original
                                              issue discount and accrued and unpaid cash interest, if any, to the date
                                              of purchase.

Ranking..................................     The notes are senior unsecured obligations of Selective and rank equal in
                                              right of payment to all of our other senior unsecured indebtedness. The
                                              notes will be effectively subordinated to any future secured indebtedness
                                              as to the assets securing such indebtedness.

                                              In addition, we are structured as a holding company, and we conduct most
                                              of our business operations through our subsidiaries. The notes will be
                                              effectively subordinated to all existing and future indebtedness and other
                                              liabilities and commitments of our subsidiaries.

                                              As of September 30, 2002, after giving effect to the offering of the notes
                                              and the application of the net proceeds, we would have had an aggregate of
                                              $269.9 million of senior unsecured indebtedness outstanding and no secured
                                              indebtedness outstanding. As of September 30, 2002, our subsidiaries had
                                              an aggregate of approximately $210.3 million of outstanding obligations,
                                              which consisted primarily of trade payables.

Use of Proceeds..........................     The selling securityholders will receive all of the net proceeds from the
                                              sale of the notes or the shares of common stock sold under this
                                              prospectus. We will not receive any of the proceeds from sales by the
</TABLE>

                                                           5
<PAGE>

<TABLE>
<CAPTION>
<S>                                           <C>
                                              selling securityholders of the notes or the underlying common stock.

Guarantees...............................     None.

Sinking Fund.............................     None.

DTC Eligibility..........................     The notes were issued in fully registered book-entry form and are
                                              represented by one or more permanent global notes without coupons. Global
                                              notes have been deposited with a custodian for and registered in the name
                                              of a nominee of The Depository Trust Company in New York, New York.
                                              Beneficial interests in global notes are shown on, and transfers thereof
                                              are effected only through, records maintained by DTC and its direct and
                                              indirect participants, and your interest in any global note may not be
                                              exchanged for certificated notes, except in limited circumstances
                                              described herein. See "Description of Notes-- Book-Entry System."

Nasdaq symbol for our Common
   Stock.................................     Our common stock is quoted on the Nasdaq under the symbol "SIGI."

Risk Factors.............................     See "Risk Factors" beginning on page 9 of this prospectus and the other
                                              information in this prospectus for a discussion of factors you should
                                              consider carefully before deciding to invest in the notes.
</TABLE>

                                                           6
<PAGE>

          Summary Historical Consolidated Financial and Operating Data

          The following table sets forth our summary historical consolidated
financial data. The statement of operations data, share data, and balance sheet
data as of and for each of the years in the five-year period ended December 31,
2001 have been derived from our audited financial statements. The statements of
operations data, share data and balance sheet data as of and for each of the
nine-month periods ended September 30, 2002 and 2001 have been derived from our
unaudited financial statements, which information reflects all adjustments
consisting of normal recurring adjustments necessary for a fair presentation of
our financial condition and results of operations for the relevant periods and,
in the opinion of management, have been prepared on the same basis as our
audited consolidated financial statements. Results for the nine months ended
September 30, 2002 are not necessarily indicative of results of operations for
the full fiscal year.

<TABLE>
<CAPTION>

                                      Nine months
                                  ended September 30,                            Year ended December 31,
                                 -----------------------   -----------------------------------------------------------------
                                   2002          2001         2001         2000          1999          1998          1997
                                 ----------  -----------   ----------  -----------   -----------    -----------  -----------
<S>                            <C>           <C>         <C>          <C>           <C>            <C>          <C>
Statement of Operations Data:
   Net premiums written......    817,171       711,569     $ 925,420    $ 843,604     $ 811,677      $ 748,873    $ 717,618
   Net premiums earned.......    730,784       651,530      883,048      821,265        799,065        722,992      676,268
   Net investment income
     earned..................     74,097        71,383       96,767       99,495         96,531         99,196      100,530
   Net realized gains
     (losses)................      1,219         5,233        6,816        4,191         29,377         (2,139)       6,021
   Diversified insurance
     services revenue(1)(2)..     60,873        52,493       69,626       57,527         29,764         14,100        8,236
   Total revenues............    869,847       782,701     1,059,020     986,217        957,879        837,329      794,183
   Underwriting loss.........    (30,479)      (43,291)     (60,638)     (65,122)       (54,147)       (24,986)      (3,022)
   Diversified insurance
     services net income
     (loss) from continuing
     operations(1)(2)........      3,266          (237)        (201)       3,605          3,473          1,440          495
   Operating income from
     continuing operations...     28,986        16,113       21,888       23,962         35,146         54,961       65,694
   (Loss) from discontinued
     operations (2)..........       (122)         (258)        (625)        (151)          (524)            --           --
   Net income................     29,657        19,257       25,693       26,535         53,717         53,570       69,608
   Ratio of earnings to
     fixed charges...........        3.8x          2.4x         2.4x         2.5x          6.4x           6.7x          9.2x
   Comprehensive income......     47,395        17,825       24,405       49,166         16,088         78,842      105,931

   Total assets..............  3,063,861     2,695,644   $2,702,319   $2,590,903     $2,507,545     $2,432,168    $2,306,191
   Notes payable and
     debentures..............    254,706       163,601      156,433      163,634         81,585         88,791       96,559
   Stockholders' equity......    639,326       586,781      591,160      577,797        569,964        607,583      565,316
   Statutory premiums to
     surplus ratio (3).......        2.0:1         1.8:1       1.8:1        1.7:1          1.6:1          1.5:1         1.5:1
   Statutory combined
     ratio(1)(4).............       103.3%        106.3%       106.7%       108.2%        105.7%          103.2%       100.1%
   Combined ratio (1)(4).....       104.2%        106.6%       106.9%       107.9%        106.8%          103.6%       100.3%
   Yield on investment,
     before-
     tax.....................         5.2%          5.4%         5.4%         5.8%          5.6%            5.7%         6.0%
   Debt to capitalization (5)         28.5%        21.8%        21.0%        22.1%         12.5%           13.2%        14.6%
   Return on average equity..          6.2%         3.6%         4.4%         4.6%          9.1%            9.1%        13.4%
Per share data:
   Net income:
   Basic.....................        1.18          0.78        $ 1.05      $ 1.07         $ 1.98         $ 1.88       $ 2.41
   Diluted...................        1.11          0.73          0.98        1.01           1.87           1.74         2.27
   Dividends to stockholders.        0.45          0.45          0.60        0.60           0.59           0.56         0.56
   Stockholders' equity......       24.20         23.04         23.15       22.92          21.46          21.30        19.32
</TABLE>
                                                   (footnotes on following page)

                                       7
<PAGE>

____________

(1)  Flood business is included in statutory underwriting results in accordance
     with prescribed statutory accounting practices. On a GAAP basis only, flood
     servicing revenue and expense has been reclassified from underwriting
     results to Diversified Insurance Services. Prior years have been restated
     to reflect this reclassification as well as the exclusion of results from
     discontinued operations.

(2)  In December 2001, our management adopted a plan to divest Selective of its
     100% ownership interest in PDA Software Services, Inc. (PDA). PDA was
     purchased in 1998 as part of our newly forming Diversified Insurance
     Services segment under which its results have historically been reported in
     accordance with FAS 131, "Disclosures about Segments of an Enterprise and
     Related Information."

(3)  Regulatory and rating agencies use the statutory premiums to surplus ratio
     as a measure of solvency, viewing an increase in the ratio as a possible
     increase in solvency risk. Management and analysts also view this ratio as
     a measure of the effective use of capital since, as the ratio increases,
     revenue per dollar of invested capital increases, indicating the possible
     opportunity for an increased return.

(4)  Changes in both the GAAP and statutory combined ratios are viewed by
     management and analysts as indicative of changes in the profitability of
     underwriting operations. A ratio over 100% is indicative of an underwriting
     loss, and a ratio below 100% is indicative of an underwriting profit.

(5)  The debt to capitalization ratio for the nine months ended September 30,
     2002 does not include the exercise of the overallotment option. A pro forma
     debt to capitalization ratio at September 30, 2002, which includes the
     exercise of the overallotment on October 16, 2002 in the amount of $15.2
     million and the paydown of our 7.84% private placement note on November 15,
     2002 in the amount of $7.1 million, is 29.1%.

                                        8
<PAGE>


                                  RISK FACTORS

          You should carefully consider the following risks, as well as the
other information contained in this prospectus, before investing in the notes.
If any of the following risks actually occur, our business could be harmed. You
should refer to the other information set forth in this prospectus and our
consolidated financial statements and the related notes incorporated by
reference herein.

                          Risks Related to the Offering

Your right to receive payments on these notes will be effectively subordinated
to the rights of any future secured creditors. The notes, in certain other
circumstances, may effectively be subordinated to any existing and future
liabilities of us or our subsidiaries.

          The notes represent unsecured obligations of Selective. Accordingly,
holders of any future secured indebtedness will have claims that are superior to
your claims as holders of the notes to the extent of the value of the assets
securing that other indebtedness. In the event of any distribution or payment of
our assets in any foreclosure, dissolution, winding-up, liquidation,
reorganization, or other bankruptcy proceeding, holders of secured indebtedness
will have superior claim to those of our assets that constitute their
collateral. In any of the foregoing events, we cannot assure you that there will
be sufficient assets to pay amounts due on the notes. Holders of the notes will
participate ratably with all holders of our unsecured indebtedness that ranks
equally in right of payment with the notes, and potentially with all of our
other general creditors, based upon the respective amounts owed to each holder
or creditor, in our remaining assets. As a result, holders of notes may receive
less, ratably, than holders of secured indebtedness.

          In addition, we are a holding company and conduct substantially all
our operations through our subsidiaries. As a result, holders of the notes will
be effectively subordinated to the debt and other liabilities of our
subsidiaries. Therefore, in the event of the insolvency or liquidation of a
subsidiary, following payment by such subsidiary of its liabilities, such
subsidiary may not have sufficient remaining assets to make payments to us as a
shareholder or otherwise. In the event of a default by a subsidiary under any
credit arrangement or other indebtedness, its creditors could accelerate such
debt, prior to such subsidiary distributing amounts to us that we could have
used to make payments on the notes. In addition, if we caused a subsidiary to
pay a dividend to us to make payment on the notes, and such dividend were
determined to be a fraudulent transfer, holders of the notes would be required
to return the payment to the subsidiary's creditors.

          We and our subsidiaries will be able to incur substantial additional
indebtedness in the future, which may be senior to the notes. The terms of the
notes do not impose any limitation on our or our subsidiaries' ability to issue
or incur such additional debt.

          Furthermore, if we fail to deliver our common stock upon conversion of
a note and thereafter become the subject of bankruptcy proceedings, a holder's
claim for damages arising from our failure could be subordinated to all of our
existing and future obligations.

We are a holding company, and we may not have access to the cash that is needed
to make payment on the notes.

          Although substantially all of our operations are conducted through our
subsidiaries, none of our subsidiaries is obligated to make funds available to
us for payment on the notes. Accordingly, our ability to make payments on the
notes and pay dividends on the common stock that may be issued upon a conversion
of the notes is dependent on the earnings and the distribution of funds from our
subsidiaries. Restrictions on our subsidiaries' ability to pay dividends or to
make other cash payments to us may materially affect our ability to pay
principal and interest on our indebtedness and dividends on the common stock we
may issue upon a conversion of the notes.

          Our subsidiaries are permitted under the terms of our indebtedness to
incur additional indebtedness that may restrict or prohibit the making of
distributions, the payment of dividends or the making of loans by our
subsidiaries to us. We cannot assure you that the agreements governing the
current and future indebtedness of our

                                       9
<PAGE>

subsidiaries will permit our subsidiaries to provide us with sufficient
dividends, distributions or loans to fund payments on these notes when due.

          The insurance subsidiaries may declare and pay dividends to us only if
they are permitted to do so under the insurance regulations of their respective
domiciliary state. All of the states in which our insurance subsidiaries are
domiciled regulate the payment of dividends. Some states, including New Jersey,
North Carolina and South Carolina, require that we give notice to the relevant
state insurance commissioner prior to our insurance subsidiaries declaring any
dividends and distributions payable to us. During the notice period, the state
insurance commissioner may disallow all or part of the proposed dividend if it
determines that the insurer's surplus as regards policyholders is not reasonable
in relation to the insurer's liabilities and adequate to its financial needs, or
in the case of New Jersey, if the regulatory authority determines that the
insurer is otherwise in a hazardous financial condition. The aggregate amount of
dividends calculated in accordance with state regulations that may be paid in
2002 from all of our insurance subsidiaries with prior regulatory approval is
anticipated to be approximately $49.0 million, of which $23.9 million has been
approved and paid as of December 31, 2002.

          Notwithstanding the foregoing, if insurance regulators otherwise
determine that payment of a dividend or any other payment to an affiliate would
be detrimental to an insurance subsidiary's policyholders or creditors, because
of the financial condition of the insurance subsidiary or otherwise, the
regulators may block dividends or other payments to affiliates that would
otherwise be permitted without prior approval.

          The insurance subsidiaries' sources of funds consist primarily of
premiums and contract fees, investment income and proceeds from sales and
redemption of investments. Such funds are applied primarily to payment of
claims, insurance operating expenses, income taxes and the purchase of
investments, as well as dividends and other payments.

We may not be able to pay cash dividends in the future.

          For the quarters ending March 31, 2002, June 30, 2002 and September
30, 2002 and each of the four quarters for the fiscal years ending December 31,
2000 and December 31, 2001 we have paid a $0.15 per share cash dividend. Any
future cash dividends will depend upon our results of operations, financial
conditions, cash requirements, the availability of a surplus and other factors,
including the ability of our subsidiaries to make distributions to us, which
ability is restricted in the manner described above.

We may not have the ability to purchase notes at the option of the holders or
upon a change in control or to raise the funds necessary to finance the
purchases.

          On September 24, 2009, 2012, 2017, 2022 and 2027, holders of the notes
may require us to purchase their notes. However, it is possible that we would
not have sufficient funds at that time to make the required purchase of notes.
We may be required to pay all or a portion of the purchase price in shares of
our common stock, subject to satisfying the conditions in the indenture for
making such payments. If we were unable to satisfy the conditions in the
indenture to use shares of our common stock to pay the purchase price, we could
be in default of our obligations on the notes. In addition, if a holder requires
us to purchase all or a portion of its notes and we elect to deliver shares of
our common stock, and we then become the subject of bankruptcy proceedings, a
holder may not be able to rescind its notice obligating us to purchase all or a
portion of its notes, and a holder's claim may be subordinated to all of our
existing and future obligations.

          In addition, upon the occurrence of certain specific kinds of change
in control events occurring on or before September 24, 2009, holders may require
us to purchase for cash all or any portion of their notes. However, it is
possible that, upon a change in control, we may not have sufficient funds at
that time to make the required purchase of notes, and we may be unable to raise
the funds necessary.

          As described above, we are a holding company and our cash flow depends
on distributions to us from our subsidiaries, which are restricted in the manner
described above. Accordingly, our ability to purchase the notes at

                                       10
<PAGE>

the option of the holder upon a change in control event will depend in part on
the ability of our subsidiaries to make distributions to us.

          In addition, the terms of any future indebtedness we incur may also
restrict our ability to purchase notes upon a change in control or if we are
otherwise required to purchase notes at the option of the holder. If such
indebtedness contained such a restriction, we would have to seek the consent of
the lenders or repay those borrowings. If we were unable to obtain the necessary
consent or unable to repay those borrowings, we would be unable to purchase the
notes and, as a result, would be in default under the notes.

You should consider the United States federal income tax consequences of owning
the notes.

          The notes will be characterized as indebtedness for United States
federal income tax purposes. Accordingly, you will be required to include
interest with respect to the notes in your income. The notes will constitute
contingent payment debt instruments. Consequently, the notes will be treated as
issued with original issue discount for United States federal income tax
purposes, and you will be required to include such original issue discount in
your income as it accrues for United States federal income tax purposes in
advance of receipt of any payment on the notes to which the income is
attributable.

          The amount of tax original issue discount required to be included by
you for each year will be in excess of the stated yield to maturity of the
notes. You will recognize gain or loss on the sale, purchase by us at your
option, exchange, conversion or redemption of a note in an amount equal to the
difference between the amount realized on the sale, purchase by us at your
option, exchange, conversion or redemption, including the fair market value of
any of our common stock received upon conversion or otherwise, and your adjusted
tax basis in the notes. Any gain recognized by you on the sale, purchase by us
at your option, exchange, conversion or redemption of a note generally will be
ordinary interest income; any loss will be ordinary loss to the extent of the
interest previously included in income, and thereafter, capital loss.

          To understand how this may affect you, you should seek advice from
your own tax advisor prior to purchasing these notes. See "Material United
States Federal Income Tax Consequences" for a more detailed discussion of the
United States federal income tax consequences to the holders of the notes of the
purchase, ownership and disposition of the notes.

An active trading market for the notes may not develop.

          The notes comprise a new issue of securities for which there is
currently no public market. The notes will not be listed on any securities
exchange or included in any automated quotation system. We do not know whether
an active trading market will develop for the notes. If the notes are traded
after their initial issuance, they may trade at a discount from their initial
offering price depending on prevailing interest rates, the market for similar
securities, the price of our common stock, its and our performance and other
factors. We do not intend to apply for listing of the notes on any securities
exchange or other stock market.

                          Risks Related to Our Business

Catastrophic events can have a significant impact on our financial and
operational condition.

          Results of property insurers are subject to weather and other
conditions prevailing in an accident year. While one year may be relatively free
of major weather or other disasters, another year may have numerous such events
causing results for such a year to be materially worse than for other years.

          Our insurance subsidiaries have experienced, and are expected in the
future to experience, catastrophe losses. It is possible that a catastrophic
event or a series of multiple catastrophic events could have a material adverse
effect on the operating results and financial condition of the insurance
subsidiaries, thereby limiting the ability of the insurance subsidiaries to pay
dividends.

                                       11
<PAGE>

          Various events can cause catastrophes, including hurricanes,
windstorms, earthquakes, hail, terrorism, explosions, severe winter weather and
fires. The frequency and severity of these catastrophes are inherently
unpredictable. The extent of losses from a catastrophe is a function of both the
total amount of insured exposures in the area affected by the event and the
severity of the event. Although catastrophes can cause losses in a variety of
property and casualty lines, most of the catastrophe-related claims of our
insurance subsidiaries are related to homeowners' coverages.

          Our insurance subsidiaries seek to reduce their exposure to
catastrophe losses through the purchase of catastrophe reinsurance.
Nevertheless, reinsurance may prove inadequate if

          o    a major catastrophic loss exceeds the reinsurance limit, or

          o    an insurance subsidiary pays a number of smaller catastrophic
               loss claims which, individually, fall below the subsidiary's
               retention level.

          In the past ten years the single largest catastrophe event generated
claims of $14.1 million net of reinsurance. In that same period, total
catastrophe losses in any one-year ranged from $2.1 million to $19.6 million net
of reinsurance.

Our geographic concentration ties our performance to the economic and regulatory
conditions and weather-related events in the east coast and midwestern states.

          Our property and casualty insurance business is concentrated
geographically. Approximately 40% of our net premiums written are for insurance
policies written in New Jersey. Other East Coast states, including Connecticut,
Delaware, Georgia, Maryland, New York, North Carolina, Pennsylvania, Rhode
Island, South Carolina, Virginia and several Midwestern states, including
Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Ohio and
Wisconsin, account for substantially all of our other business. Consequently,
unusually severe storms or other natural or man-made disasters which destroy
property in the states in which we write insurance could adversely affect our
operations. Our revenues and profitability are also subject to prevailing
economic and regulatory conditions in those states in which we write insurance.
Because our business is concentrated in a limited number of markets, we may be
exposed to risks of adverse developments that are greater than the risks of
having business in a greater number of markets.

We face significant competition from other regional and national insurance
companies, agents and from self-insurance.

          We compete with regional and national insurance companies, including
direct writers of insurance coverage. Many of these competitors are larger than
we are and have greater financial, technical and operating resources. In
addition, we face competition within each insurance agency which sells our
insurance, because most of our agencies represent more than one insurance
company.

          The property and casualty insurance industry is highly competitive on
the basis of both price and service. If our competitors price their products
more aggressively, our ability to grow or renew our business may be adversely
impacted. There are many companies competing for the same insurance customers in
the geographic areas in which we operate. The Internet may also emerge as a
significant source of new competition, both from existing competitors using
their brand name and resources to write business through this new distribution
channel and from new competitors.

          We also face competition because of entities which self-insure,
primarily in the commercial insurance market. Many of our customers and
potential customers are examining the benefits and risks of self-insuring as an
alternative to traditional insurance.

          A number of new, proposed or potential legislative or industry
developments could further increase competition in the property and casualty
insurance industry. These developments include:

                                       12
<PAGE>

          o    the enactment of the Gramm-Leach-Bliley Act of 1999, which could
               result in increased competition from new entrants to the
               insurance market, including banks and other financial service
               companies;

          o    programs in which state-sponsored entities provide property
               insurance in catastrophe-prone areas or other alternative market
               types of coverage; and

          o    changing practices caused by the internet, which have led to
               greater competition in the insurance business and, in some cases,
               greater expectations for customer service.

          New competition from these developments could cause the supply or
demand for insurance to change, which could adversely affect our results of
operations and financial condition.

We are heavily regulated in the states in which we operate.

          We are subject to extensive supervision and regulation in the states
in which we transact business. The primary purpose of supervision and regulation
is to protect individual policyholders and not shareholders or other investors.
Our business can be adversely affected by private passenger automobile insurance
regulations and any other regulations affecting property and casualty insurance
companies. For example, laws and regulations can reduce or set rates at levels
which we do not believe are adequate for the risks we insure. Other laws and
regulations can limit our ability to cancel or refuse to renew policies and
require us to offer coverage to all consumers. Changes in laws and regulations,
or their interpretations, pertaining to insurance, including workers'
compensation, health care or managed care, and to preferred provider
organizations and professional employer organizations, may also have an adverse
effect on our business. Although the federal government does not directly
regulate the insurance industry, federal initiatives, from time to time, can
also impact the insurance industry.

          In addition, proposals intended to control the cost and availability
of health care services have been debated in the U.S. Congress and state
legislatures. Although we do not write health insurance, rules affecting
healthcare services can affect workers' compensation, commercial and personal
automobile, liability and other insurance which we do write. We cannot determine
whether or in what form health care reform legislation may be adopted by the
U.S. Congress or any state legislature. We also cannot determine the nature and
effect, if any, that the adoption of health care legislation or regulations, or
changing interpretations, at the federal or state level would have on us.

          Examples of regulatory risks include:

     Automobile Insurance Regulation

          In March 1999, we began to implement a state-mandated 15% rate
reduction for all personal automobile policies in New Jersey. As a result of
this roll-back, our annual premiums in this line have been reduced. The effect
of this rollback continued through 2001 decreasing premium collected and
adversely impacting profitability. In addition, the New Jersey Urban Enterprise
Zone Program requires New Jersey auto insurers, including us, to write
involuntary urban auto insurance proportionate to our voluntary market share.
This business is and will most likely continue to be unprofitable.

          South Carolina law established a joint underwriting association for
automobile insurance. We are required to be a member along with other automobile
insurers in South Carolina. As a member of this association, we have to write
automobile insurance for some involuntary risks, and we share in the profit or
loss of the association. On March 1, 2003, the association will be replaced by
an assigned risk plan. This plan will assign risks which are unable to obtain
coverage voluntarily to insurers based on their market share. We are unable at
this time to assess the impact of these changes on our results of operations.

     Workers' Compensation Insurance Regulation

          Because we voluntarily write workers' compensation insurance, we are
required by state law to write involuntary coverage. Insurance companies that
underwrite voluntary workers' compensation insurance can either write
involuntary coverage assigned by state regulatory authorities or participate in
a sharing arrangement. We

                                       13
<PAGE>

currently write involuntary coverage assigned to us in a sharing arrangement. We
currently write involuntary coverage assigned to us directly from the State of
New Jersey, and this business is unprofitable.

     Homeowners Insurance Regulation

          New Jersey regulations prohibit us from canceling or non-renewing
homeowners insurance policies for any arbitrary, capricious or unfairly
discriminatory reason or without adequate notice to the insured. We are subject
to regulatory provisions that are designed to address problems in the homeowners
property insurance marketplace. These provisions regulate matters relating to
the availability and affordability of such insurance and take two forms:
voluntary and involuntary. Involuntary provisions, such as the New Jersey Fair
Access to Insurance Requirements (FAIR), generally result in assessments to us.
The New Jersey FAIR writes fire and extended coverage on homeowners for those
individuals unable to secure insurance elsewhere. Insurance companies who
voluntarily write homeowners insurance in New Jersey are assessed a portion of
any deficit from the New Jersey FAIR based on their share of the voluntary
market. Similar involuntary plans exist in most other states where we operate.

A change in our market share in New Jersey could adversely impact the results in
our private passenger automobile business.

          New Jersey insurance regulations require New Jersey auto insurers to
involuntarily write private passenger automobile insurance for individuals who
are unable to obtain insurance in the voluntary market at the same premium rates
that are applicable to policies which the insurers voluntarily write. The amount
of involuntary insurance which an insurer must write in New Jersey depends on
the insurer's market share in New Jersey -- the greater the market share the
more involuntary coverage the insurer is required to write. The underwriting of
involuntary personal automobile insurance in New Jersey is unprofitable.

          In 2001, insurance companies having an aggregate share of nearly 25%
of the market for New Jersey private passenger automobile insurance publicly
announced their intentions to either withdraw from New Jersey or to reduce their
writing of private passenger automobile insurance in New Jersey. It is uncertain
whether these insurance companies will actually follow through on their
announced intentions. The impact of their actions, if any, is also uncertain.
However, the withdrawal from New Jersey of insurance companies that write a
significant amount of private passenger automobile insurance coverage or the
reduction in their writing of that coverage could result in an increase in our
market share in New Jersey if their insureds were to purchase private passenger
automobile insurance from us. Our results of operations in this business could
be materially adversely affected if we were required to write significantly more
involuntary automobile insurance.

          The New Jersey Department of Banking and Insurance previously issued
an order allowing State Farm Indemnity Company to non-renew a limited portion of
its existing New Jersey voluntary private passenger automobile insurance. On
September 13, 2002, the department issued an order that establishes a method to
equitably distribute State Farm's insured vehicles among the remaining private
passenger automobile insurers in the state. The implementation of this order
would increase the number of private passenger vehicles we insure in New Jersey
by approximately 3,300 vehicles.

The property and casualty insurance industry is cyclical.

          Historically, the results of the property and casualty insurance
industry have been subject to significant fluctuations due to competition,
economic conditions, interest rates and other factors. For example, in 2000 and
2001, commercial pricing increased, but had decreased for several years
preceding 2000. Furthermore, the industry's profitability is affected by
unpredictable developments, including:

          o    natural and man-made disasters;

          o    fluctuations in interest rates and other changes in the
               investment environment that affect returns on our investments;

          o    inflationary pressures that affect the size of losses; and

                                       14
<PAGE>

          o    judicial decisions that affect insurers' liabilities.

          The demand for property and casualty insurance, particularly
commercial lines, can also vary with the overall level of economic activity.

Our reserves may not be adequate to cover estimated losses and expenses.

          We are required to maintain loss reserves for our estimated liability
for losses and loss expenses associated with reported and unreported claims for
each accounting period. From time to time we have to increase reserves, and if
our reserves are inadequate, we will be required to further increase reserves.
An increase in reserves results in an increase in losses and a reduction in our
net income and stockholders' equity for the period in which the deficiency in
reserves is identified and could have a material adverse effect on our results
of operations, liquidity and financial condition. Our reserve amounts are
estimated based on what we expect the ultimate settlement and claim
administration expenses to be. These estimates are based on facts and
circumstances of which we are aware, predictions of future events, and trends in
claims severity and frequency and other subjective factors. There is no method
for precisely estimating our ultimate liability for settlement and claims.

          We regularly review our reserving techniques and our overall amount of
reserves. We also review:

          o    information regarding each claim for losses;

          o    our loss history and the industry's loss history;

          o    legislative enactments, judicial decisions and legal developments
               regarding damages;

          o    changes in political attitudes; and

          o    trends in general economic conditions, including inflation.

          We cannot be certain that the reserves we establish are adequate or
will be adequate in the future.

Our ability to reduce our exposure to risks depends on the availability and cost
of reinsurance.

          We transfer our exposure to some risks to others through reinsurance
arrangements with other insurance and reinsurance companies. Under our
reinsurance arrangements, another insurer assumes a specified portion of our
losses and loss adjustment expenses in exchange for a specified portion of
policy premiums. The availability, amount and cost of reinsurance depend on
market conditions and may vary significantly. Any decrease in the amount of our
reinsurance will increase our risk of loss. Furthermore, we face a credit risk
with respect to reinsurance. When we obtain reinsurance, we are still liable for
those transferred risks if the reinsurer cannot meet those obligations.
Therefore, the inability of any of our reinsurers to meet its financial
obligations could materially and adversely affect our operations.

          Reinsurers experienced significant losses related to the terrorist
events of September 11, 2001. As a result, we may incur significantly higher
reinsurance costs and more restrictive terms and conditions. Also, there may be
reduced availability of reinsurance for some types of commercial exposures.

We depend on our investments to support our operations and to provide a
significant portion of our revenues and earnings.

          We, like many other property and casualty insurance companies, depend
on income from our investment portfolio for a significant portion of our
revenues and earnings. Any significant decline in our investment income as a
result of falling interest rates, decreased dividend payment rates or general
market conditions would have an adverse effect on our results. Any significant
decline in the market value of our investments would reduce our shareholders
equity and our policyholders surplus which could impact our ability to write
additional premiums. In

                                       15
<PAGE>

addition our notes payable are subject to certain debt-to-capitalization
restrictions which could also be impacted by a significant decline in investment
values.

We depend on our independent insurance agents.

          We market and sell our insurance products through independent,
non-exclusive insurance agencies and brokers. Agencies and brokers are not
obligated to promote our insurance products, and they may also sell our
competitors' insurance products. As a result, our business depends in part on
the marketing and sales efforts of these agencies and brokers. As we diversify
and expand our business geographically, we may need to expand our network of
agencies and brokers to successfully market our products. If these agencies and
brokers fail to market our products successfully, our business may be adversely
impacted. Also, independent agents may decide to sell their businesses to banks,
other insurance agencies, or other businesses. Agents with a Selective
appointment may decide to buy other agents. Changes in ownership or agencies, or
expansion of agencies through acquisition could adversely affect an agency's
ability to control growth and profitability, thereby adversely affecting our
business.

We may be adversely impacted by a change in our rating.

          Insurance companies are subject to financial strength ratings produced
by external rating agencies. Higher ratings generally indicate financial
stability and a strong ability to pay claims. Ratings are assigned by rating
agencies to insurers based upon factors relevant to policyholders. Ratings are
not recommendations to buy, hold or sell our common stock.

          The principal agencies that cover the property and casualty industry
are A.M. Best Company, Standard & Poor's and Moody's. We believe our ability to
write business is most influenced by our rating from A.M. Best. We are currently
rated "A+" (Superior) by A.M. Best, which is their second highest of fifteen
ratings. A rating below "A" from A.M. Best could materially adversely affect the
business we write. We believe that ratings from Standard & Poor's or Moody's,
although important, have less of an impact on our business. We are currently
rated "A" by Standard & Poor's and "A2" by Moody's. An unfavorable change in
either of these ratings could make it more expensive for us to access capital
markets and would increase the interest rate charged to us under our current
lines of credit. We cannot be sure that we will maintain our current lines of
credit. We cannot be sure that we will maintain our current A.M. Best, Standard
& Poor's or Moody's ratings.

We employ anti-takeover measures that may discourage potential acquirors of our
company, which could adversely affect the value of our common stock.

          We own, directly or indirectly, all of the shares of stock of
insurance subsidiaries domiciled in the states of New Jersey, New York, North
Carolina and South Carolina. State insurance laws require prior approval by
state insurance departments of any acquisition or control of a domestic
insurance company or of any company which controls a domestic insurance company.
Any purchase of 10% or more of our outstanding common stock would require prior
action by all or some of the insurance commissioners of the above-referenced
states.

          In addition, other factors may discourage, delay or prevent a change
of control of Selective. These include, among others, provisions in our
certificate of incorporation, as amended, relating to:

          o    supermajority voting and fair price to our business combinations;

          o    staggered terms for our directors;

          o    supermajority voting requirements to amend the foregoing
               provisions;

          o    our stockholder rights plan;

          o    guaranteed payments which must be made to our officers upon a
               change of control; and

          o    the ability of our board of directors to issue "blank check"
               preferred stock.

                                       16
<PAGE>

          The New Jersey Shareholders Protection Act provides, among other
things, that a New Jersey corporation, such as Selective, may not engage in
business combinations specified in the statute with a shareholder having
indirect or direct beneficial ownership of 10% or more of the voting power of
our outstanding stock (an interested shareholder) for a period of five years
following the date on which the shareholder became an interested shareholder,
unless the business combination is approved by the board of directors of the
corporation before the date the shareholder became an interested shareholder.
These provisions also could have the effect of depriving shareholders of an
opportunity to receive a premium over the prevailing market price if a hostile
takeover were attempted and may adversely affect the value of our common stock.

We depend on key personnel.

          The success of our business is dependent, to a large extent, on our
ability to attract and retain key employees, in particular our senior officers,
key management, sales, information systems, underwriting, claims, managed care,
professional employer organization, and corporate personnel. Competition to
attract and retain key personnel is intense. While we have employment agreements
with a number of key managers, in general, we do not have employment contracts
or non-compete arrangements with our employees.

We face risks from technology-related failures.

          Increasingly, our businesses are dependent on computer and
Internet-enabled technology. Our inability to anticipate or manage problems with
technology associated with scalability, security, functionality or reliability
could adversely impact our businesses.

We face risks in the professional employment organization business.

     Regulatory

          The operations of Selective HR Solutions are affected by numerous
federal and state laws and regulations relating to employment matters, benefits
plans and taxes. In performing services for its clients, Selective HR Solutions
assumes some obligations of an employer under these laws and regulations. If
these federal or state laws are ultimately applied in a manner unfavorable to
Selective HR Solutions, it could have a material adverse effect on our
operations and financial condition.

     Liability for worksite employee payroll

          In providing its services, Selective HR Solutions assumes the
obligations to pay the salaries, wages and related benefit costs and payroll
taxes of its clients' worksite employees. Clients are required to fund these
obligations for us. If clients failed to fund these obligations, and if these
obligations were to be significant, it could have a material adverse effect on
our results of operations or financial condition.

     Liabilities for Client and Employee Actions

          Selective HR Solutions establishes, by contract, division of
responsibility with the client for various personnel management matters,
including compliance with and liability under various governmental regulations.
Because of this relationship, however, Selective HR Solutions may be subject to
liability for the clients' violations of laws and regulations. Although the
agreements with clients generally obligate them to indemnify Selective HR
Solutions for any liability attributable to the conduct of the clients,
Selective HR Solutions may not be able to collect on the contractual
indemnification claim. In addition, worksite employees may be deemed to be
agents of Selective HR Solutions subjecting Selective HR Solutions to liability
for the actions of those worksite employees which could have a material adverse
effect on our results of operations or financial condition.

Class action litigation could affect our business practices and financial
results.

          The insurance industry has been the target of class action litigation
in the following areas:

                                       17
<PAGE>

          o    after-market crash parts;

          o    urban homeowner underwriting practices;

          o    health maintenance organization practices; and

          o    personal injury protection payments.

          It is possible that future class action litigation could adversely
affect our insurance and diversified insurance services businesses.

Unionization of medical providers could impact our operations.

          Our subsidiary Consumer Health Network (CHN) builds medical provider
networks and leases networks to insurers, medical management companies, third
party administrators and other medical claim payors. The lessors receive medical
fee discounts from network providers in exchange for patient volume commitments.
If medical providers, such as physicians, decided to unionize, that might impair
CHN's ability to maintain and grow networks, negotiate fee discount arrangements
and lease networks to their customers. These events would have an adverse impact
not only on CHN, but also on Alta Services, our managed care subsidiary, which
leases CHN networks, and Selective as a whole because we rely, in part, on
provider networks and discounts to manage our claim medical expenses.


                                       18
<PAGE>

                 Consolidated RATIO OF EARNINGS TO FIXED CHARGES

          Set forth below is information concerning our ratio of earnings to
fixed charges on a consolidated basis for the periods indicated. This ratio
shows the extent to which our business generates enough earnings after the
payment of all expenses other than interest to make required interest payments
on our debt.

          For the purpose of computing the ratios of earnings to fixed charges,
"earnings" consist of income before tax and fixed charges. "Fixed charges"
consist of interest expenses and amortization of expenses related to
indebtedness and the portion of rental expense, which is considered to be
representative of the interest factors in our leases.

<TABLE>
<CAPTION>

                                                   Nine Months
                                                      Ended
                                                  September 30,                   Year Ended December 31,
                                                                         ------------------------------------------
                                                       2002              2001      2000     1999      1998     1997
                                                  -------------          ----      ----     ----      ----     ----
<S>                                                    <C>               <C>       <C>      <C>       <C>      <C>
Ratio of earnings to fixed charges................     3.8x              2.4x      2.5x     6.4x      6.7x     9.2x
</TABLE>


                                 USE OF PROCEEDS

          The selling securityholders will receive all of the net proceeds from
the sale of the notes or the shares of common stock sold under this prospectus.
We will not receive any of the proceeds from sales by the selling
securityholders of the notes or the underlying common stock.


                                       19
<PAGE>


              PRICE RANGE AND DIVIDEND HISTORY OF OUR COMMON STOCK

          Our common stock is quoted on the Nasdaq National Market under the
symbol "SIGI." On February 7, 2003, the last reported bid price of the common
stock on Nasdaq was $21.95 per share. The following table sets forth for the
periods indicated below the high and low bid information for our common stock as
quoted on Nasdaq, and dividends paid, for each quarterly period during the
fiscal years 2000, 2001 and 2002.

<TABLE>
<CAPTION>
                                                                                                          Dividend
                                                                             High            Low            Paid
                                                                            -----           ------        ---------
<S>                                                                         <C>             <C>              <C>
Fiscal Year Ended December 31, 2000
     Quarter ended March 31.......................................          $17.31          $14.63           $0.15
     Quarter ended June 30........................................           20.38           16.63            0.15
     Quarter ended September 30...................................           19.38           17.19            0.15
     Quarter ended December 31....................................           25.88           15.25            0.15
Fiscal Year Ended December 31, 2001
     Quarter ended March 31.......................................          $26.94          $15.94           $0.15
     Quarter ended June 30........................................           28.21           22.25            0.15
     Quarter ended September 30...................................           27.90           20.08            0.15
     Quarter ended December 31....................................           26.10           20.50            0.15
Fiscal Year Ended December 31, 2002
     Quarter ended March 31.......................................          $27.74          $19.36           $0.15
     Quarter ended June 30........................................           31.48           25.66            0.15
     Quarter ended September 30...................................           28.07           20.45            0.15
     Quarter ended December 31....................................           25.69           20.09            0.15
Fiscal Year Ended December 31, 2003
     Quarter ended March 31 (through February 7)..................           26.48           21.93            -

</TABLE>

          For each of the four quarters for the fiscal years ending December 31,
2000, December 31, 2001, and December 31, 2002 we have paid a $0.15 per share
cash dividend. We expect to pay comparable dividends in the future. However, any
future cash dividends will depend upon our results of operations, financial
condition, cash requirements, the availability of a surplus and such other
factors as our board of directors may deem relevant. See "Risk Factors."


                                       20
<PAGE>

                              DESCRIPTION OF NOTES

          We issued the notes under an indenture, dated as of September 24,
2002, between Selective Insurance Group, Inc., as issuer, and National City
Bank, as trustee. The notes constitute senior debt securities under the
indenture. The following summarizes the material provisions of the indenture and
the notes and does not purport to be complete and is subject to, and qualified
by reference to, all of the provisions of the indenture and the notes, which we
urge you to read because they define your rights as a note holder. A copy of the
indenture has been filed with the SEC as an exhibit to this registration
statement. As used in this description of notes, the words "we," "us," "our" or
"Selective" refer only to Selective Insurance Group, Inc. and do not include any
current or future subsidiary of Selective Insurance Group, Inc.

General

          The notes are limited to $305,000,000 aggregate principal amount at
maturity. The notes mature on September 24, 2032. The principal amount at
maturity of each note will be $1,000. The notes will be payable at the principal
corporate trust office of the paying agent, which initially will be an office or
agency of the trustee, or an office or agency maintained by us for such purpose,
in the Borough of Manhattan, The City of New York.

          The notes bear cash interest at the rate of 1.6155% per year on the
principal amount at maturity from the issue date, or from the most recent date
to which interest has been paid or provided for, until September 24, 2009.
During such period, cash interest will be payable semiannually in arrears on
March 24 and September 24 of each year, commencing on March 24, 2003, to holders
of record at the close of business on the March 9 or September 9 immediately
preceding such interest payment date. Each payment of cash interest on the notes
will include interest accrued through the day before the applicable interest
payment date (or purchase, redemption or, in certain circumstances, conversion
date, as the case may be). Any payment required to be made on any day that is
not a business day will be made on the next succeeding business day.

          The notes were offered at an issue price of $380.12 per note, a
substantial discount from their $1,000 principal amount at maturity. Beginning
September 24, 2009, for non-tax purposes the notes will accrue original issue
discount while they remain outstanding at a rate of 4.25% per year. Original
issue discount is the difference between the issue price and the principal
amount (or stated redemption price for federal income tax purposes) at maturity
of a note. The calculation of the accrual of original issue discount will be on
a semiannual bond equivalent basis, using a 360-day year composed of twelve
30-day months.

          The notes are debt instruments subject to the contingent payment debt
regulations. The notes were issued with original issue discount for United
States federal income tax purposes. Even if we do not pay any contingent cash
interest on the notes, holders will be required to include accrued tax original
issue discount (including the portion of the tax original issue discount
represented by cash interest payments) in their gross income for federal income
tax purposes as it accrues from September 24, 2002. The rate at which the tax
original issue discount will accrue will exceed the stated yield of 4.25% for
accrued original issue discount. See "Material United States Federal Income Tax
Consequences."

          Original issue discount or cash interest, as the case may be, will
cease to accrue on a note upon its maturity, conversion, purchase by us at the
option of a holder or redemption. We may not reissue a note that has matured or
been converted, purchased by us at your option, redeemed or otherwise cancelled,
except for registration of transfer, exchange or replacement of such note.

          Notes may be presented for conversion at the office of the conversion
agent and for exchange or registration of transfer at the office of the
registrar. The conversion agent and the registrar shall initially be the
trustee. No service charge will be made for any registration of transfer or
exchange of notes. However, we may require the holder to pay any tax, assessment
or other governmental charge payable as a result of such transfer or exchange.

                                       21
<PAGE>

Ranking of the Notes

          The notes are senior unsecured obligations of Selective and rank equal
in right of payment to all of our other senior unsecured indebtedness. The notes
will be effectively subordinated to any future secured indebtedness to the
extent of the assets securing such indebtedness. In addition, we are structured
as a holding company, and we conduct most of our business operations through our
subsidiaries. The notes will be effectively subordinated to all existing and
future indebtedness and other liabilities and obligations of our subsidiaries,
which are distinct legal entities having no obligation to pay any amounts
pursuant to the notes or to make funds available therefor. In addition, since
our subsidiaries are insurance companies, their ability to pay dividends to us
is subject to regulatory limitations. See "Risk Factors -- Risks Related to the
Offering -- We are a holding company, and we may not have access to the cash
that is needed to make payment on the notes."

          As of September 30, 2002, after giving effect to the offering of the
notes and the application of the net proceeds, we would have had an aggregate of
$269.9 million of senior unsecured indebtedness outstanding and no secured
indebtedness outstanding. As of September 30, 2002, our subsidiaries had an
aggregate of approximately $210.3 million of outstanding obligations, which
consisted primarily of trade payables.

Conversion Rights

          A holder may convert a note, in integral multiples of $1,000 principal
amount at maturity, into common stock only if the conditions for conversion
described below are satisfied. In addition, a holder may convert a note only
until the close of business on the second business day prior to the redemption
date if we call a note for redemption. A note for which a holder has delivered a
purchase notice or a change in control purchase notice requiring us to purchase
the note may be surrendered for conversion only if such notice is withdrawn in
accordance with the indenture.

          For each $1,000 principal amount of notes surrendered for conversion,
if the conditions for conversion are satisfied, a holder will receive 12.9783
shares of our common stock, subject to adjustment upon the occurrence of certain
events described below. A holder of a note otherwise entitled to a fractional
share will receive cash equal to the applicable portion of the then current sale
price of our common stock on the trading day immediately preceding the
conversion date. Upon a conversion, we will have the option to deliver cash or a
combination of cash and shares of our common stock for the notes surrendered as
described below. The ability to surrender notes for conversion will expire at
the close of business on September 23, 2032.

          To convert a note into shares of common stock, a holder must:

          o    complete and manually sign a conversion notice, a form of which
               is on the back of the note, and deliver the conversion notice to
               the conversion agent;

          o    surrender the note to the conversion agent;

          o    if required by the conversion agent, furnish appropriate
               endorsements and transfer documents; and

          o    if required, pay all transfer or similar taxes.

          On conversion of a note, a holder will not receive any cash payment of
interest representing accrued original issue discount or, except as described
below, any accrued cash interest or contingent cash interest. Instead, accrued
original issue discount or accrued cash interest or contingent cash interest
will be deemed paid by the shares of common stock received by the holder on
conversion. Delivery to the holder of the full number of shares of common stock
into which the note is convertible, together with any cash payment of such
holder's fractional shares, will thus be deemed:

          o    to satisfy our obligation to pay the principal amount at maturity
               of the note;

                                       22
<PAGE>

          o    to satisfy our obligation to pay accrued original issue discount
               or accrued cash interest attributable to the period from the
               issue date through the conversion date; and

          o    to satisfy our obligation to pay accrued contingent interest, if
               any, attributable to the most recent accrual date.

          As a result, accrued original issue discount or accrued cash interest
is deemed paid in full rather than cancelled, extinguished or forfeited.
Notwithstanding the foregoing, accrued cash interest, if any, will be payable
upon any conversion of notes at the option of the holder made concurrently with
or after acceleration of the notes following an event of default described under
"-- Events of Default and Acceleration" below. Holders of notes surrendered for
conversion during the period from the close of business on any regular record
date next preceding any interest payment date to the opening of business on such
interest payment date will receive the semiannual interest payable on such notes
on the corresponding interest payment date notwithstanding the conversion, and
such notes upon surrender must be accompanied by funds equal to the amount of
such payment, unless such notes have been called for redemption, in which case
no such payment shall be required.

          If contingent cash interest is payable to holders of notes during any
particular six-month period, and such notes are converted after the applicable
accrual or record date therefor and prior to the next succeeding interest
payment date, holders of such notes at the close of business on the accrual or
record date will receive the contingent cash interest payable on such notes on
the corresponding interest payment date notwithstanding the conversion. Such
notes, upon surrender for conversion, must be accompanied by funds equal to the
amount of contingent cash interest payable on the principal amount of notes so
converted, unless such notes have been called for redemption, in which case no
such payment shall be required.

          The conversion rate will not be adjusted for accrued original issue
discount, accrued cash interest, any contingent cash interest or interest
payable upon occurrence of a tax event. A certificate for the number of full
shares of common stock into which any note is converted, together with any cash
payment for fractional shares, will be delivered through the conversion agent as
soon as practicable following the conversion date. For a discussion of the tax
treatment of a holder receiving shares of our common stock upon surrendering
notes for conversion, see "Material United States Federal Income Tax
Consequences."

          In lieu of delivery of shares of our common stock upon notice of
conversion of any notes (for all or any portion of the notes), we may elect to
pay holders surrendering notes an amount in cash per note (or a portion of a
note) based on the average sale price of our common stock for the five
consecutive trading days immediately following either (a) the date of our notice
of our election to deliver cash, which we must give within two business days
after receiving a conversion notice, unless we have earlier given notice of
redemption as described in this prospectus; or (b) the conversion date, if we
have given notice of redemption specifying that we intend to deliver cash upon
conversion thereafter, in either case multiplied by the conversion rate in
effect on that date. We will inform the holders through the trustee no later
than two business days following the conversion date of our election to deliver
shares of our common stock or to pay cash in lieu of delivery of the shares,
unless we have already informed holders of our election in connection with our
optional redemption of the notes as described under "-- Redemption of Notes at
Our Option." If we elect to deliver all of such payment in shares of our common
stock, the shares will be delivered through the conversion agent no later than
the fifth business day following the conversion date. If we elect to pay all or
a portion of such payment in cash, the payment, including any delivery of our
common stock, will be made to holders surrendering notes no later than the tenth
business day following the applicable conversion date. If an event of default,
as described under "-- Events of Default and Acceleration" below (other than a
default in a cash payment upon conversion of the notes), has occurred and is
continuing, we may not pay cash upon conversion of any notes or portion of a
note (other than cash for fractional shares).

          We will adjust the conversion rate for:

               (1) dividends or distributions on our common stock payable in our
          common stock or other capital stock of Selective;

               (2) subdivisions, combinations or certain reclassifications of
          our common stock;

                                       23
<PAGE>

               (3) distributions to all holders of our common stock of certain
          rights to purchase shares of our common stock for a period expiring
          within 60 days of issuance of the notes at less than the then current
          sale price of our common stock at that time; and

               (4) distributions to the holders of our common stock of a portion
          of our assets (including shares of capital stock of, or similar equity
          interests in, a subsidiary or other business unit of ours) or debt
          securities issued by us or certain rights to purchase our securities
          (excluding cash dividends or other cash distributions from current or
          retained earnings other than extraordinary cash dividends).
          "Extraordinary cash dividends" means the amount of any cash dividend
          or distribution that, together with all other cash dividends paid
          during the preceding 12-month period, are on a per share basis in
          excess of the sum of (i) 5% of the sale price of the shares of our
          common stock on the day preceding the date of declaration of such
          dividend or distribution and (ii) the quotient of the amount of any
          contingent cash interest paid on a note during such 12-month period
          divided by the number of shares of common stock issuable upon
          conversion of a note at the conversion rate in effect on the payment
          date of such contingent cash interest.

          In the event that we elect to make a distribution to all holders of
shares of our common stock pursuant to clause (3) or (4) of the preceding
paragraph, which, in the case of clause (4), has a per share value equal to more
than 10% of the sale price of our shares of common stock on the day preceding
the declaration date for such distribution, we will be required to give notice
to the holders of notes at least 20 days prior to the date for such distribution
and, upon the giving of such notice, the notes may be surrendered for conversion
at any time until the close of business on the business day prior to the date of
distribution or until we announce that such distribution will not take place.

          In the event that we pay a dividend or make a distribution on shares
of our common stock consisting of capital stock of, or similar equity interests
in, a subsidiary or other business unit of ours, the conversion rate will be
adjusted based on the market value of the securities so distributed relative to
the market value of our common stock, in each case based on the average closing
prices of those securities for the 10 trading days commencing on and including
the fifth trading day after the date on which "ex-dividend trading" commences
for such dividend or distribution on the principal United States securities
exchange or market on which the securities are then listed or quoted.

          No adjustment to the conversion rate need be made if holders of the
notes may participate in the transaction without conversion or in certain other
cases.

          In addition, the indenture provides that upon conversion of the notes,
the holders of such notes will receive, in addition to the shares of common
stock issuable upon such conversion, the rights related to such common stock
pursuant to our existing and any future shareholder rights plan, whether or not
such rights have separated from the common stock at the time of such conversion.
However, there shall not be any adjustment to the conversion privilege or
conversion rate as a result of

          o    the issuance of the rights;

          o    the distribution of separate certificates representing the
               rights;

          o    the exercise or redemption of such rights in accordance with any
               rights agreement; or

          o    the termination or invalidation of the rights.

Notwithstanding the foregoing, if a holder of notes exercising the right of
conversion attaching thereto after the distribution of rights pursuant to our
shareholder rights plan is not entitled to receive the rights that would
otherwise be attributable (but for the date of conversion) to the shares of
common stock received upon such conversion, the conversion rate will be adjusted
pursuant to clause (4) of the fourth preceding paragraph. If such an adjustment
is made and such rights are later redeemed, invalidated or terminated, then a
corresponding reversing adjustment will be made to the conversion rate on an
equitable basis.

                                       24
<PAGE>

The indenture permits us to increase the conversion rate from time to time.

          Holders of the notes may, in certain circumstances, be deemed to have
received a distribution subject to United States federal income tax as a
dividend upon:

          o    a taxable distribution to holders of common stock that results in
               an adjustment of the conversion rate on the notes;

          o    an increase in the conversion rate at our discretion; or

          o    failure to adjust the conversion rate in some instances.

          See "Material United States Federal Income Tax Consequences."

          If we are a party to a consolidation, merger or binding share exchange
or a transfer of all or substantially all of our assets, the right to convert a
note into common stock may be changed into a right to convert it into the kind
and amount of securities, cash or other assets of Selective or another person
which the holder would have received if the holder had converted the holder's
note immediately prior to the transaction.

          The conversion agent will, on our behalf, determine if the notes are
convertible and notify the trustee and us accordingly. If the conditions to the
conversion of the notes have been satisfied, we will promptly notify the holders
of the notes thereof and use our reasonable best efforts to post this
information on our website or otherwise publicly disclose this information.

          Conversion Based on Common Stock Price. If, as of the last day of any
calendar quarter beginning with the quarter ending December 31, 2002, the
closing sale price of our common stock for at least 20 trading days in a period
of 30 consecutive trading days ending on the last trading day of such calendar
quarter is more than the following percentage of the accreted conversion price
per share of common stock (excluding accrued cash interest, if any) on the last
day of such quarter, then on any business day during the following calendar
quarter holders may surrender notes for conversion into shares of common stock:
(a) 120% until and including September 30, 2009 and (b) declining approximately
0.11% per calendar quarter thereafter to 110% on the last day of the quarter
ending June 30, 2032. Upon a conversion, we will have the right to deliver cash
or a combination of cash and common stock, as described below.

          The accreted conversion price per share as of any day will equal the
sum of the issue price of a note plus the accrued original issue discount or
accrued cash interest, if any, divided by the number of shares of common stock
issuable upon conversion of a note on that day, subject to any adjustments to
the conversion rate through that day. The closing sale price of our common stock
on any trading day means the closing per share sale price (or if no closing sale
price is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
date on the principal national securities exchange on which the common stock is
listed or, if our common stock is not listed on a national securities exchange,
as reported by the Nasdaq system or otherwise as provided in the indenture.

          The conversion trigger price per share of our common stock in respect
of each of the first 28 fiscal quarters following issuance of the notes is
$35.15. This conversion trigger price reflects the accreted conversion price per
share of common stock (excluding accrued cash interest, if any) multiplied by
120%. Thereafter, the accreted conversion price per share of common stock
increases each fiscal quarter by the accreted original issue discount for the
quarter. The conversion trigger price per share for the fiscal quarter beginning
July 1, 2032 is $83.94. The foregoing conversion trigger prices assume that no
events have occurred that would require an adjustment to the conversion rate.

          Conversion Rights Based on Credit Ratings Downgrade. Holders may also
surrender notes for conversion during any period in which the credit rating
assigned to the notes is Ba2 or lower by Moody's or BB or lower by Standard &
Poor's, the notes are no longer rated by either Moody's or Standard & Poor's, or
the credit rating assigned to the notes has been suspended or withdrawn by
either Moody's or Standard & Poor's. The notes will

                                       25
<PAGE>

cease to be convertible pursuant to this paragraph during any period or periods
in which all of the credit ratings are increased above such levels.

          Conversion Based on Redemption. A holder may surrender for conversion
a note called for redemption at any time prior to the close of business on the
second business day immediately preceding the redemption date, even if it is not
otherwise convertible at such time. A note for which a holder has delivered a
purchase notice or a change in control purchase notice, as described below,
requiring us to purchase such note may be surrendered for conversion only if
such notice is withdrawn in accordance with the indenture.

          A "business day" is any weekday that is not a day on which banking
institutions in The City of New York are authorized or obligated to close. A
"trading day" is any day on which the NYSE is open for trading or, if the
applicable security is quoted on the Nasdaq, a day on which trades may be made
on such market or, if the applicable security is not so listed, admitted for
trading or quoted, any business day.

          Conversion upon Occurrence of Certain Corporate Transactions. If we
are party to a consolidation, merger or binding share exchange or a transfer of
all or substantially all of our assets, a note may be surrendered for conversion
at any time from and after the date which is 15 days prior to the anticipated
effective date of the transaction until the date that is 15 days after the
actual effective date of such transaction, and at the effective date, the right
to convert a note into common stock will be changed into a right to convert it
into the kind and amount of securities, cash or other assets of Selective or
another person which the holder would have received if the holder had converted
the holder's notes immediately prior to the transaction. If such transaction
also constitutes a change in control of Selective, the holder will be able to
require us to purchase all or a portion of such holder's notes as described
under "-- Change in Control Permits Purchase of Notes by Selective at the Option
of the Holder."

          The notes will also be convertible upon the occurrence of certain
distributions resulting in an adjustment to the conversion price as described
above.

Contingent Cash Interest

          Subject to the accrual and record date provisions described below, we
will pay contingent cash interest to the holders of the notes during any
six-month period from March 25 to September 24 and from September 25 to March
24, commencing September 25, 2009, if the average market price of a note for the
Applicable Five Trading Day Period equals 120% or more of the sum of the issue
price, accrued original issue discount and accrued cash interest, if any, for a
note to the day immediately preceding the first day of the applicable six-month
period. "Applicable Five Trading Day Period" means the five trading days ending
on the third trading day immediately preceding the first day of the relevant
six-month period, unless Selective declares a dividend for which the record date
falls prior to the first day of a six-month period but the payment date falls
within such six-month period, in which case the "Applicable Five Trading Day
Period" means the five trading days ending on the third trading day immediately
preceding such record date.

          The amount of contingent cash interest payable per note in respect of
any quarterly period within any such six-month period in which contingent
interest is payable will equal the greater of (a) any regular cash dividends
paid by us per share on our common stock during that quarterly period multiplied
by the number of shares of our common stock deliverable upon exchange of a note
or (b) $0.15 multiplied by 12.9783. For United States federal income tax
purposes, the notes constitute contingent payment debt instruments.

          Contingent cash interest, if any, will accrue and be payable to
holders of notes as of the record date for the related regular cash dividend or,
if we do not pay a regular cash dividend on our common stock during a quarter
within the relevant six-month period, to holders of notes as of the 15th day
preceding the last day of the relevant six-month period. Such payments will be
paid on the payment date of the related regular cash dividend or, if we do not
pay a regular cash dividend on our common stock during a quarter within the
relevant six-month period, on the last day of the relevant six-month period.
Original issue discount will continue to accrue at the yield to maturity whether
or not contingent cash interest is paid.

                                       26
<PAGE>

          Regular cash dividends mean quarterly or other periodic cash dividends
on our common stock as declared by our board of directors as part of its cash
dividend payment practices and that are not designated by it as extraordinary or
special or other nonrecurring dividends.

          The market price of a note on any date of determination means the
average of the secondary market bid quotations per note obtained by the bid
solicitation agent for $10 million principal amount at maturity of notes at
approximately 4:00 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers we select, provided
that if:

          o    at least three such bids are not obtained by the bid solicitation
               agent; or

          o    in our reasonable judgment, the bid quotations are not indicative
               of the secondary market value of the notes,

then the market price of the note will equal (a) the then applicable conversion
rate of the notes multiplied by (b) the average sale price of our common stock
on the five trading days ending on such determination date, appropriately
adjusted.

          The bid solicitation agent is National City Bank, the trustee. We may
change the bid solicitation agent, but the bid solicitation agent will not be
our affiliate. The bid solicitation agent will solicit bids from securities
dealers that are believed by us to be willing to bid for the notes.

          Upon determination that note holders will be entitled to receive
contingent cash interest during a relevant six-month period, we will issue a
press release and publish such information on our website or through such other
public medium as we may use at that time.

          We may unilaterally increase the amount of contingent cash interest we
may pay or pay interest or other amounts we are not obligated to pay, but we
will have no obligation to do so.

Redemption of Notes at Our Option

          No sinking fund is provided for the notes. Prior to September 24,
2007, we cannot redeem the notes at our option. Beginning on September 24, 2007,
we may redeem the notes for cash, as a whole at any time or from time to time in
part. We will give not less than 30 days' or more than 60 days' notice of
redemption by mail to holders of notes.

          If redeemed at our option, the notes will be redeemed at a price equal
to the sum of the issue price, plus the call premium, if any, plus accrued
original issue discount and accrued and unpaid cash interest, if any, on such
notes to the applicable redemption date. The table below shows the redemption
prices of a note on September 24, 2007, on each September 24 thereafter prior to
maturity and at maturity on September 24, 2032. In addition, the redemption
price of a note that is redeemed between the dates listed below would include an
additional amount reflecting the additional accrued original issue discount or
cash interest, if any, that has accrued on such note since the immediately
preceding date in the table below.

<TABLE>
<CAPTION>
                                                                  (2)                                        (4)
Redemption Date                               (1)           Accrued Original          (3)                Redemption
September 24:                           Note Issue Price     Issue Discount       Call Premium     Price (1) + (2) + (3)
- ---------------                         ----------------    ----------------      ------------     ---------------------
<S>                                          <C>                <C>                   <C>                <C>
2007.............................            $380.12            $    --               $4.62              $384.74
2008.............................             380.12                 --                2.31               382.43
2009.............................             380.12                 --                  --               380.12
2010.............................             380.12               16.33                 --               396.45
2011.............................             380.12               33.36                 --               413.48
2012.............................             380.12               51.11                 --               431.23
2013.............................             380.12               69.64                 --               449.76
2014.............................             380.12               88.96                 --               469.08
2015.............................             380.12              109.10                 --               489.22
</TABLE>

                                       27
<PAGE>

<TABLE>
<CAPTION>
                                                                  (2)                                        (4)
Redemption Date                               (1)           Accrued Original          (3)                Redemption
September 24:                           Note Issue Price     Issue Discount       Call Premium     Price (1) + (2) + (3)
- ---------------                         ----------------    ----------------      ------------     ---------------------
<S>                                          <C>                <C>                   <C>                <C>
2016.............................            $380.12             $130.12             $   --              $510.24
2017.............................             380.12              152.03                 --               532.15
2018.............................             380.12              174.89                 --               555.01
2019.............................             380.12              198.73                 --               578.85
2020.............................             380.12              223.59                 --               603.71
2021.............................             380.12              249.52                 --               629.64
2022.............................             380.12              276.56                 --               656.68
2023.............................             380.12              304.77                 --               684.89
2024.............................             380.12              334.19                 --               714.31
2025.............................             380.12              364.87                 --               744.99
2026.............................             380.12              396.87                 --               776.99
2027.............................             380.12              430.24                 --               810.36
2028.............................             380.12              465.05                 --               845.17
2029.............................             380.12              501.35                 --               881.47
2030.............................             380.12              539.21                 --               919.33
2031.............................             380.12              578.70                 --               958.82
At stated maturity...............             380.12              619.88                 --             1,000.00
</TABLE>

          If we convert the notes to semiannual coupon notes following the
occurrence of a tax event, the notes will be redeemable at the restated
principal amount plus accrued and unpaid interest from the date of the
conversion through the redemption date. However, in no event may the notes be
redeemed prior to September 24, 2007. For more information on this optional
conversion, see "Optional Conversion to Semiannual Coupon Notes upon Tax Event."

          If less than all of the outstanding notes are to be redeemed, the
trustee will select the notes to be redeemed in principal amounts at maturity of
$1,000 or integral multiples of $1,000. In this case, the trustee may select the
notes by lot, pro rata or by any other method the trustee considers fair and
appropriate. If a portion of a holder's notes is selected for partial redemption
and the holder converts a portion of the notes, the converted portion will be
deemed to be part of the portion of notes selected for redemption.

Purchase of Notes by Selective at the Option of the Holder

          On the purchase dates of September 24, 2009, September 24, 2012,
September 24, 2017, September 24, 2022 and September 24, 2027, we may, at the
option of the holder, be required to purchase, at the purchase price set forth
below plus accrued and unpaid cash interest, if any, to the purchase date, all
or a portion of such holder's outstanding notes for which a written purchase
notice has been properly delivered by the holder and not withdrawn, subject to
certain additional conditions. Holders may submit their written purchase notice
to the paying agent at any time from the opening of business on the date that is
20 business days prior to such purchase date until the close of business on the
business day immediately preceding such purchase date.

          The purchase price of a note will be:

          o    $380.12 per note on September 24, 2009;

          o    $431.23 per note on September 24, 2012;

          o    $532.15 per note on September 24, 2017;

          o    $656.68 per note on September 24, 2022; and

          o    $810.36 per note on September 24, 2027.

                                       28
<PAGE>

The above purchase prices reflect a price equal to the sum of the issue price
and accrued original issue discount, if any, on such notes as of the applicable
purchase date. We may, at our option, elect to pay the purchase price in cash or
shares of our common stock, or any combination thereof, see "Certain United
States Federal Income Tax Considerations -- United States Holders -- Sale,
Exchange, Conversion or Redemption of Notes."

          If prior to a purchase date the notes have been converted to
semiannual coupon notes following the occurrence of a tax event, the purchase
price will be equal to the restated principal amount plus accrued and unpaid
cash interest from the date of the conversion to the purchase date. For more
information on this optional conversion, see "-- Optional Conversion to
Semiannual Coupon Notes upon Tax Event."

          We will be required to give notice on a date not less than 20 business
days prior to each purchase date to all holders at their addresses shown in the
register of the registrar, and to beneficial owners as required by applicable
law, stating among other things:

          o    the amount of the purchase price;

          o    whether we will pay the purchase price of the notes in cash or
               common stock or any combination thereof, specifying the
               percentages of each;

          o    if we elect to pay in common stock, the calculation of the market
               price of the common stock; and

          o    the procedures that holders must follow to require us to purchase
               their notes.

          The purchase notice given by each holder electing to require us to
purchase notes shall state:

          o    the certificate numbers of the holder's notes to be delivered for
               purchase;

          o    the portion of the principal amount at maturity of notes to be
               purchased, which must be $1,000 or an integral multiple of
               $1,000;

          o    that the notes are to be purchased by us pursuant to the
               applicable provisions of the notes; and

          o    in the event we elect, pursuant to the notice that we are
               required to give, to pay the purchase price in common stock, in
               whole or in part, but the purchase price is ultimately to be paid
               to the holder entirely in cash because any of the conditions to
               payment of the purchase price or portion of the purchase price in
               common stock is not satisfied prior to the close of business on
               the purchase date, as described below, whether the holder elects:

          o    to withdraw the purchase notice as to some or all of the notes to
               which it relates; or

          o    to receive cash in respect of the entire purchase price for all
               notes or portions of notes subject to such purchase notice.

          If the purchase price for the notes subject to the purchase notice is
ultimately to be paid to a holder entirely in cash because we have not satisfied
one or more of the conditions to payment of the purchase price in common stock
prior to the close of business on the purchase date, a holder shall be deemed to
have elected to receive cash in respect of the entire purchase price for all
such notes unless such holder has properly notified us of its election to
withdraw the purchase notice.

          Any purchase notice may be withdrawn by the holder by a written notice
of withdrawal delivered to the paying agent prior to the close of business on
the business day prior to the purchase date. The notice of withdrawal shall
state:

          o    the principal amount at maturity being withdrawn;

                                       29
<PAGE>

          o    the certificate numbers of the notes being withdrawn; and

          o    the principal amount at maturity, if any, of the notes that
               remain subject to the purchase notice.

          If we elect to pay the purchase price, in whole or in part, in shares
of our common stock, the number of shares we deliver will be equal to the
portion of the purchase price to be paid in common stock divided by the market
price of a share of common stock. We will pay cash based on the market price for
all fractional shares of common stock in the event we elect to deliver common
stock in payment, in whole, or in part, of the purchase price. For a discussion
of the tax treatment of a holder receiving cash, common stock or any combination
thereof, see "Material United States Federal Income Tax Consequences."

          The market price of our common stock shall be an amount equal to the
average of the sale prices of our common stock for the five-trading-day period
ending on the third business day prior to the applicable purchase date, or, if
such business day is not a trading day, then on the last trading day prior to
such business day, appropriately adjusted to take into account any occurrence
that would result in an adjustment of the conversion rate with respect to the
common stock. See "-- Conversion Rights" for a description of the manner in
which the sale price of our common stock is determined.

          Because the market price of our common stock is determined prior to
the applicable purchase date, holders of notes bear the market risk with respect
to the value of the common stock to be received from the date such market price
is determined to such purchase date. We may pay the purchase price or any
portion of the purchase price in common stock only if the information necessary
to calculate the market price is published in a daily newspaper of national
circulation.

          Upon determination of the actual number of shares of common stock in
accordance with the foregoing provisions, we will promptly issue a press release
and publish such information on our website or through such other public medium
as we may use at that time.

          Our right to purchase notes, in whole or in part, with common stock is
subject to our satisfying various conditions, including:

          o    listing the common stock on the principal United States
               securities exchange on which our common stock is then listed or,
               if not so listed, on Nasdaq;

          o    the registration of the common stock under the Securities Act and
               the Exchange Act, if required; and

          o    any necessary qualification or registration under applicable
               state securities law or the availability of an exemption from
               such qualification and registration.

          If such conditions are not satisfied with respect to a holder prior to
the close of business on the purchase date, we will pay the purchase price of
the notes of the holder entirely in cash. See "Material United States Federal
Income Tax Consequences." We may not change the form or components or
percentages of components of consideration to be paid for the notes once we have
given the notice that we are required to give to holders of notes, except as
described in the first sentence of this paragraph.

         In connection with any purchase offer, we will, if required:

          o    comply with the provisions of Rule 13e-4, Rule l4e-1 and any
               other tender offer rules under the Exchange Act which may then be
               applicable; and

          o    file Schedule TO or any other required schedule under the
               Exchange Act.

          Payment of the purchase price for a note for which a purchase notice
has been delivered and not validly withdrawn is conditioned upon delivery of the
note, together with necessary endorsements, to the paying agent at any time
after delivery of the purchase notice. Payment of the purchase price for the
note will be made as soon as

                                       30
<PAGE>

practicable but in no event more than three business days following the later of
the purchase date or the time of delivery of the note.

          If the paying agent holds money or securities sufficient to pay the
purchase price of the note on the business day following the purchase date in
accordance with the terms of the indenture, then, immediately after the purchase
date, the note will cease to be outstanding and cash interest or original issue
discount on such note will cease to accrue, whether or not the note is delivered
to the paying agent. Thereafter, all other rights of the holder shall terminate,
other than the right to receive the purchase price upon delivery of the note.

          No notes may be purchased for cash at the option of holders if there
has occurred and is continuing an event of default with respect to the notes,
other than a default in the payment of the purchase price with respect to such
notes.

Change in Control Permits Purchase of Notes by Selective at the Option of the
Holder

          In the event of a change in control of Selective on or before
September 24, 2009, each holder will have the right, at the holder's option,
subject to the terms and conditions of the indenture, to require us to purchase
for cash all or any portion of the holder's notes. However, the principal amount
at maturity submitted for purchase by a holder must be $1,000 or an integral
multiple of $1,000.

          We will be required to purchase the notes as of a date no later than
30 business days after the occurrence of such change in control at a cash price
equal to the sum of the issue price plus accrued original issue discount and
accrued cash interest, if any, on such note to such date of purchase.

          If prior to such date of purchase upon a change in control the notes
have been converted to semiannual coupon notes following the occurrence of a tax
event, we will be required to purchase the notes at a cash price equal to the
restated principal amount plus accrued and unpaid interest from the date of the
conversion to such date of purchase.

          Within 15 days after the occurrence of a change in control, we are
obligated to mail to the trustee and to all holders of notes at their addresses
shown in the register of the registrar and to beneficial owners as required by
applicable law a notice regarding the change in control, which notice shall
state, among other things:

          o    the events causing a change in control;

          o    the date of such change in control;

          o    the last date on which the purchase right may be exercised;

          o    the change in control purchase price;

          o    the change in control purchase date;

          o    the name and address of the paying agent and the conversion
               agent;

          o    the conversion rate and any adjustments to the conversion rate
               resulting from such change in control;

          o    that notes with respect to which a change in control purchase
               notice is given by the holder may be converted only if the change
               in control purchase notice has been withdrawn in accordance with
               the terms of the indenture; and

          o    the procedures that holders must follow to exercise these rights.

                                       31
<PAGE>

          To exercise this right, the holder must deliver a written notice to
the paying agent prior to the close of business on the business day prior to the
change in control purchase date. The required purchase notice upon a change in
control shall state:

          o    the certificate numbers of the notes to be delivered by the
               holder;

          o    the portion of the principal amount at maturity of notes to be
               purchased, which portion must be $1,000 or an integral multiple
               of $1,000; and

          o    that we are to purchase such notes pursuant to the applicable
               provisions of the notes.

          Any such change in control purchase notice may be withdrawn by the
holder by a written notice of withdrawal delivered to the paying agent prior to
the close of business on the business day prior to the change in control
purchase date. The notice of withdrawal shall state:

          o    the principal amount at maturity being withdrawn;

          o    the certificate numbers of the notes being withdrawn; and

          o    the principal amount at maturity, if any, of the notes that
               remain subject to a change in control purchase notice.

          Payment of the change in control purchase price for a note for which a
change in control purchase notice has been delivered and not validly withdrawn
is conditioned upon delivery of the note, together with necessary endorsements,
to the paying agent at any time after the delivery of such change in control
purchase notice. Payment of this change in control purchase price for such note
will be made promptly following the later of the change in control purchase date
or the time of delivery of such note.

          If the paying agent holds money sufficient to pay the change in
control purchase price of the note on the business day following the change in
control purchase date in accordance with the terms of the indenture, then
immediately after the change in control purchase date, cash interest or original
issue discount on the note will cease to accrue, whether or not the note is
delivered to the paying agent. Thereafter, all other rights of the holder shall
terminate, other than the right to receive the change in control purchase price
upon delivery of the note.

          Under the indenture, a "change in control" of Selective is deemed to
have occurred upon the occurrence of any of the following:

          o    the sale, lease, transfer, conveyance or other disposition (other
               than by way of merger or consolidation), in one or a series of
               related transactions, of all or substantially all of our and our
               subsidiaries' assets, taken as a whole, to any person or group;
               or

          o    the adoption of a plan relating to our liquidation or
               dissolution; or

          o    the consummation of any transaction (including, without
               limitation, any merger or consolidation) the result of which is
               that any person or group becomes the beneficial owner, directly
               or indirectly, of more than 50% of the voting power of our
               outstanding voting stock; or

          o    the first day on which more than a majority of the members of our
               board of directors are not continuing directors.

          "Continuing directors" means any member of our board of directors who:

          o    was a member of our board of directors on the date of original
               issuance of the notes; or

                                       32
<PAGE>

          o    was nominated for election to our board of directors with the
               approval of, or whose election to our board of directors was
               ratified by, at least a majority of the continuing directors who
               were members of our board of directors at the time of such
               nomination or election.

          The indenture does not permit our board of directors to waive our
obligation to purchase notes at the option of holders in the event of a change
in control.

          In connection with any purchase offer in the event of a change in
control, we will:

          o    comply with the provisions of Rule 13e-4, Rule 14e-1 and any
               other tender offer rules under the Exchange Act which may then be
               applicable; and

          o    file Schedule TO or any other required schedule under the
               Exchange Act.

          The change in control purchase feature of the notes may, in certain
circumstances, make more difficult or discourage a takeover of Selective. The
change in control purchase feature, however, is not the result of our knowledge
of any specific effort:

          o    to accumulate shares of common stock;

          o    to obtain control of us by means of a merger, tender offer,
               solicitation or otherwise; or

          o    part of a plan by management to adopt a series of anti-takeover
               provisions.

          Instead, the change in control purchase feature is a standard term
contained in other offerings of securities similar to the notes that have been
marketed by the initial purchasers. The terms of the change in control purchase
feature resulted from negotiations between the initial purchasers and us.

          We could, in the future, enter into certain transactions, including
certain recapitalizations, that would not constitute a change in control with
respect to the change in control purchase feature of the notes but that would
increase the amount of our or our subsidiaries' outstanding indebtedness.

          No notes may be purchased at the option of holders upon a change in
control if there has occurred and is continuing an event of default with respect
to the notes, other than a default in the payment of the change in control
purchase price with respect to the notes.

Events of Default and Acceleration

          The following are events of default under the indenture:

          o    default in the payment of any principal amount (including accrued
               original issue discount and, if the notes have been converted to
               semiannual coupon notes following a tax event, the restated
               principal amount) at maturity, redemption price, purchase price,
               or change in control purchase price due with respect to the
               notes, when the same become due and payable;

          o    default in payment of any interest under the notes, which default
               continues for 30 days;

          o    our failure to comply with any of our other agreements in the
               notes or the indenture upon our receipt of notice of such default
               from the trustee or from holders of not less than 25% in
               aggregate principal amount at maturity of the notes, and our
               failure to cure (or obtain a waiver of) such default within 60
               days after we receive such notice;

          o    default in the payment of principal when due or resulting in
               acceleration of other indebtedness of ours for borrowed money
               where the aggregate principal amount with respect to which the
               default or

                                       33
<PAGE>

               acceleration has occurred exceeds $10 million, and such
               acceleration has not been rescinded or annulled within a period
               of 10 days after written notice to us by the trustee or to us
               and the trustee by the holders of at least 25% in principal
               amount at maturity of the notes; or

          o    certain events of bankruptcy, insolvency or reorganization
               affecting us.

If an event of default shall have happened and be continuing, either the trustee
or the holders of not less than 25% in aggregate principal amount at maturity of
the notes then outstanding may declare the issue price of the notes plus the
original issue discount on the notes accrued through the date of such
declaration, and any accrued and unpaid cash interest (or, if the notes have
been converted to semiannual coupon notes following a tax event, the restated
principal amount, plus accrued and unpaid interest) through the date of such
declaration, to be immediately due and payable. In the case of certain events of
bankruptcy or insolvency, the issue price of the notes plus the original issue
discount accrued thereon, together with any accrued and unpaid cash interest
(or, if the notes have been converted to semiannual coupon notes following a tax
event, the restated principal amount, plus accrued and unpaid interest) through
the occurrence of such event shall automatically become and be immediately due
and payable.

Mergers and Sales of Assets

          The indenture provides that we may not consolidate with or merge into
any person or convey, transfer or lease our properties and assets substantially
as an entity to another person unless:

          o    the resulting, surviving or transferee person is a corporation
               organized and existing under the laws of the United States, any
               state thereof or the District of Columbia, and such corporation
               (if other than us) assumes all our obligations under the notes
               and the indenture;

          o    after giving effect to the transaction no event of default, and
               no event that, after notice or passage of time, would become an
               event of default, has occurred and is continuing; and

          o    other conditions described in the indenture are met.

          Upon the assumption of our obligations by such corporation in such
circumstances, subject to certain exceptions, we shall be discharged from all
obligations under the notes and the indenture. Although such transactions are
permitted under the indenture, certain of the foregoing transactions occurring
could constitute a change in control of Selective, permitting each holder to
require us to purchase the notes of such holder as described above.

Optional Conversion to Semiannual Coupon Notes upon Tax Event

          From and after the date of the occurrence of a tax event we shall have
the option to elect to have interest in lieu of future accrued original issue
discount or cash interest accrue at 4.25% per year on a principal amount per
note equal to the sum of the issue price, accrued original issue discount and
accrued cash interest, if any, on such note on the date of the tax event or the
date on which we exercise such option, whichever is later.

          Such interest shall accrue from the option exercise date, and shall be
payable semiannually on the interest payment dates of March 24 and September 24
of each year to holders of record at the close of business on the March 9 or
September 9 immediately preceding the interest payment date. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Interest will accrue from the most recent date to which interest, if applicable,
has been paid or provided for or, if no interest is payable or has been paid or
provided for, from the option exercise date. In the event that we exercise our
option to pay interest in lieu of accrued original issue discount or accrued
cash interest, if any, the redemption price, purchase price and change in
control purchase price on the notes will be adjusted. However, there will be no
change in the holder's conversion rights.

          A "tax event" means that we shall have received an opinion from
independent tax counsel experienced in such matters to the effect that, on or
after the date of this prospectus, as a result of

                                       34
<PAGE>

          o    any amendment to, or change (including any announced prospective
               change) in, the laws (or any regulations thereunder) of the
               United States or any political subdivision or taxing authority
               thereof or therein; or

          o    any amendment to, or change in, an interpretation or application
               of such laws or regulations by any legislative body, court,
               governmental agency or regulatory authority,

in each case which amendment or change is enacted, promulgated, issued or
announced or which interpretation is issued or announced or which action is
taken, on or after the date of this prospectus, there is more than an
insubstantial risk that accrued original issue discount payable on the notes
either:

          o    would not be deductible on a current accrual basis; or

          o    would not be deductible under any other method;

in either case in whole or in part, by us (by reason of deferral, disallowance,
or otherwise) for United States federal income tax purposes.

          The Clinton administration previously proposed to change the tax law
to defer the deduction of original issue discount on convertible debt
instruments until the issuer pays the interest. Congress did not enact those
proposed changes. It is not certain what the views of the Bush administration
are on this issue and we cannot assure you that the same or a similar proposal
will not be proposed and enacted.

          If a similar proposal were ever enacted and made applicable to the
notes in a manner that would limit our ability to either:

          o    deduct the interest, including the accrued original issue
               discount, payable on the notes on a current accrual basis; or

          o    deduct the interest, including accrued original issue discount,
               payable on the notes under any other method for United States
               federal income tax purposes,

such enactment would result in a tax event and the terms of the notes would be
subject to modification at our option as described above.

          The modification of the terms of notes by us upon a tax event as
described above could possibly alter the timing of income recognition by holders
of the notes with respect to the semiannual payments of interest due on the
notes after the date on which we exercise our option to pay interest in lieu of
accrued original issue discount or accrued cash interest, if any, on the notes.

Modification

          The trustee and we may modify or amend the indenture or the notes with
the consent of the holders of not less than a majority in aggregate principal
amount at maturity of the notes then outstanding. However, the consent of the
holders of each outstanding note would be required to:

          o    alter the manner of calculation or rate of accrual of original
               issue discount or interest on any note or change the time of
               payment;

          o    make any note payable in money or securities other than that
               stated in the note;

          o    change the stated maturity of any note;

                                       35
<PAGE>

          o    reduce the principal amount at maturity, restated principal
               amount, issue price, accrued original issue discount, redemption
               price, purchase price or change in control purchase price with
               respect to any note;

          o    make any change that adversely affects the rights of a holder to
               convert any note;

          o    make any change that adversely affects the right to require us to
               purchase a note;

          o    impair the right to institute suit for the enforcement of any
               payment with respect to the notes or with respect to conversion
               of the notes; or

          o    change the provisions in the indenture that relate to modifying
               or amending the indenture.

          Without the consent of any holder of notes, the trustee and we may
enter into supplemental indentures for any of the following purposes: o to
evidence a successor to us and the assumption by that successor of our
obligations under the indenture and the notes;

          o    to add to our covenants for the benefit of the holders of the
               notes or to surrender any right or power conferred upon us;

          o    to secure our obligations in respect of the notes;

          o    to cure any ambiguity or inconsistency in the indenture; or

          o    to make any change that does not adversely affect the rights of
               any holder of the notes.

          The holders of a majority in principal amount at maturity of the
outstanding notes may, on behalf of all the holders of all notes:

          o    waive compliance by us with restrictive provisions of the
               indenture, as detailed in the indenture; or

          o    waive any past default under the indenture and its consequences,
               except a default in the payment of the principal amount at
               maturity, issue price, accrued and unpaid interest, accrued
               original issue discount, redemption price, purchase price or
               change in control purchase price or obligation to deliver common
               stock upon conversion with respect to any note or in respect of
               any provision which under the indenture cannot be modified or
               amended without the consent of the holder of each outstanding
               note affected.

Discharge of the Indenture

          We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding notes or by
depositing with the trustee, the paying agent or the conversion agent, if
applicable, after the notes have become due and payable, whether at stated
maturity or any redemption date, or any purchase date, or a change in control
purchase date, or upon conversion or otherwise, cash or shares of common stock
(as applicable under the terms of the indenture) sufficient to pay all of the
outstanding notes and paying all other sums payable under the indenture.

Calculations in Respect of Notes

          We will be responsible for making all calculations called for under
the notes. These calculations include, but are not limited to, determination of
the average market prices of the notes and of our common stock and amounts of
contingent cash interest payments, if any, payable on the notes. We will make
all these calculations in good faith

                                       36
<PAGE>

and, absent manifest error, our calculations will be final and binding on
holders of notes. We will provide a schedule of our calculations to the trustee,
and the trustee is entitled to rely upon the accuracy of our calculations
without independent verification.

Limitations of Claims in Bankruptcy

          If a bankruptcy proceeding is commenced in respect of Selective, the
claim of a holder of a note is, under title 11 of the United States Code,
limited to the issue price of the note plus that portion of the original issue
discount, together with any unpaid cash interest or contingent cash interest,
that has accrued from the date of issue to the commencement of the proceeding.

Governing Law

          The indenture and the notes are governed by, and construed in
accordance with, the law of the State of New York.

Information Concerning the Trustee

          National City Bank is the trustee, registrar, paying agent and
conversion agent under the indenture for the notes.

Book-Entry System

          The notes were issued in the form of global securities without coupons
held in fully registered book-entry form. DTC or its nominee, Cede & Co., is the
sole registered holder of the notes for all purposes under the indenture. Owners
of beneficial interests in the notes represented by the global securities will
hold their interests pursuant to the procedures and practices of DTC. As a
result, beneficial interests in any such securities will be shown on, and may
only be transferred through, records maintained by DTC and its direct and
indirect participants and any such interest may not be exchanged for
certificated securities, except in limited circumstances. Owners of beneficial
interests must exercise any rights in respect of their interests, including any
right to convert or require purchase of their interests in the notes, in
accordance with the procedures and practices of DTC. Beneficial owners will not
be holders and will not be entitled to any rights under the global securities or
the indenture. Selective and the trustee, and any of their respective agents,
may treat DTC as the sole holder and registered owner of the global securities.

Exchange of Global Securities

          Notes represented by a global security will be exchangeable for
certificated securities with the same terms only if:

          o    DTC is unwilling or unable to continue as depositary or if DTC
               ceases to be a clearing agency registered under the Exchange Act
               and a successor depositary is not appointed by us within 90 days;

          o    we decide to discontinue use of the system of book-entry transfer
               through DTC (or any successor depositary); or

          o    a default under the indenture occurs and is continuing.

          DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
facilitates the settlement of transactions among its participants through
electronic computerized book-entry changes in participants' accounts,
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, including the initial
purchasers, banks, trust companies, clearing corporations and other
organizations, some of whom and/or their representatives, own DTC. Access to
DTC's book-entry system

                                       37
<PAGE>

is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly.

Registration Rights

          When we issued the notes we entered into a registration rights
agreement with the initial purchasers. As required under that agreement, we have
filed with the SEC, at our expense, a shelf registration statement, of which
this prospectus forms a part, covering resale of the notes and the shares of our
common stock issued upon conversion of the notes. Under the terms of the
agreement, we have agreed to use reasonable efforts to cause the shelf
registration statement to become effective within 180 days of September 18,
2002, and to keep a shelf registration statement effective until the earlier of
(1) the sale pursuant to the shelf registration statement of all the notes and
the shares of common stock issuable upon conversion of the notes and (2) the
expiration of the holding period applicable to such securities held by persons
that are not affiliates of Selective under Rule 144(k) under the Securities Act,
or any successor provision, subject to certain permitted exceptions. We are
permitted to suspend the use of a prospectus that is part of a shelf
registration statement under certain circumstances relating to corporate
developments, public filings with the SEC and similar events for a period not to
exceed 45 days in any three-month period and not to exceed an aggregate of 120
days in any 12-month period.

          We have agreed to pay predetermined liquidated damages as described
herein ("liquidated damages") to holders of the notes and holders of shares of
common stock issuable upon conversion of the notes if a shelf registration
statement is not timely made effective or if the prospectus is unavailable for
the periods in excess of those permitted above. Such liquidated damages shall
accrue until such failure to file or become effective or unavailability is
cured, (i) in respect of any notes, at a rate per year equal to 0.25% for the
first 90 day period after the occurrence of such event and 0.5% thereafter of
the applicable principal amount (as defined below) thereof and, (ii) in respect
of any shares of common stock issued upon conversion at a rate per year equal to
0.25% for the first 90 day period and 0.5% thereafter of the then applicable
conversion price (as defined below). So long as the failure to become effective
or unavailability continues, we will pay liquidated damages in cash on March 24
and September 24 of each year to the holders of record of the notes or shares of
common stock on the immediately preceding March 9 or September 9. When such
registration default is cured, accrued and unpaid liquidated damages will be
paid in cash to the record holder as of the date of such cure.

          A holder who sells notes and shares of common stock issued upon
conversion of the notes pursuant to the shelf registration statement generally
will be required to be named as a selling securityholder in the related
prospectus, deliver a prospectus to purchasers and be bound by certain
provisions of the registration rights agreement that are applicable to such
holder, including certain indemnification provisions. We will pay all expenses
of a shelf registration statement, provide to each registered holder copies of
such prospectus, notify each registered holder when the shelf registration
statement has become effective and take certain other actions as are required to
permit, subject to the foregoing, unrestricted resales of the notes and the
shares of common stock issued upon conversion of the notes.

          The term "applicable principal amount" means, as of any date of
determination, with respect to each $1,000 principal amount at maturity of
notes, the sum of the initial issue price of such notes plus accrued original
issue discount and any accrued cash interest with respect to such notes through
such date of determination or, if no notes are then outstanding, such sum
calculated as if such notes were then outstanding.

          The term "applicable conversion price" means, as of any date of
determination, the applicable principal amount per $1,000 principal amount at
maturity of notes as of such date of determination divided by the conversion
rate in effect as of such date of determination or, if no notes are then
outstanding, the conversion rate that would be in effect were notes then
outstanding.

          We agreed in the registration rights agreement to give notice to all
holders of the filing and effectiveness of a shelf registration statement by
release made to Reuters Economic Services and Bloomberg Business News or other
reasonable means of distribution. A holder who sells notes or shares of common
stock issued upon conversion of the notes pursuant to the shelf registration
statement must complete and deliver to us a notice and questionnaire (the
"questionnaire") at least five business days prior to any intended distribution
of notes and our shares of common stock issuable in respect of the notes
pursuant to a shelf registration statement. Holders are required to complete and

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<PAGE>

deliver the questionnaire prior to the effectiveness of a shelf registration
statement so that such holder may be named as a selling securityholder in the
related prospectus. Upon receipt of such a completed questionnaire, together
with such other information as may be reasonably requested by us, from a holder
following the effectiveness of a shelf registration statement, we will, as
promptly as practicable, file such amendments to a shelf registration statement
or supplements to a related prospectus as are necessary to permit such holder to
deliver such prospectus to purchasers of notes and our shares of common stock
issuable upon conversion of the notes, subject to our right to suspend the use
of the prospectus as described above. Any holder that does not complete and
deliver a questionnaire or provide such other information will not be named as a
selling securityholder in the prospectus and therefore will not be permitted to
sell the notes or our shares of common stock issuable upon conversion of the
notes pursuant to the shelf registration statement.

          This summary of certain provisions of the registration rights
agreement is subject to, and is qualified in its entirety by reference to, all
the provisions of the registration rights agreement, a copy of which has been
filed with the SEC as an exhibit to this registration statement.


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<PAGE>

                      DESCRIPTION OF OUR OTHER INDEBTEDNESS

Convertible Subordinated Debentures

          On December 29, 1982, we issued convertible subordinated debentures in
the principal amount of $25.0 million. The debentures bear interest at a rate of
8.75% per annum, which is payable on the unpaid principal semiannually on
January 1 and July 1 in each year to holders of record at the close of business
on the preceding December 15 and June 15, respectively. The debentures are
convertible into common stock at an effective conversion price of $7.08 per
share. The principal amount of the debentures, including any accrued interest,
is due on January 1, 2008.

Notes Payable

          Between 1994 and 2000, we entered into two note purchase agreements
with various lenders for three series of senior notes at interest rates ranging
from 8.63% to 8.87%. The aggregate principal amount of these senior notes
currently outstanding is $145.5 million. Each note purchase agreement contains
restrictive covenants that limit our ability to declare dividends or incur
additional indebtedness in excess of certain debt-to-capitalization ratios. At
September 30, 2002, the amount available for dividends to stockholders under
said restrictions was $166.8 million for the 8.77% senior notes and $129.1
million for the 8.63% and 8.87% senior notes. After taking into account this
offering, we will be in compliance with the debt-to-capitalization ratios under
all three note purchase agreements.

     The 8.63% and 8.87% senior notes

          On May 4, 2000, we entered into a $30.0 million and a $61.5 million
note purchase agreement with various lenders covering the 8.63% and 8.87% senior
notes, respectively.

          For the 8.63% senior notes, we are required to pay $6.0 million
principal amount in each year commencing on May 4, 2003 and ending on May 4,
2007, inclusive, together with accrued interest thereon. For the 8.87% senior
notes, we are required to pay $12.3 million principal amount in each year
commencing on May 4, 2006 and ending on May 4, 2010, inclusive, together with
accrued interest thereon. The unpaid principal amount of the 8.63% and 8.87%
senior notes accrues interest and is payable semiannually on May 4 and November
4 of each year, until the principal is paid in full.

     The 8.77% senior notes

          On August 12, 1994, we entered into a $54.0 million note purchase
agreement with various lenders covering the 8.77% senior notes. We are required
to pay $18.0 million principal amount in each year commencing on August 1, 2003
and ending on August 1, 2005, inclusive, together with accrued interest thereon.
The unpaid principal amount of the 8.77% senior notes accrues interest and is
payable semiannually on February 1 and August 1 of each year, until the
principal is paid in full.

Revolving Lines of Credit

          As of February 7, 2003, we had revolving lines of credit totaling
$50.0 million with State Street Corporation and Wachovia Bank, National
Association ($25.0 million each). As of February 7, 2003, there was no balance
outstanding. Interest is determined on a LIBOR, prime rate or money market rate
basis at our option.

                                       40
<PAGE>

                        DESCRIPTION OF OUR CAPITAL STOCK

          Our authorized capital stock consists of 180,000,000 shares of common
stock, $2.00 par value per share, and 5,000,000 shares of preferred stock
without par value.

Common Stock

          As of January 31, 2003, there were 26,611,431 shares of common stock
outstanding, held of record by approximately 9,000 stockholders. The holders of
common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders. Subject to preferences that may
be applicable to any outstanding shares of preferred stock, the holders of
common stock are entitled to receive ratably those dividends as may be declared
by the board of directors out of funds legally available therefor. In the event
of a liquidation, our dissolution or winding up, holders of the common stock are
entitled to share ratably in all assets remaining after payment of liabilities
and the liquidation preferences of any outstanding shares of preferred stock.
Holders of common stock have no preemptive rights and no right to convert their
common stock into any other securities. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock, and all shares of common stock to be issued upon the conversion of the
notes and the 8.75% convertible subordinated debentures due 2008, are fully paid
and nonassessable. Our common stock is quoted on Nasdaq under the symbol "SIGI."

Preferred Stock

          There are no shares of preferred stock outstanding. The board of
directors has the authority, without further action by the stockholders, to
issue up to 5,000,000 shares of preferred stock without par value in one or more
series and to fix the preferences, rights and qualifications, limitations or
restrictions thereof, including dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences, sinking fund terms and the
number of shares constituting any series or the designation of the series. We
believe that the board of directors' authority to set the terms of, and our
ability to issue, preferred stock provides flexibility in connection with
possible financing transactions in the future. The issuance of preferred stock,
however, could adversely affect the voting power of holders of common stock, and
the likelihood that the holders will receive dividend payments and payments upon
liquidation. The issuance of preferred stock could have the effect of delaying,
deferring or preventing a change in control in us. We have no present plan to
issue any shares of preferred stock.

Rights Plan

          On February 2, 1999, our board of directors approved an amended and
restated stockholders' rights plan. Our rights plan is designed to make it more
costly and thus more difficult to gain control of us without the consent of our
board of directors. The description presented below is intended as a summary
only and is qualified in its entirety by reference to the rights agreement, a
form of which previously has been filed with the Securities and Exchange
Commission and is incorporated by reference.

          Our rights plan provides that each of our shares of common stock will
have the right to purchase from us one two-hundredth of a share of Series A
Junior Preferred Stock at a price of $80.00, subject to customary anti-dilution
protection adjustment.

          The rights are attached to all certificates representing outstanding
shares of our common stock, and no separate right certificates have been
distributed. The rights will separate from the shares of our common stock
approximately ten days after an announcement that a person or group has acquired
15% or more of our common stock, or commences a tender offer which would result
in their acquiring more than 15% of our common stock.

          After rights separate from our common stock, certificates representing
the rights will be mailed to record holders of our common stock. Once
distributed, the separate right certificates alone will represent the rights.

          The rights are not exercisable until the date rights separate and will
expire on February 2, 2009, unless extended or unless earlier redeemed or
exchanged by us.

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<PAGE>

          The shares of Series A Junior Preferred Stock purchasable upon
exercise of the rights are nonredeemable. Each share of Series A Junior
Preferred Stock will be entitled to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate dividend of 100
times the dividend declared per share of our common stock. In the event of
liquidation, the holders of the Series A Junior Preferred Stock will be entitled
to a minimum preferential liquidation payment of $100.00 per share but will be
entitled to an aggregate payment of 100 times the payment made per share of our
common stock.

          Each holder of Series A Junior Preferred Stock will have one vote, and
each one two-hundredth of a Series A Junior Preferred Stock will have one
two-hundredths vote, voting together with the holders of our common stock.

          In the event of any merger, consolidation or other transaction in
which shares of our common stock are exchanged, each Series A Junior Preferred
Stock will be entitled to receive 100 times the amount received per share of our
common stock. These rights are protected by customary anti-dilution provisions.

          In the event any person or group becomes an acquiring person or we are
acquired in a merger, or 50% or more of our assets are sold, proper provision
will be made so that each holder of a right, other than rights beneficially
owned by the acquiring person (which will have become void), will thereafter
have the right to receive, at a purchase price of $80.00, subject to adjustment,
that number of shares of our common stock having a market value of twice the
$80.00 exercise price, subject to adjustment.

          At any time after a person or group has become an acquiring person and
prior to the acquisition by such person or group of 50% or more of shares of our
common stock, our board of directors may exchange rights, other than the rights
held by such acquiring person which would have become void, in whole or in part,
for shares of our common stock at an exchange ratio of one share of our common
stock, or one two-hundredth of a share of our Series A Junior Preferred Stock,
per right, subject to adjustment.

          The terms of the rights may generally be amended by our board of
directors without the consent of the holders of the rights.

          Until a right is exercised, the holder will have no rights as a
stockholder.

          The rights should not interfere with any merger or other business
combination approved by the board of directors since the rights may be redeemed
by us at redemption price of $0.01 per right prior to the time that an acquiring
person has acquired beneficial ownership of 15% or more of our common stock.

New Jersey Shareholders Protection Act

          The New Jersey Shareholders Protection Act provides, among other
things, that a New Jersey corporation, such as Selective, may not engage in
business combinations specified in the statute with a shareholder having
indirect or direct beneficial ownership of 10% or more of the voting power of
our outstanding stock (an interested shareholder) for a period of five years
following the date on which the shareholder became an interested shareholder,
unless that business combination is approved by the board of directors of the
corporation before the date the shareholder became an interested shareholder.
These provisions also could have the effect of depriving shareholders of an
opportunity to receive a premium over the prevailing market price if a hostile
takeover were attempted.

Antitakeover Provisions of Our Certificate of Incorporation

          Our restated certificate of incorporation contains certain provisions
that have the effect of discouraging, delaying or preventing takeover attempts.
Under the restated certificate of incorporation, the affirmative vote of the
holders of at least 66 2/3% of our stock entitled to vote for the election of
directors is required to approve certain "business combinations" unless any such
business combination is approved by "continuing directors" or unless the holders
of our common stock receive in such business combination reasonably uniform
purchase terms and consideration as specified in the restated certificate of
incorporation. Our restated certificate of incorporation also

                                       42
<PAGE>

provides for a classified board of directors. The amendment or repeal of these
provisions requires the affirmative vote of the holders of at least 66 2/3% of
our stock entitled to vote for the election of directors.

Limitations on Liability and Indemnification of Officers and Directors

          Our restated certificate of incorporation provides that, to the
fullest extent permitted by New Jersey law, none of our directors will be
personally liable to us or to our stockholders for monetary damages for breach
of any duty. The provision effectively eliminates our rights and the rights of
our stockholders to recover monetary damages against a director for any breach
of duty as a director. Our bylaws provide for indemnification of our officers
and directors to the fullest extent permitted by applicable law.

Transfer Agent and Registrar

          EquiServe Trust Company, N.A. is the transfer agent and registrar for
our common stock.

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             MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

General

          This is a summary of certain material United States federal income tax
consequences relevant to holders of the notes and, where noted, common stock
issuable upon conversion or repurchase of the notes. This summary is based upon
the Internal Revenue Code of 1986, as amended (the "Code"), administrative
pronouncements, judicial decisions and existing and proposed Treasury
regulations now in effect, all of which are subject to change (possibly with
retroactive effect) or differing interpretations. The discussion below deals
only with notes and common stock held as capital assets and does not purport to
deal with persons in special tax situations, such as financial institutions,
insurance companies, regulated investment companies, dealers in securities or
currencies, partnerships or other entities classified as partnerships for United
States federal income tax purposes, tax-exempt entities, persons holding notes
in a tax-deferred or tax-advantaged account, persons who hold the notes whose
functional currency is not the United States dollar or persons holding notes as
a hedge against currency risks, as a position in a "straddle" or as part of a
"hedge," "conversion" or other risk-reduction transaction for tax purposes.
Persons considering the purchase of the notes should consult their own tax
advisors concerning the application of the United States federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the notes or common stock arising under the laws of
any state, local, foreign or other taxing jurisdiction.

          We do not address all of the tax consequences that may be relevant to
a holder of notes. In particular, we do not address:

          o    the United States federal income tax consequences to shareholders
               in, or partners or beneficiaries of, an entity that is a holder
               of notes or common stock;

          o    the United States federal estate, gift or alternative minimum tax
               consequences of the purchase, ownership or disposition of notes
               or common stock; and

          o    any state, local or foreign tax consequences of the purchase,
               ownership or disposition of notes or common stock.

          No statutory or judicial authority directly addresses the treatment of
all aspects of the notes for United States federal income tax purposes. The
Internal Revenue Service (the "IRS") has recently issued a revenue ruling with
respect to instruments similar to the notes. This ruling supports certain
aspects of the treatment described below. No ruling has been or is expected to
be sought from the IRS with respect to the United States federal income tax
consequences of the issues that are not addressed in the recently released
revenue ruling. The IRS would not be precluded from taking contrary positions.
As a result, no assurance can be given that the IRS will agree with all of the
tax characterizations and the tax consequences described below.

          We urge prospective investors to consult their own tax advisors with
respect to the tax consequences to them of the purchase, ownership and
disposition of notes and common stock in light of their own particular
circumstances, including the tax consequences under state, local, foreign and
other tax laws and the possible effects of changes in United States federal or
other tax laws.

Classification of the Notes

          We have received an opinion from our counsel, Shearman & Sterling,
that the notes will be treated as indebtedness for United States federal income
tax purposes and that the notes will be subject to the Treasury regulations
governing contingent payment debt instruments (to which we refer as the
"contingent debt regulations"). Pursuant to the terms of the indenture, we and
every holder agree (in the absence of administrative pronouncement or judicial
ruling to the contrary), for United States federal income tax purposes, to treat
the notes as debt instruments that are subject to the contingent debt
regulations and to be bound by our application of the contingent debt
regulations to the notes, including generally our determination of the rate at
which interest will be deemed to accrue on the notes and the related "projected
payment schedule" determined by us as described below.

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<PAGE>

          Notwithstanding the issuance of the recent revenue ruling, the proper
application of the contingent debt regulations to the notes is not entirely
certain, and no assurance can be given that the IRS will not assert that the
notes should be treated differently. A different treatment from that described
below could affect the amount, timing, source and character of income, gain or
loss with respect to an investment in the notes. In particular, a holder might
be required to accrue interest income at a higher or lower rate, might not
recognize income, gain or loss upon conversion of a note into common stock, and
might recognize capital gain or loss upon a taxable disposition of a note.
Holders should consult their tax advisors concerning the tax treatment of
holding a note.

          The remainder of this discussion assumes that the notes are treated as
indebtedness subject to the contingent debt regulations.

United States Holders

          For purposes of this discussion, a United States Holder is a
beneficial owner of the notes or common stock who or which is:

          o    a citizen or individual resident of the United States for United
               States federal income tax purposes;

          o    a corporation, including any entity treated as a corporation for
               United States federal income tax purposes, created or organized
               in or under the laws of the United States, any state thereof or
               the District of Columbia;

          o    an estate if its income is subject to United States federal
               income taxation regardless of its source; or

          o    a trust if (1) a United States court can exercise primary
               supervision over its administration and (2) one or more United
               States persons have the authority to control all of its
               substantial decisions.

Notwithstanding the preceding sentence, certain trusts in existence on August
20, 1996, and treated as United States persons prior to such date, may also be
treated as United States Holders.

Accrual of Interest on the Notes

          Pursuant to the contingent debt regulations, United States Holders of
the notes will be required to accrue interest income on the notes on a
constant-yield basis, as described below, regardless of whether such holders use
the cash or accrual method of tax accounting. Accordingly, United States Holders
will be required to include interest in income each year in excess of the
accruals on the notes for non-tax purposes and in excess of any interest
payments actually received in that year.

          The contingent debt regulations provide that a United States Holder
must accrue an amount of ordinary interest income, as original issue discount
for United States federal income tax purposes, for each accrual period prior to
and including the maturity date of the notes that equals:

               (1)  the product of (i) the adjusted issue price (as defined
          below) of the notes as of the beginning of the accrual period and (ii)
          the comparable yield to maturity (as defined below) of the notes,
          adjusted for the length of the accrual period;

               (2)  divided by the number of days in the accrual period; and

               (3)  multiplied by the number of days during the accrual period
          that the United States Holder held the notes.

          A note's issue price is the first price at which a substantial amount
of the notes is sold to the public, excluding sales to bond houses, brokers or
similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers. The adjusted issue price of a note is its issue
price increased by any interest

                                       45
<PAGE>

income previously accrued, determined without regard to any adjustments to
interest accruals described below, and decreased by the projected amount of any
payments previously made with respect to the notes.

          Shearman & Sterling, our counsel, has advised us that the term
"comparable yield" means the annual yield we would pay, as of the initial issue
date of the notes, on a fixed-rate, nonconvertible debt security with no
contingent payments, but with terms and conditions otherwise comparable to those
of the notes. Based in part on that advice, we intend to take the position that
the comparable yield for the notes is 6.60%, compounded semiannually. The
precise manner of calculating the comparable yield is not entirely clear.

          The contingent debt regulations require that we provide to United
States Holders, solely for United States federal income tax purposes, a schedule
of the projected amounts of payments (to which we refer as "projected payments")
on the notes. This schedule must produce a yield to maturity that equals the
comparable yield. The projected payment schedule includes estimates for certain
contingent interest payments and an estimate for a payment at maturity taking
into account the conversion feature. In this connection, the fair market value
of any common stock (and cash, if any) received by a holder upon conversion will
be treated as a contingent payment. The comparable yield and the projected
payment schedule will be set forth in the indenture. United States Holders also
may obtain the projected payment schedule by submitting a written request for
such information to us at: Selective Insurance Group, Inc., Treasury Operations,
40 Wantage Avenue, Branchville, New Jersey 07890.

          For United States federal income tax purposes, a United States Holder
must use the comparable yield and the projected payment schedule in the
indenture in determining its interest accruals and the adjustments thereto
(described below) in respect of the notes unless such United States Holder
timely discloses and justifies the use of other estimates to the IRS. A United
States Holder that determines its own comparable yield or projected payment
schedule also must establish that our comparable yield or projected payment
schedule is unreasonable.

          The comparable yield and the projected payment schedule are not used
for any purpose other than to determine a holder's interest accruals and
adjustments thereto in respect of the notes for United States federal income tax
purposes. They do not constitute a projection or representation regarding the
actual amounts payable on the notes or the value at any time of the common stock
into which the notes may be converted.

          We may be required to make payments of liquidated damages if we do not
cause to be declared effective a registration statement, as described under
"Description of Notes -- Registration Rights." We intend to take the position
for United States federal income tax purposes that any payments of liquidated
damages should be taxable to United States Holders as additional ordinary income
when received or accrued, in accordance with their method of tax accounting. Our
determination is binding on holders of the notes, unless they explicitly
disclose that they are taking a different position to the IRS on their tax
returns for the year during which they acquire the note. The IRS could take a
contrary position from that described above, which could affect the timing and
character of United States Holders' income from the notes with respect to the
payments of liquidated damages.

          If we do fail to cause to be declared effective a registration
statement, United States Holders should consult their tax advisers concerning
the appropriate tax treatment of the payment of liquidated damages with respect
to the notes.

     Adjustments to Interest Accruals on the Notes

          If, during any taxable year, a United States Holder of notes receives
actual payments with respect to such notes that, in the aggregate, exceed the
total amount of projected payments for that taxable year, the United States
Holder will incur a "net positive adjustment" under the contingent debt
regulations equal to the amount of such excess. The United States Holder will
treat a "net positive adjustment" as additional interest income. For this
purpose, the payments in a taxable year include the fair market value of
property (including common stock received upon conversion or repurchase of the
notes) received in that year.

          If a United States Holder receives in a taxable year actual payments
with respect to the notes that, in the aggregate, are less than the amount of
projected payments for that taxable year, the United States Holder will incur a
"net negative adjustment" under the contingent debt regulations equal to the
amount of such deficit. This negative

                                       46
<PAGE>

adjustment will (a) reduce the United States Holder's interest income on the
notes for that taxable year, and (b) to the extent of any excess after the
application of (a), give rise to an ordinary loss to the extent of the United
States Holder's interest income on the notes during prior taxable years, reduced
to the extent such interest was offset by prior net negative adjustments. Any
negative adjustment in excess of the amounts described in (a) and (b) will be
carried forward to offset future interest income with respect to the notes or to
reduce the amount realized on a sale, exchange, conversion or retirement of the
notes.

          If a United States Holder purchases notes at a discount or premium to
the adjusted issue price, the discount will be treated as a positive adjustment
and the premium will be treated as a negative adjustment. The United States
Holder must reasonably allocate the adjustment over the remaining term of the
notes by reference to the accruals of original issue discount at the comparable
yield or to the projected payments. It may be reasonable to allocate the
adjustment over the remaining term of the notes pro rata with the accruals of
original issue discount at the comparable yield. You should consult your tax
advisor regarding these allocations.

     Sale, Exchange, Conversion or Redemption of Notes

          Generally, the sale or exchange of a note or the redemption of a note
for cash will result in taxable gain or loss to a United States Holder. As
described above, our calculation of the projected payment schedule for the
notes, which generally is binding on holders of notes, includes the receipt of
stock upon conversion as a contingent payment with respect to the notes.
Accordingly, we intend to treat the receipt of common stock by a United States
Holder upon (a) the conversion of a note or (b) a United States Holder's
exercise of a put right that we elect to pay in common stock as a payment under
the contingent debt regulations. So viewed, a conversion of a note into common
stock, or a repurchase where we elect to pay in common stock, also will result
in taxable gain or loss to a United States Holder.

          The amount of gain or loss on a sale, exchange, conversion or
redemption will be equal to the difference between (a) the amount of cash plus
the fair market value of any other property received by the United States
Holder, including the fair market value of any common stock received, and (b)
the United States Holder's adjusted tax basis in the note.

          A United States Holder's adjusted tax basis in a note generally will
be equal to the United States Holder's original purchase price for the note,
increased by any interest income previously accrued by the United States Holder
(determined without regard to any adjustments to interest accruals described
above, other than adjustments to reflect discount or premium to the adjusted
issue price, if any) and decreased by the amount of any projected payments that
previously have been scheduled to be made in respect of the notes (without
regard to the actual amount paid).

          Gain recognized upon a sale, exchange, conversion or redemption of a
note generally will be treated as ordinary interest income; any loss will be
ordinary loss to the extent of interest previously included in income, and
thereafter capital loss (which will be long-term if the note is held for more
than one year). The deductibility of capital losses is subject to limitations.

          A United States Holder's tax basis in common stock received upon a
conversion of a note, or upon a United States Holder's exercise of a put right
that we elect to pay in common stock, will equal the then current fair market
value of such common stock. The United States Holder's holding period for the
common stock received will commence on the day immediately following the date of
conversion or repurchase.

     Constructive Dividends to Holders of Notes

          If at any time we were to make a distribution of property to our
stockholders that would be taxable to the stockholders as a dividend for United
States federal income tax purposes and, in accordance with the anti-dilution
provisions of the notes, the conversion rate of the notes were increased, such
increase might be deemed to be the payment of a taxable dividend to holders of
the notes.

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<PAGE>

          For example, an increase in the conversion rate in the event of
distributions of our evidences of indebtedness or our assets or an increase in
the event of an extraordinary cash dividend generally would result in deemed
dividend treatment to holders of the notes, but an increase in the event of
stock dividends or the distribution of rights to subscribe for common stock
generally would not.

     Dividends on Common Stock

          If we make distributions on our common stock, the distributions
generally will be treated as dividends to a United States Holder of our common
stock to the extent of our current or accumulated earnings and profits as of the
year of distribution, then as tax-free return of capital to the extent of the
United States Holder's adjusted tax basis in the common stock and thereafter as
gain from the sale or exchange of that stock.

     Disposition of Common Stock

          Upon the disposition of common stock received on conversion or
repurchase of a note, a United States Holder generally will recognize capital
gain or loss equal to the difference between (i) the amount of cash and the fair
market value of any property received upon the sale or exchange and (ii) the
United States Holder's adjusted tax basis in the common stock. That capital gain
or loss will be long-term if the United States Holder's holding period is more
than one year. The deductibility of capital losses is subject to limitations.

Non-United States Holders

          As used herein, the term "Non-United States Holder" means a beneficial
holder of a note or common stock that is, for United States federal income tax
purposes:

          o    an individual who is classified as a nonresident for United
               States federal income tax purposes;

          o    a foreign corporation; or

          o    an estate or trust that is not a United States estate or trust,
               as described above.

     Notes

          We intend to treat payments of contingent interest made to a
Non-United States Holder (other than (i) the receipt of common stock upon
conversion of a note and (ii) any payment of contingent cash interest made in
any period up to the floor amount (i.e., $1.95)) as subject to United States
federal withholding tax. Therefore, Non-United States Holders will be subject to
withholding on such payments of contingent interest at a rate of 30%, subject to
reduction (a) by an applicable treaty if the Non-United States Holder provides
an IRS Form W-8BEN certifying that it is entitled to such treaty benefits or (b)
upon the receipt of a Form W-8ECI from a Non-United States Holder claiming that
the payments are effectively connected with the conduct of a United States trade
or business. A Non-United States Holder that is subject to the withholding tax
should consult its own tax advisor as to whether it can obtain a refund for a
portion of the withholding tax because some portion of the contingent interest
represents a return of principal under the contingent debt regulations, or on
some other grounds.

          All other payments on the notes made to a Non-United States Holder,
including a payment in common stock pursuant to a conversion, and any gain
realized on a sale or exchange of the notes (other than gain attributable to
accrued contingent interest payments), will be exempt from United States income
or withholding tax, provided that: (i) such Non-United States Holder does not
own, actually or constructively, 10% or more of the total combined voting power
of all classes of our stock entitled to vote, is not a controlled foreign
corporation related, directly or indirectly, to us through stock ownership, and
is not a bank receiving certain types of interest; (ii) the statement
requirement set forth in section 871(b) or section 881(c) of the Code has been
fulfilled with respect to the beneficial owner, as discussed below; (iii) such
payments and gain are not effectively connected with the conduct by such
Non-United States Holder of a trade or business in the United States; (iv) our
common stock continues to be actively traded within the meaning of section
871(h)(4)(C)(v)(I) of the Code (which, for these purposes and subject to certain
exceptions, includes trading on the Nasdaq National Market); and (v) we are not
and have not been a United States

                                       48
<PAGE>

real property holding corporation ("USRPHC"). We believe that we are not and
have never been, nor do we anticipate becoming, a USRPHC. However, if a
Non-United States Holder of a note were deemed to have received a constructive
dividend (see "United States Holders -- Constructive Dividends to Holders of
Notes" above), the Non-United States Holder generally would be subject to United
States withholding tax at a 30% rate, subject to reduction by an applicable
treaty, on the taxable amount of such dividend.

          The statement requirement referred to in the preceding paragraph will
be fulfilled if the beneficial owner of a note certifies on IRS Form W-8BEN,
under penalties of perjury, that it is not a United States person and provides
its name and address or otherwise satisfies applicable documentation
requirements.

     Common Stock

          Dividends paid to a Non-United States Holder of common stock generally
will be subject to withholding tax at a 30% rate subject to reduction (a) by an
applicable treaty if the Non-United States Holder provides an IRS Form W-8BEN
certifying that it is entitled to such treaty benefits or (b) upon the receipt
of a Form W-8ECI from a Non-United States Holder claiming that the payments are
effectively connected with the conduct of a United States trade or business.

          A Non-United States Holder generally will not be subject to United
States federal income tax on gain realized on the sale or exchange of common
stock unless (a) the gain is effectively connected with the conduct of a trade
or business of the Non-United States Holder, (b) in the case of a Non-United
States Holder who is a nonresident alien individual, the individual is present
in the United States for 183 or more days in the taxable year of the disposition
and certain other conditions are met, or (c) we are or have been a USRPHC. We
believe that we are not and have never been, nor do we anticipate becoming, a
USRPHC.

     Income Effectively Connected with a United States Trade or Business

          If a Non-United States Holder of notes or common stock is engaged in a
trade or business in the United States, and if interest on the notes, dividends
on the stock, or gain realized on the sale or exchange of the notes or common
stock is effectively connected with the conduct of such trade or business, the
Non-United States Holder, although exempt from the withholding tax discussed in
the preceding paragraphs, will generally be subject to regular United States
federal income tax on interest, dividends and any gain realized on the sale or
exchange (and, with respect to the notes, conversion of the notes into common
stock) of the notes or common stock in the same manner as if it were a United
States Holder. Such a Non-United States Holder would be required to provide to
the withholding agent a properly executed IRS Form W-8ECI (or successor form) in
order to claim an exemption from withholding tax. In addition, if such a
Non-United States Holder is a foreign corporation, such holder may be subject to
a branch profits tax equal to 30% (or such lower rate provided by an applicable
treaty) of its effectively connected earnings and profits for the taxable year,
subject to certain adjustments.

Backup Withholding Tax and Information Reporting

          Payments of principal, premium, if any, and interest (including
original issue discount and a payment in common stock pursuant to a conversion
of a note) on the notes, payments on the common stock, and the proceeds of
dispositions of the notes or common stock may be subject to information
reporting and United States federal backup withholding tax if the United States
Holder thereof fails to supply an accurate taxpayer identification number or
otherwise fails to comply with applicable United States information reporting or
certification requirements. A Non-United States Holder may be subject to United
States backup withholding tax on payments on the notes or common stock and the
proceeds from a sale or other disposition of the notes or common stock unless
the Non-United States Holder complies with certification procedures to establish
that it is not a United States person. Any amounts so withheld will be allowed
as a credit against a United States Holder's United States federal income tax
liability and may entitle a holder to a refund, provided the required
information is timely furnished to the IRS.

Tax Event

                                       49
<PAGE>

          The modification of the terms of the notes by us upon a Tax Event as
described in "Description of Notes -- Optional Conversion to Semiannual Coupon
Notes upon Tax Event," could possibly alter the timing of income recognition by
the holders with respect to the semiannual payments of interest due after the
option exercise date.

                                       50
<PAGE>

                             SELLING SECURITYHOLDERS

          The notes originally were issued by us and sold by Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First
Boston Corporation, Ferris, Baker Watts, Incorporated and Sandler O'Neill &
Partners, L.P., as the initial purchasers, in transactions exempt from the
registration requirements of the Securities Act of 1933 to persons reasonably
believed by the initial purchasers to be qualified institutional buyers. Selling
securityholders, including their transferees, pledges or donees or their
successors, may from time to time offer and sell any or all of the notes and the
common stock into which the notes are convertible pursuant to this prospectus.
The selling securityholders may offer all, some or none of the notes and the
common stock.

          The table below sets forth the name of each selling securityholder,
the principal amounts of notes that may be offered by each selling
securityholder under this prospectus and the number of shares of common stock
into which the notes are convertible. The information is based on information
provided to us by or on behalf of the selling securityholders on or prior to
February 7, 2003. The selling securityholders identified below may have sold,
transferred or otherwise disposed of all or a portion of their notes or common
stock since the date on which they provided this information in transactions
exempt from the registration requirements of the Securities Act. Information
about the selling securityholders may change from time to time. Any changed
information will be set forth in prospectus supplements or post-effective
amendments, as required.

          Because the selling securityholders may offer all or some portion of
the notes or the common stock into which the notes are convertible, we cannot
estimate the amount of notes or common stock that may be held by the selling
securityholders upon the completion of any sales. For information on the
procedure for sales by selling securityholders, read the disclosure under the
heading "Plan of Distribution" below.

<TABLE>
<CAPTION>
                                                      Principal
                                                       Amount
                                                      of Notes                        Number of       Number of
                                                    Beneficially                      Shares of       Shares of      Percentage
                                                        Owned       Percentage of    Common Stock    Common Stock     of Common
                     Name of                         That May Be        Notes        Beneficially    That May Be        Stock
            Selling Securityholder(1)                   Sold         Outstanding       Owned(2)       Sold(3)(4)    Outstanding(5)
- -------------------------------------------         ------------    -------------    ------------    ------------   --------------
<S>                                                   <C>               <C>           <C>            <C>                   <C>
  AKELA Capital Master Fund Ltd.                      11,000,000        3.61%            N/A         142,761               *
  Allstate Life Insurance                              2,000,000          *           13,200(6)       25,956               *
  Argent Classic Convertible Arbitrage Fund
  (Bermuda) Ltd.                                       2,000,000          *              N/A          25,956               *
  Argent Low Lev Convertible Arbitrage Fund Ltd.       2,000,000          *              N/A          25,956               *
  BGI Global Investors C/O Forest Investment
  Management L.L.C.                                      396,000          *              N/A           5,139               *
  BNP Paribus Equity Strategies, SNC                  20,850,000        6.84%           26,003       270,597            1.02%
  Calamos Convertible Fund - Calamos Investment
  Trust                                               13,300,000        4.36%            N/A         172,611               *
  Calamos Convertible Growth & Income Fund -
  Calamos Investment Trust                            10,900,000        3.57%            N/A         141,463               *
  Calamos Convertible Portfolio - Calamos
  Advisor Trust                                          300,000          *              N/A           3,893               *
  CC Investments LOC                                     250,000          *              N/A           3,244               *
  Chrysler Corporation Master Retirement Trust         2,595,000          *              N/A          33,678               *
  Context Convertible Arbitrage Fund, LP                 165,000          *              N/A           2,141               *
  Context Convertible Arbitrage Offshore, LP              85,000          *              N/A           1,103               *
  Cooper Neff Convertible Strategies (Cayman)
  Master Fund L.P.                                    11,189,000        3.67%            N/A         145,214               *
  Deephaven Domestic Convertible Trading Ltd.          3,250,000        1.07%            N/A          42,179              *
  Delta AIR Lines Master Trust
  (c/o Oaktree Capital Management, LLC)                  655,000          *              N/A           8,500              *
  Delta Pilots D & S Trust (c/o Oaktree
</TABLE>

                                       51
<PAGE>

<TABLE>
<CAPTION>
                                                      Principal
                                                       Amount
                                                      of Notes                        Number of       Number of
                                                    Beneficially                      Shares of       Shares of      Percentage
                                                        Owned       Percentage of    Common Stock    Common Stock     of Common
                     Name of                         That May Be        Notes        Beneficially    That May Be        Stock
            Selling Securityholder(1)                   Sold         Outstanding       Owned(2)       Sold(3)(4)    Outstanding(5)
- -------------------------------------------         ------------    -------------    ------------    ------------   --------------
<S>                                                   <C>               <C>           <C>            <C>                   <C>
  Capital Management, LLC)                               360,000          *              N/A           4,672              *
  Forest Global Convertible Fund Series A-5            5,775,000        1.89%            N/A          74,949               *
  Forest Fulcrum Fund L.L.P.                           1,383,000          *              N/A          17,948               *
  Forest Multi-Strategy Master/Fund SPC on
  Behalf of Series F, Multi-Strategy Segregated
  Portfolio                                            2,000,000          *              N/A          25,956               *
  GDO Equity Arbitrage Master Fund                     1,000,000          *              N/A          12,978               *
  JMG Convertible Investments LP                       1,500,000          *              N/A          19,467               *
  KBC Financial Products USA Inc.                      3,000,000          *              N/A          38,934               *
  LLT Limited                                            396,000          *              N/A           5,139               *
  Lyxor Master Fund C/O Forest Investment
  Management L.L.C.                                    1,305,000          *              N/A          16,936               *
  Marathon Global Convertible Master Fund Ltd.         5,000,000        1.64%            N/A          64,891               *
  McMahan Securities Co. L.P.                         12,250,000        4.02%            N/A         158,984               *
  Merrill Lynch, Pierce Fenner and Smith Inc.          2,910,000          *              N/A          37,766               *
  MLQA Convertible Securities Arbitrage Ltd           15,000,000        4.92%            N/A         194,674               *
  Microsoft Corporation                                  935,000          *              N/A          12,134               *
  Motion Picture Industry Health Plan-Active
  Member Fund                                            170,000          *              N/A           2,206               *
  Motion Picture Industry Health Plan-Retiree
  Member Fund                                            105,000          *              N/A           1,362               *
  OCM Convertible Trust                                1,725,000          *              N/A          22,387               *
  Partner Reinsurance Company, Ltd.                      540,000          *              N/A           7,008               *
  Qwest Occupational Health Trust                        200,000          *              N/A           2,595               *
  RBC Alternative Assets LP C/O Forest
  Investment Management L.L.C.                           231,000          *              N/A           2,997               *
  Relay II Holdings C/O Forest Investment
  Management L.L.C.                                      198,000          *              N/A           2,569               *
  Sphinx Convertible Abritrage C/O Forest
  Investment Management L.L.C.                           102,000          *              N/A           1,323               *
  State Employee's Retirement Fund of the
  State of Delaware                                      715,000          *              N/A           9,279               *
  Sturgen Limited                                      2,711,000          *              N/A          35,184               *
  Sunrise Partners Limited Partnership                14,250,000        4.67%            N/A         184,940               *
  SusQuehanna Capital Group                            5,000,000        1.64%            N/A          64,891               *
  Thrivent Financial for Lutherans                     1,000,000          *              N/A          12,978               *
  UFJ Investments Asia Limited                           250,000          *              N/A           3,244               *
  Victus Capital LP                                   17,000,000        5.57%            N/A         220,631               *
  Wachovia Securities International LTD               27,000,000        8.85%            N/A         350,414           1.32%
  Zurich Institutional Benchmarks Master Fund
  Ltd.                                                   500,000          *              N/A           6,489               *
  Zurich Master Hedge Fund C/O Forest Investment
  Management L.L.C.                                      714,000          *              N/A           9,266               *
  Any other holder of notes or future
  transferee, pledgee, donee or successor of any
  holder                                            98,840,000          32.41%           N/A        1,282,775           4.82%
                                                    ------------       -------          ------      ---------          ------
  Total                                             $305,000,000       100.00%          39,203      3,958,382(7)       14.87%
                                                    ============       =======          ======      ============       ======
    _______________
    *  Less than 1%
</TABLE>

                                       52
<PAGE>

     (1)  Also includes any sale of the notes and the underlying common stock by
          pledgees, donees, transferees or other successors in interest that
          receive such securities by pledge, gift, distribution or other
          non-sale related transfer from the named selling securityholders.
          Information about other selling securityholders will be set forth in
          prospectus supplements or in other documents that we file from time to
          time with the Securities and Exchange Commission that are incorporated
          by reference in this prospectus, if required. See "Where You Can Find
          More Information."

     (2)  Excludes common stock issuable upon conversion of the selling
          securityholder's notes.

     (3)  Assumes conversion of all of the selling securityholder's notes at a
          conversion rate of 12.9783 per note and a cash payment in lieu of the
          issuance of any fractional share interest. However, this conversion
          rate is subject to adjustment as described under "Description of the
          Notes -- Conversion Rights." As a result, the number of shares of
          common stock issuable upon conversion of the notes may increase or
          decrease in the future.

     (4)  Reflects rounding down of fractional common stock issuable to each
          selling securityholder upon conversion of the notes.

     (5)  Calculated based on Rule 13d-3 of the Securities Exchange Act of 1934
          using 26,611,431 shares of common stock outstanding as of January 31,
          2003. In calculating this amount, we did not treat as outstanding the
          common stock issuable upon conversion of notes.

     (6)  Consists of 9,000 shares held by Allstate Insurance Company, 3,100
          shares held by Allstate Retirement Plan and 1,100 shares held by
          Agents Pension Plan.

     (7)  Column does not add up correctly because the fractional shares to
          which the holders would be entitled have been disregarded.

          None of the selling securityholders listed above has, or within the
past three years had, any position, office or any material relationship with us
or any of our affiliates.

          To the extent that any of the selling securityholders identified above
are broker-dealers, they are deemed to be, under interpretations of the
Securities and Exchange Commission, "underwriters" within the meaning of the
Securities Act.

          With respect to selling securityholders that are affiliates of
broker-dealers, we believe that such entities acquired their notes or underlying
common stock in the ordinary course of business and, at the time of the purchase
of the notes or the underlying common stock, such selling securityholders had no
agreements or understandings, directly or indirectly, with any person to
distribute the notes or underlying common stock. To the extent that we become
aware that such entities did not acquire their notes or underlying common stock
in the ordinary course of business or did have such an agreement or
understanding, we will file a post-effective amendment to the registration
statement of which this prospectus forms a part to designate such affiliate as
an "underwriter" within the meaning of the Securities Act.

          Only selling securityholders identified above who beneficially own the
notes set forth opposite each such selling securityholder's name in the
foregoing table on the effective date of the registration statement, of which
this prospectus forms a part, may sell such securities pursuant to the
registration statement. Prior to any use of this prospectus in connection with
an offering of the notes or the underlying common stock by any holder not
identified above, the registration statement of which this prospectus forms a
part will be amended by a post-effective amendment to set forth the name and
aggregate amount of notes beneficially owned by the selling securityholder
intending to sell such notes or the underlying common stock and the aggregate
amount of notes or the number of shares of the underlying common stock to be
offered. The prospectus, which will be a part of such a post-effective
amendment, will also disclose whether any selling securityholder selling in
connection with such prospectus has held any position or office with, has been
employed by or otherwise has had a material relationship with us during the
three years prior to the date of the prospectus if such information has not been
disclosed herein.


                                       53
<PAGE>

                              PLAN OF DISTRIBUTION

          The notes and the underlying common stock are being registered to
permit the resale of such securities by the holders of them from time to time
after the date of this prospectus. We will not receive any of the proceeds from
the sale by the selling securityholders of the notes and common stock. We will
bear the fees and expenses incurred in connection with our obligation to
register the notes and the underlying common stock. These fees and expenses
include registration and filing fees, printing and duplications expenses, fees
and disbursements of our counsel, reasonable fees and disbursements of the
trustee and its counsel and of the registrar and transfer agent for the common
stock, and fees and disbursements of one firm of legal counsel for the
securityholders. However, the selling securityholders will pay all underwriting
discounts, commissions and agent's commissions, if any.

          The selling securityholders may offer and sell the notes and the
common stock into which the notes are convertible from time to time in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
Such sales may be effected by a variety of methods, including the following:

          o    in market transactions;

          o    in privately negotiated transactions;

          o    through the writing of options;

          o    in a block trade in which a broker-dealer will attempt to sell a
               block of securities as agent but may position and resell a
               portion of the block as principal to facilitate the transaction;

          o    if we agree to it prior to the distribution, through one or more
               underwriters on a firm commitment or best-efforts basis;

          o    through broker-dealers, which may act as agents or principals;

          o    directly to one or more purchasers;

          o    through agents; or

          o    in any combination of the above or by any other legally available
               means.

          In connection with the sales of the notes and the common stock into
which the notes are convertible or otherwise, the selling securityholders may
enter into hedging transactions with broker-dealers, which may in turn engage in
short sales of the offered securities, short and deliver the notes and the
common stock into which the notes are convertible to close out such short
positions, or loan or pledge the notes and the common stock into which the notes
are convertible to broker-dealers that in turn may sell such securities.

          If a material arrangement with any underwriter, broker, dealer or
other agent is entered into for the sale of any notes and the common stock into
which the notes are convertible through a secondary distribution or a purchase
by a broker or dealer, or if other material changes are made in the plan of
distribution of the notes and the common stock into which the notes are
convertible, a prospectus supplement will be filed, if necessary, under the
Securities Act disclosing the material terms and conditions of such arrangement.
The underwriter or underwriters with respect to an underwritten offering of
notes and the common stock into which the notes are convertible and the other
material terms and conditions of the underwriting will be set forth in a
prospectus supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover of the prospectus supplement. In connection with the sale of the notes
and the common stock into which the notes are convertible, underwriters will
receive compensation in the form of underwriting discounts or commissions and
may also receive commissions from purchasers of notes and underlying common
stock for whom they may act as agent. Underwriters may sell to or through
dealers, and such dealers may receive compensation in the form of

                                       54
<PAGE>

discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they may act as agent.

          To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the notes or the underlying common
stock by the selling securityholders. Selling securityholders may decide not to
sell all or a portion of the notes or the underlying common stock offered by
them pursuant to this prospectus or may decide not to sell notes or the
underlying common stock under this prospectus. In addition, any selling
securityholder may transfer, devise or give the notes or the underlying common
stock by other means not described in this prospects. Any notes or underlying
common stock covered by this prospectus that qualify for sale pursuant to Rule
144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A
rather than pursuant to this prospectus.

          The selling securityholders and any underwriters, broker-dealers or
agents participating in the distribution of the notes and the common stock into
which the notes are convertible may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the notes or common
stock by the selling securityholders and any commissions received by any such
underwriters, broker-dealers or agents may be deemed to be underwriting
commissions under the Securities Act. If the selling securityholders were deemed
to be underwriters, the selling securityholders may be subject to statutory
liabilities including, but not limited to, those of Sections 11, 12 and 17 of
the Securities Act and Rule 10b-5 under the Exchange Act.

          The selling securityholders and any other person participating in the
distribution will be subject to the applicable provisions of the Exchange Act
and the rules and regulations under the Exchange Act, including, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the notes and the common stock into which the notes are convertible by
the selling securityholders and any other relevant person. Furthermore,
Regulation M may restrict the ability of any person engaged in the distribution
of the notes and the common stock into which the notes are convertible to engage
in market-making activities with respect to the particular notes and the common
stock into which the notes are convertible being distributed. All of the above
may affect the marketability of the notes and the common stock into which the
notes are convertible and the ability of any person or entity to engage in
market-making activities with respect to the notes and the common stock into
which the notes are convertible.

          Under the securities laws of certain states, the notes and the common
stock into which the notes are convertible may be sold in those states only
through registered or licensed brokers or dealers. In addition, in certain
states the notes and the common stock into which the notes are convertible may
not be sold unless the notes and the common stock into which the notes are
convertible have been registered or qualified for sale in the state or an
exemption from registration or qualification is available and complied with.

          We have agreed to indemnify the selling securityholders against
certain civil liabilities, including certain liabilities arising under the
Securities Act, and the selling securityholders will be entitled to contribution
from us in connection with those liabilities. The selling securityholders will
indemnify us against certain civil liabilities, including liabilities arising
under the Securities Act, and will be entitled to contribution from the selling
securityholders in connection with those liabilities.

          We are permitted to suspend the use of this prospectus under certain
circumstances relating to corporate developments, public filings with the SEC
and similar events for a period not to exceed 45 days in any three-month period
and not to exceed an aggregate of 120 days in any 12-month period. If the
duration of such suspension exceeds any of the periods above-mentioned, we have
agreed to pay liquidated damages. Please refer to the section entitled
"Description of Notes--Registration Rights."

                                       55
<PAGE>


                                  LEGAL MATTERS

          Certain legal matters regarding the notes and the shares of common
stock issuable upon conversion thereof have been passed upon for us by Michele
N. Schumacher, Vice President, Corporate Secretary and Corporate Governance
Officer of Selective.

                                     EXPERTS

          The consolidated financial statements and schedules of Selective
Insurance Group, Inc. and subsidiaries as of December 31, 2001 and 2000, and for
each of the years in the three-year period ended December 31, 2001, have been
incorporated by reference herein in reliance upon the reports of KPMG LLP,
independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.


                                       56

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
