SCHEDULE II

SELECTIVE INSURANCE GROUP, INC.

(Parent Corporation)

Balance Sheets



	December 31,
($ in thousands, except share amounts)	2014			2013
Assets:
Fixed income securities, available-for-sale – at fair value (amortized cost: $49,890 – 2014; $55,447 – 2013)	$	50,028		55,623
Short-term investments	16,605			15,399
Cash	16,367			193
Investment in subsidiaries	1,604,162			1,493,996
Current federal income tax	16,848			28,471
Deferred federal income tax	15,781			15,122
Other assets	7,268			9,410
Total assets	$	1,727,059		1,618,214

Liabilities:
Notes payable	$	334,297		334,414
Intercompany notes payable	88,961			102,721
Accrued long-term stock compensation	21,890			20,828
Other liabilities	6,325			6,323
Total liabilities	$	451,473		464,286

Stockholders’ Equity:
Preferred stock at $0 par value per share:
Authorized shares 5,000,000; no shares issued or outstanding	$	—		—
Common stock of $2 par value per share:
Authorized shares: 360,000,000
Issued: 99,947,933 – 2014; 99,120,235 – 2013	199,896			198,240
Additional paid-in capital	305,385			288,182
Retained earnings	1,313,440			1,202,015
Accumulated other comprehensive income	19,788			24,851
Treasury stock – at cost (shares: 43,353,181 – 2014; 43,198,622 – 2013)	(562,923		)	(559,360	)
Total stockholders’ equity	1,275,586			1,153,928
Total liabilities and stockholders’ equity	$	1,727,059		1,618,214

Information should be read in conjunction with the Notes to Consolidated Financial Statements of Selective Insurance Group, Inc. and its subsidiaries in Item 8. “Financial Statements and Supplementary Data.” of this Form 10-K.

SCHEDULE II (continued)

SELECTIVE INSURANCE GROUP, INC.

(Parent Corporation)

Statements of Income



	Year ended December 31,
($ in thousands)	2014			2013		2012
Revenues:
Dividends from subsidiaries	$	57,511		32,129		196,091
Net investment income earned	620			585		495
Other income	342			55		464
Total revenues	58,473			32,769		197,050

Expenses:
Interest expense	23,840			24,309		20,711
Other expenses	24,575			27,888		20,632
Total expenses	48,415			52,197		41,343

Income (loss) from continuing operations, before federal income tax	10,058			(19,428	)	155,707

Federal income tax benefit:
Current	(15,920		)	(22,779	)	(4,602	)
Deferred	(646		)	4,835		(9,347	)
Total federal income tax benefit	(16,566		)	(17,944	)	(13,949	)

Net income (loss) from continuing operations before equity in undistributed income of subsidiaries	26,624			(1,484	)	169,656

Equity in undistributed income of continuing subsidiaries, net of tax	115,203			108,899		—
Dividends in excess of continuing subsidiaries’ current year earnings	—			—		(131,693	)

Net income from continuing operations	141,827			107,415		37,963

Loss on disposal of discontinued operations, net of tax of $(538) - 2013	—			(997	)	—

Net income	$	141,827		106,418		37,963

SCHEDULE II (continued)

SELECTIVE INSURANCE GROUP, INC.

(Parent Corporation)

Statements of Cash Flows



	Year ended December 31,
($ in thousands)	2014			2013		2012
Operating Activities:
Net income	$	141,827		106,418		37,963

Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of subsidiaries, net of tax	(115,203		)	(108,899	)	—
Dividends in excess of continuing subsidiaries’ current year income	—			—		131,693
Stock-based compensation expense	8,702			8,630		6,939
Loss on disposal of discontinued operations	—			997		—
Net realized gains	(2		)	—		(219	)
Amortization – other	1,421			4,353		450

Changes in assets and liabilities:
Increase in accrued long-term stock compensation	1,062			6,791		5,221
Decrease (increase) in net federal income taxes	10,977			(14,968	)	4,897
Increase (decrease) in other assets and other liabilities	1,045			1,204		(7,014	)
Net adjustments	(91,998		)	(101,892	)	141,967
Net cash provided by operating activities	49,829			4,526		179,930

Investing Activities:
Purchase of fixed income securities, available-for-sale	(18,511		)	(21,708	)	(148,604	)
Redemption and maturities of fixed income securities, available-for-sale	23,210			6,432		118,371
Sale of fixed income securities, available-for-sale	300			—		8,973
Purchase of short-term investments	(102,717		)	(241,748	)	(106,539	)
Sale of short-term investments	101,510			253,136		113,700
Capital contribution to subsidiaries	—			(57,125	)	(139,122	)
Purchase of subsidiary, net of cash acquired	—			—		255
Sale of subsidiary	—			1,225		751
Net cash provided by (used in) investing activities	3,792			(59,788	)	(152,215	)

Financing Activities:
Dividends to stockholders	(28,428		)	(27,416	)	(26,944	)
Acquisition of treasury stock	(3,563		)	(3,716	)	(3,495	)
Proceeds from notes payable, net of debt issuance costs	—			178,435		—
Net proceeds from stock purchase and compensation plans	7,283			7,119		4,840
Excess tax benefits from share-based payment arrangements	1,020			1,545		1,060
Repayment of notes payable	—			(100,000	)	—
Principal payment on borrowings from subsidiaries	(13,759		)	(722	)	(3,688	)
Net cash (used in) provided by financing activities	(37,447		)	55,245		(28,227	)

Net increase (decrease) in cash	16,174			(17	)	(512	)
Cash, beginning of year	193			210		722
Cash, end of year	$	16,367		193		210