SCHEDULE II

SELECTIVE INSURANCE GROUP, INC.

(Parent Corporation)

Balance Sheets



	December 31,
($ in thousands, except share amounts)	2015			2014
Assets:
Fixed income securities, available-for-sale – at fair value (amortized cost: $61,794 – 2015; $49,890 – 2014)	$	61,567		50,028
Short-term investments	29,116			16,605
Cash	898			16,367
Investment in subsidiaries	1,716,681			1,604,162
Current federal income tax	18,297			16,848
Deferred federal income tax	17,513			15,781
Other assets	670			660
Total assets	$	1,844,742		1,720,451

Liabilities:
Notes payable	$	328,192		327,689
Intercompany notes payable	86,163			88,961
Accrued long-term stock compensation	26,465			21,890
Other liabilities	5,881			6,325
Total liabilities	$	446,701		444,865

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: 100,861,372 – 2015; 99,947,933 – 2014	201,723			199,896
Additional paid-in capital	326,656			305,385
Retained earnings	1,446,192			1,313,440
Accumulated other comprehensive (loss) income	(9,425		)	19,788
Treasury stock – at cost (shares: 43,500,642 – 2015; 43,353,181 – 2014)	(567,105		)	(562,923	)
Total stockholders’ equity	1,398,041			1,275,586
Total liabilities and stockholders’ equity	$	1,844,742		1,720,451

See accompanying Report of Independent Registered Public Accounting Firm. Information should be read in conjunction with the Notes to Consolidated Financial Statements of Selective Insurance Group, Inc. and its subsidiaries. Both items are 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)	2015			2014		2013
Revenues:
Dividends from subsidiaries	$	57,752		57,511		32,129
Net investment income earned	852			620		585
Other income	—			342		55
Total revenues	58,604			58,473		32,769

Expenses:
Interest expense	24,057			24,817		28,132
Other expenses	28,393			23,598		24,065
Total expenses	52,450			48,415		52,197

Income (loss) from continuing operations, before federal income tax	6,154			10,058		(19,428	)

Federal income tax benefit:
Current	(16,609		)	(15,920	)	(22,779	)
Deferred	(1,603		)	(646	)	4,835
Total federal income tax benefit	(18,212		)	(16,566	)	(17,944	)

Net income (loss) from continuing operations before equity in undistributed income of subsidiaries	24,366			26,624		(1,484	)

Equity in undistributed income of continuing subsidiaries, net of tax	141,495			115,203		108,899

Net income from continuing operations	165,861			141,827		107,415

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

Net income	$	165,861		141,827		106,418

SCHEDULE II (continued)

SELECTIVE INSURANCE GROUP, INC.

(Parent Corporation)

Statements of Cash Flows



	Year ended December 31,
($ in thousands)	2015			2014		2013
Operating Activities:
Net income	$	165,861		141,827		106,418

Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of subsidiaries, net of tax	(141,495		)	(115,203	)	(108,899	)
Stock-based compensation expense	8,973			8,702		8,630
Loss on disposal of discontinued operations	—			—		997
Net realized gains	—			(2	)	—
Amortization – other	740			1,421		4,353

Changes in assets and liabilities:
Increase in accrued long-term stock compensation	4,575			1,062		6,791
(Increase) decrease in net federal income taxes	(3,052		)	10,977		(14,968	)
(Decrease) increase in other assets and other liabilities	(214		)	1,045		1,204
Net adjustments	(130,473		)	(91,998	)	(101,892	)
Net cash provided by operating activities	35,388			49,829		4,526

Purchase of fixed income securities, available-for-sale	(33,717		)	(18,511	)	(21,708	)
Redemption and maturities of fixed income securities, available-for-sale	21,578			23,210		6,432
Sale of fixed income securities, available-for-sale	—			300		—
Purchase of short-term investments	(106,933		)	(102,717	)	(241,748	)
Sale of short-term investments	94,422			101,510		253,136
Capital contribution to subsidiaries	—			—		(57,125	)
Sale of subsidiary	—			—		1,225
Net cash (used in) provided by investing activities	(24,650		)	3,792		(59,788	)

Financing Activities:
Dividends to stockholders	(31,052		)	(28,428	)	(27,416	)
Acquisition of treasury stock	(4,182		)	(3,563	)	(3,716	)
Proceeds from notes payable, net of debt issuance costs	—			—		178,435
Net proceeds from stock purchase and compensation plans	10,089			7,283		7,119
Excess tax benefits from share-based payment arrangements	1,736			1,020		1,545
Repayment of notes payable	—			—		(100,000	)
Principal payment on borrowings from subsidiaries	(2,798		)	(13,759	)	(722	)
Net cash (used in) provided by financing activities	(26,207		)	(37,447	)	55,245

Net (decrease) increase in cash	(15,469		)	16,174		(17	)
Cash, beginning of year	16,367			193		210
Cash, end of year	$	898		16,367		193