PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
=========
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended . . . . . . .June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from . . . . . . . . . .to
Commission file number: 0-8641
SELECTIVE INSURANCE GROUP, INC.
-------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2168890
---------- ----------
(State or other jurisdiction (I.R.S. Employer Identification No,)
of incorporation or organization)
40 Wantage Avenue, Branchville, New Jersey 07890
------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
201-948-3000
------------
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
Common stock, par value $2 per share, outstanding as of
July 31, 1996: 14,603,058
PAGE 2
PART I FINANCIAL INFORMATION
==============================
Item 1. Financial Statements.
- - -----------------------------
SELECTIVE INSURANCE GROUP, INC.
===============================
Consolidated Balance Sheets
---------------------------
(dollars in thousands) (unaudited)
ASSETS June 30 Dec. 31
- - ------ 1996 1995
Investments: -------- --------
Debt securities, held-to-maturity -
at amortized cost(fair value of
$464,036-1996; $460,444-1995) $ 454,517 439,585
Debt securities, available-for-sale - at fair value
(amortized cost of $922,875-1996; $902,375-1995) 931,145 949,004
Equity securities, available-for-sale - at fair value
(cost of $95,235-1996; $76,858-1995) 147,842 117,522
Short-term investments (at cost which approximates
fair value) 33,067 47,306
Other investments (at cost which approximates
fair value) 10,721 10,721
--------- ---------
Total investments 1,577,292 1,564,138
Interest and dividends due or accrued 23,885 23,619
Premiums and other receivables 167,453 165,194
Reinsurance recoverable on paid losses and
loss expenses 7,091 5,169
Reinsurance recoverable on unpaid losses and
loss expenses 128,326 121,369
Prepaid reinsurance premiums 36,970 39,952
Deferred Federal income tax 41,155 32,202
Real estate, furniture and equipment 48,888 49,373
Deferred policy acquistion costs 82,100 82,200
Excess of cost over fair value of net assets acquired 10,128 10,362
Other assets 19,736 19,499
--------- ---------
Total assets $ 2,143,024 2,113,077
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
Liabilities:
- - -----------
Reserve for losses $ 984,996 953,251
Reserve for loss expenses 173,023 166,801
Unearned premiums 336,357 343,887
Convertible subordinated debentures 7,282 7,292
Notes payable 104,000 104,000
Current Federal income tax 3,174 1,993
Other liabilities 95,122 99,104
--------- ---------
Total liabilities 1,703,954 1,676,328
--------- ---------
Stockholders' Equity:
- - --------------------
Common stock of $2 par value per share:
Authorized shares: 90,000,000
Issued: 17,816,669 - 1996; 17,647,178 - 1995 35,633 35,294
Additional paid-in capital 51,131 46,071
Net unrealized gains on available-for-sale securities,
net of deferred income tax effect 39,570 56,740
Retained earnings 363,654 347,318
Treasury stock - at cost (shares: 3,249,136 - 1996;
3,247,189 - 1995) (46,497) (46,429)
Notes receivable from stock sales and deferred
compensation expense (4,421) (2,245)
--------- ---------
Total stockholders' equity 439,070 436,749
--------- ---------
Total liabilities and stockholders' equity $ 2,143,024 2,113,077
========= =========
See accompanying notes to unaudited consolidated financial statements.
PAGE 3
SELECTIVE INSURANCE GROUP, INC.
===============================
Consolidated Statements of Income
---------------------------------
(unaudited)
(in thousands, except per share data)
Quarter ended Six months ended
June 30 June 30
Revenues: 1996 1995 1996 1995
- - --------- ------- ------- ------- -------
Net premiums written $ 174,767 193,426 348,214 384,993
Net increase (decrease) in unearned
premiums and prepaid reinsurance
premiums 1,307 (7,459) 4,547 (20,460)
------- ------- ------- -------
Net premiums earned 176,074 185,967 352,761 364,533
Net investment income earned 23,783 22,464 47,794 44,188
Net realized gains (losses)
on investments 934 (313) 1,363 (400)
Other income 767 906 1,525 1,732
------- ------- ------- -------
Total revenues 201,558 209,024 403,443 410,053
------- ------- ------- -------
Expenses:
- - ---------
Losses incurred 105,399 112,847 220,795 218,678
Loss expenses incurred 19,072 20,186 38,844 40,986
Policy acquisition costs 52,513 55,402 105,219 109,132
Dividends to policyholders 1,317 1,769 2,745 3,633
Interest expense 2,323 2,324 4,646 4,649
Other expenses 1,085 1,814 1,806 2,845
------- ------- ------- -------
Total expenses 181,709 194,342 374,055 379,923
------- ------- ------- -------
Income before Federal income tax 19,849 14,682 29,388 30,130
------- ------- ------- -------
Federal income tax expense (benefit):
Current 3,569 3,765 4,636 7,332
Deferred 710 (1,388) 292 (2,352)
------- ------- ------- -------
Total Federal income tax expense 4,279 2,377 4,928 4,980
------- ------- ------- -------
Net income $ 15,570 12,305 24,460 25,150
======= ======= ======= =======
Earnings per share:
- - -------------------
Net income-primary $ 1.07 .86 1.69 1.77
Net income-fully diluted $ 1.04 .84 1.64 1.72
Dividends to stockholders $ .28 .28 .56 .56
See accompanying notes to unaudited consolidated financial statements
PAGE 4
SELECTIVE INSURANCE GROUP, INC.
===============================
Consolidated Statements of Cash Flows
-------------------------------------
(unaudited)
Six months ended June 30
(in thousands) 1996 1995
Operating Activities ---- ----
- - --------------------
Net income $ 24,460 25,150
Adjustments to reconcile net income to
net cash provided by operating activities:
Increase in reserves for losses and loss expenses 37,967 54,185
Increase (decrease) in unearned premiums (7,530) 14,858
Increase (decrease) in Federal income taxes 1,474 (6,936)
Depreciation and amortization 2,501 2,731
Increase in premiums and other receivables (2,259) (21,715)
Decrease (increase) in deferred policy acquisition costs 100 (4,600)
Increase in interest and dividends due or accrued (266) (496)
Increase in reinsurance recoverable on paid
losses and expenses (1,922) (964)
Increase in reinsurance recoverable on unpaid
losses and expenses (6,957) (3,305)
Decrease in prepaid reinsurance premiums 2,982 5,602
Net realized losses (gains) on investments (1,364) 400
Other - net (16,273) 5,078
------- -------
Net adjustments 8,453 44,838
------- -------
Net cash provided by operating activities 32,913 69,988
------- -------
Investing Activities
- - --------------------
Purchase of debt securities, held-to-maturity (56,968) (58,838)
Purchase of debt securities, available-for-sale (51,841) (47,963)
Purchase of equity securities, available-for-sale (20,905) (3,079)
Sale of debt securities, available-for-sale 11,200 14,696
Redemption and maturities of debt securities,
held-to-maturity 41,792 20,783
Redemption and maturities of debt securities,
available-for-sale 20,819 4,443
Sale of equity securities, available-for-sale 3,639 574
Proceeds from other investments 63 33
Increase in net payable from security
transactions not settled 12,430 2,379
Net additions to real estate, furniture and equipment (1,919) (1,734)
------- -------
Net cash used in investing activities $ (41,690) (68,706)
------- -------
See accompanying notes to unaudited consolidated financial statements.
PAGE 5
SELECTIVE INSURANCE GROUP, INC.
===============================
Consolidated Statements of Cash Flows, continued
------------------------------------------------
(unaudited)
Six months ended June 30
(in thousands) 1996 1995
Financing Activities ---- ----
- - --------------------
Dividends to stockholders $ (8,124) (7,966)
Acquisition of treasury stock (68) (110)
Net proceeds from dividend reinvestment plan 579 586
Net proceeds from employee, agent and director
stock plans 4,810 3,010
Proceeds from notes receivable from stock sale
and additions to deferred compensation expense (2,659) (832)
------- -------
Net cash used in financing activities (5,462) (5,312)
------- -------
Net decrease in short-term investments (14,239) (4,030)
Short-term investments at beginning of year 47,306 30,631
------- -------
Short-term investments at end of period $ 33,067 26,601
======= =======
Supplemental disclosures of cash flow information
- - -------------------------------------------------
Cash paid during the period for:
Interest $ 4,966 4,507
Federal income tax 3,455 11,915
Supplemental schedule of non-cash financing activity:
Conversion of convertible subordinated debentures 10 40
See accompanying notes to unaudited consolidated financial statements.
PAGE 6
Notes to Unaudited Consolidated Financial Statements
- - ----------------------------------------------------
1. Basis of Presentation
---------------------
The interim financial statements are unaudited but reflect all
adjustments which, in the opinion of management, are necessary to
provide a fair statement of the results of Selective Insurance Group,
Inc. and its consolidated subsidiaries (collectively, the "Company") for
the interim periods presented. References herein to "Selective" are to
the Parent Company, Selective Insurance Group, Inc. All such adjustments
are of a normal recurring nature. The results of operations for any
interim period are not necessarily indicative of results for the full
year. These financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
2. Reinsurance
-----------
The following is a table of assumed and ceded amounts by income
statement caption:
- - -----------------------------------------------------------------------------
Quarter ended Six months ended
June 30 June 30
(in thousands) 1996 1995 1996 1995
- - -----------------------------------------------------------------------------
Net premiums written:
Assumed $ 6,897 8,205 14,647 13,006
Ceded (24,484) (23,407) (47,453) (46,272)
Net premiums earned:
Assumed $ 8,186 12,581 16,635 21,353
Ceded (25,065) (24,182) (50,435) (48,874)
Losses incurred:
Assumed $ 4,081 9,713 7,476 18,583
Ceded(1) (11,130) (12,410) (41,165) (22,284)
Loss expenses incurred:
Assumed $ 521 699 1,039 1,091
Ceded (706) (433) (2,122) (1,054)
- - -----------------------------------------------------------------------------
(1) The significant increase in ceded losses incurred for the six
months ended June 30, 1996 reflected flood and weather-related
winter storm claims which generated reinsurance loss recoveries of
$13.4 million and $5.0 million, respectively. The flood business
is ceded 100% to the National Flood Insurance Program and,
therefore, the Company is a servicer and not an underwriter of
this type of insurance and bears no risk of policyholder loss.
PAGE 7
Item 2. Management's Discussion and Analysis of Financial Condition and
- - ------ ---------------------------------------------------------------
Results of Operations
---------------------
The following discussion relates to the Company's results of operations,
financial condition and liquidity for the interim periods indicated.
Results of Operations
- - ---------------------
Comparison of Second Quarter and Six Months Ended June 30, 1996 to Second
- - -------------------------------------------------------------------------
Quarter and Six Months Ended June 30, 1995
- - ------------------------------------------
Revenues
- - --------
Net premiums written for the quarter and six months ended June 30, 1996
decreased by 9.6%, or $18.7 million, and 9.6%, or $36.8 million,
respectively, compared to the same periods in 1995. Most of the premium
decline occurred in the Strategic Business Units ("SBUs") writing commercial
lines insurance, where net premiums written decreased by 12.6%, or $17.2
million for the quarter and 12.8%, or $35.3 million for the six months ended
June 30, 1996. The decrease in premiums written for the quarter and six
months ended June 30, 1996, coupled with the higher premium volume recorded
during the corresponding 1995 periods, translated into an overall decrease in
total net premiums earned of 5.3%, or $9.9 million, for the quarter and 3.2%,
or $11.8 million, for the six months ended June 30, 1996, compared to the
same periods in 1995.
The decrease in net premiums written for the quarter and six months ended
June 30, 1996 compared to the same periods in 1995 was in all commercial
lines SBUs, except for bonds, and primarily reflected: (i) higher premiums
recorded in the corresponding 1995 periods due to the reduction in premium
processing backlog of approximately $9 million and $18 million, respectively;
(ii) a reduction in premium volume of approximately $7 million and $11
million, respectively, due to agency terminations; (iii) a reduction in
retention business (renewals) attributable to a highly competitive commercial
lines marketplace and the Company's reunderwriting (re-evaluating) of certain
business classes, resulting in non-renewals, offset by an increase in new
business; and (iv) recent rate decreases, mainly in the workers' compensation
line of insurance. In addition, both commercial and personal lines SBUs net
premiums written were reduced by higher ceded premiums recorded for the New
Jersey Unsatisfied Claim and Judgment Fund for the quarter and six months
ended June 30, 1996 of $0.6 million and $1.9 million, respectively, over the
same periods in 1995.
The personal lines SBU net premiums written remained relatively consistent
for the quarter and six months ended June 30, 1996 compared to the same
periods in 1995. Additional premiums generated from rate increases in New
Jersey personal automobile ($1.6 million for the quarter and $3.1 million for
the six months ended June 30, 1996) were offset by a reduction in the number
of policies in-force in the personal automobile line of insurance of
approximately 2,000 policies.
The property and casualty industry is presently very competitive. In these
current conditions, the Company's position is to maintain its pricing
discipline and commitment to long-term profitability by rejecting underpriced
risks without regard to premium volume considerations. However, as a result
of price competition, the Company is reducing rates in certain lines of
commercial insurance, which is expected to impact, when fully implemented,
net premiums written and earned by approximately $9 million. In addition to
price competition, alternative self-insurance mechanisms have become more
prevalent which reduces the demand for traditional insurance, but creates the
opportunity to service self-insured entities. In 1993, the Company organized
Selective Technical Administrative Resources, Inc. ("SelecTech") to provide
third-party administrative services for public entities that self-insure.
These services include claims administration, loss control and risk
management. In its third year of operation, SelecTech continues to expand
its operations in the self-insurance market in an effort to attract customers
that choose alternative methods of insurance. In addition to the
aforementioned factors which are expected to impact the Company's future net
premiums written, the Company revised some of its reinsurance agreements
during the third quarter of 1996, which will enable the Company to retain
more of its premiums. (For further discussion on reinsurance, see page 10
for the section entitled, "Reinsurance.")
Net investment income earned for the quarter and six months ended June 30,
1996 increased 5.9%, or $1.3 million, and 8.2%, or $3.6 million,
respectively,
PAGE 8
over the same periods in 1995. The increases were due to the income generated
from investments acquired from cash provided by operating activities during
1995 and 1996. The growth in investment income was partially offset by
redemptions and maturities during 1995 of higher yielding debt securities
reinvested at lower fixed income yields currently available in the
marketplace. These factors, coupled with the increase in fair value of both
the available-for-sale debt and equity securities recognized during 1995,
reduced the Company's overall annualized investment yield for the six month
period to 6.1% for 1996, down from 6.5% for the same period one year ago.
Expenses
- - --------
The ratio of losses and loss expenses incurred to net premiums earned for the
quarter ended June 30, 1996 was 70.7%, a decrease from 71.5% for the same
period in 1995. The 0.8 point decrease in the net loss and loss expense ratio
reflected an overall improvement in the contractors and habitational and
recreational SBUs. Contractors, habitational and recreational, along with the
public entity SBUs reflected improvement in the general liability and
workers' compensation lines of insurance due to rate increases obtained
during 1995. Partially offsetting the improvement are less favorable results
primarily in the property and commercial automobile lines of insurance,
effecting the habitational and recreational, mercantile and service, and
public entity SBUs.
The ratio of losses and loss expenses incurred to net premiums earned for the
six months ended June 30, 1996 was 73.6%, an increase from 71.2% for the same
period in 1995. The 2.4 point increase in the loss and loss expense ratio,
for the most part, reflected numerous winter storm claims primarily in the
personal lines, mercantile and service, public entities, as well as the
habitational and recreational SBUs. These weather-related claims for the six
months ended June 30, 1996 amounting to $10.6 million (net of $5.1 million of
reinsurance), increased the six months loss and loss expense ratio by 3.0
points.
Absent the claims from weather-related winter storms, the loss and loss
expense ratio improved 0.6 points. The 0.6 point decrease in the net loss
and loss expense ratio reflected an overall improvement in the personal
lines, contractors, and habitational and recreational SBUs. Contractors,
habitational and recreational, along with the public entity SBUs reflected
favorable loss experience in both the general liability and workers'
compensation lines of insurance due to rate increases obtained during 1995.
Partially offsetting the improvement are less favorable results primarily in
the property and commercial automobile lines of insurance, effecting
the habitational and recreational, mercantile and service, and the public
entity SBUs. The increase in the loss and loss expense ratio in property
insurance was due to the higher level of claim severity and the increase in
commercial automobile insurance was due to claim frequency within the current
accident year.
The ratio of policy acquisition costs to net premiums earned for the quarter
and six months ended 1996 was 29.8% remaining consistent compared to the same
periods in 1995. The consistency in the ratio reflected the reduction in the
New Jersey Fair Automobile Insurance Reform Act assessment offset by higher
labor costs expressed as a percentage of net premiums earned. While labor
costs remained stable, the lower levels of premiums earned impacted this
ratio.
Total Federal income tax expense increased $1.9 million to $4.3 million for
the quarter ended June 30, 1996, compared to $2.4 million for the same period
in 1995. For the six months ended June 30, 1996, the Federal income tax
expense decreased slightly to $4.9 million, compared to $5.0 million for the
first six months in 1995. The Company's effective tax rates for the six
months ended June 30, 1996 and 1995 were 16.8% and 16.5%, respectively. The
Company's effective tax rate differs from the Federal corporate tax rate of
35% primarily as a result of the tax-exempt investment income.
Income
- - ------
The table on page 9 shows operating income, net realized gains(losses), and
net income, including per share amounts for the quarter and six months ended
June 30, 1996.
PAGE 9
- - -----------------------------------------------------------------------------
($ in thousands, Quarter ended June Six months ended June
except for per share data) 1996 1995 1996 1995
- - -----------------------------------------------------------------------------
Operating income, excluding
net realized gains
(net of tax) (1) $14,963 12,509 23,574 25,410
Net realized gain (loss),
net of tax 607 (204) 886 (260)
Net income (1) 15,570 12,305 24,460 25,150
Per Primary Share:
Operating income (1) 1.03 .88 1.63 1.79
Net realized gain (loss) .04 (.02) .06 (.02)
Net income (1) 1.07 .86 1.69 1.77
- - -----------------------------------------------------------------------------
(1) Operating and net income for the six months ended June 30, 1996, include
$6.9 million of weather-related winter storm losses, or $.48 per primary
share.
Financial Condition, Liquidity and Capital Resources
- - ----------------------------------------------------
Selective is an insurance holding company whose principal assets are its
investments in its insurance subsidiaries. As an insurance holding company,
Selective meets its cash requirements through proceeds from the sale of
Selective's common stock and dividends from its insurance subsidiaries, the
payments of which are subject to state regulatory requirements.
Total assets increased 1.4%, or $29.9 million from December 31, 1995 to June
30, 1996. The growth in assets was primarily due to: (i) an increase in
total investments of $13.2 million, which included cash provided by operating
activities of $32.9 million partially offset by a decrease in net unrealized
gains of $26.4 million on available-for-sale securities; (ii) an increase of
$7.0 million in reinsurance recoverable on unpaid losses and expenses due in
part to flood claims ($2.1 million) as well as claims from weather related
winter storms ($1.2 million) during the six months ended June 30, 1996; and
(iii) an increase of $9.0 million in deferred Federal income taxes, mainly
due to tax benefits related to the decrease in net unrealized gains
recognized on the available-for-sale securities.
The rise in total liabilities of 1.6%, or $27.6 million, from December 31,
1995 to June 30, 1996 was mainly composed of increases in reserves for losses
and loss expenses of $38.0 million due to: (i) outstanding reserves for 1996
winter storm losses of $3.4 million; (ii) outstanding reserves for 1996 flood
losses of $2.1 million; and (iii) normal reserve increases. This increase
was partially offset by a $7.5 million decrease in unearned premiums due to
the lower level of premiums written.
The overall obligations and cash outflow of the Company include: claim
settlements; commissions; labor costs; premium taxes; general and
administrative expenses; investment purchases; interest expenses; capital
expenditures with respect to the Company's automation program; principal
payments on the senior notes; and dividends to policyholders and Selective's
stockholders. The insurance subsidiaries satisfy their obligations and cash
outflow through premium collections, interest and dividend income and debt
securities maturities. The Company has authorized a share repurchase program
under which Selective may repurchase up to one million of its common stock,
depending on market conditions, through available cash and a $10 million line
of credit. For the six months ended June 30, 1996 and 1995, cash provided by
operating activities amounted to $32.9 million and $70.0 million,
respectively. The decrease in cash provided by operating activities for the
first six months of 1996 was in part due to: (i) increased loss and loss
expenses paid of approximately $20 million, which includes $8.5 million due
to the weather-related winter storm claims; (ii) an increase in the 1996 UCJF
assessment payment of approximately $5 million; (iii) an increase in 1995
incentives and profit sharing amounts totaling approximately $4 million paid
during the
PAGE 10
six months ended June 30, 1996; and (iv) lower levels of premiums. The
Company expects to continue to generate cash from operations over the balance
of the year.
Reinsurance
- - -----------
Effective July 1, 1996, the Company revised certain reinsurance agreements
from a surplus share and facultative arrangement to a treaty excess of loss
arrangement. Under the new arrangement, property lines are reinsured for
each occurrence in excess of $0.4 million up to $10.0 million. In certain
instances where greater capacity is needed for larger property
risks,facultative reinsurance will be purchased. There was no change to
the current property catastrophe reinsurance arrangement. Casualty lines
are reinsured for each occurrence in excess of $1.0 million up to $50.0
million except commercial umbrella which is reinsured for each occurrence
up to $10.0 million. Facultative reinsurance is purchased for any casualty
risks requiring greater capacity.
The revised reinsurance agreements will result in the Company retaining
approximately $15 million of additional annual net premiums written and the
related loss exposure. During the third quarter of 1996, the Company will
also realize a one-time increase in net premiums written of approximately
$8 million which is represented by the Company's buyout of the June 30, 1996
surplus reinsurance unearned premium reserve.
PAGE 11
Part II OTHER INFORMATION
--------------------------
Item 5. Other Information
- - --------------------------
(a) On July 29, 1996, Selective's Board of Directors authorized a repurchase
program under which Selective may repurchase up to one million shares of its
common stock, depending on market conditions, available cash and alternative
investment opportunities. This program expires on December 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
(a) Exhibits
Exhibit
Number
- - ------
11 Statement Re Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
None
PAGE 12
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SELECTIVE INSURANCE GROUP, INC.
-------------------------------
Registrant
Date August 14, 1996
/s/James W. Entringer
- - ---------------------
James W. Entringer
President, Chairman and
Chief Executive Officer
Date August 14, 1996
/s/Gregory E. Murphy
- - --------------------
Gregory E. Murphy
Senior Vice President and
Chief Financial Officer
PAGE 13
SELECTIVE INSURANCE GROUP, INC.
-------------------------------
INDEX TO EXHIBITS
-----------------
Form
10-Q
Exhibit No. Page
- - ----------- ----
11 Statement re Computation of per Share Earnings 14
27 Financial Data Schedule 15
PAGE 14
EXHIBIT 11
SELECTIVE INSURANCE GROUP, INC.
-------------------------------
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
----------------------------------------------
- - -----------------------------------------------------------------------------
Quarter ended Six months ended
($ in thousands, June 30 June 30
except per share data) 1996 1995 1996 1995
- - -----------------------------------------------------------------------------
Primary earnings per share:
Net income $ 15,570 12,305 24,460 25,150
Weighted average number of
shares of common stock
outstanding 14,531,303 14,255,420 14,496,228 14,230,651
Net income per share of
common stock $ 1.07 .86 1.69 1.77
========== ========== ========== ==========
Fully diluted earnings per share:
Income applicable to common stock
on a fully diluted basis:
Net income $ 15,570 12,305 24,460 25,150
Interest on convertible
debentures 159 160 318 321
Amortization of other
debt expenses 2 2 4 4
Tax effect on interest
and debt expenses (56) (56) (113) (113)
---------- ---------- ---------- ----------
$ 15,675 12,411 24,669 25,362
========== ========== ========== ==========
Weighted average number of shares
outstanding on a fully diluted basis:
Weighted average number of
common shares outstanding 14,531,303 14,255,420 14,496,228 14,230,651
Additional shares assuming
conversion of debentures 513,907 518,221 514,000 518,804
---------- ---------- ---------- ----------
15,045,210 14,773,641 15,010,228 14,749,455
========== ========== ========== ==========
Fully diluted income per
share of common stock $ 1.04 .84 1.64 1.72
========== ========== ========== ==========
- - -----------------------------------------------------------------------------
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from the June
30, 1996 10Q and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000230557
<NAME> SELECTIVE INS. GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 931,145
<DEBT-CARRYING-VALUE> 454,517
<DEBT-MARKET-VALUE> 464,036
<EQUITIES> 147,842
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 1,577,292
<CASH> 33,067
<RECOVER-REINSURE> 7,091
<DEFERRED-ACQUISITION> 82,100
<TOTAL-ASSETS> 2,143,024
<POLICY-LOSSES> 1,158,019<F1>
<UNEARNED-PREMIUMS> 336,357
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 111,282<F2>
0
0
<COMMON> 35,633
<OTHER-SE> 403,437
<TOTAL-LIABILITY-AND-EQUITY> 2,143,024
352,761
<INVESTMENT-INCOME> 47,794
<INVESTMENT-GAINS> 1,363
<OTHER-INCOME> 1,525
<BENEFITS> 259,639<F3>
<UNDERWRITING-AMORTIZATION> 105,219
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 29,388
<INCOME-TAX> 4,928
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,460
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.64
<RESERVE-OPEN> 1,120,052<F4>
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 1,158,019<F5>
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Equals the sum of Reserve for losses and the Reserve for loss expenses.
<F2>Equals the sum of Notes payable and Convertible subordinated debentures.
<F3>Equals the sum of Losses incurred and Loss expenses incurred.
<F4>Equals the sum of Reserve for losses and Reserve for loss expenses at the
beginning of the year.
<F5>Equals the sum of Reserve for losses and Reserve for loss expenses at the
end of the period.
</FN>
</TABLE>
