Selective Insurance Group, Inc.

4th Quarter Investor Presentation

Current as of October 30, 2014

Forward Looking Statements

Certain statements in this report, including information incorporated by reference, are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The PSLRA provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements. 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. 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.

Factors, that could cause our actual results to differ materially from those projected, forecasted or estimated by us in forward-looking statements are discussed in further detail in Selective’s public filings with the United States Securities and Exchange Commission. 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 can neither 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 in any forward-looking statements in this report. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur.

Financial Overview

History of Success as a Super-Regional

Field-based operating

model

44th largest U.S. P&C carrier*

History of financial strength

Small commercial,

E&S and personal

lines business

*Source: A.M. Best, based on 2013 Net Premiums Written

Standard Commercial Lines

Standard Commercial Lines • “Main street” account underwriter • Average account size $10,000 • ~1,100 agents • Field underwriters supported by

regional and corporate expertise

YTD Ex-CAT Statutory Combined Ratio = 91.5%

76%

September 30, 2014 % Net Premiums Written

Personal Lines

16%

September 30, 2014 % Net Premiums Written Personal Lines

• Focus on account customers • ~690 agents in 13 states • By-peril rating capabilities

YTD Ex-CAT Statutory Combined Ratio = 89.8%

Excess and Surplus Lines

Excess & Surplus Lines • Tightly controlled binding

authority, no claims authority • ~85 wholesale general agencies • Average policy size of $2,700 • ~70% general liability • 98% $1M or lower limits

YTD Ex-CAT Statutory Combined Ratio = 98.0%

September 30, 2014 % Net Premiums Written

8%

Strong balance sheet provides a foundation for success

Lower volatility allows for greater operational leverage

Effective cycle management

Path to a 92% ex-catastrophes combined ratio in 2014

Key Takeaways

Conservative Investment Portfolio

Bonds 90%

Equities 4%

Alternatives 2% Short-Term

4%

September 30, 2014 $4.8B in Invested Assets

• “AA-” average credit quality • 3.8 year duration, excluding short-term • Investment leverage of 3.8x

16%

11% 8%

14%

19%

0%

5%

10%

15%

20%

2009 2010 2011 2012 2013SIGI Industry*

Net Operating Cash Flows as % of NPW

*Source: Conning, Inc. and A.M. Best

2014 Property Catastrophe Treaty • $685M in excess of $40M retention • Increased top layer by $100M • Flat premium despite additional

limit • Exhausts at approximately 1-in-

250 year event • Average reinsurer rating “A+”

Conservative Catastrophe Reinsurance

11%

4%

2012 2013

% of Equity at Risk – 1 in 250 Event Blended Model Results (RMS & AIR)

Losses are after tax and include applicable reinstatement premium.

Impact of CATs on Combined Ratio

0

1

2

3

4

5

6

7

8

9

10

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 6/30/14YTD

pts SIGI Avg = 3.2 pts Ind. Avg. = 5.0 pts

Industry Source: A.M. Best

3.9

6.4

SIGI Peer Average*

Combined Ratio

1.2

3.9

SIGI Peer Average*

Reserve Development (Points on Combined Ratio)

Lower Volatility of Results

“Ground-up” quarterly reserve review and focus on “main street” accounts

Standard Deviation (2004-2013)

*Source: SNL Financial, Statutory Data Peers include CINF, THG, STFC, UFCS, CNA, HIG, TRV, and WRB

Combined Ratio Improvement Plan

2013 Accident Year Ex-CAT

Loss Trend Earned Rate Underwriting / Claims

Expense 2014 Projected*

96.5%

2.0%

(4.0)%

(2.0)% (0.5)%

92%

2014 Ex-CAT Statutory Combined Ratio Plan

Expectation for 4 to 4.5 points of CAT losses in 2014

Guidance provided as of October 30, 2014

*Excluding CATS and additional reserve development May not foot due to rounding

1.4x

0.7x

SIGI Industry

4.0x

2.3x

SIGI Industry SIGI Industry

Underwriting Leverage (Premiums-to-Surplus)

Investment Leverage (Invested Assets/

Stockholders’ Equity)

ROE Generated at a 96.5% Combined Ratio

Impact of Leverage (as of December 31, 2013)

10.0%

7.5%

Industry Source: A.M. Best 2013E

Strategic Overview

Competitive Advantages

Field Model Based On

Empowered Decision Makers

Sophisticated Underwriting/Claims Tools

Focus On Customer

Experience

Effective Manager of Leverage

Superior Agency

Relationships

Broad Appetite and Strong

Product Portfolio

Capabilities of a National…Relationships of a Regional

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Effective Cycle Management

Managed Growth Through Cycle

Net

Pre

miu

ms

Wri

tten

($

in m

illio

ns)

Growth Opportunities

Increase Market

Share Within Existing

Footprint Expansion of Product Offerings

Addition of Agents and Storefronts New E&S

Operations

60%

65%

70%

75%

80%

85%

90%

0%

1%

2%

3%

4%

5%

6%

7%

8%

3Q:09 1Q:10 3Q:10 1Q:11 3Q:11 1Q:12 3Q:12 1Q:13 3Q:13 1Q:14 3Q:14

Rete

ntio

n

Rene

wal

Pur

e Pr

ice

• 22 consecutive quarters of renewal pure price increases • In 2014, anticipate overall renewal pure price increases of 5.5%*

Standard Commercial Lines Pricing *Guidance provided as of October 30, 2014

Dynamic Portfolio Manager allows underwriters to drive mix improvement

88.6%

71.1%

60%

65%

70%

75%

80%

85%

90%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Above Average Average Below Average Low Very Low

Poin

t of

Ren

ewal

Ret

enti

on

Rene

wal

Pur

e Pr

ice

September 2014 YTD Pricing by Retention Group Standard Commercial Lines

Underwriting

Workers Compensation Plan

Renewal Pure Price of 7.5% in 2013; 5.2% September

YTD Compared to 4% Loss Trend

Claims Initiatives

Balance Underwriting

Initiatives with Overall Account

Profitability

3 Year Average Statutory Combined Ratio = 117.1%

Claims Initiatives

Strategic Case Unit (WC)

Escalation Model

Medical Cost Management

Fraud Detection and Recovery Models

Complex Claims Unit

Litigation Management

Why Invest in Selective?

Strong balance sheet provides a foundation for success

Lower volatility allows for greater operational leverage

Effective cycle management

Path to a 92% ex-catastrophes combined ratio in 2014

Additional Information

Financial Highlights 2010 – Q3 2014 2010 2011 2012 2013 Q1

2014 Q2

2014 Q3

2014

Statutory NPW Growth (2.4)% 7.0% 12.2% 8.7% 5.9% 3.8% 0.5%

Operating EPS* $1.38 $0.38 $0.58 $1.65 $0.23 $0.46 $0.76

Net Income per Share* $1.23 $0.40 $0.68 $1.87 $0.31 $0.51 $0.93

Dividend per Share $0.52 $0.52 $0.52 $0.52 $0.13 $0.13 $0.13

Book Value per Share* $18.97 $19.45 $19.77 $20.63 $21.09 $21.96 $22.45

Return on Average Equity* 6.8% 2.1% 3.5% 9.5% 6.1% 9.7% 17.0%

Operating Return on Average Equity* 7.7% 2.0% 3.0% 8.4% 4.5% 8.7% 13.8%

Statutory Combined Ratio - Total 101.6% 106.7% 103.5% 97.5% 100.8% 97.5% 91.5%

- Standard Commercial Lines 100.8% 103.9% 103.0% 97.1% 100.3% 95.5% 90.9%

- Standard Personal Lines 106.4% 117.3% 100.7% 96.9% 104.5% 106.1% 88.9%

- Excess and Surplus Lines NA 131.3% 118.8% 102.9% 97.9% 99.9% 102.9%

GAAP Combined Ratio - Total* 101.4% 107.2% 104.0% 97.8% 101.1% 97.8% 92.6%

- Standard Commercial Lines* 100.0% 104.3% 103.3% 97.4% 101.0% 95.6% 92.1%

- Standard Personal Lines* 108.3% 117.8% 101.3% 97.1% 103.2% 107.5% 89.2%

- Excess and Surplus Lines* NA 270.2% 124.7% 103.0% 97.0% 100.1% 103.8%

*Historical values (2010-2011) have been restated to reflect impact of deferred policy acquisition cost accounting change

228

159

123

227

336

40

90

140

190

240

290

340

2009 2010 2011 2012 2013

Net Operating Cash Flow ($ in millions)

16%

11%

8%

Cash Flow as % of NPW

14%

19%

YTD September 2014: $158M

Investment Income – After-tax

96

111 111

100 101

40

50

60

70

80

90

100

110

120

2009 2010 2011 2012 2013

($ in millions)

YTD September 2014: $80M

Focus on Expense Management

Source: SNL Financial Note: Expense Ratio including Dividends Peers include CINF, CNA, HIG, STFC , THG, TRV, UFCS, and WRB *Excludes self-insured group sale

Insurance Operations Productivity ($ in 000s)

%

*Excludes Excess & Surplus Lines

766 761 791

842

908 896

29.0

29.5

30.0

30.5

31.0

31.5

32.0

32.5

33.0

300

500

700

900

2009 2010 2011* 2012 2013 9/30/14YTD**

NPW per Employee Statutory Expense Ratio

**Expense ratio excludes 0.6 point benefit from self-insured group sale

%

Standard Commercial Lines Pricing

-1.5%

-0.5%

0.5%

1.5%

2.5%

3.5%

4.5%

5.5%

6.5%

7.5%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2009 2010 2011 2012 2013 2014

Ren

ewal

Pur

e Pr

ice

Selective CLIPS

Industry Source: Towers Watson Commercial Lines Insurance Pricing Survey

93.9 93.3 93.8 95.0

96.4

99.3

97.5 97.5 98.0

95.3

91.5

1.5 0.3 1.2

0.9 2.1

0.5 3.3

6.4 5.0

1.7

4.0

85

90

95

100

105

110 %

103.9

Impact of Catastrophe Losses Combined Ratio excluding CATS

95.4

Statutory Combined Ratios

93.6 95.0 95.9

98.5

99.8 100.8

Standard Commercial Lines Profitability

103.0

*Includes impact of reinstatement premium on catastrophe reinsurance program as a result of Hurricane Sandy Some amounts may not foot due to rounding

97.1 95.5

Contractors 33%

Manufacturing & Mercantile

42%

Community and Public Services

23%

Bonds 2%

Premium by Strategic Business Unit 2013 Standard Commercial Lines

Direct Premium Written

General Liability 31%

Auto 24%

BOP 6%

Bonds 1%

Other 1%

Commercial Property

17%

Workers Compensation

20%

Premium by Line of Business 2013 Standard Commercial Lines Net Premium Written

Long-Term Shareholder Value Creation

14.96 16.44

17.87 18.82

15.81

17.80 18.97 19.45 19.77

20.63 22.45

0.35 0.40

0.44 0.49

0.52

0.52 0.52 0.52 0.52

0.52 0.56

$0

$5

$10

$15

$20

$25

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sept2014Book Value Dividend

Per S

hare

*Annualized indicated dividend Note: Book value restated for change in deferred policy acquisition costs (2004-2006 Estimated)

*