Selective Insurance Group, Inc. · NASDAQ:SIGI
Selective Insurance — KBW Insurance Conference 2015
25 slides from Selective Insurance's conference presentation, Sep 9, 2015
Slide 1: Selective Insurance Group, Inc. KBW Insurance Conference
Selective Insurance Group, Inc. KBW Insurance Conference September 10, 2015 ~~ SELECTIVE®
Slide 2: Forward Looking Statements
Forward Looking Statements ” as that term is beliefs projection: t," "plan," "anticipate," “target,” "project," “intend, will "could," “would," “should, ‘pro forma," *seek," “ikely" or "continue’ i ions wi We undertake no may, believe," "estimate," "predict" ‘potential, obligation, statement from ti
Slide 3: Strategic Overview
Strategic Overview Gregory Murphy Chairman and Chief Executive Officer ~~ SELECTIVE®
Slide 4: Selective's Value-Added Approach
Selective’s Value-Added Approach @ Super-regional P&C Carrier wi istory i uperior execution and disciplined growth — Rated “A” or higher by A.M. Best for 85 consecutive years aa Unique “High-tech, High-touch” 76% 16% NOE Standard Excess & Commercial Lines Surplus Lines & seiective
Slide 5: High-Tech
> High-Tech Easy-to-use agency technology experience Leader & seuctive
Slide 6: High-Touch
High-Touch Ny Corporate ' 4 Underwriters "Small Business Team @ Responsive, field-based model Field Model Supported by regional & corporate expertise . sd Focus on customer experience Technology! Regional Systems Support Underwriting Teams @& sELECTIVE p SELECTIVE
Slide 7: Continuous Improvement
» Continuous Improvement Claims Initiatives @ Centralized handling of Workers’ Compensation claims @ Strateg @ Enhanced property oversight and management @ Fraud detecti © Impl Cm dvisor (COA) Underwriting Initiatives @ Worker: I hazard grade ¢ Bp @ Addition of 12 new AMS territories @ Targeted segm
Slide 8: Continuous Improvement: Strategic Business Unit Diversification
> Continuous Improvement: Strategic Business Unit Diversification Improved mix of business 22% Contractors 24% m= Community & Public Services Manufacturing Mercantile Service 18% 4 y SELECTIVE Percentages based on Direct Premiums Written 8
Slide 9: Continuous Improvement: Workers Compensation Improvement
y Continuous Improvement: Workers Compensation Improvement Statutory Combined Ratio @% iz @% ES) (2% 2014 ' Calendar Year ' Eamed Rate ' Underwriting? ' Expense ' Loss Trend \ 2015 Reserve Claims Guidance” Development ty SELECTIVE” *Guidance as of September 9, 2015 9
Slide 10: Successfully Execute Profitability Plan
» Successfully Execute Profitability Plan Exec, ti 198.4% plan 97.3% 94.8% 92.5% 2011 2012 2013 2014 2015 Guidance* y a b & stuctive "Guidance as of September 9, 2015
Slide 11: Pricing Strategy: Balancing Rate and Retention
Pricing Strateg Balancing Rate and Retention Standard Commercial Lines % rr a a a 2Q 4Q 2Q 2009 2010 2011 4Q 2Q 4Q 2Q 2012 “1 2013 4Q 2Q 4Q 20 4 2014 100% 95% 90% + 88% + 80% gz 5% 3 70% & 65% 60% + 86% ALL 50% 2Q 2015 > Op SELECTIVE
Slide 12: Pricing Strategy: Highly Granular Pricing Capability
Pricing Strategy: Highly Granular Pricing Capability Standard Commercial Lines June 2015 YTI 18% 95% 16% 90% 14% " 2 2 12% 85% = g 1% _ @ 10% ~ 2 Ez 8% 80% g SB 6% 5% B = 4% 4 & Zon | 10% g 0% + + 1 + 65% $ Above Average Below Low Very Low Average erage Retention Group otPremim | 548% | 28.6% | 10.4
Slide 13: Growth Opportunity: Standard Commercial Lines
Bown = Growth Opportunity: Standard Commercial Lines Middle Market: Additi iali: y throughout the footprint for regional processing Increasing share of wallet within agency plant with a goal of 12% y y ‘ is % market <a New business 1g py 4 f F share representation in a state y f production capacity
Slide 14: Growth Opportunity: Excess and Surplus Lines
> Growth Opportunity: Excess and Surplus Lines New online quoting capability NPW Growth Rate 25% 4 23% 20% ~ 16% 16% 15% 10% 5% - 0% T T 2013 2044 dune 2015 YTD > SELECTIVE y SELECTIVE
Slide 15: Standard Personal Lines
Standard Personal Lines ¢ The Selective Edges product value and servic — Combined auto and home policies — duly 1 enhancement rollout = Diminishing deductible = Accident forgiveness cement = Selective Choice replacement cost The Selective ty SELECTIVE”
Slide 16: Selective's Differentiators
+ Selective’s Differentiators Unique “High-tech, High-touch” operating Positioned for and Excess & Surplus Lines Operating Return on Equity 18) 149% wad 433% 4 11.3% . 18% «18% T.% aid | ial ~ - ' : Bs 44 2% 3% 24 ps 2005, 2006 2007 2008 2000 210 2011 12 2013 2014 June 2015 YTD & seiective
Slide 17: Financial Strength
Financial Strength Dale Thatcher EVP. Chief Financial Officer ~~ SELECTIVE®
Slide 18: Long-Term Shareholder Value Creation
ad * nnudiizedindicated dividend 18 of Financial Stren Long-Term Shareholder Value Creation AM Best pene strength rating of $0.56" “A? su superi $22.95 Robust risk and return strategy 0 — im = a7 Py S $15. Disciplined reserving practices $10 Focus on shareholder value creation | $5 go + 2005 2006 20
Slide 19: Robust Risk and Return Strategy
) Robust Risk and Return Strategy Conservative Reinsurance Program N a \ Conservative Investment Portfolio j i | Low to a f i | } _ Superior Management Information | & Analytical Capabilities 1 . YN . NX .» Higher than Average Operational Leverage @ = 1.5x NPW to Surplus # 3.8x Invested Assets to Eq
Slide 20: Conservative CAT Reinsurance
Conservative CAT Reinsurance Renewed January 1, 2015 SEM i SAM 5 % of Equity at Risk 1 in 250 Year Event sg Reduced gross PML through CAT management actions 2015 Property Exhausts at approximately 1-in-273 year event Catastrophe Treaty $196 million Average reinsurer rating ‘AY collateralized “Blende
Slide 21: Conservative Investment Portfolio
Conservative Investment Portfolio After-Tax Net Investment Income Altematives short-term 1 ( in Millions) 2% 3% 115 Equities 5 pes ais 105 \ A y @ “AA-” average credit quality y _ 7 3.7 year duration (incl. short-term) ~q y _ ¢ Investment Leverage of 3.8x Fixed Income Asof June 30, 2015 90% ‘Guidanc
Slide 22: Disciplined reserving practices
Disciplined reserving practices Quarterly actuarial reserve reviews 9 consecutive years of favorable development 3 evaluations per year by independent auditor Points on the Combined Ratio Peer Average* 3.6% Selective | 1.4% "Source; SNL Financial Steiuiory Filings 4p SELECTIVE’ 2
Slide 23: Total Return: SIGI vs. Benchmarks
» Total Return: SIGI vs. Benchmarks SIGl S&P 500 m@ S&P PropiCas 30 - 29.0% Total Return % 1Year 3 Years 5 Years 4p SELECTIVE As of Sepiember 4, 2015 23
Slide 24: h tstandi
h tstandi @.% 00% 0.2% 90% ane — = = .n% 214 Avcident | Calendar Year" EamedRate | Underuriing? | ‘Expense Lose Trend 2015 Ex-CAT Year Ex-CAT Reserve Development Chims Guidance Guidance 2s of September 9, 2015 ty SELECTIVE”
Slide 25: Selective's Differentiators
Selective’s Differentiators Unique “High-tech, High-touch” g ° iti g i rsonal Lines, and Excess & Surplus Lines Higher i poi i io = 1 point of ROE equity @ Higher i =~8% investment ROE oe ty SELECTIVE
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