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.................September 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 of incorporation or organization) Identification No.) 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 October 31, 1996: 14,627,713 PAGE 2 PART I FINANCIAL INFORMATION ============================== Item 1. Financial Statements. - ------------------------------ SELECTIVE INSURANCE GROUP, INC. ------------------------------- Consolidated Balance Sheets ------------------------------- (dollars in thousands) (unaudited) ASSETS September 30 December 31 - ------ 1996 1995 Investments: ------------ ---------- Debt securities, held-to-maturity - at amortized cost (fair value of $448,362-1996; $460,444-1995)......... $ 437,423 439,585 Debt securities, available-for-sale - at fair value (amortized cost of $926,351-1996; $902,375-1995)......... 936,816 949,004 Equity securities, available-for-sale - at fair value (cost of $97,197-1996; $76,858-1995)........... 152,561 117,522 Short-term investments (at cost which approximates fair value) 50,070 47,306 Other investments (at cost which approximates fair value)........................... 10,596 10,721 --------- --------- Total investments ...................... 1,587,466 1,564,138 Interest and dividends due or accrued ..... 22,950 23,619 Premiums and other receivables............. 176,629 165,194 Reinsurance recoverable on paid losses and loss expenses..................... 9,191 5,169 Reinsurance recoverable on unpaid losses and loss expenses......................... 130,024 121,369 Prepaid reinsurance premiums............... 31,078 39,952 Deferred Federal income tax................ 39,349 32,202 Real estate, furniture and equipment....... 48,632 49,373 Deferred policy acquisition costs.......... 88,500 82,200 Excess of cost over fair value of net assets acquired....................... 10,011 10,362 Other assets............................... 21,639 19,499 --------- --------- Total assets............................ $ 2,165,469 2,113,077 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Liabilities: - ----------- Reserve for losses......................... $ 994,987 953,251 Reserve for loss expenses.................. 174,030 166,801 Unearned premiums.......................... 355,125 343,887 Convertible subordinated debentures........ 6,912 7,292 Notes payable.............................. 104,000 104,000 Current Federal income tax................. 2,204 1,993 Other liabilities ......................... 76,231 99,104 --------- --------- Total liabilities....................... 1,713,489 1,676,328 --------- --------- See accompanying notes to unaudited consolidated financial statements. PAGE 3 Stockholders' Equity: - -------------------- Common stock of $2 par value per share: Authorized shares-90,000,000 Issued: 17,879,448-1996; 17,647,178-1995 . 35,759 35,294 Additional paid-in capital................. 52,485 46,071 Net unrealized gains on available-for-sale securities, net of deferred income tax effect............................ 42,790 56,740 Retained earnings.......................... 371,816 347,318 Treasury stock - at cost (shares: 3,251,995-1996; 3,247,189-1995) (46,590) (46,429) Notes receivable from stock sales and deferred compensation expense.................. (4,280) (2,245) --------- --------- Total stockholders' equity ............. 451,980 436,749 --------- --------- Total liabilities and stockholders' equity $ 2,165,469 2,113,077 ========= ========= See accompanying notes to unaudited consolidated financial statements. PAGE 4 SELECTIVE INSURANCE GROUP, INC. ================================ Consolidated Statements of Income (unaudited) (in thousands, except per share data) Quarter ended Nine months ended September 30 September 30 1996 1995 1996 1995 ------ ------ ------ ------ Revenues: - -------- Net premiums written........... $ 196,765 215,178 544,979 600,171 Net increase in unearned premiums and prepaid reinsurance premiums ..... (24,659) (23,250) (20,112) (43,710) ------- ------- ------- ------- Net premiums earned ........... 172,106 191,928 524,867 556,461 Net investment income earned... 23,908 22,866 71,702 67,054 Net realized gains (losses) on investments............... (35) 216 1,328 (184) Other income................... 756 983 2,281 2,715 ------- ------- ------- ------- Total revenues.............. 196,735 215,993 600,178 626,046 ------- ------- ------- ------- Expenses: - -------- Losses incurred ............... 104,445 118,428 325,240 337,106 Loss expenses incurred......... 18,418 19,375 57,262 60,361 Policy acquisition costs....... 53,896 56,014 159,115 165,146 Dividends to policyholders..... 1,164 1,699 3,909 5,332 Interest expense............... 2,299 2,323 6,945 6,972 Other expenses................. 1,641 1,281 3,447 4,126 ------- ------- ------- ------- Total expenses.............. 181,863 199,120 555,918 579,043 ------- ------- ------- ------- Income before Federal income tax 14,872 16,873 44,260 47,003 ------- ------- ------- ------- Federal income tax expense (benefit): Current........................ 2,547 4,408 7,183 11,740 Deferred....................... 73 (1,209) 365 (3,561) ------- ------- ------- ------- Total Federal income tax expense................... 2,620 3,199 7,548 8,179 ------- ------- ------- ------- Net income..................... $ 12,252 13,674 36,712 38,824 ======= ======= ======= ======= Earnings per share: - ------------------ Net income-primary.......... $ .84 .96 2.53 2.72 Net income-fully diluted ... $ .82 .93 2.46 2.65 Dividends to stockholders...... $ .28 .28 .84 .84 See accompanying notes to unaudited consolidated financial statements. PAGE 5 SELECTIVE INSURANCE GROUP, INC. ============================== Consolidated Statements of Cash Flows ------------------------------------- (unaudited) Nine months ended September 30 (in thousands) 1996 1995 ---- ---- Operating Activities - -------------------- Net Income....................................$ 36,712 38,824 ------- ------- Adjustments to reconcile net income to net cash provided by operating activities: Increase in reserves for losses and loss expenses............................ 48,965 92,975 Increase in unearned premiums................. 11,238 49,894 Increase (decrease) in Federal income taxes... 576 (6,982) Depreciation and amortization................. 3,680 4,133 Increase in premiums and other receivables.... (11,435) (38,516) Increase in deferred policy acquisition costs. (6,300) (10,400) Decrease (increase)in interest and dividends due or accrued........................... 669 (1,251) Increase in reinsurance recoverable on paid losses and loss expenses................. (4,022) (1,978) Increase in reinsurance recoverable on unpaid losses and loss expenses................. (8,655) (7,225) Decrease (increase)in prepaid reinsurance premiums................................. 8,874 (6,184) Net realized losses (gains) on investments.... (1,328) 184 Other - net................................... (24,228) 8,230 ------- ------- Net adjustments............................... 18,034 82,880 ------- ------- Net cash provided by operating activities..... 54,746 121,704 ------- ------- Investing Activities - -------------------- Purchase of debt securities, held-to-maturity. (56,968) (119,182) Purchase of debt securities, available-for-sale....................... (65,722) (80,111) Purchase of equity securities, available-for-sale....................... (24,295) (14,604) Sale of debt securities, held-to-maturity..... - 2,000 Sale of debt securities, available-for-sale... 13,217 23,808 Redemption and maturities of debt securities, held-to-maturity......................... 59,057 35,687 Redemption and maturities of debt securities, available-for-sale....................... 29,264 16,822 Sale of equity securities, available-for-sale. 5,017 11,879 Proceeds of other investments................. 79 49 Increase in net payable from security transactions not settled................. 49 14,345 Net additions to real estate, furniture and equipment................................ (2,915) (2,335) ------- -------- Net cash used in investing activities......... (43,217) (111,642) ------- -------- See accompanying notes to unaudited consolidated financial statements. PAGE 6 SELECTIVE INSURANCE GROUP, INC. ================================================ Consolidated Statements of Cash Flows, continued ------------------------------------------------ (unaudited) Nine months ended September 30 (in thousands) 1996 1995 ---- ---- Financing Activities - -------------------- Dividends to stockholders..................... $ (12,214) (11,973) Acquisition of treasury stock................. (161) (287) Net proceeds from dividend reinvestment plan.. 901 876 Net proceeds from employee, agent and director stock plans.............................. 5,598 3,840 Proceeds from notes receivable from stock sale and additions to deferred compensation expense.................................. (2,889) (665) ------ ------ Net cash used in financing activities......... (8,765) (8,209) ------ ------ Net increase in short-term investments........ 2,764 1,853 Short-term investments at beginning of year... 47,306 30,631 ------ ------ Short-term investments at end of period....... $ 50,070 32,484 ====== ====== Supplemental disclosures of cash flow information - ------------------------------------------------- Cash paid during the period for: Interest...................................... $ 7,333 7,196 Federal income tax ........................... 6,971 15,170 Supplemental schedule of non-cash financing activity: Conversion of convertible subordinated debentures............................... 380 86 See accompanying notes to unaudited consolidated financial statements. PAGE 7 Notes to 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. All such adjustments are of a normal recurring nature. References herein to "Selective" are to the Parent Company, Selective Insurance Group, Inc. 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 Nine months ended September 30 September 30 ------------- ----------------- (in thousands) 1996 1995 1996 1995 - ----------------------------------------------------------------------------- Net premiums written: Assumed $ 7,559 19,719 22,206 32,725 Ceded (1) (17,356) (32,865) (64,809) (79,137) Net premiums earned: Assumed $ 7,292 19,041 23,927 40,394 Ceded (23,248) (24,079) (73,683) (72,953) Losses incurred: Assumed $ 8,361 13,043 15,837 31,626 Ceded (2) (17,016) (18,501) (58,181) (40,785) Loss expenses incurred: Assumed $ 589 559 1,628 1,650 Ceded (742) (503) (2,864) (1,557) - ----------------------------------------------------------------------------- (1) The significant decrease in ceded premiums written reflected the revision of certain reinsurance agreements, effective July 1, 1996, which resulted in retention of a greater portion of business written directly. (2) The significant increase in ceded losses incurred for the nine months ended September 30, 1996 reflected flood and weather-related storm claims which generated reinsurance loss recoveries of $17.9 million and $5.9 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 8 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 Third Quarter and Nine Months Ended September 30, 1996 to - ----------------------------------------------------------------------- Third Quarter and Nine Months Ended September 30, 1995 - ------------------------------------------------------ Revenues - -------- Net premiums written for the quarter and nine months ended September 30, 1996 decreased by 8.6%, or $18.4 million, and 9.2%, or $55.2 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 11.3%, or $18.2 million, for the quarter, and 12.3%, or $53.5 million, for the nine months ended September 30, 1996. The decrease in net premiums written for the quarter and nine months ended September 30, 1996, translated into an overall decrease in total net premiums earned of 10.3%, or $19.8 million, for the quarter, and 5.7%, or $31.6 million, for the nine months ended September 30, 1996, compared to the same periods in 1995. The personal lines SBU net premiums written reflected a slight decrease for the quarter and nine months ended September 30, 1996, compared to the same periods in 1995. Additional premiums generated from rate increases in New Jersey personal automobile ($1.3 million for the quarter and $4.4 million for the nine months ended September 30, 1996) were offset by a 3% reduction in the number of policies in-force in the personal automobile line of insurance for the nine months ended September 30, 1996. Most commercial lines SBUs experienced a decline in net premiums written for the quarter and nine months ended September 30, 1996, compared to the same periods in 1995, primarily attributable to: (i) higher premiums recorded in the corresponding 1995 periods due to the reduction in premium processing backlog of approximately $6 million and $24 million, respectively; (ii) a reduction in premium volume due to agency terminations of approximately $8 million and $19 million, respectively; (iii) a reduction in retention business (renewals) attributable to a highly competitive commercial lines marketplace as well as the Company's re-underwriting (re-evaluating) of certain business classes, and/or risks, resulting in non-renewals; 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 nine months ended September 30, 1996 of $1.3 million and $3.3 million, respectively, over the same periods in 1995. PAGE 9 The reduction in net premiums written in the commercial lines SBUs for the quarter and nine months ended September 30, 1996, was partially offset by new business issued and the Company's revision of certain reinsurance agreements. During the third quarter of 1996, the Company realized a one-time increase in net premiums written of approximately $8 million reflecting the Company's buyout of certain ceded reinsurance unearned premium reserves at June 30, 1996. See Item 2. "Reinsurance." The property and casualty industry is presently very competitive for commercial lines business. 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. In addition, rate reductions have occurred in the workers' compensation line of insurance principally due to state bureau or loss costs filings that have indicated improving loss trends. The improvement in the loss trends, for the most part, reflects: (i) legislative reforms; (ii) introduction of managed care; as well as (iii) active return to work programs. In total, the Company expects its annual workers' compensation premiums, as a result of various rate reductions, to decline by approximately $8 million. Mainly due to the competitive environment, other commercial lines of insurance have experienced some modest reductions in premium pricing that the Company expects to approximate $3 million on an annualized basis. 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. Net investment income earned for the quarter and nine months ended September 30, 1996 increased 4.6%, or $1.0 million, and 6.9%, or $4.6 million, respectively, 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 coupled with lower levels of cash provided by operating activities. These factors, when combined 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 nine month period to 6.1% for 1996, down from 6.4% for the same period one year ago. PAGE 10 Expenses - -------- The ratio of losses and loss expenses incurred to net premiums earned for the quarter ended September 30, 1996 was 71.4%, a decrease from 71.8% for the same period in 1995. During the quarter ended September 30, 1996, the Company incurred $6.4 million (net of 0.9 million of reinsurance) as a result of weather-related claims, which increased the loss and loss expense ratio by 3.7 points. Absent these weather-related claims, the loss and loss expense ratio improved by 4.1 points, which was reflected in the results of the personal lines, habitational and recreational, mercantile and service as well as public entities SBUs. In the habitational and recreational SBU, the Company has been successfully re-underwriting (re-evaluating) certain business classes and/or risks. In addition, as noted earlier, the improving loss trend in the workers' compensation line of insurance has favorably impacted most of the commercial lines SBUs. The personal lines SBU, for the most part, reflected favorable experience in the automobile line of insurance due to continued rate increases. The ratio of losses and loss expenses incurred to net premiums earned for the nine months ended September 30, 1996 was 72.9%, a decrease from 71.4% for the same period in 1995. During the nine months ended September 30, 1996, the Company incurred $17.0 million (net of 6.0 million of reinsurance) as a result of weather-related claims, which increased the loss and loss expense ratio by 3.2 points. Absent these weather-related claims, the loss and loss expense ratio improved by 1.7 points. This reflected favorable loss experience in the workers' compensation line of insurance that affected most of our commercial lines SBUs that write this line of insurance. In addition, improvements in the general liability line of insurance due in part to rate increases obtained during 1995, have impacted the contractor, public entities as well as habitational and recreational SBUs. In addition, the personal lines SBU results for the nine months ended September 30, 1996, compared to the same period in 1995, improved primarily due to better experience in the homeowners line of insurance due to rate increases and lower reinsurance costs. The ratio of policy acquisition costs to net premiums earned for the quarter ended September 30, 1996 was 31.3%, as compared to 29.2%, for the same period in 1995, and for the nine months ended September 30, 1996 was 30.3%, as compared to 29.7%, for the same period in 1995. The ratio reflected an increase in the relationship of labor costs and other operating expenses expressed as a percentage of net premiums earned, partially offset by the reduction in the New Jersey Fair Automobile Insurance Reform Act ("FAIRA") assessment. While the total dollar amount of labor costs and other operating costs remained relatively stable, the lower levels of premiums earned impacted this ratio. PAGE 11 Income - ------ The table below shows operating income, net realized gains (losses), and net income, including per share amounts for the quarter and nine months ended September 30, 1996. - ----------------------------------------------------------------------------- Quarter ended Nine months ended ($ in thousands, September 30 September 30 except for per share data) 1996 1995 1996 1995 - ----------------------------------------------------------------------------- Operating income, excluding net realized gains (net of tax) (1) $ 12,275 13,534 35,849 38,944 Net realized gain (loss), net of tax (23) 140 863 (120) Net income (1) 12,252 13,674 36,712 38,824 Per primary share: Operating income (1) .84 .95 2.47 2.73 Net realized gain (loss) - .01 .06 (.01) Net income (1) .84 .96 2.53 2.72 - ---------------------------------------------------------------------------- (1) Operating and net income for the quarter and nine months ended September 30, 1996, include weather-related storm losses of $4.2 million, or $.28 per primary share, and $11.1 million, or $.76 per primary share, respectively. 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 governed by state regulatory requirements. Total assets increased 2.5%, or $52.4 million from December 31, 1995 to September 30, 1996. The growth in assets was primarily due to: (i) an increase in total investments of $23.3 million, which included cash provided by operating activities of $54.7 million partially offset by a decrease in net unrealized gains of $21.5 million on available-for-sale securities; (ii) an increase in premiums and other receivables of $11.4 million; (iii) an increase in reinsurance recoverable on unpaid losses and loss expenses of $8.7 million and an increase of $4.0 million in reinsurance recoverable on paid losses and loss expenses due, in part, to flood claims as well as weather-related storms during the nine months ended September 30, 1996; and (iv) an increase in deferred Federal income taxes of $7.1 million mainly due to deferred tax benefits related to the decrease in unrealized gains recognized on the available-for-sale securities. PAGE 12 The rise in total liabilities of 2.2%, or $37.2 million, from December 31, 1995 to September 30, 1996 was mainly composed of increases in reserves for losses and loss expenses of $49.0 million and growth in unearned premiums of $11.2 million. These increases were partially offset by a $22.9 million decrease in other liabilities, which mainly reflected the payment of the 1996 FAIRA assessment and 1995 profit sharing incentives. 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 shares of its common stock, depending on market conditions, through available cash and a $10 million line of credit. For the nine months ended September 30, 1996 and 1995, cash provided by operating activities amounted to $54.7 million and $121.7 million, respectively. The decrease in cash provided by operating activities for the first nine months of 1996 was in part due to: (i) increased loss and loss expenses paid of approximately $32 million, which includes $12.4 million due to the weather-related 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 nine months ended September 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 agreement. 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 realized 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 13 Part II OTHER INFORMATION -------------------------- Item 6. Exhibits and Reports on Form 8-K. - ----------------------------------------- (a) Exhibits Exhibit Number - ------- 10.1 Cover Page Amendment No. 2, dated as of September 1, 1996, between Selective and Dominic J. Addesso 10.2 Cover Page Amendment No. 2, dated as of September 1, 1996, between Selective and James W. Entringer 10.3 Cover Page Amendment No. 2, dated as of September 1, 1996, between Selective and Thornton R. Land 11 Statement Re Computation of Per Share Earnings. 27 Financial Data Schedule (b) Reports on Form 8-K. None. PAGE 14 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: November 13, 1996 /s/James W. Entringer ------------------- James W. Entringer President, Chairman and Chief Executive Officer Date: November 13, 1996 /s/Gregory E. Murphy ----------------- Gregory E. Murphy Senior Vice President and Chief Financial Officer PAGE 15 SELECTIVE INSURANCE GROUP, INC. ------------------------------ INDEX TO EXHIBITS ----------------- Form 10-Q Exhibit No. Page - ---------- ---- 10.1 Cover Page 16 Amendment No. 2, dated as of September 1, 1996, between 17 Selective Insurance Company of America and Dominic J. Addesso. 10.2 Cover Page 18 Amendment No. 2, dated as of September 1, 1996, between 19 Selective Insurance Company of America and James W. Entringer. 10.3 Cover Page 20 Amendment No. 2, dated as of September 1, 1996, between 21 Selective Insurance Company of America and Thornton R. Land. 11 Statement Re Computation of Per Share Earnings. 22 27 Financial Data Schedule 23