Good day, everyone. Welcome to the Selective Insurance Group's Third Quarter 2013 Earnings Release Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President, Investor Relations and Treasurer, Ms. Jennifer DiBerardino.

Thank you. Good morning. And welcome to Selective Insurance Group's third quarter 2013 conference call. This call is being simulcast on our website and replay will be available through December 2, 2013. A supplemental investor package, which includes GAAP reconciliations of non-GAAP financial measures referred to on this call, is available on the Investors page of our website www.selective.com. Selective uses operating income, a non-GAAP measure, to analyze trends and operations. Operating income is net income excluding the after-tax impact of net realized investment gains or losses, as well as the after-tax results of discontinued operations. We believe that providing this non-GAAP measure makes it easier for investors to evaluate our insurance business. As a reminder, some of the statements and projections that will be made during this call are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We refer you to Selective's annual report on Form 10-K and any subsequent Form 10-Q filed with the U.S. Securities and Exchange Commission for a detailed discussion of these risks and uncertainties. Please note that Selective undertakes no obligation to update or revise any forward-looking statements. Joining me today on the call are the following members of Selective's executive management team, Greg Murphy, CEO; Dale Thatcher, CFO; John Marchioni, President and Chief Operating Officer; and Ron Zaleski, Chief Actuary. Now, I'll turn the call over to Dale to review third quarter results.

Thanks, Jennifer. Good morning. We are very pleased with our third quarter results as commercial and personal lines pricing remained strong and we continue to executive on our underwriting and claims initiatives. For the quarter, operating income of $0.42 per diluted share was up from $0.34 per diluted share in the third quarter of 2012, with the improvement largely driven by better underwriting results. The third quarter statutory combined ratio improved by 2 point 1 point from a year ago to 96.3%. Catastrophe losses were $11.9 million pre-tax or 2.7 points, up slight from $9.6 million pre-tax or 2.4 points a year ago. The driver for catastrophe losses this quarter was a series of Midwest thunder storm but the largest one Cat accounting for $7.5 million. We also have favorable prior year casualty development in the quarter of $3.5 million or 0.8 points, compared to $7 million or 1.7 points a year ago. Overall, statuary net premiums written were up 9% in the quarter, driven by standard commercial lines, which were up 10% and excess and surplus lines which increased 20%. Standard commercial lines renewal pure price was up 7.9% and retention held steady at 83% in the quarter. The commercial lines statutory combined ratio in the quarter was 95.6%, including 0.7 points of catastrophe losses. Commercial property generated a 67% statutory combined ratio in the quarter, 14.3 points lower than a year ago, due to fewer large losses. General liability, our largest line of business produced the 96.2% combined ratio. This is more than a 4-point improvement from the third quarter of 2012 with 3 points of the improvement coming from favorable prior year reserve development. Workers compensation produced 118.2% statutory combined ratio in the quarter, which included $3.5 million of unfavorable prior development driven by older accident years.…

Thanks, Dale. Good morning. Third quarter results reflect a success of our underwriting and claim strategies, and the exceptional employees and agents we have executing on those strategies. This marks our 18th consecutive quarter for Commercial Lines pure pricing increases. We are successfully deploying our underwriting and pricing tools that provide underwriters with specific policy level guidance on an agency portfolio basis, which allows underwriters to target the highest rate increases on the worse performing accounts, while protecting retention on our best accounts. Year-to-date for Standard Commercial Lines, we obtained 16% pure rate on our lowest quality accounts with a point of renewal retention of 71%. This represents 3% of our Commercial Lines premium. We obtained a 6% pure rate increase on our highest quality accounts, while maintaining a solid 89% point of renewal retention, representing 54% of our Commercial Lines premium. As previously mentioned, we achieved 7.9% standard commercial renewal pure pricing in the quarter and year-to-date is up to 7.6%, right in line with our projection of 7.6% for the full year. Retention also remains strong at 82% year-to-date. In addition to rate, we separately measured the impact of underwriting improvements to our combined ratio. Currently, underwriting improvements are well ahead of our expectations in our three-year plan. Our Commercial Lines growth is largely a result of the success we’ve had in pricing and a 2% increase in exposure. Standard Commercial Lines new business improved substantially in the third quarter to $75 million, up 33% from depressed levels a year ago. On a year-to-date basis, new business is up 18% to $217 million. Our new business opportunities are coming from the long-term partnerships we have with our superior agency force. Much of this business is controlled by our agents, meaning they have a very good familiarity with the…

Thank you, John. Before I give you my perspective on the quarter and market place, I’d like to take this opportunity to congratulate John on his new responsibilities as President and Chief Operating Officer. Board of Directors elevated John to this role as a result of his excellent relationships with our agency for us and his efforts that drive our superior underwriting and claims initiatives towards our 2014 underwriting goal. Our third quarter results for underwriting combined ratio, renewal price increases, new business growth and retention clearly demonstrate the improvements to our underwriting operations and are moving us towards successful achievement of our goal toward 92% ex-cat statutory combined ratio in 2014. Renewal fuel price increases are at the high end of our previously announced range and retention has remained strong, an important indicator of market stability. As we just completed our 18th consecutive quarter of renewal pure price increases, we read the commentary about the lack of sustainability for commercial lines renewal price increases that we don’t agree while it’s clearly not a hard market like the ones in the past. Commercial lines prices are still firm and ahead of loss cost trends. In addition to loss trend, higher pricing levels must offset the following industry wide trends. Single A corporate bonds for the industry, they are yielding about 350 basis points below where they were five years ago and reported calendar year results that are about 4.5 points better than the 2013 accident year results due to ongoing favorable reserve development. Another benchmark is overall commercial lines growth versus GDP. For the first six months of 2013, industry wide commercial lines net premium written group 4.6% while GDP was up about 2%, the net growth 2.6% is clearly not high enough to offset loss trend, lower investment yield…

(Operator Instructions) We have a question from Vincent DeAugustino with KBW. You may ask your questions.

Good morning, Vince.

Good morning, everyone, and thanks for taking the question. Greg and John, you had this 92% court minor issue target for 2014, when it was issued that looked out pretty far and that’s actually been very helpful in training, where you are driving the business? But in some way its more importantly how you plan on getting there until now the 2014 is a bit closer and the 92% ex-Cat court and minor issue target is looking exciting? I am curious if you are playing on bringing that go-forward another year and also continue to use that figure which has been pretty helpful?

Yeah. I would say that of all the carriers out there, I think we have been probably the most transparent in terms of our three year plan and the elements of the profit improvement. And we are currently assessing that right now and figuring out how we will update that and what’s best should we will roll that out. So I don’t have anything for you right now, but we are working on that.

Okay. Good. Very much look forward to that. And John, one of the things you mentioned was discouraged between small commercial and mid-market and how there is benefit of leveraging a straight through processing model, also commercial and just so we can benchmark call it ease-of-use for agents, do you have any thoughts on how long it might take a CSR to enter in a data for a quote on a vanilla bonds account, I am just trying to bounce that off of what’s -- your commentary has been this quarter?

Yeah. So, clearly, I mean, you are hitting out a very board point relative to how companies are perceived in terms of ease of doing business and the ability to go straight through relative to smaller accounts. That is something we have benchmark we bring together our commercial lines, customer service reps and producers from our agent’s office to come in and evaluate our system and give us feedback on others. I don’t want to sit here and quote actual transactions time, but I would tell you the bigger issue I would say you that we are focused on is the percentage of those accounts that they enter into the system that they actually have the ability to bind on the spot as opposed to the percentage of those accounts that actually headed out of the system due to a underwriting or pricing at it and require manual intervention by an underwrite at Selective. And I think that’s, if you were to ask a small commercial producers or personalized producers for that matter and agents office, that’s the bigger issue. I think for the most part companies that are focused on small commercial are pretty tightly grouped in terms of the amount of time it would take, it varies obviously if you are talking about a straight BOP or if you are talking about a BOP that’s going to have an (inaudible) attached to it or whether a umbrella attached to it and or comp account attached to it. I don’t determine the amount of time it takes, but its really more of a focus on what percentage of the business they can actually issue at the end of the process as opposed to waiting some year back for one of our underwriters to finalize the issuance.

Okay. Good. That color is helpful. And Dale, just you had mentioned Selective’s conserving reserving philosophy and (inaudible) that the track record in our analysis completely agrees that? And just on a go-forward basis, I am curious that my understanding of the new FASBY draft is correct in the sense that at least on a GAAP basis you won't be able to take that same conservative deterministic approach that you have been doing? And then really the question gets to how should we think about reconciling that methodology versus cash flow results? If your current methodology prevails within stat where in this framework would be actually, would you not have a divergence in that methodology at all? I am just trying to get a sense of how both would look if it actually goes through?

Well, you are trying to get a sense of it and quite frankly so are we and so is every other accountant in the world. It’s still early. It’s still difficult to tell how does that ultimately get put into play on a practical way, obviously it’s clear in the guidance that the old concept of management test estimate is going by the way side. The problem that I think that they don’t fully recognize who’s -- there is still a lot of art to the actuarial or science in terms of understanding trends and recognizing trends that aren’t always completely and clearly decipherable into a mathematical formulas. So it’s going to be a evolutionary process as we see how that actually gets the road. All I can tell you is that that Selective has always and will remain committed to a strong balance sheet and that’s the only thing that we can put out there and I don’t think that anybody in the accounting world would ever be against that. So we will implement it to the spirit and the ladder of the law but we are also very committed to a strong balance sheet.

Okay. Great. Thanks for your color and talk to you soon.

(Operator Instructions) We have a question from Mark Dwelle with RBC Capital Markets. Your line is open.

Yeah. Good morning. Couple of questions. First related to your flood insurance servicing business, were you impacted all by the government shutdown at the beginning of the month on that business?

No. We were not.

Okay. Second question is to the extent that they delay the implementation of the rate increases in the flood insurance business, will that have any impact on you or you really paid based on a kind of a fee per account, it doesn’t really matter what the premiums are?

I -- this is John. I would say the only way that impacts us is when we think about our premium forecast for that line of business, that segment of business going forward, because, clearly, we anticipate the rate levels through as passed by the act or we understand the political pressures that are on there to roll some of that back. So, we do get paid a servicing fee relative to premiums and that will be impacted, but again it’s more about our planning going forward in terms of how we factor that in.

It’s a straight commission rate that we get paid from the Federal Government. So right now, there would be no real change in the operation other than John mentioned in terms of what happens with our expectation in terms of premium growth.

But it’s a percentage of premium…

Right.

But it’s also that percentage is revisited annually. So, it’s uncertain to what the Federal government may or may not do if the rate increase is actually did go through, they would have the option of lowering that percentage but if they did nothing with the percentage clearly then our revenues will go up but so are the commissions that we pay to agents.

So, I guess, it would seem like they are phrasing those various comments. The statues quo would be the statues quo if they don’t implement the rate increase. If they do implement the increase, possibly there are some upside but that would remain to be seen.

You are correct, characterization margin.

Okay. Second question, I hear your comments, Greg, in terms of what the industry needs as far as rate increases and why that would be the right thing for us to do, for the industry to do. But just to play double that a bit, I mean we have seen time and again that not everybody is as disciplined as Selective as far as continuing to go after the rate that they actually need. When you have your conversations, this is a question maybe for both John and Greg. When you are in conversations with your customers and you are asking them for 10%, 7.9% whatever the answer is, I mean inevitably they are starting to hear from your other carriers who are dangling more attractive improvements. I mean, how does that conversion go at this stage? I mean, we are starting to see some inflection where there is a little bit more rate aggressiveness starting to emerge in certain areas and certain companies?

This is John. I will start and Greg can certainly follow on. There is no question that the longer our rate level continues at this pace, the more difficult some of those conversations become. I will say the way we’ve approached it from the start, dating back to early 2009 and continued to approach it and will always approach it that way going forward, is to make sure we are very targeted. So the conversion with the customer, there is some underlying review relative to what that account is priced, what the quality of that account is, what the lost experience of that account is and our rate variation between those buckets is fairly significant. So what assumes is, if certain accounts go to market, they are going to realize and in fact, the pricing we are putting out there is still fair relative to the exposure presented. So that I think protected us in a lot of ways from losing our better accounts, because as we said earlier that’s where we are at the lower end of our overall rate levels in terms of what we are achieving. But I would say the other thing is the way we have administrated our rate changes and our relationship with our agents that allows us to have a very good conversation relative to the overall portfolio and what we are trying to achieve. But agents are also very open with us about where they really have competition on an account and where they have less competition. So it allows us to flex based on that. But it is clearly an account-by-account negotiation and our view has been for that worst 10 or so percent of our business, we are going to put rate recommendations out there that we are going to stick to and if push comes, the shop are going to lose that account. And on the other side of it, we are going to put rate indications out for our best business and if push comes to show, we will make a decision in certain cases to back off a little bit but again, within the context of our overall rate targets.

And if I could, Mark, there is a little fatigue out there from a consumer standpoint in terms of all the ongoing shopping. And there is this number out there that we constantly hear that trips a wire where people are going to go to market. But I think it gets down to the point that John made in terms of, hey, where we are pushing that hard at high level, we have got convictions to stand behind the account. We have got convictions to stand behind our inside underwriters relative to that. Conversely, you heard our conversations, our comments earlier. There are target rates levels for 2014 between 6% and 7.5%. We are going to be doing that very granularly, so it will be differently apply to how it has to be applied to 80% of our business than the remaining 20%. And then if I could come back to your overarching comment. At a 6.3% investment yield -- 6.3% ROE from the investment portfolio, there is not a lot of places to hide. So the industry has to underwrite a sub-100 combined ratio to have any shot of hitting any kind of reasonable ROE in the 8%, 9% range so. And the industry benefit that we garner is that given our premium leverage of 1.5 to 1, I mean, for every one point of combined ratio we are generating almost full point of ROE. The industry is just around half of that. So not only do they have the pressure to improve their results, but they have got to drive their combined ratios much lower than we do to generate the equal amount of returns. So there is a little bit of advantage to us in this marketplace and to be frankly I don’t see anything that’s going to change that dynamic for several years. I just don’t see. There is a lot more pressure on price increases. You and analysts are putting a lot more heat on companies in terms of where is their renewal pure price, why aren’t you quoting that to me, where is it, what’s your expectations for 2014, what’s your loss trend look like, what the medical part of the loss trend be like. And then overall, I want to tell you, I mean there has been a fair amount of favorable development that still continues and at some point that well is going to run draught and when it does that’s going to be a big turnaround in industry performance.

Very helpful color. If I can -- probably one other question just kind of in that same thing. In broader terms, what percentage of your customers would you say actively shop their book of business in any given year and does that vary between kind of large, medium and small?

Yes, it’s a great question. It’s one that we talked with our agents about. It’s going to vary agency-by-agency. So we tend to have and as you all know, we have a smaller group of agents. Our view is higher premium volume per agency. Our agents tend to be those that are less sensitive to pricing from a sales prospective. They tend to lead with coverage, they tend to lead with exposure analysis. They tend to lead with service. So our expectation is they generally shop their renewals less than most of other agents do but the other part of your question is more about the consumer end to that and how much are they asking to be shop. I would say it generally happens to us on this more commercial side because agents on the client spend a lot of time and energy recording that business every year. It’s just not cost effective for them because they move up the scale on your most sophisticated buyers in the middle market margin account side to have better understanding on their insurance program, may be more likely to come for the agent and say I like you the shop me. So it really does vary agency by agency.

And Mark, I would say that one of the things that we do measure internally, we get little bit at that and that’s why we measure retention at point of renewal, which is entirely different measurement because that measures every account that our -- underwriters had the opportunity to touch the renewal. That point of renewal retention runs approximately 8 points higher than our regular retention. We quote you retention levels of 82-83, point of renewals are more in the 90 low high 80’s or 90’s and that’s telling you that we renew -- 90% of the business that we had the opportunity to renew, which means 10% would leave for various reasons, obviously a, we put out too higher of a rate relative to that they might have found on other market or they may be actively shopping. So it kind of cuts to a little bit on. That’s why we measure that as -- and then we look at renewals, when we lose those renewals, when we don’t write that business. We’re actively looking at that to find out why we didn’t write those accounts. So I want you to make sure we understand there is something we closely stay on top of.

Thanks very much for your very thorough answer.

Our next question comes from Robert Paun with Sidoti & Company. Your line is open. Robert Paun - Sidoti & Company: Good morning.

Good morning, Robert.

Good morning, Robert. Robert Paun - Sidoti & Company: I want to just follow up on that pricing discussion. In terms of the workers comp business, can you talk about the pricing in that business. How do renewal rates today compare to say what you were seeing about six months ago or a year ago?

So for the quarter, workers comp pricing is pretty much right on target with our overall commercial lines pricing level and on the year-to-date bases slightly higher. I would say generally speaking, what you are seeing in terms of file rate levels from the various bureaus, NCCI and the various rate bureaus is probably down slightly year-on-year of what we saw last year in terms of what they are filing for and in certain cases what they are getting. That get valued by jurisdiction. You have seen some stakes, with individual rate bureaus or NCCI are now getting higher rate level filed, but I would say generally speaking 2012 was a higher filed rate level by the bureaus in 2013. And I think you’ll continue to see a little bit more pressure on that on a go forward bases in terms of file rates. That’s only one component of the rate increase you’re getting. You also are able to move around individual schedule models on the account-by-account basis to get rate level, but again get that varies state-to-state. There are some states where you got to early high level of schedules credits on your book and in other states where you have fairly little to move around. But I will say year-on-year the bureau file rate levels are down overall slightly but still relatively high relative to trend. I would just say that you won’t get -- the calendar year versus accident year results are accomplished trading slightly over 110 -- in the 110-111 range. And as John mentioned, regarding rate around 78, 79 rate increases. So that’s not enough to do what we need to. This is the line that’s got to highest degree of focus on our claim side for efficiencies and other improvements that are dedicated to really driving better results, better outcomes in that line. And so we know that we’re not going to be able to do this all through rate. There is some that has to happen to do different underwriting initiatives, claims initiatives, also remember that we write this as a part of an account that we’re on account basis. Underwriter has dealt and John had a mirror comments. So that’s where our focuses are on comp. We’re very careful with it, but we also are trying to try as much rate in underwriting and points improvement as we possibly can through that line. Robert Paun - Sidoti & Company: Okay. Thanks. And also just second question, can you talk a little bit more about the E&S business. What drove the top line growth in the quarter and may be you can talk about what drove the combined ratio improvement in that business as well.

Yes. So this is John. Two distinct questions, obviously on the top line growth side, the predominant driver is -- we are now completely through our integration efforts of those operations and clearly when you got through a significant integration, it is the distraction for the operation. That done is behind us, like we’ve started to better execute in terms of appointing new wholesales agents in places where we had gaps in our agency plan. And I think we’re starting to have more success within the selective footprint of driving business from our retail agency partners to our wholesaler. So new business generally has been a positive in terms of the lift in the overall top line growth in our E&S operations. In terms of the bottom line improvement, there were a couple of segments in a couple of specific geographies that were really driving their performance in that book of business in a negative way, that we aggressively address through price and in certain cases underwriting actions and in other cases specifically targeted actions with the couple of wholesale partnerships. And because of the nature of that business and your ability to take fairly aggressive actions over the short term in terms of pricing and underwriting, we’re able to drive that loss ratio down fairly quickly relative to what we are able to do in our standard book of business. And then the final piece is you are getting the benefit of expense improvement year-over-year as well. In other words, through the integration cost -- the integration cost as well as the premium coming through. Robert Paun - Sidoti & Company: Right. Thank you for the answers.

(Operators Instructions) We have no further questions at this time.

Well thank you. If you have any follow-up comments, please contact Dale and Jennifer. Thank you very much for participating in the call this morning.

That does conclude today’s conference. Thank you for participating. You may disconnect at this time.