Good day everyone. Welcome to the Selective Insurance Group’s First Quarter 2015 Earnings 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. Ma’am you may proceed.

Thank you. Good morning and welcome to Selective Insurance Group's first quarter 2015 conference call. This call is being simulcast on our website and a replay will be available through June 1, 2015. 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; John Marchioni, President and Chief Operating Officer; Dale Thatcher, CFO; and Ron Zaleski, Chief Actuary. Now, I'll turn the call over to Dale to review the first quarter results.

Thanks Jen and good morning. We are off to a good start in 2015 despite another difficult winter throughout our footprint. For the quarter we reported operating income per diluted share of $0.48, up from $0.23 a year ago. Our statutory combined ratio for the quarter was 93%, improving from 100.8% a year ago and our underlying combined ratio excluding CATs and prior year causality development improved by 4.5 points to 91.9%. As you analyze the results for the quarter, I’d like to remind you that last year’s first quarter included a $0.09 EPS benefit and a 1.7 point statutory combined ratio benefit from the sale of our self insured group business. While CAT losses were elevated due to winter weather at 5.3 points, they were lower than the 7.5 points reported a year ago. Non-CAT property losses were also elevated due to weather at about 2 points above expectations for the quarter, but about 5 points lower than first quarter 2014. Favorable prior year casualty reserve development in the quarter was $20 million or 4.2 statutory combined ratio points, compared to $14 million or 3.1 points a year ago. The development was related to the benefits of our underwriting and claims initiatives over the past several years, while our overall reserve position continues to be very strong. For the quarter overall statutory net premiums written grew by 9% driven by steady retention levels, renewal pure price increases and higher new business. Standard commercial lines premiums were up 9% benefiting from renewal pure price of 3.5%, steady retention of 84% and a new business increase of 28% to $88 million. For the quarter this segment generated a statutory combined ratio of 89.7% compared to 100.3% a year ago. The improvement was drive by eared rate exceeding expected claim inflection, favorable…

Thanks Dale. Insurance Operations delivered solid overall statutory results in the quarter, a combined ratio of 93% and ex-catastrophe combined ratio of 87.7% and net premiums written growth of 9%. These results are evidence of our strong position in the market and ability to properly growth our business. One of the company’s strategic imperatives is to grow, but not at the expense of overall profitability. Last quarter we announced structural changes to our small business needs. The purpose of these changes was to improve our underwriting efficiency on smaller accounts, while allowing the AMS’s to increase their focus on new-market opportunities. We also told you of our intention to increase our share of wallet with existing agents by deploying more agency management specialists or AMS’s. In the first quarter 12 new AMS’s where hired and we added 25 agencies within our footprint. These changes contributed to the new business growth of almost 30% as both submission and court activity increased in the quarter compared to last year. We are pleased with these early successes. The market seems to be acting in a rational manner, as the low interest rate environment dampens overall returns and pressures companies to generate better underwriting margins. In this context strong distribution partner relationships, technology and superior underwriting capabilities provides Selective with ample opportunity to grow profitability. On the renewal portfolio, we continue to balance rate and retention by providing our underwriters the tools they need to make informed decisions. During the first quarter standard commercial lines retention remained strong at 84% and renewal pure price was 3.5% on a written basis. This is approximately 50 basis points above our expected claim inflation, while earned rate is about 200 basis points above claim inflation. For our highest quality standard commercial lines accounts, which represent 53% of…

Thanks John. Good morning and welcome to our first quarter conference call. As was the case last year, we started off 2015 with higher than expected CAT and non-CAT weather related losses. It should not slow down the significant underlying improvements in our operations two to one, written and earned fuel renewal price increases at still outpaced expected inflation. Two, retention and point of renewal, our underwriting quality grew proving that it improves underwriting performance and is strong overall. Three, significant benefits from our multi disciplinary efforts that produced profitable workers compensation results and four, changes to our commercial lines growth capacity by adding more AMS’s and creating small business teams that are producing increased levels of new business. These are just a few of the many initiatives that should produce ongoing underwriting profit improvements necessary to meet our long term operating return on equity targets of three points above our weighted average cost of capital, which is currently 11.5%. In the interest rate environment and assuming four points of catastrophe losses, we need to deliver a 90 Edge CAT combined ratio to reach our 11.5% target. We view the unrelenting pressure on investment returns as a competitive advantage for Selective, because our net premiums written to surplus ratio of 1.5 times is twice the industry ratio. For us, each one point of combined ratio generates one point of operating return on equity. In this ultra low interest rate environment the industry will produce about six points of ROE from its investment portfolio, which should create ongoing pressure to produce underwriting profits or operating return on equities with the claim below 6%. We are achieving strong top line growth in a disciplinary manner through the numerous strategic initiatives that John articulated. We are also taking advantage of the dislocations in…

Thank you. [Operator Instructions] Our first question comes from the line of Mr. Vincent DeAugustino from KBW. Sir, your line is open.

Hi, good morning everyone. Thanks for taking the questions.

Good morning Vince.

Good morning Vince.

So, fun topic here, workers comp schedule pay. If we look at the closed claim ratio, in accident year ’14 we see that drop off pretty substantially and I was hoping to get some color on to what extent some of those claims initiatives in the investigative aspect of those; might be they are keeping the claims open longer or from the other side of any of the claims consolidation as far as physical location and staff, if that’s had any temporary delay on that metric. And then on the flip side, if we look at the average paid claims metrics, we see that go up about 25% on accident year ’14 and so I just wanted to see if we can get some color on those two trends and then connect that with some of the severity comments that you had this morning. Thanks, I know that’s a lot.

Yes, I know, it is a lot and I would say that the kind of crowd us a little bit – obviously moving all the claims to Charlotte, I don’t think created any outrageous dislocation relative to settlement patterns, because I think we had done very orderly by a very seasoned group of people that we have in that operation now and I would say that our intent ultimately is to increase disposal rate and you should see that in terms of number of claims being settled earlier, but I think it’s a little early to sit there and start drawing absolute 100% conclusions either way. I do think you will see the data pushed around a little bit relative to the new staff and I would comment overall that some of the increases obtained, some of the savings that your starting to see on a claim-by-claim basis is really a result of our strategic unit and the benefits that they are having on the more serious claims or potentially serious claims, and your starting to see that flow through. But the true benefits of having a medical only unit, having some of the things that we’ve done, I think you’ll start to see those more so as we move through ’15. So I wouldn’t draw too much conclusions either way right now on the data. It’s just too early relative to when all these changes are done and you need more time for this to manifest itself through.

Okay, fair enough. There’s certainly a lot going on there. And John, on your AMS comments for this morning, I just wanted to make sure I understood or at least caught the comments right. So the new business improvement, you would attribute more to the AMS strategy than the increased agency deployment strategy or is that really just one of the same and comprehensive kind of between the two.

Yes, that’s a good question. So the overall agency appoints are not all that significant in the overall picture and when you think about the time that takes to ramp up a newer appointment, that’s not a major contributor in the quarter. I think the major drivers you pointed to and it’s not just the addition of AMS’s and their focus on middle market. Its moving more small accounts into these small business teams, giving them a little bit more authority to get business written than they have had in the past, which has the double effect of increasing our performance and efficiency and throughput on small, but also allowing AMSs more time to focus on what’s a little bit more of a longer time term sales process of acquiring middle market business. So I would say both of those are generating performance and the other point would be new AMSs take some time to get up and running in the territory and we think that that provides us some real opportunity going forward as these folks start to mature in these roles and really help us drive greater market penetration with our existing agents and make strategic appointments across our footprint where it makes sense.

And this is Greg. I will just say that John articulated those two levers that we look at in the business. The first is the agency share and estate, which is currently 14. Your question to John is that 14 as we’ve indicated, we want to push that up to 25 over time, that will happen much slower, but the share of wallet aspect which is around seven country wide, the goal is to push that to 12. I think you’ll see the benefits of that measurement come through NPW [ph] much quicker than you’ll see the benefits of premium coming through by increase in the agency representation from 14 to 25 for the reasons John just went through. For the share of wallet you should start to see the benefits of that coming through NPW way quicker than the agency representation in the state.

Okay, great, thanks for that and then just one last one. On the 3.9% kind of rate trend this quarter versus the 4% plan, if that were to continue to decelerate throughout the year, can we assume that a lot of the other initiatives that you have going on can pick up the slack and that’s why we get the affirmation on the 91 ex-CAT goal there.

Right, this is John. I think we certainly look at loss ratio improving year-over-year as a combination over the past couple of years. The earn rate over trend has been a big driver, but as we’ve transitioned through ’14 into ’15 and look forward, we do expect to continue to get a bigger contribution on the loss ratio side from the underwriting initiatives, as well as the claims initiatives as we see rate come under a little bit more pressure and we continue to focus on driving rate right around the loss trend target, but we think there is more improvement on the loss ratio for mix and claims.

And there’s again just overall I would say that we don’t expect any weakening of price in the personal lines area, particularly on the whole front, so you got to remember the three, the four is an aggregation of all three segments. So we don’t envision any weakening of that price at all and then the same thing is true, E&S price needs to improve. That needs to uptick and I need your comments that are more directed around the commercial lines aspect and obviously when you weight them out, that’s at the lowest level of the three segments, is the expected level of the commercial lines pricing.

All right. Now, thank you very much and a nice quarter guys. Congrats. Thanks.

Thank you.

Thank you very much. [Operator Instructions]. Our next question comes from the line of Mr. Mark Dwelle of RBC. Sir your line is open.

Yes, good morning.

Good morning Mark.

Good morning Mark.

I apologize if you guys covered this earlier; I was little late getting under the call. The 4.2 points of favorable development, can you allocate those between the – you probably already did, between personal and commercial and was there any meaningful amount that was in the comp line.

Yes Mark, basically the comp line has $5 million of favorable development, the general liability line had $20 million of favorable development, and then we saw the BOP and commercial auto each had adverse development of $3 million on the BOP and $1 million on the commercial auto and then E&S also had $1 million of adverse development, so none showing up in the personal lines.

Okay, that’s helpful, thank you. On the workers comp, I mean that’s the best number I’ve even seen; it’s probably a record. What do you – how do I ask this question. What do you think the real sustainable long term rate is there? Do you think there were anything in the quarter that kind of made that number better than expected or is it just the cumulative fruits of the long period of labor that has kind of finally gotten us to a very good place?

I would reiterate our guidance that we expect to deliver below 103 combined ratio for workers comp for the year. Obviously a single quarter can have different volatility in it. So clearly it’s the culmination of a lot of hard work that we’ve been putting into the works comp line and it’s early yet, but all signs are favorable and we are encouraged by that.

On the underlying trends, is there anything noticeable in either loss frequency or loss severity that you might be enhancing the results or I’m just trying to get an understanding of the number?

We are seeing decreases in both frequency and severity. The frequency side, we attribute that this state is again to the fact that we made a big push to modifying the underwriting side of things to go the lighter hazard classes and that’s really showing some positives in terms of the frequency of claims. And then the centralization of the claims handing in Charlotte with the strategic case management unit seems to be having a real positive impact on the severities of claims. So on an overall basis as I said it’s earlier, but all signs are very encouraging.

Its good stuff. In the commercial auto, the adverse development there, is that older accident years or more recent.

It’s a little bit more recent. It’s in the ‘13 and ‘14 kind of timeframe that we are seeing that. But again, it’s only a $1 million adverse development. So it’s not a big number for a very big line of ours, but as you know us well, we like to stay ahead of any kind of negative trends and we react much more quickly than anything that we see that even has a whiff of negativism.

No worries, it’s defiantly I was just trying to get some sense of there was something old that boomerang done here or something that you are being proactive on. I think I’ll stop there. That’s all are my questions. Thank you.

Thank you very much. [Operator Instructions]. And speakers, at this time we don’t have additional questions. You may proceed.

Well, thank you very much for your participation this morning. If you have any follow-up questions, please contact Jennifer or Dale. Thank you very much.

And that concludes today's conference. Thank you all for participating. You may now disconnect.