CASH INCENTIVE PLAN
1.   Purpose.
         The purpose of the Cash Incentive Plan of Selective Insurance Group,
Inc. is to provide the Company with an effective vehicle to assist in
attracting, retaining, and motivating its employees; to reinforce corporate,
organizational and business development goals; and to promote year-to-year and
long-range financial and other business objectives by rewarding the
performance of officers and other employees in fulfilling their individual
responsibilities for achieving these year-to-year and long-range objectives.
2.   Definitions.
          The following terms, as used herein, shall have the following
          (a)  "Award" shall mean an incentive compensation award granted
pursuant to the Plan that is contingent upon the individual performance of a
Participant and the attainment of Performance Goals with respect to a
Performance Period.
          (b)  "Board" shall mean the Board of Directors of the Company.
          (c)  "Code" shall mean the Internal Revenue Code of 1986, as amended.
          (d)  "Committee" shall mean the Salary and Employee Benefits Committee
of the Board.
          (e)  "Company" shall mean Selective Insurance Group, Inc., a New
Jersey corporation, and its subsidiaries.
          (f)  "Covered Employee" shall have the meaning set forth in Section
162(m)(3) of the Code.
          (g)  "Participant" shall mean an officer or other employee of the
Company who is, pursuant to Section 4 of the Plan, selected to participate in
the Plan.
          (h)  "Performance Goals" means performance goals based on one or more
of the following criteria: (i) return on total stockholder equity; (ii)
earnings per share or book value per share of the Company's stock; (iii) net
income (before or after taxes); (iv) earnings before all or any interest,
taxes, depreciation and/or amortization; (v) return on assets, capital or
investment; (vi) market share; (vii) cost reduction goals; (viii) earnings from
continuing operations; (ix) levels of expense, costs or liabilities; (x)
department, division or business unit level performance; (xi) operating profit;
(xii) sales or revenues; (xiii) stock price appreciation; (xiv) total
stockholder return; (xv) growth in net premiums written; (xvi) combined ratios;
(xvii) implementation or completion of critical projects or processes; (xviii)
except in the case of a "Covered Employee," any other performance criteria
established by the Committee; or (xix) any combination of the foregoing. Where
applicable, the Performance Goals may be expressed in terms of attaining a
specified level of the particular criteria or the attainment of a percentage
increase or decrease in the particular criteria, and may be applied to one or
more of the Company, a subsidiary or affiliate, or a division or strategic
business unit of the Company or a combination thereof, or may be applied to the
performance of the Company relative to a market index, a group of other
companies or a combination thereof, all as determined by the Committee. The
Performance Goals may include a threshold level of
performance below which no payment will be made, levels of performance at
which specified payments will be made, and a maximum level of performance
above which no additional payment will be made. To the extent possible, each
of the foregoing Performance Goals shall be determined, as appropriate, in
accordance with generally accepted accounting principles or statutory
accounting principles and shall be subject to certification by the Committee;
provided that the Committee shall have the authority to make equitable
adjustments to the Performance Goals in recognition of unusual or
non-recurring events affecting the Company or any subsidiary or affiliate or
the financial statements of the Company or any subsidiary or affiliate, in
response to changes in applicable laws or regulations, or to account for items
of realized and unrealized gain, loss or expense determined to be
extraordinary or unusual in nature or infrequent in occurrence or related to
the disposal of a segment of a business or related to a change in accounting
          (i)  "Performance Period" shall mean a period of time determined by
the Committee that is no less than one year.
          (j)  "Plan" shall mean this Selective Insurance Group, Inc. Cash
Incentive Plan.
3.   Administration.
          The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee shall have the authority in its sole
discretion, to administer the Plan and to exercise all the powers and
authorities either specifically granted to it under the Plan or necessary or
advisable in the administration of the Plan, including, without limitation, the
authority to grant Awards; to determine the persons to whom and the time or
times at which Awards shall be granted; to determine the terms, conditions,
restrictions and performance criteria, including Performance Goals and the
length of the Performance Period relating to any Award; to determine whether,
to what extent, and under what circumstances an Award may be settled,
cancelled, forfeited, or surrendered; to make adjustments in the Performance
Goals in recognition of unusual or non-recurring events affecting the Company
or the financial statements of the Company, or in response to changes in
applicable laws, regulations, or accounting principles, or for any other
reason; to construe and interpret the Plan and any Award; to prescribe, amend
and rescind rules and regulations relating to the Plan; to determine the terms
and provisions of any Award; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
          The Committee may delegate to one or more of its members or to one or
more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan. All decisions, determinations
and interpretations of the Committee shall be final and binding on all persons,
including the Company, the Participant (or any person claiming any rights under
the Plan from or through any Participant) and any shareholder.
4.   Eligibility.
          Awards may be granted to officers and other employees of the Company
in the sole discretion of the Committee. In determining the persons to whom
Awards shall be granted and the Performance Goals relating to each Award, the
Committee shall take into account such factors as the Committee shall deem
relevant in connection with accomplishing the purposes of the Plan.
5.   Terms of Awards.
          Awards granted pursuant to the Plan shall be evidenced in such form
as the Committee shall from time to time approve and the terms and conditions
of such Awards shall be set forth therein. For each Performance Period, the
Committee shall specify the Performance Goals applicable to each Award.
Performance Goals may include a level of performance below which no payment
shall be made and levels of performance at which specified percentages of the
Award shall be paid. Award levels for any Performance Period may be expressed
as a dollar amount or as a percentage of the Participant's annual base salary.
Unless otherwise determined by the Committee, all payments in respect of Awards
granted under this Plan shall be made, in cash, within a reasonable period
after the end of the Performance Period, provided, however, that all payments
in respect of Awards granted under this Plan shall be made within two and
one-half (2 1/2) months following the of end of the taxable year in which such
payments become earned and payable. Participants must be employed by the
Company or one of its subsidiaries as of the payment date established for
Awards relating to the Performance Period for which payment is to be made
provided that, if the Participant's employment is terminated prior to such
payment date by reason of death, retirement on or after "Normal Retirement Age"
as such is defined in the Retirement Income Plan For Selective Insurance
Company of America, "Total Disability" as such is defined in the aforementioned
Retirement Income Plan, or for any other reason with the express consent of the
Committee, the Committee, in its sole discretion, may provide for an Award
payment to the Participant or, if applicable, the Participant's designated
beneficiary. Notwithstanding anything to the contrary contained herein, in no
event shall payments in respect of Awards be made in any Performance Period to
a Participant in an amount that exceeds the product of (x) seven million five
hundred thousand dollars ($7.5 million), multiplied by (y) the number of full
and partial years of the Performance Period. The Committee may reduce or
eliminate any Award under the Plan, but in no event may the Committee increase
the amount of an Award payable to a Covered Employee over such amount payable
based on the objective criteria established at the outset of the fiscal year
for which the Award is made.
6.   General Provisions.
          (a)  Compliance with Legal Requirements. The Plan and the granting and
payment of Awards, and the other obligations of the Company under the Plan or
other agreement shall be subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or governmental
agency as may be required.
          (b)  Nontransferability. Awards shall not be transferable by a
Participant except by will or the laws of descent and distribution.
          (c)  No Right To Continued Employment. Nothing in the Plan or in any
Award granted or other agreement entered into pursuant hereto shall confer upon
any Participant the right to continue in the employ of the Company or to be
entitled to any remuneration or benefits not set forth in the Plan or other
agreement or to interfere with or limit in any way the right of the Company to
terminate such Participant's employment.
          (d)  Withholding Taxes. Where a Participant or other person is
entitled to receive a cash payment pursuant to an Award hereunder, the Company
shall have the right to withhold from such Award or require the Participant or
such other person to pay to the Company the amount of any taxes that the
Company may be required to withhold before delivery to such Participant or
other person of such payment.
          (e)  Amendment, Termination and Duration of the Plan. The Board or the
Committee may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part; provided that, no amendment that
requires shareholder approval in order for the Plan to continue to comply with
Code Section 162(m) shall be effective unless the same shall be approved by the
requisite vote of the shareholders of the Company. Notwithstanding the
foregoing, no amendment shall affect adversely any of the rights of any
Participant, without such Participant's consent, under any Award previously
granted under the Plan.
          (f)  Participant Rights. No Participant shall have any claim to be
granted any Award under the Plan, and there is no obligation for uniformity of
treatment for Participants.
          (g)  Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company.
          (h)  Governing Law. The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of New Jersey
without giving effect to the conflict of laws principles thereof.
          (i)  Effective Date. The Plan shall take effect April 1, 2005, subject
to approval by the Company's shareholders.
          (j)  Beneficiary. A Participant may file with the Committee a written
designation of a beneficiary on such form as may be prescribed by the Committee
and may, from time to time, amend or revoke such designation. If no designated
beneficiary survives the Participant, the executor or administrator of the
Participant's estate shall be deemed to be the grantee's beneficiary.
          (k)  Interpretation. The Plan is designed and intended to comply, to
the extent applicable, with Section 162(m) of the Code, and all provisions
hereof shall be construed in a manner to so comply.
          (l)  Other Plans or Payments. Nothing in this Plan shall be construed
(i) to limit the authority of the Committee, the Board of Directors, the
Company, or any subsidiary to establish any other compensation plan, or (ii) to
limit their authority to pay bonuses or other supplemental compensation to any
persons employed by the Company or a subsidiary, whether or not such person is
a Participant in this Plan and regardless of how such compensation or bonus is