OLDWICK, N.J. - (Business Wire) Insert at the end of the first sentence in third graph: although it has been more favorable in recent years.
The corrected release reads:
A.M. BEST AFFIRMS RATINGS OF SELECTIVE INSURANCE GROUP, INC. AND ITS SUBSIDIARIES
A.M. Best Co. has affirmed the financial strength ratings (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of Selective Insurance Group (Selective) and its seven property/casualty pooling members. Concurrently, A.M. Best has affirmed the ICR of “a-” and the debt ratings of Selective’s parent holding company, Selective Insurance Group, Inc. (SIGI) (NASDAQ:SIGI) (Branchville, NJ). The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)
The ratings reflect Selective’s solid capitalization, sustained level of operating profitability, established presence within its targeted regional markets, successful field-based operating model and the technology infrastructure, which allows the group the ability to leverage its strong agency relationships. Furthermore, the ratings consider the favorable market presence and strong franchise value of Selective, which ranks among the top 50 property/casualty organizations in the United States based on net premiums written. This strong reputation, along with Selective’s dedicated service capabilities, has enabled it to sustain strong market penetration and maintain high policyholder retention rates. The group also benefits from the additional financial flexibility provided by SIGI, which maintains modest financial leverage, strong interest coverage ratios and considerable liquid assets.
These positive rating factors are somewhat offset by Selective’s above average underwriting and investment leverage ratios and significant prior year adverse loss reserve development, although it has been more favorable in recent years. In addition, Selective’s market profile is somewhat geographically concentrated relative to its rating level, as more than 50% of its writings are derived from three states (New Jersey, Pennsylvania and New York), leaving it exposed to regulatory, competitive and catastrophic risks.
Despite these concerns, the rating outlook is reflective of the group’s solid level of risk-adjusted capital, strong regional market knowledge and proven operating performance. While the group’s underwriting performance is expected to deteriorate modestly given the increased competitive environment and likelihood of higher catastrophe related losses, A.M. Best believes Selective should continue to report favorable operating results over the near term.
The FSR of A+ (Superior) and ICRs of “aa-” have been affirmed for Selective Insurance Group and its following property/casualty pooling members:
- Selective Insurance Company of America
- Selective Way Insurance Company
- Selective Insurance Company of the Southeast
- Selective Insurance Company of New York
- Selective Insurance Company of South Carolina
- Selective Insurance Company of New England
- Selective Auto Insurance Company of New Jersey
The ICR of “a-” has been affirmed for Selective Insurance Group, Inc.
The following debt ratings have been affirmed:
Selective Insurance Group, Inc. —
-- “a-” on $36.9 million 8.87% senior unsecured notes, due 2010
-- “a-” on $49.9 million 7.25% senior unsecured notes, due 2034
-- “a-” on $99.4 million 6.70% senior unsecured notes, due 2035
-- “a-” on $8.7 million 1.6155% senior unsecured convertible notes, due 2032
-- “bbb” on $100 million 7.50% junior subordinated notes, due 2066
For Best’s Debt Ratings, all other Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Co.
Analysts:
Edward Keane, 908-439-2200, ext. 5291
edward.keane@ambest.com
or
Michelle Baurkot, 908-439-2200, ext. 5507
michelle.baurkot@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
