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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 13, 2013 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of a+ of Selective Insurance Company of America and its nine pooled affiliates, collectively referred to as Selective. In addition, A.M. Best has affirmed the ICR of bbb+ and the debt ratings of Selectives parent, Selective Insurance Group, Inc. (SIGI) [NASDAQ: SIGI]. The outlook for all ratings is stable. All companies are headquartered in Branchville, NJ. (Please see below for a detailed listing of companies and ratings.)
The ratings reflect Selectives solid risk-adjusted capitalization, which results from its consistent and profitable operating results, offset by payment of shareholder dividends. Those operating results are derived from the groups disciplined underwriting focus and increasing use of predictive modeling technology. Selectives established presence in its targeted regional markets is reinforced by its strong independent agency relationships,
which the company fosters through its field-based operating model and technology infrastructure. The groups balance sheet is strengthened by its consistently stable loss reserve position, and operating results have benefitted from recognition of favorable development of loss reserves in seven straight calendar years. The ratings also consider Selectives position as a Top 50 U.S. property/casualty enterprise (based on net written premiums), its experienced management team and the financial flexibility afforded by SIGI.
Offsetting these positive rating factors are Selectives variable underwriting results, which generated operating results that on average are not in line with the broad peer group or similarly-rated enterprises; return measures and investment yield that generally trail the composite averages; and elevated levels of underwriting leverage.
Positive rating movement may result if Selective outperforms its peers for an extended period of time. Negative rating pressure could result if operating performance falls markedly short of A.M. Bests expectations or if there is a significant deterioration in the organizations risk-adjusted capitalization as measured by Bests Capital Adequacy Ratio.
The FSR of A (Excellent) and the ICRs of a+ have been affirmed for Selective Insurance Company of America and its following affiliates:
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
Mesa Underwriters Specialty Insurance Company
Selective Casualty Insurance Company
Selective Fire & Casualty Insurance Company
The following debt ratings have been affirmed:
Selective Insurance Group, Inc.
- bbb+ on $49.9 million 7.25% senior unsecured notes, due 2034
- bbb+ on $99.5 million 6.70% senior unsecured notes, due 2035
- bbb+ on $185 million 5.875% senior unsecured notes, due 2043
The following indicative ratings on the shelf registration have been affirmed:
Selective Insurance Group, Inc.
- bbb+ on senior debt
- bbb on subordinated debt
- bbb- on preferred stock
The methodology used in determining these ratings is Bests Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bests rating process and contains the different rating criteria employed in the rating process. Bests Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the worlds oldest and most authoritative insurance rating and information source.