Selective Affirmed

A.M. Best Co. affirmed the financial strength rating of “A+” (superior) and assigned issuer credit ratings of “aa-” to Selective Insurance Group and its six property/casualty pooling members. All ratings have a stable outlook.

The ratings reflect Selective’s solid capitalization, historically favorable operating performance, quality management team and strong regional market presence within the small commercial lines business segment. In addition, the ratings recognize Selective’s disciplined underwriting culture, broad product offerings, the leveraging of its agency relationships, conservative investment philosophy and prudent capital management.

Furthermore, the group has made significant advancements in Web-based technology in recent years, enabling its agency and claims management specialists to be more responsive to local agents and customers. Selective’s operating results have improved substantially over the past several years and, despite the recent emergence of more competitive property/casualty markets, are expected to remain strong in 2005.

Partially offsetting these positive factors is Selective’s above-average net underwriting leverage and investment leverage, the emergence of unfavorable prior year loss reserve development in recent years and the group’s relatively high geographic concentration in New Jersey, where competition within personal lines from existing players and new entrants has become intense.