AM Best Upgrades Credit Ratings of Selective Insurance Group, Subsidiaries

AM Best has upgraded the financial strength rating (FSR) to A+ (superior) from A (excellent) and the long-term issuer credit ratings (long-term ICR) to “aa-” (superior) from “a+” (excellent) of the pooled members of Selective Insurance Group.

Additionally, AM Best has upgraded the long-term ICR to “a-” (excellent) from “bbb+” (good) and the long-term issue credit ratings (long-term IR) of the ultimate parent, Selective Insurance Group Inc. (SIGI). The outlook of these credit ratings have been revised to stable from positive. All companies are headquartered in Branchville, New Jersey.

These ratings reflect Selective’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

Selective’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level and is offset partially by exposure to catastrophe losses and terrorism. The upgrade reflects strong levels of profitability over the past five years on an absolute basis and improved profitability relative to its peers.

The group’s underwriting results have benefited from a low- to medium-hazard business mix, conservative underwriting philosophy and catastrophe risk mitigation initiatives. In addition, the group has improved underwriting results in its more challenged commercial auto and excess and surplus books of business through various underwriting initiatives and targeted rate increases.

The favorable business profile is based partly on the group’s close working relationship with its selected agencies and the use of technology to enhance its underwriting and servicing capabilities.

The FSR has been upgraded to A+ (superior) from A (excellent) and the long-term ICRs to “aa-” (superior) from “a+” (excellent) with outlooks revised to stable from positive for the pooled members of Selective Insurance Group.

The following long-term IRs has been upgraded with outlooks revised to stable from positive: for Selective Insurance Group Inc.:

• to “a-” (excellent) from “bbb+” (good) on $49.9 million 7.25% senior unsecured notes, due 2034
• to “a-” (excellent) from “bbb+” (good) on $99.4 million 6.70% senior unsecured notes, due 2035
• to “a-” (excellent) from “bbb+” (good) on $294.2 million 5.375% senior unsecured notes, due 2049

The following indicative Long-Term IRs have been upgraded with outlooks revised to stable from positive on the current shelf registration for Selective Insurance Group Inc.:

• to “a-” (excellent) from “bbb+” (good) on senior unsecured debt
• to “bbb+” (good) from “bbb” (good) on subordinated debt
• to “bbb” (good) from “bbb-” (good) on preferred stock

Source: AM Best

Topics AM Best