AM Best


A.M. Best Affirms Credit Ratings of Selective Insurance Group, Inc. and Its Subsidiaries


CONTACTS:

Carl Altenburg
Senior Financial Analyst
+1 908 439 2200, ext. 5213
carl.altenburg@ambest.com

Jacqalene Lentz, CPA
Director
+1 908 439 2200, ext. 5762
jacqalene.lentz@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 08, 2017 09:02 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of the ten pooled members of Selective Insurance Group (Selective). In addition, A.M. Best has affirmed the Long-Term ICR of “bbb+” and the Long-Term Issue Credit Ratings (Long-Term IR) of the ultimate parent, Selective Insurance Group, Inc. (SIGI) [NASDAQ: SIGI]. The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in Branchville, NJ. (Please see below for a detailed listing of companies and ratings.)

The ratings reflect the group’s strong level of risk-adjusted capitalization, improved operating performance since 2012 and high policy retention rate across its standard lines of business. These positive attributes are driven by the group’s experienced management team, disciplined underwriting with the use of sophisticated predictive analytic modeling tools and efficient claims handling. The ratings also consider Selective’s favorable market presence, as it ranks as the 36th largest property/casualty insurance writer in the United States based on 2016 net premiums written.

The positive rating factors are offset partly by Selective’s lower net investment yield compared with that of the commercial casualty composite over the past five years, and that is due mainly to Selective’s more conservative investment stance. In addition, the group has an elevated level of operating leverage relative to the composite.

SIGI’s adjusted debt-to-total capital ratio of 22% at year-end 2016 and 21% at June 30, 2016, were well-within A.M. Best’s guidelines for the company’s ratings. In addition, SIGI’s interest coverage ratio was more than adequate for its assigned ratings.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” have been affirmed for the pooled members of Selective Insurance Group:


  • 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

  • Mesa Underwriters Specialty Insurance Company

  • Selective Casualty Insurance Company

  • Selective Fire & Casualty Insurance Company

The following Long-Term IRs have been affirmed:

Selective Insurance Group, Inc.

—“bbb+” on $49.9 million 7.25% senior unsecured notes, due 2034

—“bbb+” on $99.4 million 6.70% senior unsecured notes, due 2035

—“bbb+” on $185.0 million 5.875% senior unsecured notes, due 2043

The following indicative Long-Term IRs on the shelf registration have been affirmed:

Selective Insurance Group, Inc.

—“bbb+” on senior unsecured debt

—“bbb” on subordinated debt

—“bbb-” on preferred stock

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


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