AM Best Upgrades Credit Ratings of Selective Insurance Group, Inc. and Its Subsidiaries

Rhea-AI Summary

AM Best has upgraded the Financial Strength Rating (FSR) of Selective Insurance Group (SIGI) to A+ (Superior) from A (Excellent). The Long-Term Issuer Credit Ratings (ICR) have also been upgraded to 'aa-' from 'a+'. The rating outlooks have been revised to stable from positive. Selective's strong balance sheet strength, stable risk-adjusted capitalization, and improved underwriting results in challenging segments contribute to these upgrades. The ratings reflect Selective's favorable business profile and effective enterprise risk management.

Positive

• Upgraded FSR to A+ (Superior) from A (Excellent).
• Long-Term ICR upgraded to 'aa-' (Superior) from 'a+'.
• Strong balance sheet strength, assessed as strongest by AM Best.
• Improved underwriting results in commercial auto and excess/surplus lines.

Negative

• Outlook revised to stable from positive.
• Exposure to catastrophe losses and terrorism partially offsets strengths.

OLDWICK, N.J.--(BUSINESS WIRE)-- 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 (Selective). 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) [NASDAQ: SIGI]. The outlook of these Credit Ratings (ratings) have been revised to stable from positive. All companies are headquartered in Branchville, NJ. (Please see below for a detailed listing of companies and ratings.)

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:

• 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 has been upgraded with outlooks revised to stable from positive:

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:

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

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211110006223/en/

Edin Imsirovic

Associate Director

+1 908 439 2200, ext. 5740

edin.imsirovic@ambest.com



Michael Lagomarsino, CFA, FRM

Senior Director

+1 908 439 2200, ext. 5810

michael.lagomarsino@ambest.com



Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com



Jim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: AM Best

FAQ

What is the latest rating upgrade for Selective Insurance Group (SIGI)?

AM Best has upgraded Selective Insurance Group's Financial Strength Rating to A+ (Superior) from A (Excellent).

How did AM Best assess the financial stability of SIGI?

AM Best assesses Selective's balance sheet strength as the strongest, and its risk-adjusted capitalization is also rated strongest.

What factors contributed to the rating upgrade for SIGI?

The upgrade reflects strong profitability over the past five years, improved underwriting results, and a favorable business profile.

What changes were made to the credit ratings of SIGI's parent company?

The Long-Term ICR for Selective Insurance Group, Inc. was upgraded to 'a-' (Excellent) from 'bbb+' (Good).