AM Best Affirms Selective Insurance Group's Strong Financial Ratings with Stable Outlook

AM Best has reaffirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "aa-" (Superior) for the pooled members of Selective Insurance Group (Selective). The parent company, Selective Insurance Group, Inc., also retained its Long-Term ICR of "a-" (Excellent) and various long-term issue credit ratings, including a stable "a-" rating on $397.3 million of senior unsecured notes due in 2035. These ratings reflect Selective's strongest balance sheet strength, strong operating performance, favorable business profile, and enterprise risk management practices. Selective's balance sheet strength is underscored by its strongest risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), supported by a comprehensive reinsurance program, low-risk investment portfolio, and financial flexibility from its publicly traded parent company. However, challenges include elevated exposure to catastrophe losses and consecutive years of net adverse reserve development. Despite these factors, the group has demonstrated underwriting profitability, growing investment income, and favorable results chiefly in the commercial casualty segment over recent multi-year periods. The insurer's underwriting success is attributed to a low- to medium-hazard business mix, conservative underwriting philosophy, and catastrophe risk mitigation initiatives. Further, Selective implements strategic underwriting initiatives and targeted rate increases across its portfolio, transitioning its standard personal lines towards the mass affluent market to enhance its limit profile. The company's business segments are comprised mainly of standard commercial lines (79% of net premiums), excess and surplus lines (12%), and standard personal lines (9%). Additionally, Selective acts as a servicing carrier for the National Flood Insurance Program's Write-Your-Own program administered by FEMA. The affirmed ratings on Selective's senior unsecured notes due from 2034 to 2049 maintain the Excellent "a-" designation with stable outlooks. The company’s robust capital adequacy, risk management, and conservative investment strategies support these ratings. AM Best's stable outlooks indicate confidence in Selective's financial and operational sustainability amid industry challenges. These ratings also provide important insight for stakeholders regarding Selective's capacity to meet its financial obligations and maintain underwriting discipline in a competitive insurance environment. The reaffirmation of high-grade credit ratings despite exposure to natural catastrophe risk reflects effective risk management and financial resilience. The stable outlook aligns with Selective's ongoing business strategies and balance sheet management, signaling steady operational performance anticipated in the near term.