Purchase auto insurance online

Purchase auto insurance online with absolute the best prices. Auto insurance quotes

Fitch Affirms Selective Insurance’s Ratings; Outlook Stable | Business Wire

/
/
/
54 Views
<p>CHICAGO–(BUSINESS WIRE)–Fitch Ratings has affirmed Selective insurance Group, Inc.’s (Selective)

ratings as follows:

–Issuer Default Rating (IDR) at ‘A-‘.

–Senior debt at ‘BBB+’.

Fitch has also affirmed the ‘A+’. Insurer Financial Strength (IFS)

ratings of the members of the Selective intercompany pool. The Rating

Outlook is Stable. A full rating list is shown below.

KEY RATING DRIVERS

The affirmation of Selective’s ratings reflects the company’s strong

underwriting results, solid capitalisation with growth in shareholders’.

equity and stable leverage metrics along with improved interest coverage

metrics.

Selective’s underwriting and return ratios remain at the upper end of

the median guidelines for the ‘A’. Rating category within Fitch’s sector

credit factors. Selective’s calendar-year combined ratio (GAAP basis)

improved to 92.0% in the first half of 2016 (1H16) and 92.5% for

full-year 2015 as the company reported positive growth in pricing and

favourable loss experience. Selective achieved an underwriting profit in

its standard reporting segments in 1H16, Standard Commercial (91.3%

combined ratio), Standard Personal (89.6%), offset by a modest

underwriting loss in the Excess and Surplus (101.1%) segment.

Selective’s shareholders’. Equity increased by 11.1% in 1H16 to over $1.5

billion as a result of $81 million of net earnings and $79 million of

unrealised investment gains. Group statutory surplus was approximately

$1.5 billion at June 30, 2016. Selective’s insurance subsidiary capital

adequacy as measured by Fitch’s Prism capital model remains ‘Very

Strong’, based on 2014 data. Prism results for 2015 will be available in

late summer 2016.

Selective’s GAAP operating leverage (net premiums written to

shareholders’. Equity) remains higher than that of peer companies.

has recently experienced a moderate decline. At June 30, 2016, 12-month

trailing GAAP operating leverage was 1.4x, which is consistent with

Selective’s ‘A+’. IFS rating.

Selective employed a conservative amount of financial leverage at the

end of second-quarter 2016, with adequate financial flexibility. The

company’s financial leverage ratio is roughly 21.2% at June 30, 2016.

Selective increased total short-term borrowings in July 2016 by $10

million. Pro forma leverage including the new borrowing was 21.7% as of

June 30, 2016.

Operating earnings-based interest coverage was 11.3x through 1H16 and

10.8x for full-year 2015 as strong underwriting results drove favourable

earnings and coverage metrics. Fitch estimates statutory fixed charge

coverage of approximately 8.1x for full-year 2016.

RATING SENSITIVITIES

Key rating triggers that could lead to a downgrade include:

–Prolonged underwriting weakness, demonstrated by a failure to produce

an underwriting profit given normal catastrophe losses.

–Material deterioration in capitalisation including a failure to remain

comfortably within the ‘Strong’. Category on Fitch’s Prism capital model.

–Operating leverage as measured by net written premiums-to-equity

rising above 1.6x, net leverage rising above 4.8x.

–Adjusted financial leverage above 25%.

–Operating earnings based interest coverage that fails to remain at

5x-7x or better and statutory fixed charge coverage below 4.5x.

Key rating triggers that could lead to an upgrade over the long-term

include:

–Enhanced scale and relative competitive position associated with

higher rating levels.

–Sustained recent underwriting performance in which Selective maintains

a low 90’s calendar-year combined ratio.

–Statutory net leverage under 3.5x.

–Financial leverage approximating 15%.

–Operating earnings based interest coverage reaching low double digits

or better.

FULL LIST OF RATING ACTIONS

Fitch has affirmed the following ratings with a Stable Outlook:

Selective Insurance Group, Inc.

–IDR at ‘A-‘.

–$100 million senior notes 6.7% due Nov. 1, 2035 at ‘BBB+’.

–$50 million senior notes 7.25% due Nov. 15, 2034 at ‘BBB+’.

–$185 million senior notes 5.875% due Feb. 9, 2043 at ‘BBB+’.

Selective Insurance Company of America

Selective Way Insurance Company

Selective Insurance Company of South Carolina

Selective Insurance Company of the Southeast

Selective Insurance Company of New York

Selective Insurance Company of New England

Selective Auto Insurance Company of New Jersey

Mesa Underwriters Speciality Insurance Company

Selective Casualty Insurance Company

Selective Fire and Casualty Insurance Company

–IFS at ‘A+’.

Additional information is available on www.fitchratings.com

Applicable Criteria

Insurance Rating Methodology (pub. 17 May 2016)

https://www.fitchratings.com/site/re/881564

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1010740

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1010740

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND

DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING

THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.

IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE

AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘.

PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS

SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS

OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES

AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’. SECTION OF

THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE

RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR

RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY

CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH

WEBSITE.

Fitch Ratings
Primary Analyst
Christopher A. Grimes, CFA
Director
+1-312-368-3263
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Douglas Pawlowski, CFA
Senior Director
+1-312-368-2054
or
Committee Chairperson
Mark E. Rouck, CPA, CFA
Senior Director
+1 312-368-2085
or
Media Relations:
Hannah James, +1 646-582-4947
hannah.james@fitchratings.com

adimage
  • Facebook
  • Twitter
  • Google+
  • Linkedin
  • Pinterest

Leave a Comment

Your email address will not be published. Required fields are marked *

It is main inner container footer text