NU Online News Service, May 21, 2:38 p.m.EDT

A.M. Best Co. has revised the outlook for Selective InsuranceGroup and its seven property-casualty pooling members to negativefrom stable, citing weakened operating results and sizeableinvestment losses and impairment charges at year-end 2008.

Branchville, N.J.-based Selective's A plus financial strengthrating (FSR) and aa minus issuer credit ratings (ICR) wereaffirmed.

"In 2008, Selective reported $27.1 million in realizedinvestment losses, primarily driven by other than temporaryimpairment charges related to residential mortgage-backedsecurities, commercial mortgage-backed securities, asset-backedsecurities, corporate bonds, common stock and limited partnerships,as well as $97.9 million in unrealized investment losses(after-tax), primarily driven by a decline in market values of itsequity portfolio and alternative investment portfolio," saidOldwick, N.J.-based Best.

The rating agency said Selective also faces challenges toimprove operating results due to competition in the commerciallines segment and Selective's susceptibility to further investmentlosses.