NU Online News Service, May 21, 2:38 p.m. EDT
A.M. Best Co. has revised the outlook for Selective Insurance Group and its seven property-casualty pooling members to negative from stable, citing weakened operating results and sizeable investment losses and impairment charges at year-end 2008.
Branchville, N.J.-based Selective's A plus financial strength rating (FSR) and aa minus issuer credit ratings (ICR) were affirmed.
"In 2008, Selective reported $27.1 million in realized investment losses, primarily driven by other than temporary impairment charges related to residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, 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 its equity portfolio and alternative investment portfolio," said Oldwick, N.J.-based Best.
The rating agency said Selective also faces challenges to improve operating results due to competition in the commercial lines segment and Selective's susceptibility to further investment losses.
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