Fitch affirms Selective Insurance

Fitch Ratings said it affirmed Selective Insurance Group, Inc.'s A- issuer default rating, BBB+ senior debt rating and BBB junior subordinated debt rating.

The outlook is stable.

Fitch said the ratings represent the company's consistently strong operating figures, its disciplined underwriting culture, independent agency relationships and enhanced diversification as it sought to expand beyond New Jersey. The company has been able to raise rates above industry averages because of its strong regional presence, along with its small- and middle-market commercial lines focus, the agency said. What's more, the company lacks coverage issues in the catastrophe-prone states of Florida, California, Texas, Alabama and Louisiana.

The positive aspects are offset in part, Fitch said, by the company's geographically concentrated revenue base, moderate historical adverse loss reserve development, moderate operating leverage and increased competition.

Fitch said that it expects the company's operating leverage to stay at 2 times. As of year-end 2006, leverage was 1.5 times, down slightly from 1.6 times at year-end 2005.

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