Chairman and CEO Gregory Murphy dismissed the idea that prices in the U.S.commercial lines market would fall, saying the industry is under pressure toproduce underwriting profits in the wake of a low interest rate environment.

Speakingon an earnings call, Murphy said leading commercial lines carriers are barelymaking an underwriting profit, with statutory combined ratios of companies thatcontrol more than 25% of the market remaining close to, or in excess of, 100%.With investment yields remaining low, the industry is left with no option otherthan to increase rates.

"Ibelieve that much of the rhetoric about commercial lines pricing turningnegative is overcooked. However, a somewhat more competitive marketplace fornew business does exist," he said.

Theexecutive touted Selective's underwriting discipline, saying the company'scommercial lines renewal rate hikes have met or exceeded expected claiminflation for the past 26 consecutive quarters.