AFG and P/C Subsidiaries Affirmed

Standard & Poor's Ratings Services revised its outlook on American Financial Group Inc. and the members of the Great American Insurance Co. pool, the Republic Indemnity Co. pool, the American Empire Pool, the Great American Holdings Pool, and the MidContinent Pool to stable from negative.

S&P also affirmed its "A" counterparty credit and financial strength ratings on the operating companies. In addition, S&P affirmed its "BBB" counterparty credit rating on AFG.

According to an S&P credit analyst, "the group's strong business position in its specialty property/casualty markets, continued strengthening of operating results, improved financial flexibility, and strong capital adequacy" influenced the outlook revision. Partially offsetting these factors is AFG's marginal historical operating performance, exacerbated by a multitude of material charges and reserve development in recent years. In addition, AFG's earnings diversification decreased following the IPO of its personal lines business in February 2003.

S&P believes AFG's competitive position, as defined by its diversified portfolio of specialty lines business, is strong. Although AFG is not a market leader in any sub-segment, it does have a sufficient premium base ($3.2 billion in gross written specialty premium in 2003) to support a competitive infrastructure. With the disposal of the personal auto business in 2003, however, S&P believes management will be pressured to demonstrate that the strength and diversification of its specialty segments will fuel a consistently strong earnings stream over the long term.

Atlantic Preferred Rated "B+"

Atlantic Preferred Insurance Company, a member of the Florida-based Poe Financial Group, earned a "B+" rating from A.M. Best. Atlantic Preferred's rating reflects its ability to meet its ongoing financial obligations to its policyholders and strength in the market.

Since Jan. 5, 2001, Atlantic Preferred has grown significantly from $10 million in capital, the point at which Poe Financial Group purchased the company, to $38.6 million as of March 31, 2004. Established in 1998 as a homeowners P/C company, Atlantic Preferred began its operations by "taking out" policies from Citizens Property Insurance Company, the successor of Florida Residential Property and Casualty Joint Underwriting Association (JUA), resulting in service to 15,000 in force policies. Atlantic Preferred has steadily grown to 122,000 homeowner policyholders as of March 31, 2004, and premiums have significantly risen from $7 million in Jan. 2001 to $140 million as of March 31, 2004.

Infrassure 'B++' Rating Affirmed

A.M. Best Co. affirmed the financial strength rating of "B++" (very good) of Switzerland's Infrassure Ltd. with a stable outlook. The rating reflects the company's improving and solid risk-adjusted capitalization, strong market position in its specialist engineering niche and very good underwriting performance according to Best. Offsetting factors are potential gross volatility in loss experience and reliance upon reinsurance. Retained earnings, strengthening of equalization reserves and increased cover from an aggregate excess of loss protection have improved the company's capital position. Best also expects Infrassure to report good profits at year-end 2004 as a result of disciplined underwriting and the continued strong rating environment in classes such as Erection All Risks.