Acceptance Credit Rating Affirmed

September 30, 2002

Standard & Poor’s affirmed its “B+” counterparty credit rating on Acceptance Insurance Cos. Inc. (Acceptance). It also affirmed its ratings on AICI Capital Trust I and American Growers Insurance Co. (AGIC) and revised all outlooks to positive from stable. At the same time, S&P’s lowered and subsequently withdrew, at management’s request, its ratings on Acceptance Insurance Co. (AIC).

Acceptance will record another unprofitable year because of losses at AIC and the service on the subordinated debt that it has issued to AICI Capital Trust I and that supports the Trust’s service on its preferred securities. At this time of year, it is impossible to predict AGIC’s profitability because the weather and market conditions that determine it have yet to develop to the point where such a forecast is possible.

If 2002 is an average year for multi-peril crop insurance (MPCI), AGIC should be soundly profitable. Longer-term, AIC will become progressively less important to Acceptance, and the fundamentals of AGIC, which S&P’s views as good, will become more important.

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