Best Affirms FSR for United Fire & Casualty; Outlook Stable

May 19, 2005

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of the property/casualty members of United Fire & Casualty Group (United Fire), which operate under a business pooling agreement. Additionally, A.M. Best has upgraded the issuer credit ratings (ICR) to “a+” from “a” of United Fire & Casualty Company and the other property/casualty members of United Fire. All the above ratings have a stable outlook.

In addition, A.M. Best has withdrawn the debt rating of “bbb” previously assigned to United Fire & Casualty’s $69 million 6.375% convertible preferred stock that was redeemed on May 16, 2005. The vast majority of shares were converted to common by May 13, 2005.

The ratings of United Fire reflect its strong risk-adjusted capitalization, substantially improved underwriting performance, as well as good overall liquidity position and diversified product offerings.

The ratings also acknowledge the various initiatives taken by management over the past several years that have significantly improved profitability and the continued advantages to be gained from leveraging United Fire’s long-standing agency relationships and solid regional franchise. The group also has made significant advancements in Web-based technology, enabling greater responsiveness to its agents and customers. In recent years, United Fire’s operating results have improved substantially and are expected to remain strong in 2005.

The United Fire & Casualty Company, incorporated in 1946, is a regional insurance organization with property/casualty and life insurance operations throughout the United States.

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