Ratings Recap: RSUI Group, Covington, AMERISAFE, Combined, UNAIC

April 4, 2008

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of RSUI Group and its members. Best also affirmed the ICR of “bbb” and debt rating of “bb+” on $290.4 million 5.75% mandatory convertible preferred stock, due 2009 of RSUI’s ultimate parent, Alleghany Corporation The outlook for the ICRs and debt rating has been revised to positive from stable, while the outlook for the FSR is stable. Concurrently Best has assigned an FSR of ‘A’ (Excellent) and ICR of “a” to Covington Specialty Insurance Company of Manchester, NH. The outlook assigned to the FSR is stable, and the outlook assigned to the ICR is positive. Best explained: “Covington has been added as a member of RSUI due to the implementation of an inter-company quota share reinsurance agreement effective October 2007 between Covington and RSUI Indemnity Company (Manchester, NH). Covington was formed on September 28, 2007 to support future non-admitted business written primarily by RSUI’s binding authority department, which writes small, specialized coverages pursuant to underwriting authority arrangements with managing general agents.”

A.M. Best Co. has affirmed the issuer credit rating (ICR) of “bbb-” and debt ratings of AMERISAFE, Inc (Texas), as well as the financial strength rating (FSR) of ‘A-‘ (Excellent) and ICRs of “a-” of Amerisafe Insurance Group. Amerisafe includes American Interstate Insurance Company, Silver Oak Casualty, Inc. and American Interstate Insurance Company of Texas, which are operating subsidiaries of AMERISAFE, Inc. The outlook for all ratings is stable. “The ratings reflect Amerisafe’s strong risk-adjusted capitalization, improved underwriting and operating results and solid market presence within its niche workers’ compensation market for high hazard risks,” said Best.

Standard & Poor’s Ratings Services has raised its counterparty credit and financial strength ratings on Combined Insurance Co. of America and Combined Life Insurance Co. of NY (collectively referred to as Combined) to ‘A’ from ‘A-‘ and removed the ratings from CreditWatch with positive implications. The outlook on Combined is stable. “This rating action follows the close of the sale of Combined to ACE Ltd. (ACE; A-/Stable/A-2),” said S&P. ” We had placed the ratings on CreditWatch positive on Dec. 17, 2007, based on the agreement by Combined’s former parent, Aon Corp., to sell the operations to ACE.”

A.M. Best Co. has assigned a financial strength rating (FSR) of ‘A-‘ (Excellent) and an issuer credit rating (ICR) of “a-” to Universal North America Insurance Company (UNAIC) of San Antonio, Texas with a stable outlook. “UNAIC will operate as a property/casualty insurance company focused on providing personal dwelling, auto coverage and umbrella policies in Texas, Arizona, Nevada, South Carolina and Georgia,” Best noted. “Currently, UNAIC is capitalized with approximately $22 million from the contributions of the ultimate parent company, Universal Group, Inc. (Puerto Rico). The assigned ratings reflect UNAIC’s solid capitalization, conservative business plan and experienced and highly regarded management team. The ratings for UNAIC also receive enhancement based on explicit support provided by Universal Group, Inc.”

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