[January 24, 2013]

A.M. Best Withdraws Ratings of Ullico Casualty Company

A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B (Fair) and issuer credit rating to "bb-" from "bb" of Ullico Casualty Company (headquartered in the District of Columbia). The outlook for both ratings is negative. Concurrently, A.M. Best has withdrawn the ratings in response to management's request to no longer participate in A.M. Best's interactive rating process.

The rating downgrades are a result of Ullico Casualty Company's continued unprofitable underwriting performance in its discontinued workers' compensation program business and surety operation and its further weakened capital position due to additional adverse loss reserve development associated with those businesses.

In 2012, Ullico Casualty Group, Inc., a susidiary of Ullico Inc. entered into an agreement with Alterra American Insurance Company (Alterra), whereby fiduciary and union liability business is now fronted by Alterra and a portion is then ceded to a newly-formed, unrated captive. Ullico Casualty Company is currently in run off as all prior managing general agency relationships (programs) for workers' compensation and commercial business were terminated in 2012.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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