MAY 16, 2008 12:00 AM (EDT)

A.M. Best Upgrades Ratings of North Country Insurance Company; Revises Outlook to Stable

Maurice Thomas
(908) 439-2200, ext. 5794

Joseph Burtone
(908) 439-2200, ext. 5125
Public Relations
Jim Peavy
(908) 439-2200, ext. 5644

Rachelle Morrow
(908) 439-2200, ext. 5378


OLDWICK, N.J. - MAY 16, 2008 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating (FSR) to B+ (Good) from B (Fair) and issuer credit rating to "bbb-" from "bb+" of North Country Insurance Company (North Country) (Watertown, NY). The outlook for both ratings has been revised to stable from positive.

The upgrades reflect North Country's strengthened risk-adjusted capitalization and improved operating performance over the past several years. Recent operating profitability has been attributed to management's commitment to underwriting discipline, pricing adequacy and enhanced risk selection. Despite soft market conditions, A.M. Best anticipates continuation of the company's favorable operating results due to technology enhancements and new producer relationships.

Partially offsetting these positive rating factors is North Country's geographic concentration as a predominant property writer in New York. As a result, earnings are exposed to significant weather-related events as well as changes in regulatory and competitive market conditions. However, this exposure is partially mitigated by North Country's prudent reinsurance program. Although North Country maintains a comparatively high expense structure relative to its industry composite, this burden is expected to decline in the future through strategic growth, sustained profitability and ongoing expense management initiatives.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.

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AMB# Company Name
010566 North Country Insurance Company