Press Release - NOVEMBER 24, 2009

A.M. Best Upgrades Issuer Credit Ratings of Western Mutual Insurance Pool and Its Members


CONTACTS:
 Analysts
Michael T. Venezia
(908) 439-2200, ext. 5034
michael.venezia@ambest.com

Jeff Mango, CPA
(908) 439-2200, ext. 5204
jeffrey.mango@ambest.com
Public Relations
Jim Peavy
(908) 439-2200, ext. 5644
james.peavy@ambest.com

Rachelle Morrow
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK, N.J. - NOVEMBER 24, 2009
A.M. Best Co. has upgraded the issuer credit ratings (ICR) to "a+" from "a" and affirmed the financial strength rating (FSR) of A (Excellent) of Western Mutual Insurance Pool (Western Mutual) (Irvine, CA) and its members. The outlook for all ratings is stable.

The upgrade of Western Mutual's ICRs reflects its continuing production of excellent operating results, maintenance of strong risk-adjusted capitalization and extensive local market knowledge as a writer of personal property business. The ratings also acknowledge the group's conservative investment risk profile, favorable loss reserve development trends and strong operating cash flow measures.

These positive rating factors are partially tempered by Western Mutual's concentration of business in California that exposes its earnings and surplus to setbacks from localized catastrophes, competitive market conditions and economic factors. The group also maintains significant dependence on reinsurance to reduce its high gross exposure to earthquakes. Nonetheless, management has reduced Western Mutual's net catastrophe leverage to a modest level through its catastrophe mitigation strategies and a comprehensive reinsurance program.

The ICRs have been upgraded to "a+" from "a" and the FSR of A (Excellent) has been affirmed for Western Mutual Insurance Pool and its following members:

-Residence Mutual Insurance Company

-Western Mutual Insurance Company

-Arizona Home Insurance Company


For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.

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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