Press Release - APRIL 09, 2010

A.M. Best Revises Outlook to Positive From Stable for Nodak Mutual Group and Nodak Mutual Insurance Company


CONTACTS:
 Analyst(s)
Bob Podolski
(908) 439-2200, ext. 5731
bob.podolski@ambest.com

Joseph Burtone
(908) 439-2200, ext. 5125
joseph.burtone@ambest.com
Public Relations
Rachelle Morrow
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com

Jim Peavy
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK, N.J. - APRIL 09, 2010
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Nodak Mutual Group (Nodak) and its member company, Nodak Mutual Insurance Company. Concurrently, A.M Best has affirmed the FSR of B++ (Good) and ICR of "bbb" of Nodak Mutual Insurance Company's wholly owned and separately rated subsidiary, American West Insurance Company (American West). The outlook for these ratings is stable. All companies are domiciled in Fargo, ND.

Nodak's ratings reflect its favorable operating results, solid capitalization and strong market presence as a leading personal lines carrier in North Dakota. The outlook reflects the consistency of the group's operating performance, generated by solid net underwriting income that has contributed to solid risk-based capitalization, as well as its strong business profile as one of North Dakota's leading writers of property/casualty insurance.

The positive rating factors are derived from Nodak's solid capitalization resulting from consecutive years of pre-tax operating gains, which were driven by positive net underwriting income supplemented by solid investment income. The group has benefited from rate changes, strict underwriting guidelines, and in some years, less severe weather. Also, reserve development has been favorable, as evidenced by consistent redundancies on both an accident and calendar year basis. Nodak maintains a strong market presence, a cost-effective distribution network and has extensive local market knowledge. In addition, the group is sponsored by the North Dakota Farm Bureau Federation, which facilitates its marketing, business retention and government relations efforts.

Somewhat offsetting these positive rating factors are the group's heavy concentration of business in a single state, which exposes it to the potential for frequent and severe weather-related events as well as judicial and regulatory changes. The group's business concentration is somewhat mitigated, however, through ceded reinsurance treaties.

American West's ratings and outlook recognize its solid capitalization, profitable operating performance derived from its consistent net investment income and generally favorable underwriting results, and its affiliation with Nodak Mutual Insurance Company.

Partially offsetting these positive factors are the company's limited coverage offerings and its geographic concentration, which exposes it to frequent and severe weather-related events. In addition, there is additional inherent risk since American West decided to retain all of its business effective 2007. The company offers primarily crop hail and multi-peril crop insurance, with a concentration of business in Minnesota and South Dakota and minimal exposure in North Dakota.

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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