Press Release - JUNE 18, 2010

A.M. Best Assigns Ratings to Bankers Specialty Insurance Company


CONTACTS:
 Analysts
Raymond Thomson, ARM
(908) 439-2200, ext. 5621
raymond.thomson@ambest.com

Jeffrey Mango, CPA
(908) 439-2200, ext. 5204
jeffrey.mango@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. - JUNE 18, 2010
A.M. Best Co. has assigned a financial strength rating (FSR) of B+ (Good) and issuer credit rating (ICR) of "bbb-" to Bankers Specialty Insurance Company (BSIC) (Metairie, LA), a member of Bankers Insurance Group (Bankers). Concurrently, A.M. Best has affirmed the FSR of B+ (Good) and ICRs of "bbb-" of Bankers and its other property/casualty members. The outlook for all ratings is stable. All companies are domiciled in St. Petersburg, FL, unless otherwise specified. (See below for a detailed list of the companies and ratings.)

In addition, A.M. Best has revised the outlook to stable from negative and affirmed the FSR of B- (Fair) and ICR of "bb-" of the group's separately rated life/health affiliate, Bankers Life Insurance Company (Bankers Life) (St. Petersburg, FL).

The ratings of BSIC recognize its supportive risk-adjusted capital position, as well as it being a strategic entity within Bankers as a writer of homeowners' policies in the Louisiana marketplace. In addition, BSIC benefits from operational infrastructure and financial support provided by Bankers. The company also generates fee income from claims handling and policy processing services. The ratings also reflect inter-company agreements with its parent company regarding reinsurance coverage.

The ratings of Bankers reflect its favorable risk-adjusted capitalization and expertise in the homeowners and small commercial niches and underwriting enhancements. In addition, the group continues to maintain prudent catastrophe reinsurance programs.

These positive rating factors are somewhat offset by historical variability in underwriting performance, aggressive premium growth, elevated underwriting expense ratios and susceptibility to frequent and severe weather-related events due to Bankers' exposure in the Florida and Louisiana marketplaces.

The ratings of Bankers Life recognize its strengthened capital level due to the capital contribution of the parent company, although the company's risk-adjusted capitalization remains weak.

Partially offsetting these factors is the improvement in earnings performance in the annuity product line due to a combination of good surrender charge protection and controlled new business production.

The FSR of B+ (Good) and ICRs of "bbb-" have been assigned to Bankers Specialty Insurance Company, a property/casualty member of Bankers Insurance Group.

The FSR of B+ (Good) and ICRs of "bbb-" have been affirmed for Bankers Insurance Group and its following property/casualty members:

-Bankers Insurance Company

-First Community Insurance Company


The FSR of B- (Fair) and ICR of "bb-" have been affirmed for Bankers Life 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, which 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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