Press Release - APRIL 11, 2001

A.M. Best Downgrades Ratings of Various Bankers Insurance Companies


CONTACTS:
 Jim Peavy
(908) 439-2200, ext 5644

FOR IMMEDIATE RELEASE

OLDWICK, N.J. - APRIL 11, 2001
A.M. Best Co. has downgraded the financial strength ratings of Banker's Insurance Group and Bankers Security Insurance Company, St. Petersburg, Florida, from B++ (Very Good) to B (Fair). The group rating applies to Bankers Insurance Company, which is evaluated on a consolidated basis with its majority owned but separately rated subsidiary, Bankers Security Insurance Company. In addition, the financial strength rating of First Community Insurance Company, a member of the Bankers Insurance family of companies, has been downgraded from A- (Excellent) to B (Fair).

The ratings downgraded into the vulnerable rating category reflects the significantly reduced capital position and deteriorating operating performance trends at the insurance company. Moreover, the immediate and ultimate holding companies, Bankers Insurance Group Inc. and Bankers Financial Corporation, have posted sizeable operating losses. Bankers Insurance Group Inc. subsequently fell out of compliance with a fixed charge coverage ratio covenant as part of a bank loan agreement. Although granted waivers by the primary lender at revised terms, the group's ability to cover future interest payments continues to be pressured by the on-going deterioration in operating performance. At the Banker's Insurance Group level, surplus declined by nearly 40% as a result of unrealized capital losses on the stock portfolio, sizeable operating losses as well as legal fees and settlement costs associated with the group's on-going case with the Florida Department of Insurance.

Although historically First Community has not paid dividends to finance the debt service obligations at the respective parent levels, future dividend payments may be required given the deteriorated strength of its sister companies. Further, operations of Bankers Insurance Group and First Community are closely tied through similar management as well as through the reallocation of management fees from the parent which has resulted in significant expense volatility.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source.

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