AM Best

A.M. Best Affirms Ratings of Alfa Insurance Group, Alfa Life Insurance Corporation and Alfa Corporation



David McTernan - P/C

(908) 439-2200, ext. 5206

Steven Faulks - L/H

(908) 439-2200, ext. 5035
Public Relations

Jim Peavy

(908) 439-2200, ext. 5644

Rachelle Striegel

(908) 439-2200, ext. 5378


OLDWICK, N.J. - OCTOBER 29, 2004 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A++ (Superior) of the subsidiaries of the Alfa Insurance Group (Alfa). Additionally, A.M. Best has affirmed the rating of A+ (Superior) of Alfa Life Insurance Corporation (Alfa Life).

Concurrently, A.M. Best has affirmed the debt rating of AMB-1+ of Alfa Corporation's [NYSE:ALFA] commercial paper program and the "aa" rating for the senior debt of $70 million, which is due in 2017. The outlook for all ratings is stable.

Together, Alfa Mutual Insurance Company, Alfa Mutual Fire Insurance Company and Alfa Mutual General Insurance Company (Alfa Mutual Group) maintain majority ownership of Alfa Corporation at roughly 55% and have unconditionally guaranteed all outstanding commercial paper and long-term debt. All of the aforementioned companies are located in Montgomery, AL.

The A++ (Superior) rating of Alfa reflects its outstanding capitalization and consistently strong operating returns. These positive factors are derived from Alfa's firmly entrenched personal lines market position in Alabama, efficient claims service center network and cost-effective exclusive agency distribution system. Furthermore, the rating acknowledges Alfa's well-established brand name in Alabama, exceptional business persistency and high customer loyalty, which is driven by outstanding customer service practices. Financial flexibility is made available through the Alfa Corporation, the Group's publicly-traded downstream holding company.

The affirmation of the A+ (Superior) financial strength rating on Alfa Life reflects its strategic role as a member of the Alfa Group, where the organization has established a strong market niche in the state of Alabama. The rating action also recognizes Alfa Life's steadily increasing new business production enhanced by the cross-selling strategies of the group and strong sales of its level term life and universal life products, positive operating performance and favorable stand-alone risk-adjusted capitalization.

In addition to writing property/casualty and life/health business, Alfa is engaged in non-insurance operations such as consumer financing and commercial leasing.

The financial strength rating of A++ (Superior) has been affirmed for the following subsidiaries of the Alfa Insurance Group:

- Alfa General Insurance Corporation

- Alfa Insurance Corporation

- Alfa Mutual Insurance Company

- Alfa Mutual Fire Insurance Company

- Alfa Mutual General Insurance Company

- Alfa Specialty Insurance Corporation

- Virginia Mutual Insurance Company
(afforded the same rating due to a quota share reinsurance agreement with Alfa Mutual Fire Insurance Company)

The financial strength rating of A+ (Superior) has been affirmed for Alfa Life Insurance Corporation.

The following debt ratings have been affirmed:

Alfa Corporation-

- AMB-1+ on the commercial paper program

- "aa"on $70 million 6% senior notes, due 2017

For a list of A.M. Best's debt ratings, please visit Best's Debt Rating Center.

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

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