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Best’s News & Research Service - May 20, 2008 04:26 PM (EDT)

A.M. Best Affirms Ratings of American European Insurance Group; Upgrades Ratings of Rutgers Casualty Insurance Company

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OLDWICK, N.J. //BestWire// - A.M. Best Co. has affirmed the financial strength rating (FSR) of B+ (Good) and issuer credit ratings (ICR) of “bbb-” of American European Insurance Group and its member, American European Insurance Company (American European) (formerly Merchants Insurance Company of New Hampshire, Inc.). Concurrently, A.M. Best has upgraded the FSR to B+ (Good) from B- (Fair) and ICR to “bbb-” from “bb-” of Rutgers Casualty Insurance Company (Rutgers Casualty), following the inclusion of the company in the American European Insurance Group. A.M. Best also has withdrawn the FSR of B- (Fair) and ICR of “bb-” of Rutgers Casualty Insurance Group. These rating withdrawals are due to Rutgers Casualty being included in American European Insurance Group. All companies are headquartered in Cherry Hill, NJ. The outlook for all ratings is stable.

The rating affirmations of American European Insurance Group are based on its favorable capitalization, moderate operating profitability and regional market knowledge. These positive rating factors are partially offset by significant execution risk in the management and integration of American European on a going forward basis, following its March 30, 2007 purchase by American European Group, Inc.

The rating upgrades of Rutgers Casualty are based on its improved risk-adjusted capitalization and operating performance, following the completion of its pooling agreement with American European, retroactive to January 1, 2008. Based on the completion of the pooling agreement, Rutgers Casualty has become a member of American European Insurance Group and receives the group ratings along with American European.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.



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