AM Best

APRIL 29, 2008 12:00 AM (EDT)

A.M. Best Affirms Ratings of Foremost Corporation Group and Its Members

Frederick DeLeon
(908) 439-2200, ext. 5175

Gary Davis
(908) 439-2200, ext. 5665

Public Relations
Jim Peavy
(908) 439-2200, ext. 5644

Rachelle Morrow
(908) 439-2200, ext. 5378


OLDWICK, N.J. - APRIL 29, 2008 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of "a" of Foremost Corporation Group (Foremost) (Caledonia, MI) and its members. The outlook for all ratings is stable.

The ratings reflect Foremost's favorable risk-adjusted capitalization on a stand-alone basis, solid operating performance, established market position, as well as the advantages associated with being affiliated with Farmers Insurance Group (Farmers) (Los Angeles, CA). Offsetting rating factors include Foremost's above average underwriting leverage and significant exposure to weather-related losses.

Foremost's risk-adjusted capital position is based on its conservative investment risk profile and the catastrophe reinsurance provided by Farmers. Additionally, the group's favorable operating profitability, derived from its strict underwriting discipline and prudent risk management, has enabled Foremost to produce strong surplus growth over the past five years.

Foremost's elevated underwriting leverage was the result of rollover business from Farmers after its acquisition of Foremost. Net premium leverage is expected to continue to improve through organic surplus growth over the next several years. In addition, Foremost's net exposure to hurricane loss events is substantially reduced by its sound reinsurance program, particularly the catastrophe reinsurance protection provided by Farmers.

The FSR of A (Excellent) and ICRs of "a" have been affirmed for Foremost Corporation Group and its following members:

- American Federation Insurance Company

- Foremost County Mutual Insurance Company

- Foremost Insurance Company Grand Rapids, Michigan

- Foremost Lloyds of Texas

- Foremost Signature Insurance Company

- Foremost Property and Casualty Insurance Company

For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.

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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