AM Best Information Services

MARCH 11, 2003 12:00 AM (EST)

A.M. Best Affirms Rating of Amica Mutual Group; Upgrades Rating of Amica Life Insurance Company

William Decker/Anthony Diodato
(908) 439-2200, ext. 5423/5704

Colleene Parodi/Steve Irwin
(908) 439-2200, ext. 5095/5454
Public Relations
Jim Peavy
(908) 439-2200, ext. 5644

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


OLDWICK, N.J. - MARCH 11, 2003 12:00 AM (EST)
A.M. Best Co. has affirmed the financial strength rating of A++ (Superior) of Amica Mutual Group (Lincoln, RI). This rating applies to its lead company, Amica Mutual Insurance Company (Lincoln, RI), and its affiliate, Amica Lloyd's of Texas (Bellaire, TX). Additionally, the financial strength rating has been upgraded to A+ (Superior) from A (Excellent) of Amica Life Insurance Company (Lincoln, RI). Both the property/casualty and life ratings are assigned stable outlooks.

The rating of Amica Mutual Group reflects its outstanding capitalization, solid operating performance and established market presence as one of the 60 largest property/casualty insurers in the nation. These strengths are derived from management's sound underwriting fundamentals, geographic diversification and low cost distribution channels. Amica Mutual Group's operating performance is impacted by the return of capital to its policyholders in the form of dividends, which enables it to maintain a high persistence level. In addition, the group maintains modest underwriting leverage and follows conservative loss reserving practices.

Amica Mutual Group's strong operating fundamentals and synergies carry over into its life operations, which benefit from the group's capital strength, distribution, management andgrowing customer base. A.M. Best believes that the synergy between the life and property/casualty entities improved in recent years, as reflected in the trend of increased life insurance production through referrals from the group's property and casualty producers. However, A.M. Best believes that opportunities for improved life penetration into the property and casualty customer base exist and that this market remains largely untapped. The rating upgrade of Amica Life recognizes this strategic relationship, in addition to Amica Life's favorable statutory operating earnings trend, the good overall quality of its investment portfolio and its strong capitalization.

These strengths are somewhat offset by competitive pressures, escalating loss costs and the volatility in the equity market that affected total returns. Despite competitive market conditions and rising loss costs, Amica Mutual Group is well positioned to sustain its strong capitalization and profitability as a result of its low cost structure, loyal client base and excellent reputation for service.

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

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