A.M. Best Affirms Ratings of Zurich American Insurance Company and Its Affiliates

  A.M. Best Affirms Ratings of Zurich American Insurance Company and Its

Business Wire

OLDWICK, N.J. -- November 27, 2012

A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and
issuer credit ratings (ICR) of “aa-“ of Zurich American Insurance Company
(Zurich US) (headquartered in Schaumburg, IL) and its property/casualty
pooling affiliates. Zurich US and its affiliates are subsidiaries of Zurich
Insurance Company Limited (ZIC) Switzerland), the main operating company of
Zurich Insurance Group Ltd (Zurich) (Switzerland). The outlook for all ratings
is stable. (See below for a detailed list of the companies and ratings.)

The ratings reflect Zurich US’ trend of favorable operating performance over
the past five years, strong level of risk-adjusted capitalization and its
comprehensive enterprise risk management practices. Additional positive rating
factors include Zurich US’ profile as one of the top five writers of
commercial property/casualty insurance in the United States, the implicit and
explicit support provided by Zurich and the strategic importance of the U.S.
operation to Zurich’s worldwide operation.

Somewhat offsetting these positive rating factors are the ongoing competitive
environment within the property/casualty markets and Zurich US’ exposure to
natural and man-made catastrophes. Although Zurich has not given guidance on
any losses as a result of Hurricane Sandy, the losses are expected to be
reasonably significant, albeit manageable in the context of Zurich’s overall
2012 results.

Upwards rating actions are unlikely at this point.

However, factors that could lead to negative rating actions include
deterioration in Zurich US’ underwriting and operating performance to a level
below its peers, an erosion of surplus that causes a decline in risk-adjusted
capital to a level no longer supportive of the group’s current ratings, any
lessening of implicit or explicit support from Zurich or if prospective losses
from Hurricane Sandy were significantly outside Zurich’s risk tolerance.

The FSR of A+ (Superior) and ICRs of “aa-” have been affirmed for Zurich
American Insurance Company and its following property/casualty pooling

  *Fidelity and Deposit Company of Maryland
  *Empire Fire and Marine Insurance Company
  *Empire Indemnity Insurance Company
  *Universal Underwriters Insurance Company
  *Assurance Company of America
  *Maryland Casualty Company
  *Northern Insurance Company of New York
  *American Guarantee and Liability Insurance Company
  *American Zurich Insurance Company
  *Universal Underwriters of Texas Insurance Company
  *Steadfast Insurance Company
  *Zurich American Insurance Company of Illinois
  *Colonial American Casualty & Surety Company

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: “Risk Management and the Rating
Process for Insurance Companies”; “Understanding BCAR for Property/Casualty
Insurers”; “Catastrophe Analysis in A.M. Best Ratings”; “The Treatment of
Terrorism Risk in the Rating Evaluation”; and “Rating Members of Insurance
Groups.” Best’s Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more information,
visit www.ambest.com.

       Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
Michael Russo
Senior Financial Analyst
908-439-2200, ext. 5372
Michael Lagomarsino, CFA
Assistant Vice President
908-439-2200, ext. 5810
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
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