A.M. Best Affirms Rating of The Republic Group Companies

           A.M. Best Affirms Rating of The Republic Group Companies

PR Newswire

DALLAS, Jan. 25, 2013

DALLAS, Jan. 25, 2013 /PRNewswire/ -- The Republic Group (Republic) today
announced A.M. Best Company has affirmed the financial strength rating of A-
(Excellent) and credit rating outlook as "negative" for each of the group's

(Logo: http://photos.prnewswire.com/prnh/20050801/REPUBLICLOGO)

The rating and outlook reflect the group's adequate risk-adjusted
capitalization, conservative investment strategy, and strong, long-standing
regional market presence. The group's adequate risk-adjusted capitalization
is due to its on-going effort to reduce overall exposure concentration and
conservative investment portfolio, which continues to produce favorable
investment earnings that have partially mitigated underwriting losses to
produce positive net income. The group's underwriting results have been
volatile in recent years primarily due to frequent and severe weather-related
events. In response, management has been de-emphasizing the property book of
business, especially in commercial lines, taken significant rate increases,
increased deductibles and reduced exposures in catastrophe prone areas. Also,
the group strengthened reserves significantly in 2011 in commercial lines and
management has implemented a comprehensive underwriting and claim corrective
action plan. Despite the unprofitable underwriting performance, net income
has generally been positive, driven by net investment income, fee income and
realized capital gains, The group continues to maintain a strong regional
market presence, especially in Texas and with its long standing agency
relationships developed over its 110 year history.

"We recognize that our concentration of property exposures during a period of
increased weather frequency, elevated expense structure and inadequate
reserving in prior years were the primary drivers of our unprofitable
underwriting performance. In response, we have strengthened the senior
management team and implemented aggressive and comprehensive plans to return
Republic to a solid underwriting performing company," said Joseph E.
Mattingly, Republic's President and Chief Executive Officer. He added, "We
are currently celebrating our 110th year anniversary and expect to be here
another 110 years due to our stable foundation of loyal agents, dedicated
underwriters and claims staff, diversified book of business and conservative
financial position."

About Republic
Republic Companies, Inc. provides personal and commercial property and
casualty insurance products through a group of insurance companies and related
entities designated in the industry as "The Republic Group". In its
Independent Agents segments, Republic distributes these products to
individuals and small to medium-size businesses through a network of
independent agents primarily in Texas, Louisiana, Oklahoma, New Mexico,
Mississippi and Arkansas. In its Program Management and Insurance Services
segments, Republic capitalizes on its unique combination of charters and
licenses to develop and manage target-niche insurance products that are
distributed through managing general agents and other producers in many
additional states. Republic Companies, Inc. is indirectly owned by Delek Group
Ltd. Visit www.RepublicGroup.com for more information.

SOURCE The Republic Group

Website: https://www.republicgroup.com
Contact: Robert W. Frierson, Esq., Vice President and General Counsel,
Republic Companies, Inc., +1-972-788-6000
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