A.M. Best Comments on the Announced Acquisition of James River Group, Inc. by the D. E. Shaw Group

Business Wire, June 12, 2007

OLDWICK, N.J. -- A.M. Best Co. has commented that the financial strength rating (FSR) of A- (Excellent) and the issuer credit ratings (ICR) of "a-" of James River Group, Inc.'s (James River) (Chapel Hill, NC) [NASDAQ: JRVR] separately rated operating subsidiaries, James River Insurance Company (JRIC) (Ohio) and Stonewood Insurance Company (Stonewood) (North Carolina) remain unchanged. The ICR of "bbb-" of James River also remains unchanged. The outlook for all ratings is stable.

This comment follows yesterday's announcement that a definitive agreement was signed under which a Bermuda-based holding company subsidiary of the D. E. Shaw group will acquire James River in a transaction with a total equity value of approximately $575 million.

Under the proposed transaction, James River will no longer be publicly-traded and will be wholly-owned by a global investment management firm, the D.E. Shaw group. In conjunction with this transaction, a Bermuda holding company formed by the D.E. Shaw group will purchase all outstanding shares of James River and its operating subsidiaries. Notwithstanding the ownership change, management at James River remains intact.

In April 2007, A.M. Best affirmed the ratings of James River, which took into consideration the group's solid operating profitability, excellent capitalization and the strong track record of its management team. The ratings also recognized the group's focused business plan that targets specific niche classes in the surplus lines and workers' compensation markets utilizing the expertise of an experienced underwriting staff.

The acquisition of James River by the D. E. Shaw group is expected to close in the second half of 2007, subject to stockholder and regulatory approvals. This transaction also contemplates the formation of a Bermuda-based reinsurer, which will become an affiliate of JRIC and Stonewood. A.M. Best is currently reviewing the business plan as it relates to this new entity and expects to assign a rating upon its formation.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.