A.M. Best Affirms Ratings of Amica Mutual Group and Amica Life Insurance Company

Business Wire, April 15, 2008

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Superior) and issuer credit rating (ICR) of "aa " of Amica Mutual Group (Amica). These ratings also apply to the lead company, Amica Mutual Insurance Company and its other affiliates, Amica Lloyd's of Texas (Sugar Land, TX) and Amica Property & Casualty Insurance Company. Additionally, A.M. Best has affirmed the FSR of A (Superior) and ICR of "aa-" of Amica Life Insurance Company (Amica Life). The outlook for all ratings is stable. All companies are located in Lincoln, RI, except where specified.

The affirmation of Amica's ratings reflect its outstanding capitalization, strong enterprise risk management practices, solid operating performance and well established market position as one of the 60 largest property/casualty insurers in the United States. These strengths are derived from management's solid underwriting fundamentals, geographic diversification strategy and low cost distribution channels. Amica's operating performance, although favorable, is reduced to marginal levels by the return of capital to its policyholders in the form of dividends. This annual dividend, however, is an integral part of Amica's rate structure, which enables it to maintain high retention levels. Furthermore, the group maintains modest underwriting leverage and follows conservative loss reserving practices. Partially offsetting these positive rating factors are the elevated tolerances directly correlated to Amica's exposure to weather-related events.

Amica's operating strength, customer base and available resources at the group level help support the life insurance operations. The ratings of Amica Life are based on its strategic role within Amica, strong stand alone risk-adjusted and absolute level of capitalization and profitable statutory operating results over a five-year period. Amica Life is exploring opportunities to generate further growth in life insurance premiums as it continues its focus on further penetrating of its parent's customer base. A.M. Best also notes that the life company has a high percentage of structured settlements relative to its total business mix and a potential withdrawal exposure with its individual annuity block.

Over the near term, A.M. Best expects Amica to sustain its strong capitalization and favorable profitability levels through its adherence to conservative operating fundamentals and exceptional customer service standards.

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 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. For more information, visit www.ambest.com.