A.M. Best Downgrades Ratings of Great Western Insurance Company; Revises Outlook to Stable

Business Wire, March 24, 2008

OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Good) from B (Good) and the issuer credit rating (ICR) to "bbb-" from "bbb " of Great Western Insurance Company (Great Western) (Ogden, UT). The outlook has been revised to stable from positive.

These rating actions are based on Great Western's net loss in 2007 due to impairment of some collateralized debt obligations (CDOs), further possible negative impact from the remaining CDOs, which currently have potential unrealized losses that may affect its overall capitalization and a decline in its capital and surplus to liability ratio. With continuing concerns over a weakened credit market and significant deterioration in the subprime mortgage loan market in the United States, A.M. Best notes that Great Western's balance sheet will remain under financial pressure as additional CDOs may be impaired going forward. As a result, Great Western's capital and surplus position could decline further and could lead to additional pressure on the company's risk-adjusted capitalization relative to its insurance and investment profile.

Partially offsetting these rating factors are the company's sustained growth in the pre-need marketplace, consistently positive statutory operating results and its improving business profile from its expanded geographical presence. Great Western anticipates continuing its new business growth from its pre-need insurance business while remaining profitable on an operating basis.

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.