A.M. Best Revises Outlook to Stable for Grange Mutual Fire Insurance Company

Business Wire, May 23, 2008

OLDWICK, N.J. -- A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of B (Good) and issuer credit rating of "bbb-" of Grange Mutual Fire Insurance Company (Grange Mutual) (Troy, PA).

The ratings reflect Grange Mutual's conservative underwriting leverage, adequate balance sheet liquidity and local market knowledge as a provider of homeowners' coverage in north central Pennsylvania. These positive rating factors are partially offset by the company's historically fluctuating operating results due to its business concentration, which exposes its performance to weather-related losses, an elevated expense structure due to the company's relatively small scale of operations, and above average investment leverage.

The outlook is based on Grange Mutual's improved operating performance in recent years aided by improved underwriting standards. Further, Grange Mutual's investment leverage has been on a declining trend in recent years due to a shift in emphasis away from equities and toward cash and short-term investments.

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.