A.M. Best Revises Outlook to Stable for Benchmark Insurance Company

Business Wire, May 28, 2008

OLDWICK, N.J. -- A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of "a-" for Benchmark Insurance Company (BIC) (Overland Park, KS), a wholly-owned subsidiary of TREAN Corporation (Trean) (Eden Prairie, MN).

The stable outlook reflects the improvement in BIC's risk-adjusted capitalization, driven by improved operating earnings and a significant reduction in ceded and gross underwriting leverage. The reduction in ceded and gross leverage resulted from the company's exit from a number of pure fronting arrangements in which the company previously participated. The company's decision in early 2007 to terminate its grocers' insurance program, which historically had produced areas of adverse loss reserve development and subjected the company to catastrophic weather-related losses, also contributed to the improved risk-adjusted capitalization. The change in outlook also reflects the improved financial leverage and solid interest coverage ratios at Trean which remain within A.M. Best's guidelines for its given ratings.

The ratings reflect BIC's solid risk-adjusted capitalization, improved earnings and favorable liquidity. Somewhat offsetting these positive factors are continued adverse loss reserve development on earlier accident years and questions regarding the impact on soft market conditions on the company's plans for expansion of its specialty program business.

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.