A.M. Best Affirms Ratings of Northbridge Financial Corp and Its Subsidiaries

Business Wire, Jan 19, 2009

Lombard General's performance has been supported by its broad based commercial lines focus, which targets small and mid-sized businesses, specialty lines, commercial trade groups and associations, as well as a select number of large Canadian businesses.

The rating affirmations of Lombard reflect its favorable accident year underwriting performance generated by its personal lines business, which was offset by less than favorable calendar year results emanating from continued commercial liability prior year reserve development. The stable outlook is based on A.M. Best's belief that each of these business segments will maintain underwriting discipline in the prolonged competitive market, appropriate capital levels and above average financial performance over the long term.

The ICR of Northbridge acknowledges its lack of financial leverage, the diversified nature of its markets and earnings, reduced severity of earnings volatility from shock losses and its stable balance sheet supported by investment returns and favorable reserve development. Northbridge's annual cash needs primarily are its shareholder dividend payments, which are covered through subsidiary dividend payments. The capital levels of Northbridge's subsidiaries comfortably allow for these payments.

The ICR of "bbb" has been affirmed for Northbridge Financial Corp.

The FSRs of A (Excellent) and ICRs of "a" have been affirmed for the following operating subsidiaries of Northbridge Financial Corp:

* Commonwealth Insurance Company

* Commonwealth Insurance Company of America

* Federated Insurance Company of Canada

* Lombard General Insurance Company of Canada

* Markel Insurance Company of Canada

* Zenith Insurance Company

The FSR of A- (Excellent) and ICR of "a-" have been affirmed for Lombard Insurance Company.

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.