Press Release - JUNE 15, 2011

A.M. Best Upgrades Ratings of GeoVera Insurance Group and Its Members


CONTACTS:
 
Michael T. Venezia
Senior Financial Analyst
(908) 439-2200, ext. 5034
michael.venezia@ambest.com

Jeffrey Mango, CPA
Assistant Vice President
(908) 439-2200, ext. 5204
jeffrey.mango@ambest.com

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK, N.J. - JUNE 15, 2011
A.M. Best Co. has upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and issuer credit ratings (ICR) to "a" from "a-" of GeoVera Insurance Group (GeoVera) (Fairfield, CA) and its members. The outlook for all ratings has been revised to stable from positive. (See below for a complete listing of the companies.)

The rating upgrades reflect GeoVera's excellent risk-adjusted capitalization, strong operating earnings and management's experience in its market segments. GeoVera's profitable underwriting performance, combined with solid investment income, has resulted in favorable operating earnings in each of the past five years. In addition, GeoVera maintains a moderate net underwriting leverage position due to prudent risk management efforts, which have further strengthened its risk-adjusted capital. GeoVera's underwriting focus continues to capitalize on its experienced market knowledge in catastrophe-prone business segments.

Although GeoVera concentrates all of its underwriting efforts on providing coverage in catastrophe-prone areas, it combines an established catastrophe-modeled and web-based quoting and binding system to ensure proper pricing with an extensive catastrophe reinsurance program to mitigate its exposure. However, GeoVera maintains high gross catastrophe leverage and is significantly dependent on reinsurance to reduce this exposure to a manageable level on a net basis.

The FSR has been upgraded to A (Excellent) from A- (Excellent) and the ICR to "a" from "a-" for GeoVera Insurance Group and its following members:

- GeoVera Insurance Company

- Pacific Select Property Insurance Company

- GeoVera Specialty Insurance Company

- GeoVera Security Insurance Company

- GeoVera Re, Ltd.


The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers"; "Natural Catastrophe Stress Test Methodology"; and "Rating Members of Insurance Groups." Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

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