AM Best


A.M. Best Upgrades Ratings of MGA Insurance Company, Inc.


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Raymond Thomson, ARM

Financial Analyst

(908) 439-2200, ext. 5621

raymond.thomson@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. - FEBRUARY 07, 2011 12:00 AM (EST)
A.M. Best Co. has upgraded the financial strength rating to B+ (Good) from B (Fair) and the issuer credit rating (ICR) to "bbb-" from "bb+" of MGA Insurance Company, Inc. (MGA). The outlook for both ratings has been revised to stable from positive.

Concurrently, A.M. Best has withdrawn the ICR of "b" of MGA's holding company, GAINSCO, INC. and assigned an "nr" to the ICR. The ICR withdrawal is due to the delisting of the company's stock from the AMEX exchange effective January 31, 2011. Both companies are domiciled in Dallas, TX.

These rating actions recognize MGA's favorable risk-adjusted capitalization and generally profitable operating results during a period of challenging economic conditions, particularly within its niche of personal non-standard automobile. The company has adjusted rates and advanced its pricing sophistication, which have led to improvement in underwriting performance in recent years. In addition, MGA's loss reserve strengthening and recent favorable loss trends have led to improved development in recent periods.

These positive rating factors are somewhat offset by MGA's historically variable underwriting performance. Furthermore, though MGA's growth has been tempered the past two years, rapid premium growth through 2008 led to elevated underwriting leverage measures. Moreover, the company maintains a somewhat modest business profile with concentration in states with difficult operating environments for the non-standard automobile segment.

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" and "Understanding BCAR for Property/Casualty Insurers." 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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AMB# Company Name
058379 GAINSCO, INC.
002854 MGA Insurance Company, Inc.