A.M. Best Affirms Ratings of United States Liability Insurance Company and Its Subsidiaries

A.M. Best has affirmed the financial strength rating of A++ (Superior) and the issuer credit ratings of “aa+” of United States Liability Insurance Company (USLI) (Wayne, PA) and its subsidiaries, Mount Vernon Fire Insurance Company (MVF) (Wayne, PA) and U.S. Underwriters Insurance Company (USU) (Bismarck, ND). The outlook for all ratings is stable.

The ratings of the insurance operating companies reflect their excellent risk-adjusted capital position, extended trends of underwriting and operating profitability, very strong market presence, and conservative reserve positions. Additional favorable factors include USLI’s proactive claim management philosophy, exceptional diversification in their book of business, commitment to customer service, and extensive employee training and retention programs.

Furthermore, these ratings continue to benefit from the implicit and explicit support provided to USLI and its subsidiaries by their ultimate parent, Berkshire Hathaway Inc. (Berkshire) [NYSE: BRK.A and BRK.B].

This support is in the form of significant reinsurance treaties with National Indemnity Company, a Berkshire subsidiary. In addition to this agreement, Berkshire has established an extended track record of supporting its member companies.

These positive rating factors are partially offset by the above average investment leverage recorded by the group. A.M. Best is also highly attentive to recent organizational structure and market changes implemented at USLI.

A.M. Best believes the ratings are well-positioned at their current level. Factors that could lead to downward rating pressure include risk-adjusted capital and/or operating performance falling markedly short of A.M. Best’s expectations, deterioration in loss trends or material disruptions to the current business strategy. In addition, because of the breadth of the relationship between this group and other Berkshire companies, changes in the ratings or outlooks of any of the associated insurance companies may impact the ratings of the members of the group or related entities.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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