RTW Inc. Notes Receipt of Secure A.M. Best Rating

March 10, 2004

Minnesota-based RTW Inc. reported that A.M. Best Co. (Best) increased the financial strength rating of American Compensation Insurance Company (ACIC), a subsidiary of RTW, Inc., to B+ (Very Good, Secure) from B (Fair, Vulnerable).

Best cited improved capitalization and continued profitable operating performance as the primary factors contributing to the increase. The company increased the capital and surplus to $33.0 million in 2003 from $26.8 million in 2002 as a result of profitability in 2003.

According to Best, “The rating reflects ACIC’s improved capitalization and profitability over the last two years. After returning an experienced executive management team in December 2001, the company has closed unprofitable regions, reduced premiums in force, improved pricing and refocused on its specific underwriting niche and intense claims and case management.

“After the change in management in December 2001, the company revised its business strategy and produced a modest underwriting profit in both 2002 and 2003, leading to much stronger pre-tax and net returns on premium and surplus. ACIC continues to close claims more quickly and at a lower average cost per claim than its competitors in the workers’ compensation industry. A.M. Best expects ACIC’s capitalization and profitability to improve further in 2004. The rating outlook is stable at this time.”

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