Best Upgrades FSR for Medical Protective Co; Outlook is Stable

November 8, 2005

A.M. Best Co. has upgraded the financial strength rating (FSR) to A+ (Superior) from A- (Excellent) and issuer credit rating (ICR) from “a-” to “aa-” of The Medical Protective Company (Medical Protective) (Fort Wayne, Indiana). Both ratings have been assigned a stable outlook.

These rating actions reflect both the implicit and explicit financial support provided by Medical Protective’s ultimate parent, Berkshire Hathaway Inc. and its (re)insurance affiliates, and the future benefits to be derived from two significant reinsurance transactions effective Jan. 1, 2006.

The ratings also consider Medical Protective’s leading market presence in the primary medical professional liability market, its distribution capabilities, aggressive claims philosophy and its comparatively strong operating performance.

Finally, the ratings acknowledge the change in reserve philosophy and the additional reserve strengthening that occurred in the third quarter of 2005. Medical Protective was acquired by Columbia Insurance on June 30, 2005.

The reinsurance transactions include a loss portfolio transfer and quota share agreement between Medical Protective and its parent, Columbia Insurance Company (Columbia Insurance), and an affiliate, National Indemnity Company, which are indirect wholly-owned subsidiaries of Berkshire Hathaway Inc. (all of Omaha, Nebraska).

The transactions demonstrate in effect the commitment provided by Berkshire Hathaway, partially mitigating the future risk of adverse loss reserve development and significantly improving Medical Protective’s risk-adjusted capitalization that is supportive of its Superior rating.

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