Ratings Recap: Philadelphia/Liberty American Group; Eastern Alliance

June 11, 2007

A.M. Best Co. has affirmed the financial strength rating (FSR) of “A+” (Superior) and the issuer credit ratings (ICR) of “aa-“of Philadelphia Insurance Companies and its members. Best also affirmed the FSR of “A-” (Excellent) and ICRs of “a-” of Liberty American Insurance Group, as well as the ICR of “bbb+” of Philadelphia Consolidated Holding Corporation, based in Bala Cynwyd, Pa., the parent holding company of Philadelphia and Liberty American. The outlook for all ratings is stable. Best cited the Philadelphia Group’s “consistently superior operating results, strong capitalization and excellent market presence as a writer of specialty commercial business,” as supporting the ratings. They are also based on Philadelphia’s “excellent operating cash flow, solid liquidity measures and financial flexibility.”

A.M. Best Co. has affirmed the financial strength rating (FSR) of “A-” (Excellent) and the issuer credit rating (ICR) of “a-“of Lancaster Pa.-based Eastern Alliance Insurance Group (EAIG) and its members. The rating reflects the combined results of Eastern Alliance Insurance Company (EAIC) and Allied Eastern Indemnity Company (AEIC), which operate under an intercompany pooling agreement. Best also affirmed the ICR of “bbb-” of the holding company, Eastern Insurance Holdings, Inc. (EHI). The outlook for all ratings is stable. “The ratings recognize EAIG’s excellent capitalization, strong underwriting profitability and diversified organizational structure providing multiple revenue streams,” said Best. EAIG provides managed care workers’ compensation products and services to employers in rural and suburban Pennsylvania, Delaware and Maryland. The group benefits from strong relationships with its agency force and maintains a local market presence, enabling better service to its niche clients.

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