Best Downgrades FSR of Mississippi Farm Bureau Mutual Insurance Co.

October 14, 2005

A.M. Best Co. has downgraded the financial strength rating to A- (Excellent) from A+ (Superior) of Mississippi Farm Bureau Mutual Insurance Company (MFB) (Jackson). The rating remains under review with negative implications.

MFB’s A+ (Superior) rating was previously placed under review on Sept. 15, 2005 in response to initial modeled loss estimates associated with Hurricane Katrina. As more detailed loss information has become available, the company has revised its loss estimates.

Based on this updated information, the rating has been downgraded to reflect the considerable deterioration in MFB’s risk-adjusted capital position and anticipated surplus loss due to significant gross and net losses from Hurricane Katrina. Although reinsurance coverage was in place to provide protection from modeled catastrophe losses in the magnitude of a 250-year event, losses from Hurricane Katrina are expected to exceed the company’s reinsurance protection.

Additionally, due to continued uncertainty with the ultimate losses associated with Hurricane Katrina, the financial strength rating will remain under review with negative implications pending further loss settlements and A.M. Best’s review of management’s capital enhancement plans.

In the absence of a timely and achievable capital replenishment plan and corresponding improved risk-adjusted capitalization, MFB’s rating will likely be downgraded further.

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