[2] A.M. Best Downgrades Members of Symons International Group.

OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 16, 1999--

A.M. Best Co. has downgraded the two ratings assigned to the property and casualty subsidiaries of the Symons International Group. Superior Insurance Group was downgraded to B- (Fair) from B+ (Very Good); the rating applies to Superior Insurance Co. and its two reinsured subsidiaries, Superior American Insurance Co. and Superior Guaranty Insurance Co. In addition, the rating of Pafco General Insurance Co. was downgraded to C (Weak) from B- (Fair).

These rating actions follow the release of the third quarter statutory results which reflected substantial deterioration in the operating performance, cash flow and capitalization of both Superior group and Pafco. Although the net premium volume of the Superior group has remained flat, a 28% drop in policyholder surplus through the third quarter of 1999 raised the operating leverage beyond that of companies rated at secure levels. These performance results follow a period of rapid growth when the group's gross writings more than tripled between 1995 and 1997. In addition, the group's ultimate parent, Symons International Group, Inc. carries high financial leverage with debt servicing requirements anticipated from affiliates.

The Pafco rating action was driven by underwriting results which have caused surplus to decline by 36.5.% since year end 1998 and by 47% since year end 1997. These operating results follow years of aggressive premium growth with gross premiums written more than doubling between 1994 and 1998. In 1999, the commutation of an intercompany reinsurance agreement significantly contributed to net premium growth increasing by 46%, increasing net underwriting leverage (net writings and net liabilities compared to surplus) to 13.8 times surplus. Finally, regulatory uncertainty exists as the year-end 1998 Risk Based Capital result was at the Company Action Level. The Indiana Department of Insurance is requiring monthly reporting of financial results, prior approval of reinsurance arrangements and affiliated transactions.

Management has taken a number of steps to improve the operating performance of both Superior group and Pafco. These have included improved operating systems, expense control initiatives, withdrawal from certain unprofitable states and introducing redesigned underwriting products. In addition, a $3 million capital contribution was made during the fourth quarter of 1999 to Pafco by Superior Insurance Group Inc., the immediate holding company.

Both Superior Insurance Group and Pafco General Insurance Co. are nonstandard auto companies primarily operating in the Southeast, Midwest and on the West Coast.

A third operating entity, IGF Insurance Co. had its rating changed to NR-3 (Rating Procedure Inapplicable) from NR-2 (Insufficient Size and/or Operating Experience). The rating more accurately reflects the company's lack of retention of risk, making it ineligible for a Best's Rating.

Symons International Group is majority owned by Goran Capital Inc.,Toronto. Goran also owns Granite Insurance Co. (Canada) and Granite Reinsurance Company, Ltd. (Barbados), neither of which is rated by A.M. Best.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.