A.M. Best Affirms Ratings of ADVANTA Insurance Company and ADVANTA Life Insurance Company.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of B+ (Very Good) and assigned a issuer credit ratings (ICR) of "bbb-" to ADVANTA Insurance Company (AIC) (Phoenix, AZ), a wholly-owned subsidiary of ADVANTA Corp. [NASDAQ/NM: ADVNA and ADVNB]. Concurrently, A.M. Best has affirmed the FSR of B+ (Very Good) and assigned an ICR of "bbb-" to Advanta Life Insurance Company (ALIC) (Phoenix, AZ), a wholly-owned subsidiary of AIC. The outlook for all ratings is stable.

AIC's ratings reflect the company's adequate level of risk-adjusted capital, favorable operating profitability and the benefits it derives through its relationship with ADVANTA Corp. These factors are offset by the company's significant affiliated investment leverage, limited scope of business and its rather ancillary role within ADVANTA Corp. The company's business is derived entirely from customers of ADVANTA Corp., creating a high degree of concentration risk. Decisions made by the parent corporation with respect to its customers and credit insurance offerings, which include a marketing focus on high credit-quality small businesses and the replacement of traditional credit insurance products with a bank debt waiver and cancellation program, will continue to impact the company's ability to expand its business. A.M. Best expects that the company will continue to experience positive operating results and will maintain an appropriate level of capitalization relative to its declining premium volume.

The rating of ALIC reflects the company's adequate level of risk-adjusted capital, along with favorable operating results in recent years. However, premium levels have declined substantially over the past several years primarily due to a number of strategic decisions at the parent company, principally the expansion of its debt cancellation program, which has replaced Advanta Life's credit insurance products in most states. A.M. Best feels the absence of a strategic business plan to expand its credit product offerings and its business concentration within its parent company's customer base limits ALIC's future growth prospects.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.

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.