A.M. Best Affirms Ratings of AmTrust Group, Extends Group Rating to Wesco Insurance Company.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit ratings (ICR) of "a-" of AmTrust Group (AmTrust) (New York, NY). The ratings apply to AmTrust International Insurance, Ltd. (AII) (Bermuda), Technology Insurance Company, Inc. (Technology) (New Hampshire) and Rochdale Insurance Company (Rochdale) (New York, NY). The ratings were also extended to Wesco Insurance Company (Wesco), which was recently acquired and operates through an intercompany quota share reinsurance arrangement. Wesco's ratings have been removed from under review. The outlook for all ratings is stable.

These ratings reflect AmTrust's adequate balance sheet strength inclusive of the proceeds of a private placement offering, strong operating performance and the benefits derived from its parent, AmTrust Financial Services, Inc. (AFS), including the commitment to maintain sufficient capital, as well as access to additional capital to support the group's expanding operations.

Partially offsetting these positive rating factors are AmTrust's aggressive growth in both premium volumes and associated liabilities in recent years, driven by its rapid transition into workers' compensation, the inherent risk in underwriting the non-workers' compensation lines associated with the acquisition of renewal rights on existing books of business (Alea Specialty) and the projected strain that this growth places on the group's risk-adjusted capitalization. Despite these concerns, the outlook is supported by the group's strong operating results, access to capital and commitment to prudent underwriting.

To bolster the capitalization of its insurance subsidiaries, AmTrust's parent company issued $50 million in trust preferred securities in the spring of 2005. During February 2006, AFS completed a private placement of common shares. The net proceeds of the offering were approximately $166 million. Of the total proceeds, approximately $115 million was contributed to AmTrust's insurance operations with approximately $50 million allocated to AII and approximately $50 million contributed to Technology in support of planned growth initiatives with the balance related to the purchase of Wesco. Wesco was purchased from HSBC in June 2006 and provides AmTrust with licenses in 50 states, as well as additional tiered pricing flexibility.

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