A.M. Best Affirms Ratings of GEICO.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A++ (Superior) and issuer credit ratings (ICR) of "aaa" of Government Employees Group (GEICO) (Chevy Chase, MD) and its property/casualty members. A.M. Best also has affirmed the ICR of "aaa" as well as the debt rating of "aaa" of the existing debt securities of the immediate holding company, GEICO Corporation (Wilmington, DE). The outlook for all ratings is stable. (See below for a detailed list of companies and ratings.)

The ratings reflect GEICO's superior financial strength, strong operating performance, brand name recognition and market position as one of the top five personal automobile writers in the United States. These strengths are partially offset by significant stockholder dividend payments to its parent, high investment leverage, as well as exposure to potential regulatory issues in several of its larger states.

GEICO's strong operating results reflect a considerable underwriting expense advantage, which is driven by its direct distribution business model and its favorable loss experience over the previous five-year period. Overall returns also have benefited from a steadily increasing stream of investment income in recent years. When combined with its capital gains, GEICO has generated substantial capital over the previous five-year period, which has supported steady growth in net premiums written and enabled it to pay substantial dividends to its parent.

The ratings also recognize the considerable resources and financial strength of GEICO's ultimate parent, Berkshire Hathaway Inc. (Nebraska) [NYSE: BRKa and BRKb], whose financial profile includes approximately $121 billion of stockholders' equity, minimal debt and a long history of strong profitability. Moreover, GEICO Corporation maintains modest financial leverage and strong cash flows to fund fixed charges.

GEICO's dividend payments to its parent totaled $2.7 billion in 2006 and resulted in a moderate decline in surplus and risk-adjusted capitalization. GEICO also maintains high investment leverage derived from its significant allocation of invested assets to unaffiliated common stock. However, its strong risk-adjusted capitalization and historic success in managing its portfolio partially mitigate this risk. In addition, GEICO maintains a modest geographic concentration that exposes it to legislative changes and judicial decisions, as its top five states account for approximately one-half of its direct premiums written. However, this risk is largely mitigated by its geographic spread throughout the rest of the country and management's proven ability to quickly adapt to changing market conditions.

The FSR of A++ (Superior) and ICRs of "aaa" have been affirmed for Government Employees Group and its following property/casualty members:

* Government Employees Insurance Company

* GEICO Indemnity Company

* GEICO Casualty Company

* GEICO General Insurance Company

The following debt rating has been affirmed:

GEICO Corporation--

-- "aaa" on $150 million of 7.35% senior unsecured debentures, due 2023

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.