A.M. Best Affirms Ratings of Markel North America Insurance Group and Its Subsidiaries.

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 Markel North America Insurance Group (Markel) (Glen Allen, VA) and its subsidiaries. Concurrently, A.M. Best has affirmed the debt ratings of "bbb" and "bb+" of Markel Corporation's (MKL) (NYSE: MKL) (Glen Allen, VA) existing senior unsecured notes and preferred securities. All ratings have a stable outlook. (See below for a detailed list of the ratings.)

These rating actions recognize Markel's favorable market position as one of the leading excess and surplus lines organizations in the United States, the sustained profitability reported through the first quarter of 2006 and the group's solid risk-adjusted capitalization. These ratings also acknowledge the group's excellent operating cash flow, adequate liquidity and the flexibility of MKL derived from its manageable financial leverage and access to capital. These positive attributes are somewhat tempered by Markel's elevated underwriting leverage, above average investment leverage and the potential capital strain related to its U.K. subsidiary, Markel International Insurance Company Limited (MIICL). Markel has long held an underwriting leverage position higher than the average of the surplus lines composite, driven in recent years by increased written premium and conservative loss reserving. Despite the elevated underwriting leverage, capitalization remains comfortably supportive of the group's current rating.

MKL's financial leverage remains on par with its current rating levels as demonstrated by a total debt-to-capital ratio of 33.1%. As for fixed charge coverage, the ratio of earnings before interest and taxes (EBIT) to interest expense was strong at 8.1 times as of March 31, 2006. For liquidity purposes, MKL has a $375.0 million revolving credit facility, of which the entire capacity was available as of March 31, 2006.

The FSR of A (Excellent) and ICR of "a" has been affirmed for Markel North America Insurance Group and its following subsidiaries:

--Associated International Insurance Company

--Deerfield Insurance Company

--Essex Insurance Company

--Evanston Insurance Company

--Markel American Insurance Company

--Markel Insurance Company

The following debt ratings have been affirmed:

Markel Corporation--

--"bbb" on $75 million, 7.20% unsecured senior notes, due 2007

--"bbb" on $100 million, 7.00% unsecured senior notes, due 2008

--"bbb" on $250 million, 6.80% unsecured senior notes, due 2013

--"bbb" on $200 million, 7.35% unsecured senior notes, due 2034

--"bbb" on $408 million, unsecured zero coupon senior convertible notes, due 2031

Markel Capital Trust I--

--"bb+" on $150 million 8.71% junior subordinated preferred securities, due 2046

The following indicative ratings on securities available under shelf registration have been affirmed:

Markel Corporation--

--"bb+" on preferred securities

--"bbb-" on subordinated debt 

--"bbb" on senior unsecured debt

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.