A.M. Best Affirms Ratings of Medical Protective and Assigns Positive Outlook.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) of The Medical Protective Company (Medical Protective) (Fort Wayne, IN). A.M. Best has also assigned an issuer credit rating (ICR) of "a-" to Medical Protective. The FSR has been removed from under review, and all ratings have been assigned a positive outlook.

These rating actions follow the acquisition on June 30, 2005, of Medical Protective by Columbia Insurance Company (Columbia Insurance), which is an indirect wholly owned subsidiary of Berkshire Hathaway Inc. (both of Omaha, NE).

These rating affirmations recognize Medical Protective's new affiliation with the Berkshire Hathaway group of (re)insurance companies and the ability and willingness of its direct parent, Columbia Insurance, to support Medical Protective. Furthermore, the ratings also recognize the stellar financial strength of Columbia Insurance, which is currently rated A++ (Superior). Finally, the ratings acknowledge Medical Protective's leading market presence in the primary medical professional liability market, its distribution capabilities, aggressive claims philosophy, and its historically strong pre tax-earnings supported by a stable and substantial level of invested asset base.

Notwithstanding, Medical Protective's stand alone risk-adjusted capitalization has been pressured in recent years, stemming from its aggressive premium growth and loss reserve strengthening. However, at year-end 2004 and into the first quarter of 2005, the company reported more favorable underwriting profits, which have served to moderate its operating leverage. Although A.M. Best anticipates some degree of further adverse loss reserve development, Medical Protective has generated strong pre-tax operating earnings on a 10-year basis. The company is led by a strong management team, which will retain their current positions under the new ownership.

The positive outlook reflects Columbia Insurance's intention, subject to the necessary regulatory approval, to execute a loss portfolio transfer and quota share agreement prior to year-end 2005, which will partially mitigate the future risk of adverse loss reserve development and in effect will significantly improve Medical Protective's risk-adjusted capitalization. Following these agreements, the company could be upgraded by multiple levels on an issuer credit rating scale.

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