A.M. Best Affirms Ratings of Members of the American Family; Downgrades Issuer Credit Ratings of American Family Insurance Group.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and downgraded the issuer credit ratings (ICR) to "a" from "a+" for the American Family Insurance Group (AMFAM), which is led by American Family Mutual Insurance Company and its three reinsured subsidiaries. Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of "a" of American Family Life Insurance Company (AFLIC). Concurrently, A.M. Best has affirmed the debt rating of AMB-1 for the commercial paper program of American Family Financial Services, Inc. (AFFSI). All companies are domiciled in Madison, WI. The outlook for all ratings is stable.

The ratings of AMFAM are based on its strong risk-adjusted capitalization, conservative investment portfolio and well-established regional market presence as a leading personal lines insurer in the Midwest. These positive rating factors are derived from AMFAM's conservative operating philosophy and competitive expense structure, which AMFAM achieved from its exclusive agency distribution system.

Offsetting these factors is AMFAM's volatile underwriting performance due to the impact weather-related events have had on its property book, which is concentrated in the Midwest.

Despite AMFAM's strong risk-adjusted capitalization, its ICRs have been downgraded due to management's risk appetite that accepts more volatility in its underwriting performance and its property concentration, which makes it susceptible to weather related events.

The rating actions taken on AFLIC recognize its integral role as the life insurance member of AMFAM. AFLIC provides a wide array of life insurance and financial products through AMFAM's multi-line career agency distribution channel. The ratings also reflect AFLIC's overall profitable operating performance and strong risk-adjusted capitalization on a stand-alone basis.

Offsetting these rating strengths are the challenges to improve the operating performance of AFLIC's variable annuity lines, sustain life insurance sales and increase the penetration of AMFAM's customer base.

The FSR of A (Excellent) has been affirmed and the ICRs have been downgraded to "a" from "a+" for American Family Insurance Group and its following members:

* American Family Mutual Insurance Company

* American Family Insurance Company

* American Standard Insurance Company of Ohio

* American Standard Insurance Company of Wisconsin

The FSR of A (Excellent) and the ICR of "a" have been affirmed for American Family Life Insurance Company.

     The following debt rating has been affirmed:

     American Family Financial Services, Inc. --
     --AMB-1 on the commercial paper program

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.