A.M. Best Affirms Ratings of the Mutual of Omaha Companies; Revises Outlook to Positive.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) for Mutual of Omaha Insurance Company (Mutual) and its key insurance subsidiaries, United of Omaha Life Insurance Company (United of Omaha), Companion Life Insurance Company (Lynbrook, NY) and United World Life Insurance Company (collectively, Mutual of Omaha). A.M. Best has also assigned issuer credit ratings (ICRs) of "a+" to Mutual and United of Omaha. Unless otherwise indicated, all companies are located in Omaha, NE. The rating outlook has been revised to positive from stable.

The revised outlook reflects Mutual of Omaha's success in strategically refining its business profile, its superior absolute and risk-adjusted capitalization and A.M. Best's view that its operating profile will improve prospectively. A.M. Best views favorably the strategic repositioning of the group's core and extended product lines. Moreover, A.M. Best believes Mutual of Omaha's ability to compete effectively in markets where it has core competencies, coupled with its renewed financial discipline, should create positive earnings momentum.

The ratings reflect the group's solid top line revenue growth within core product lines, prudent asset/liability and risk management processes, strong franchise and diversified earnings sources within group and individual business lines.

The Mutual of Omaha companies utilize a well-diversified individual and group business model marketing health, life and annuity products to the middle income and senior marketplace. In recent years, the group's focus has shifted to a more limited number of individual and group core product lines, which include Medicare supplement, individual long-term care, individual permanent and group life insurance and individual single premium immediate annuities, group disability and AD&D. Mutual of Omaha's core product lines are supplemented with extended product lines including GICs and funding agreements, health, retirement plans and special risk on the group side and term life, supplemental health, critical illness, disability income and other annuities on the individual side.

Mutual of Omaha's strengths are tempered by operating results, which have historically been dampened by losses from product lines that have been discontinued, excess expense imbalances and an unleveraged capital base. In addition, the group has in more recent years, maintained a modestly higher investment risk profile compared to its peers and faces increased competition, particularly in its Medicare supplement product line. More recently, Mutual of Omaha has experienced declines in investment total returns due to lower reinvestment rates and write-downs largely within its asset-backed securities portfolio. On a prospective basis, A.M. Best expects Mutual of Omaha's operating performance to gradually improve as expense gaps are eliminated, scale-related efficiencies are achieved and interest rates rise from their historically low levels.

Additionally, A.M. Best has affirmed the financial strength rating of A- (Excellent) of Exclusive Healthcare, Inc. (EHI). The rating outlook is stable.

EHI provides comprehensive health maintenance services to enrollees through arrangements with healthcare and other providers through a direct contract model in Nebraska and Iowa.

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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 http://www.ambest.com.