A.M. Best Comments on Rating of Kingsway Financial Services Inc.

OLDWICK, N.J. -- A.M. Best Co. has commented that the issuer credit rating (ICR) of "bbb-" of Kingsway Financial Services Inc. (Kingsway) (Mississauga, Ontario) [TSX/NYSE: KFS] remains unchanged following Kingsway's announcement that it intends to acquire the Mendota Insurance Company (Mendota), a wholly owned subsidiary of The St. Paul Travelers Companies, Inc. [NYSE: STA]. The transaction includes Mendota's wholly owned subsidiaries, Mendakota Insurance Company and Mendota Insurance Agency, Inc. All companies are domiciled in Minnesota unless otherwise specified. The outlook for the ICR is stable.

Kingsway is a Canadian holding company, whose shares are publicly traded on the Toronto and New York stock exchanges. Its insurance operating companies in the United States and Canada are primarily specialty writers of non-standard automobile and commercial trucking coverages. Mendota is primarily a non-standard automobile writer operating in 20 states, with specific concentrations in California, Colorado, Florida and Texas.

Based upon information that Kingsway provided to A.M. Best, the transaction is not expected to have a material impact on the company's consolidated capitalization. While Kingsway will be challenged to integrate Mendota's employees and data into their culture and systems, Kingsway's management team has a history of successful growth through acquisitions. A.M. Best anticipates that the transaction will be completed early in second quarter 2007.

For 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.