A.M. Best Takes Various Rating Actions on Aviva USA's Life Insurance Members.

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating (FSR) to A+ (Superior) from A (Excellent) and the issuer credit ratings (ICR) to "aa-" from "a+" for AmerUs Life Insurance Company (Des Moines, IA), American Investors Life Insurance Company, Inc. (Topeka, KS), Indianapolis Life Insurance Company and Bankers Life Insurance Company of New York. All four are life and annuity subsidiaries of the formerly public AmerUs Group Co. (AmerUs) (Des Moines, IA), which was acquired by Aviva plc (Aviva) (United Kingdom) in November 2006. A.M. Best also has upgraded the debt ratings for AmerUs and Indianapolis Life Insurance Company. The outlook for the above ratings has been revised to stable from positive.

Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and the ICRs of "aa-" of Aviva's other U.S. life and annuity companies, Aviva Life Insurance Company (Wilmington, DE) and Aviva Life Insurance Company of New York. The outlook for these ratings is stable. All six life operating companies are now collectively referred to as Aviva USA. (See link below for a detailed list of the companies and ratings.)

These rating actions reflect A.M. Best's continued favorable view of the acquisition by Aviva of the former AmerUs companies. This acquisition has provided Aviva USA significant growth opportunities in the world's largest life and retirement savings market and has enhanced Aviva's geographical diversification--an important objective of the organization. Aviva USA maintains a market leadership position in the modest but growing fixed indexed life market and is the number two provider of fixed-indexed annuities (FIA). The group also maintains strong niches in the tax-sheltered and structured settlement annuity markets. A.M. Best notes that integration efforts are substantially complete and published run rate savings are on target.

The ratings also reflect Aviva USA's favorable risk-adjusted capitalization--enhanced by its solid operating performance--and the absence of financial leverage as the vast majority of AmerUs' public debt was satisfied by Aviva. Additionally, as a strategically important segment and increasingly significant contributor to the overall revenue and earnings of Aviva, Aviva USA's ratings recognize the benefits derived from the financial flexibility of its parent.

Partially offsetting these positive rating factors are Aviva USA's challenge to profitably manage its increasing exposure to interest-sensitive annuity and universal life liabilities, its exposure to potential market conduct issues inherent within the FIA market, its relatively high levels of below investment grade bonds and the challenges associated with integrating its enterprise risk management (ERM) process into the overall ERM framework of Aviva.

Aviva USA's net premium growth in recent years primarily has been driven by its FIA segment. While Aviva USA's annuity growth has resulted in significant interest rate exposure, surrender charge protection and market value adjustment features partially mitigate these risks. A.M. Best also acknowledges Aviva USA's prudent product design and customer profiles, effective hedging programs and cash flow strategies, well-defined asset/liability management process and active market conduct and compliance programs. However, A.M. Best remains cautious over the potential declines in the industry's future FIA sales and its impact on earnings given the increasing due diligence demanded to comply with the prevailing heightened regulatory environment.

For a complete listing of Aviva USA's FSRs, ICRs and debt ratings, visit www.ambest.com/press/100904aviva.pdf.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.