A.M. Best Upgrades Ratings of Members of Bristol West Insurance Group.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 12, 2004

A.M. Best Co. has upgraded the financial strength ratings to B+ (Very Good) from B (Fair) for Coast National Insurance Company, Bristol West Insurance Company, Bristol West Casualty Insurance Company and Security National Insurance Company, all members of the Bristol West Insurance Group (Davie, FL) (NYSE: BRW). The rating outlook is positive.

The ratings reflect the group's strengthened capitalization following the initial public offering (IPO) of the parent company, Bristol West Holdings, Inc., and recently improved operating results. Partially offsetting these rating factors are aggressive policy growth and unfavorable operating results in prior years driven by adverse loss reserve development. The positive outlook reflects the group's solid capitalization and expectation of sustainable favorable earnings.

The positive rating attributes are derived from the improved capitalization relating to the IPO of the parent company. Of the $125 million of capital raised, $110 million was contributed to the insurance subsidiaries to support future premium growth, become less dependent upon reinsurance for surplus relief and strengthen the overall capital position of the insurance operations. The rating also considers the significant investments made in technology in recent years to improve risk segmentation, refine pricing, enhance loss reserve monitoring and provide better service to producers. In addition, corrective measures have included significant rate increases, ongoing producer reviews, refined underwriting and producer compensation guidelines and improved claims handling. As a result of these measures, a strengthened loss reserve position and firm market conditions, operating results improved significantly in 2003.

Despite these attributes, negative rating factors are attributable to the aggressive current and projected policy growth and unfavorable operating results prior to 2003 due to significant adverse loss reserve development and inadequate rates. With significant growth expected to continue, Bristol West maintains execution risk to adjust its infrastructure to absorb additional policies, mitigate the higher loss ratios--which are typically associated with new business--and maintain adequate loss reserves following a period of adverse development. In addition, the group maintains dependence upon reinsurance for surplus relief, although at a reduced level, following the addition of new capital from the IPO.

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 www.ambest.com.