A.M. Best Affirms Ratings of Mercury General Corporation and Its Operating Subsidiaries.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of Mercury Casualty Group (Mercury) (Los Angeles, CA) and its members. Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and ICRs of "a-" of American

Mercury Insurance Group (AMI) (Oklahoma City, OK) and its members. Concurrently, A.M. Best has affirmed the ICR of "a-", the senior debt rating of "a-" on existing debt securities and the indicative rating of "a-" of the senior debt under the $300 million shelf registration, of which $175 million remains, of Mercury and AMI's parent, Mercury General Corporation (Los Angeles, CA) [NYSE: MCY]. The outlook for all ratings is stable. (See link below for a detailed listing of the companies and ratings.)

Mercury's ratings reflect its strong risk-adjusted capital position, conservative investment risk profile and low dependence on reinsurance. Moreover, Mercury's capitalization is supported by solid surplus growth through a consistently positive operating performance. In addition, Mercury maintains a sustainable competitive advantage within its core personal auto segment that includes pricing and risk classification expertise, strong independent agency relationships and aggressive claims management practices. Mercury also benefits from the financial flexibility of Mercury General Corporation due to its modest financial leverage and access to capital markets.

AMI's ratings reflect its adequate level of risk-adjusted capital, stabilizing operating performance and the demonstrated history of financial support provided by Mercury General Corporation. These positive rating factors are partially offset by AMI's elevated underwriting leverage due to recent significant premium growth, its relatively high expense structure and exposure to catastrophe losses in its operating region.

For a complete listing of Mercury General Corporation's FSRs, ICR and debt ratings, please visit www.ambest.com/press/061404mercury.pdf.

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.