MIGP Mercer Insurance Grp., Inc. (MM)

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and the issuer credit ratings of �a� of Mercer Insurance Group (Mercer) (Pennington, NJ). The ratings apply to the following four inter-company reinsurance pool members: Mercer Insurance Company (Lock Haven, PA), Mercer Insurance Company of New Jersey, Inc. (Pennington, NJ), Franklin Insurance Company (Lock Haven, PA) and Financial Pacific Insurance Company (Rocklin, CA). The outlook for all ratings is stable. The ratings reflect Mercer�s excellent capitalization, solid operating performance and conservative management philosophy. These positive rating factors are partially offset by Mercer�s noncompetitive expense structure, historical earnings volatility and the risks associated with the run-off of its California building contractor�s book of business (construction defect). With its October 1, 2005 acquisition of Financial Pacific Insurance Company (California) by Mercer�s publicly-traded parent, Mercer Insurance Group, Inc. [NASDAQ:MIGP], Mercer reduced its geographic concentration from nearly 80% in New Jersey (prior to the acquisition) to nearly 30% and roughly 55% in California (post acquisition). 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.