DCX Strategic Accel Redemption Sec

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and assigned an issuer credit rating of �a-�to Intrepid Insurance Company (Intrepid) (Farmington Hills, MI). The outlook for both ratings is stable. The rating is based on Intrepid�s strong capitalization, the program�s favorable loss ratios and the company�s niche market expertise. Further, Intrepid�s parent, DaimlerChrysler Insurance Company (DCIC) [NYSE: DCX], issues an unconditional claim payment guarantee endorsement with each policy issued. Partially offsetting these positive rating factors is Intrepid�s minimal spread of risk as a single line writer to a generally homogeneous insured population and the relatively large policy limits offered relative to its surplus size. In addition, the company is subject to weather-related losses. However, Intrepid uses facultative reinsurance on insureds with large weather-related exposures to reduce the potential for catastrophic losses. Although the marketing, underwriting and claims management is handled through a third party, there is a profit sharing agreement between DCIC and the managing general agent (MGA), DealerGuard, that performs these functions. As a result, the MGA is incentivized to run this program profitably. Intrepid reimburses DealerGuard for the expenses it incurs to manage the program in addition to paying ceding commissions to its agents. As a result, Intrepid�s underwriting expense ratios are somewhat elevated compared to its industry peers. As all business is generated by a third party, there is the risk that the MGA could begin offering its coverages through a different carrier. Management believes its profit sharing agreement encourages DealerGuard to maintain its current relationship with Intrepid. 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.