Moody's and S&P Rating Actions

New York, NY, April 19, 2004 - Atlantic Mutual commented on recent rating agency actions from Moody's and S&P today. Both rating agencies have moved their ratings of Atlantic Mutual to a stable status within the past two weeks. Specifically, Moody's reaffirmed Atlantic Mutual's financial strength at Baa3 and improved the outlook to stable. S&P, while lowering the financial strength rating to BB+, also improved the outlook to stable.

Atlantic Mutual stated that as it transforms itself into company that concentrates exclusively on the affluent personal lines market, different rating agencies will have different views of the change. Nevertheless, the company pointed out several positive developments cited by both rating agencies following the sale of select commercial business to OneBeacon on March 31, 2004:

  • The company is well on its way towards reducing its expense ratio to 30%.
  • The company has good capitalization relative to our premium base. It will be even stronger once the exit from commercial lines is complete.
  • The company has a high quality investment portfolio following its repositioning in mid-2003.
  • Thanks to the support of its independent agents, the company is continuing to maintain strong levels of premium retention and new business.

While both agencies cite run-off reserves as a risk, this is in line with expectations considering their conservative postures. The company noted the following facts supporting the strength of its reserve position:

  • At year-end, reserves stood at $919 million, a level that matches the “best” estimate of two outside consulting firms and includes reserves for asbestos and environmental claims.
  • Meanwhile, open claims counts have fallen steadily since 2000. The current count is the lowest in over ten years.

Considering the stable outlooks from both Moody's and S&P, as well an A rating with Demotech, the company feels that it has reached a turnaround point and is well positioned to start the climb back to an A status with all the rating agencies.

About The Atlantic Companies

The Atlantic Companies, also known as Atlantic Mutual, is a group of diversified financial services companies with a Wall Street heritage dating back to 1842. The group is widely known for the Atlantic Master Plan insurance program, which is designed specifically for affluent individuals and sold through a select group of independent agents. The Atlantic Companies acts as a property-casualty insurer, manages claims for commercial insurance, and helps other business partners target profitable niches in the insurance marketplace. Additional information about The Atlantic Companies and the Atlantic Master Plan can be found at www.atlanticmasterplan.com.


Contact: Peter G. Scott
Corporate Marketing & Communications
973-408-6044