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Ratings

Last updated December 10, 2009

• Rating Agencies typically issue two types of ratings:
  • Claims-paying and/or financial strength ratings assess an insurer's ability to meet its financial obligations to policyholders
  • Debt ratings assess a company's prospects for repaying debts and assist lenders in setting interest rates and terms for a company's commercial paper, loans, bonds, etc.
• Assurant receives ratings from the following agencies:
  • A.M. Best Company ("A.M. Best") www.ambest.com
  • Standard and Poor's Ratings Services ("S&P") www.standardandpoors.com
  • Moody's Investors Service ("Moody's") www.moodys.com

Financial Strength Ratings

Through financial strength ratings, independent ratings organizations continually review the financial positions of insurers' legal insurance subsidiaries. Insurance companies are assigned financial strength ratings by independent rating agencies based upon factors relevant to policyholders. Ratings provide both industry participants and insurance consumers meaningful information on specific insurance companies and are an important factor in establishing the competitive position of insurance companies. They provide an opinion of the insurer's financial strength, operating performance, strategic position, and ability to meet ongoing obligations to its policyholders. These ratings reflect the views of the different agencies and are not applicable to our debt or equity securities and are not a recommendation to buy, sell or hold any security including our common stock or debt securities. These ratings are subject to periodic review and may be raised upward, downward or revoked at the sole discretion of the agencies.

All of our active domestic operating insurance subsidiaries are rated by A.M. Best. Moody's rates six of our operating insurance subsidiaries. S&P rates seven of our domestic operating entities.

Assurant's financial strength ratings are as follows:

• A. M. Best:
  • A or A- (excellent): These ratings are assigned to companies that A. M. Best feels have an excellent ability to meet their ongoing obligations to policyholders. These are the second highest of ten ratings categories.
  • S&P
    • A- (strong): An insurer rated A has strong financial security characteristics. This is the third highest of nine rating categories. Relative standings within each broad category are identified by +/-.
    • BBB+ (adequate): An insurer rated BBB has adequate financial security characteristics. This is the fourth highest of nine rating categories. Relative standings within each broad category are identified by +/-.
    • Moody's:
      • A2: Insurance companies rated A offer good financial security. This is the third highest of nine ratings categories. Numeric modifiers are used to show relative standings within each broad category, with 1 being the highest and 3 being the lowest.

Credit or Debt Ratings

Debt Ratings assess a company's prospects for repaying its debts and assist lenders in settling interest rates and terms for a company's commercial paper, loans, bonds, etc.

We have both long term debt ratings and commercial paper ratings issued by the three rating agencies mentioned above.

Assurant's long term debt ratings are as follows:

• A.M. Best
  • bbb: This rating is assigned to issues where the issuer has an adequate ability to meet the terms of the obligation.
• S&P
  • BBB: An insurer with a debt rating of BBB has adequate capacity to meet its financial commitments.
• Moody's:
  • Baa1: Obligations rated Baa are subject to moderate credit risk.

Assurant's commercial paper ratings are as follows:

• A.M. Best
  • AMB-2: This rating is assigned to companies that have satisfactory ability to pay short term debt obligations.
• S&P
  • A-2: An issuer with a short-term obligation rated A-2 indicates that the obligor's capacity to meet its financial commitment on the obligation is satisfactory.
• Moody's:
  • P-2: Issuers rated Prime-2 have a strong ability to repay short-term debt obligations.

Current Outlook on Ratings

The current outlooks for our ratings for the rating agencies mentioned above are listed below.

• A.M. Best
  • Stable outlook
• S&P
  • Negative outlook
• Moody's
  • Stable outlook

Ratings breakdown by Assurant business.

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