A.M. Best Upgrades Issuer Credit Ratings of Motors Insurance Corp. and Its Subsidiaries

A.M. Best has upgraded the issuer credit ratings (ICR) to "bbb+" from "bbb" and affirmed the financial strength rating of B++ (Good) of Motors Insurance Corp. and its reinsured subsidiaries, MIC Property and Casualty Insurance Corp. and CIM Insurance Corp., collectively referred to as Ally Insurance Group (Ally Insurance).

The outlook for all ratings is stable. All companies are domiciled in Southfield, MI.

The upgrading of the ICRs of Ally Insurance reflects the improved financial performance of its ultimate parent, Ally Financial, Inc. (Ally Financial). Historically, mortgage lending was a significant portion of Ally Financial's operations and was primarily conducted through its Residential Capital (ResCap) subsidiary. However, in May 2012, ResCap and certain of its subsidiaries filed for prearranged voluntary Chapter 11 bankruptcy. Subsequently in December 2013, the Bankruptcy Court accepted a bankruptcy plan, and as a result, Ally Financial has fully exited the mortgage origination and servicing business. In addition, in April 2014, Ally Financial issued a $2.38 billion initial public offering, which should continue to help pay off the remaining U.S. Government ownership of the company.

Ally Insurance continues to maintain its strong risk-adjusted capitalization, historically solid operating results and well- established market presence as a specialized underwriter of motor vehicle extended service contracts. In addition, Ally Insurance also offers commercial insurance products to dealers that primarily insure dealers' wholesale vehicle inventory.

Ally Financial is a leading automotive financial services company led by a direct banking franchise. Ally Financial's automotive services business offers a full suite of financing products and services, including new and used vehicle inventory and consumer financing, leasing, inventory insurance, commercial loans and vehicle remarketing services.

Potential upward movement on Ally Insurance's ratings over the near term is unlikely due to the financial constraints at Ally Financial. In the medium term, possible upward rating movement could result from the continued reduction in U.S. Government ownership of Ally Financial thereby allowing greater flexibility at Ally Insurance. Possible downward or negative movement on the ratings could result from a reduction in profitability due to a decline in U.S. auto sales, a corresponding decline in vehicle service contract revenues, and/or lower earnings at Ally Financial.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process.

A.M. Best Company is an insurance rating and information source.

More Information:

www.ambest.com

www.ambest.com/ratings/methodology

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