A.M. Best Upgrades Ratings of Esurance Insurance Company and Its Subsidiary

A.M. Best Co. has upgraded the financial strength rating (FSR) to A+ (Superior) from A- (Excellent) and issuer credit ratings (ICR) to “aa-” from ”a-” of Esurance Insurance Company (EIC) and its subsidiary, Esurance Property and Casualty Insurance Company (EPC). At the same time, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of “a-” of EIC’s other subsidiary, Esurance Insurance Company of New Jersey (EICNJ). All ratings have been removed from under review with positive implications and assigned a stable outlook. All the above companies are headquartered in San Francisco, CA.

The rating actions follow the October 7, 2011 closing of the acquisition of EIC, EPC and EICNJ by The Allstate Corporation (Allstate) [NYSE: ALL] (Northbrook, IL) from White Mountains Insurance Group, Ltd. (Hamilton, Bermuda). The ratings of EIC and EPC reflect the implementation of 100% reinsurance support provided by affiliate, Allstate Insurance Company, the lead company in Allstate Insurance Group. The ratings of EICNJ reflect the implementation of 100% reinsurance support provided by affiliate, Allstate New Jersey Insurance Company, the lead company in the Allstate New Jersey Insurance Group.

These acquisitions will expand on Allstate’s strategy of utilizing different value propositions for distinct customer segments. Furthermore, A.M. Best believes the acquisition of EIC, EPC and EICNJ will improve Allstate’s overall market position by increasing its distribution capacity in the growing direct channel. EIC, EPC and EICNJ sell personal automobile insurance directly to customers online and through select agents, including their sister company, Answer Financial.

As a result of the EIC, EPC and EICNJ acquisitions by Allstate, the ratings of Esurance Insurance Group, no longer exist.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Rating Members of Insurance Groups”; “Risk Management and the Rating Process for Insurance Companies”; and “Understanding BCAR for Property/Casualty Insurers.” Methodologies can be found at http://www.ambest.com/ratings/methodology.