OLDWICK, N.J.--(BUSINESS WIRE)--May 3, 2006--A.M. Best Co. has affirmed the issuer credit rating (ICR) of "a-" of Mercury General Corporation (NYSE: MCY) (Los Angeles, CA), its senior debt rating of "a-" on existing debt securities and the indicative rating of "a-" for the senior debt under the company's $300 million shelf registration, of which $175 million remains. Concurrently, A.M. Best has affirmed the financial strength ratings (FSR) of A (Superior) and assigned ICRs of "aa-" to Mercury Casualty Group (Mercury) (Los Angeles, CA) and its members. The outlook for these ratings is stable. Additionally, A.M. Best has affirmed the FSRs of A- (Excellent) and assigned ICRs of "a-" to American Mercury Insurance Group (AMI) (Oklahoma City, OK) and its members. The rating outlook for the FSR has been revised to stable from positive, and a stable outlook has been assigned to the ICRs. (See link below for a detailed listing of the ratings.)

Mercury's ratings reflect its strong risk-adjusted capital position, which is derived from its moderate underwriting leverage, conservative investment risk profile and low dependence on reinsurance. Moreover, Mercury's capitalization is supported by solid surplus growth through consistent operating performance. In addition, Mercury maintains a sustainable competitive advantage within its core personal auto segment that includes pricing and risk classification expertise, strong independent agency relationships and aggressive claims management practices while maintaining a competitive expense structure. Mercury also benefits from the financial flexibility of its parent, Mercury General Corporation, due to its modest financial leverage and access to capital markets.

The change in outlook to stable on AMI reflects its high underwriting leverage due to significant premium growth, which negatively impacted its risk-adjusted capitalization. Additionally, AMI's relatively high expense structure and exposure to catastrophe losses in its operating region resulted in volatile underwriting income. However, AMI's excellent rating reflects its level of risk-adjusted capital and the demonstrated history of financial support provided by its parent, Mercury General Corporation.

For a complete listing of Mercury General Corporation's FSRs, ICR and debt ratings, please visit www.ambest.com/press/050301mercury.pdf.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.

Contacts
A.M. Best Co.
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Striegel, 908-439-2200, ext. 5378
rachelle.striegel@ambest.com
or
Analysts
Antonio M. Simoes, 908-439-2200, ext. 5448
antonio.simoes@ambest.com
or
Rick Decker, 908-439-2200, ext. 5423
rick.decker@ambest.com

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