OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has upgraded the issuer credit ratings (ICR) to "a " from "a" and affirmed the financial strength rating (FSR) of A (Excellent) of Markel North America Insurance Group (Markel) (Glen Allen, VA) and its members. Concurrently, A.M. Best has upgraded the ICR and debt ratings to "bbb " from "bbb" of Markel Corporation (MKL) (NYSE:MKL - News; Glen Allen, VA) and the ratings of its existing senior unsecured notes. All ratings have a stable outlook. (See below for a detailed list of the ratings.)

These rating actions recognize Markel's well-established market position as one of the leading excess and surplus lines organizations in the United States, the sustained profitability reported in recent years and the group's improved risk-adjusted capitalization. These ratings also acknowledge the group's excellent operating cash flow, adequate liquidity and the financial flexibility of MKL.

Somewhat tempering these positive factors is Markel's elevated underwriting leverage and above average investment leverage. Markel has long held an underwriting leverage position higher than the average of the surplus lines composite, driven by a net premium level that has grown in recent years, and the impact of conservative loss reserving. Despite the elevated underwriting leverage, the group's excellent operating performance has fueled surplus appreciation and led to improved capitalization that is comfortably supportive of the group's current rating.

MKL's financial leverage remains on par with its current rating level as demonstrated by a debt-to-capital ratio of 24.1% as of March 31, 2007. Fixed charge coverage was also strong at 10.2 times as of the same date. For liquidity purposes, MKL maintains a $375.0 million revolving credit facility.

The FSR of A (Excellent) has been affirmed and the ICR of "a" has been upgraded to "a " for Markel North America Insurance Group and its following members:

• Associated International Insurance Company
• Deerfield Insurance Company
• Essex Insurance Company
• Evanston Insurance Company
• Markel American Insurance Company
• Markel Insurance Company

The following debt ratings have been upgraded to "bbb "from "bbb":

Markel Corporation--

• "bbb " on $75 million, 7.20% senior unsecured notes, due 2007
• "bbb " on $100 million, 7.00% senior unsecured notes, due 2008
• "bbb " on $250 million, 6.80% senior unsecured notes, due 2013
• "bbb " on $200 million, 7.35% senior unsecured notes, due 2034
• "bbb " on $150 million, 7.50% senior unsecured notes, due 2046

The following indicative ratings on securities available under shelf registration have been upgraded:

Markel Corporation--

• "bb " to "bbb-" for preferred securities
• "bbb-" to "bbb" for subordinated debt
• "bbb" to "bbb "for senior unsecured debt

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.

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Source: A.M. Best Co.