Best Ratings Report

Editor's note: This information is courtesy of A.M. Best Co. For further information, visit www.ambest.com/ratings.

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and assigned an issuer creditrating (ICR) of “a-” to LUBA Casualty Insurance Company (LUBA) (BatonRouge, LA). The outlook for the FSR is stable, and the outlook assigned to the ICR is stable.

The rating reflects LUBA’s adequate risk-adjusted capitalization,excellent operating performance and strong business profile in the Louisiana workers’ compensation market. These positive rating factors are somewhat offset by the company’s business concentration in a single lineand single state, which magnifies its exposure to competition and adverseeconomic and regulatory changes.

LUBA maintains moderate leverage measures, and its balance sheetstrength is supported by a conservative investment portfolio and a suitablereinsurance program. While controlling its growth, LUBA retains a very highpercentage of its policyholders and has become one of Louisiana’s largest writers of workers’ compensation business, offering coverage to a large and diverse population of mostly small to medium-sized businesses.

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A.M. Best Co. has upgraded the ICR to“a-” from “bbb+” of Philadelphia Consolidated Holding Corp. (PhiladelphiaConsolidated) (Bala Cynwyd, PA) [NASDAQ: PHLY] and affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of“aa-”of Philadelphia Insurance Companies (Philadelphia) and its members.

Concurrently, A.M. Best also has affirmed the FSR of A- (Excellent) andICRs of “a-” of Liberty American Insurance Group (Liberty American) and its members. Philadelphia Consolidated is the parent holding company of the member companies of Philadelphia and Liberty American.

The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)

The ICR of Philadelphia Consolidated acknowledges its excellent balance sheet strength and considerable financial flexibility. For liquidity purposes, Philadelphia Consolidated maintains a $50.0 million revolving credit facility, of which $15.0 million was available as of March 31, 2008. In addition, the two insurance companies that comprise Philadelphia are members of the Federal Home Loan Bank of Pittsburgh(FHLB), providing a borrowing capacity of approximately $736.9 million as of March 31, 2008.

The rating actions on Philadelphia recognize its consistentlysuperior operating results, strong capitalization and excellent market presence as a writer of specialty commercial business. The ratings also acknowledge the group’s excellent operating cash flow, solid liquiditymeasures and the financial flexibility of Philadelphia Consolidated.

The rating actions on Liberty American reflect its strong capitalization and adequate liquidity in support of the current plan not to renew all of the Florida-domiciled group’s personal lines business, except for the business it writes under the National Flood Insurance Program. These positive rating factors are partially tempered by Liberty American’s narrow geographic concentration and the inherent susceptibility of its run-off book of Florida property business to catastrophe losses.

The ICR of “bbb+” for Philadelphia Consolidated Holding Corp. has been upgraded to “a-”. The FSR of A+ (Superior) and ICRs of “aa-” have been affirmed for Philadelphia Insurance Companies and its following members:

Philadelphia Indemnity Insurance Company

Philadelphia Insurance Company.

The FSR of A- (Excellent) and ICRs of “a-” have been affirmed for Liberty American Insurance Group and its following members:

Liberty American Insurance Company

Liberty American Select Insurance Company.