Market Overview

A.M. Best Revises Outlooks to Positive for Members of Ally Insurance Group


A.M. Best has revised the outlooks to positive from stable and
affirmed the Financial Strength Rating of B++ (Good) and the Long-Term
Issuer Credit Ratings of "bbb+" of the members of the Ally Insurance
Group (Ally Insurance). The members include Motors Insurance Corporation
and its reinsured subsidiaries, MIC Property and Casualty Insurance
Corporation and CIM Insurance Corporation, as well as an affiliate, Ally
International Insurance Company, Ltd. (AIICL). All companies are
domiciled in Detroit, MI, except AIICL, which is domiciled in Bermuda.

These Credit Ratings (ratings) reflect Ally Insurance's balance sheet
strength, which A.M. Best categorizes as strongest, as well as its
adequate operating performance, neutral business profile and appropriate
enterprise risk management. These positive rating factors are offset
somewhat by the credit profile of its ultimate parent, Ally Financial
Inc. (Ally Financial), which is rated below investment grade by other
nationally recognized statistical rating organizations (NRSRO). However,
A.M. Best has placed a positive outlook on Ally Insurance's ratings due
to an improvement in its parent's NRSRO ratings, and a narrowing of Ally
Financial's credit default swap (CDS) spread.

Ally Insurance has a well-established market presence as a specialized
writer of vehicle service contracts (VSC), but as a result has a
concentration of underwriting risk in auto warranty lines. Ally
Insurance's positive rating attributes are derived from management's
focused operating strategy, extensive product knowledge and established
track record of solid earnings generated from its long-term VSC
business. The group has consistently generated capital through operating
earnings, which is reflective of disciplined underwriting and a steady
stream of investment income and realized gains. Although results in
recent years have been marred by losses in its automobile physical
damage line due to severe weather events, the company has taken steps to
mitigate this variability through reinsurance. The ratings also consider
the group's higher than average expense structure. Management is
committed to maintaining the strongest level of risk-adjusted
capitalization, which is supportive of its ratings.

The positive outlooks reflect the impact of Ally Financial's improved
financial condition and the potential for further improvement as credit
default swap spreads and financial leverage ratios continue to decline.

Other factors that may lead to positive rating action include improved
and sustainable underwriting and operating performance that outperforms
peers and the property/casualty industry throughout the underwriting
cycle. Positive rating actions may occur from an improvement in the
ratings of Ally Financial. Negative rating action may occur from
significant weakening of risk-adjusted capitalization, deterioration in
the operating performance or a downgrade in the ratings of Ally

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases

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