A.M. Best Upgrades Ratings Of American Summit Insurance Company; Assigns Rating To Hilltop Holdings Inc.

A.M. Best Co. has upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and issuer credit rating (ICR) to “a” from “a-” of American Summit Insurance Company (American Summit). The outlook for these ratings has been revised to stable from positive.

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a+” of National Lloyds Insurance Company (National Lloyds), an affiliate of American Summit. The outlook for these ratings is stable. Both companies are subsidiaries of Hilltop Holdings Inc. (HTH) (headquartered in Dallas, TX) (NYSE: HTH).

Additionally, A.M. Best has assigned an ICR of “bbb+” to HTH with a stable outlook. All companies are domiciled in Waco, TX, except where specified.

HTH currently operates as an insurance holding company, although it intends to make opportunistic acquisitions on an ongoing basis.

These rating actions on American Summit recognize its solid risk-adjusted capitalization, geographic spread of risk in moderately catastrophe prone areas and its continued profitable underwriting performance. In addition, the ratings reflect prudent risk management strategies and underwriting initiatives, which continue to enhance operating performance. These positive rating factors are somewhat offset by American Summit’s elevated underwriting expense ratio and low investment yields.

The rating actions on National Lloyds reflect its solid risk-adjusted capitalization, favorable operating performance in recent years and local market expertise within its niche of the personal property insurance market.

These positive rating factors are somewhat offset by National Lloyds’ geographic concentration of risk primarily in the Texas marketplace, with susceptibility to frequent and severe weather related events. As a result, the company posted underwriting losses in 2008 and 2009, due to multiple hurricane and tornado/hail events. However, National Lloyds continues to improve its underwriting guidelines in an effort to reduce inherent risk.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

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