A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of American Southern Insurance Company (Topeka, KS) and its wholly owned and 100% reinsured subsidiary, American Safety Insurance Company (collectively referred to as American Southern). Concurrently, A.M. Best has affirmed the ICR of “bbb-” of the parent company, Atlantic American Corporation (Atlantic American) (NASDAQ: AAME). Additionally, A.M. Best has upgraded the FSR to A- (Excellent) from B++ (Good) and ICR to “a-” from "bbb+" of Bankers Fidelity Life Insurance Company (Bankers Fidelity). The outlook for all ratings is stable. All companies are domiciled in Atlanta, GA, unless otherwise specified. American Southern’s ratings reflect its strong risk-adjusted capitalization, conservative balance sheet, long history of profitability, management’s disciplined underwriting approach and its local market knowledge. Somewhat offsetting these positive rating factors is American Southern’s history of paying substantial stockholder dividends, which historically have been used to service the debt held at Atlantic American, and its trend of deteriorating underwriting performance in recent years. The upgrading of Bankers Fidelity’s ratings recognizes its strong risk-adjusted capital position, improved financial results, continued business diversification strategy and its strategic importance to Atlantic American. The company continues to focus on the sale of senior life and niche individual life business, while maintaining its core Medicare supplement presence. Although the worksite arena is quite competitive, A.M. Best views favorably Bankers Fidelity’s longer term emphasis on the development of a complete worksite marketing channel. The group’s ratings also consider the financial leverage and interest coverage of Atlantic American; adjusted debt-to-total capital and interest coverage ratios are currently about 21% and 2-3 times, respectively. Interest coverage is slightly below expectations for the given rating level; however, this is offset by the insurance companies’ ability to historically generate sufficient earnings to cover obligations at the parent. In addition, Atlantic American held roughly $26 million of cash and short-term investments and other marketable securities at June 30, 2012. A.M. Best expects Atlantic American to continue paying shareholder dividends at roughly the same level as seen in recent years.