[April 28, 2006]

A.M. Best Takes Various Rating Actions on Unitrin Inc. and Its Subsidiaries

(BestWire Services Via Thomson Dialog NewsEdge)
A.M. Best Co. has affirmed the financial strength ratings (FSR) of A (Excellent) and assigned issuer credit ratings (ICR) of a to the Unitrin Property and Casualty Insurance Group (Unitrin) (Dallas). The FSR outlook has been revised to stable from negative, and the ICRs have been assigned a stable outlook.

A.M. Best has also affirmed the FSR of A (Excellent) and assigned ICRs of a to United Insurance Company of America (UICA) (Chicago), Union National Life Insurance Company (Baton Rouge, La.) and The Reliable Life Insurance Company (Webster Groves, Mo.), the three career agent life/health insurance companies of Unitrin, Inc. (Chicago) [NYSE: UTR]. The FSR outlook has been revised to stable from negative, and the ICRs have been assigned a stable outlook.

Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and assigned an ICR of a- to Reserve National Insurance Co. (RNIC) (Oklahoma City), Unitrin Inc.s independent agent life/health insurance company. The rating outlook is stable. A.M. Best has also affirmed the ICR of bbb of Unitrin Inc. The outlook has been revised to stable from negative. In addition, A.M. Best has upgraded the FSRs to A (Excellent) from B++ (Very Good) and has assigned ICRs of a to Old Reliable Casualty Co. (St. Louis) and Capitol County Mutual Fire Insurance Co. (Texas). Both ratings have a stable outlook.

Concurrently, A.M. Best has affirmed the ratings on Unitrin Inc.s outstanding senior notes and revised the outlook to stable from negative and has assigned indicative ratings to Unitrin Inc.s $300 million shelf registration. The outlook for these ratings is stable.

Unitrins ratings reflect its strong capitalization, improved underwriting performance and balanced book of business among personal and commercial lines. Unitrins positive rating attributes are the result of a diversified product offering, strong regional market presence, long-standing independent agency relationships and the benefits derived from prudent catastrophe exposure management.

The ratings also acknowledge that managements actions to improve profitability, which have included implementation of rate increases, geographical diversification and the re-underwriting of select books of business, have resulted in improved operating results in recent years. Also, Unitrin benefits from the financial flexibility and operational support of its publicly traded parent, Unitrin, Inc. A.M. Best believes the groups financial leverage (approximately 19% at year-end 2005) is prudent, and interest coverage is strong and sustainable.

The stable outlook is reflective of Unitrins improved operating performance in recent years and the successful assimilation of the business acquired from Kemper.

The ratings of the life/health career agent companies reflect their strategic role within the Unitrin Inc. organization, strong niche presence in the home service life insurance market, well established career agency force and favorable operating performance. In addition, A.M. Best believes the risk-adjusted capitalization of the three companies, both on a combined and stand-alone basis, remains sufficient despite large dividend payments made to Unitrin, Inc. over the last several years.

Partially offsetting these factors is A.M. Bests belief that the life/health companies may be challenged to sustain premium growth and operating performance given the limited growth potential in the mature home service market and the low interest rate environment, which has dampened net investment income.

RNICs ratings reflect its improved accident and health premium trends, favorable operating performance and adequate stand-alone risk-adjusted capitalization despite a significant dividend payment made in conjunction with the reorganization of certain life/health insurance subsidiaries.

Partially offsetting these factors is the challenge for RNIC to sustain its operating performance with its limited business profilemarketing accident and health insurance products and Medicare supplement insurance to individuals and small business owners living in rural areas.

For a complete list of Unitrin, Inc.s FSRs, ICRs and debt ratings, visit http://www.ambest.com/press/042801unitrin.pdf.

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