Press Release January 28, 2020

FOR IMMEDIATE RELEASE

OLDWICK – JANUARY 28, 2020

AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” to Danielson National Insurance Company (Danielson National) (San Diego, CA). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and a Long-Term ICR of “a-” of Worth Casualty Company (Worth Casualty) (Fort Worth, TX). The outlook of this rating remains stable.

These rating actions follow the sale of Worth Casualty from Agricultural Workers Mutual Auto Insurance Company (Ag Workers) to Incline Insurance Group, LLC, a Texas program writer, which has also acquired Danielson National, a California insurance carrier. AM Best notes these companies pending name changes from Worth Casualty Company to Incline Casualty Company, and Daniel National Insurance Company to Incline National Insurance Company, which are awaiting regulatory approval. Danielson National and Worth Casualty are collectively referred to as Incline.

The ratings reflect Incline’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

Incline is owned collectively by Merfax Financial Group, LLC (Merfax) and Ag Workers, with Merfax having majority ownership. The ratings and outlooks consider the financial support and capital contribution provided by Merfax and Ag Workers. Fundamental to the successful execution of Incline’s business development plans is its management of program business being assumed from multiple managing general agents. Additionally, these ratings reflect Incline’s comprehensive reinsurance program, which is designed to provide horizontal and vertical protection against severe weather-related events. Based on management’s near-term financial plan, the projected net probable maximum loss comprises a modest amount of surplus.

The current level of risk-adjusted capitalization supports the underwriting, credit and investment risk of Incline. The company’s business plans consist of writing program business in the Southwestern United States. While strict risk selection criteria and underwriting guidelines are in place, its start-up nature creates execution risk. The company’s near-term business plans consist of writing property, workers compensation and auto business in California, Texas and New Mexico. Although in the initial stages, comprehensive underwriting and claims processes are in place to support growth.

Negative rating actions could result if the operational and financial plans anticipated by management do not materialize as projected and result in adverse operating results or a decline in risk-adjusted capitalization.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.