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A.M. Best Affirms PUREs Financial Strength Rating of A- Excellent

December 3, 2010

WHITE PLAINS, NY - January 4, 2011 - A.M. Best Company (A.M. Best) has affirmed the Financial Strength Rating (FSR) of "A-" (Excellent) and the Issuer Credit Rating (ICR) of "A-" (Excellent) for Privilege Underwriters Reciprocal Exchange (PURE) and the PURE Group of Insurance Companies. PURE, a member-owned reciprocal insurer, offers comprehensive property and casualty insurance coverage to responsible owners of well-built, high-value homes in a growing number of states.

"We remain extremely proud of A.M. Best's continued positive evaluation of PURE and the PURE Group's financial strength," said Ross Buchmueller, president and chief executive officer of PURE Risk Management LLC. "We are confident our members will appreciate the significance of our "A-" rating, and feel secure in the fact that they are well-protected by PURE's steady flow of capital, conservative reinsurance plan and highly experienced staff."

In its 2010 report, A.M. Best cites PURE's positive rating factors, including the PURE Group's "solid risk-adjusted capitalization," which reflects the fact that PURE's surplus leverage ratios are very conservative when compared to industry standards.

The rating goes on to recognize "potential additional financial flexibility afforded through [PURE's] parent company with multiple investor sources, and the growing impact of surplus contributions from PURE subscribers." As a reciprocal insurance exchange, PURE is member-owned. In addition to their annual premiums, PURE members make contributions to the surplus capital of the insurer. These contributions provide an important and steady source of capital to support PURE's growth, and PURE's current members enjoy the security of nearly $100 million of surplus capital, fueled in part by these contributions.

A.M. Best also notes that "PURE has maintained adequate reinsurance protection, using a combination of quota share, excess of loss, and catastrophe reinsurance programs to protect its surplus from catastrophe events." Currently, PURE purchases reinsurance to limit its expected net loss in a major event to less than 20% of the group's prior year surplus.

Additionally, the rating states the group's management has "extensive experience, with favorable operating results associated with starting and managing similar niche books of business with other carriers." Buchmueller founded AIG Private Client Group in 1999 and served as its president until 2006 when he established PURE with his partners, Jeffrey Paraschac, PURE senior vice president and CFO, and Martin Hartley, PURE senior vice president and COO. Both Paraschac and Hartley served in executive roles at AIG Private Client Group.

PURE, which began writing policies in 2007, currently serves more than 8,500 members in 13 states. PURE has filed applications for licensure across the country as it continues to execute against its national expansion plans.

About PURE

PURE refers to Privilege Underwriters Reciprocal Exchange, a member insurer of the PURE Group of Insurance
Companies. Licensed in 32 states, PURE provides coverage for high-value homes, automobiles, jewelry, art, personal liability and watercraft to successful individuals and families. PURE is a member-owned reciprocal
insurer and is rated A- (Excellent) by A.M. Best. PURE is committed to helping its members reduce the price of insurance today while controlling the long-term cost of risk. PURE Risk Management LLC serves as the attorney-in-fact for PURE. For more information, visit

About A.M. Best Company

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 healthcare system providers. For more information, visit

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Editor's Notes:
Interviews with PURE's executives, agents and members may be coordinated

Copies of the A.M Best Company report are available

Average annual savings on homeowners insurance for 900 members reporting prior carrier premium through Feb. 26, 2009. This material is descriptive only. The precise coverage offered is subject to the terms and conditions of the policies issued. The rights and responsibilities of members are subject to the
Subscriber's Agreement and Power of Attorney. Coverage may not be
available in all jurisdictions. Actual savings, if any, will vary.