Fitch Downgrades American Family's IFS to 'A'; Outlook Stable

CHICAGO--(Business Wire)--
Fitch Ratings has downgraded to 'A' from 'AA-' the Insurer Financial Strength
(IFS) rating of the American Family Insurance Group (American Family) (see
rating list below). The Rating Outlook is Stable.

The rating action is primarily driven by American Family's recent trend of
unfavorable financial performance, on an absolute basis and relative to its
personal lines peers. This is due in part to three consecutive years of
significant catastrophe losses, as well as a material decline in the company's
capital position as a result of poorer profitability and deterioration in value
of equity and fixed income investments in 2008.

For the year ending Dec. 31, 2008, American Family posted a statutory combined
ratio of 113.3%. Statutory capitalization decreased by roughly $945 million due
to over $1 billion of storm losses as well as roughly $480 million of pretax
unrealized losses stemming from the company's equity portfolio. American
Family's ratings historically reflected the company's strong capitalization on a
risk-adjusted basis as measured by Fitch's Prism economic capital model. Fitch's
expectation is that the company's Prism score in the near-to-intermediate term
will be significantly lower.

Positively, American Family's strong ratings reflect the company's very low
financial leverage and adequate operating leverage, excellent market position
and franchise value, and its ability to meet policyholder obligations. Fitch
anticipates a return to a combined ratio in the low-to-mid 100s in 2009, and
less earnings volatility from catastrophe losses going forward tied to recent
changes in the company's reinsurance program.

Partially offsetting these positives are the effects of American Family's
limited amount of geographic diversification versus peers and the effects of
heightened competitive conditions in the company's key lines. The company's top
five states (Wisconsin, Missouri, Minnesota, Illinois, and Colorado) account for
over 60% of premiums written. This concentration results in a heightened
sensitivity to competitive conditions and high catastrophe exposure to Midwest
storm activity.

American Family Life Insurance Co.'s (AFLIC) rating reflects its status as a
strategic insurer within the American Family group of companies, as Fitch
believes AFLIC's traditional life insurance products are complementary to
American Family's exclusive agent distribution system.

Fitch has downgraded the following ratings with a Stable Outlook:

American Family Mutual Insurance Co.

American Standard Insurance Co. of Wisconsin

American Family Insurance Co.

American Standard Insurance Co. of Ohio

American Family Life Insurance Co.

--IFS to 'A' from 'AA-'.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
Gretchen K. Roetzer, 312-606-2327 (Chicago)
Brian C. Schneider, CPA, CPCU, 312-606-2321 (Chicago)
Media Relations:
Cindy Stoller, 212-908-0526 (New York)
cindy.stoller@fitchratings.com

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