A.M. Best Upgrades Ratings of JEVCO Insurance Company; Removes Ratings From Under Review

OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has upgraded the financial strength rating to B++ (Good) from B-
(Fair) and issuer credit rating (ICR) to "bbb" from "bb-" of JEVCO Insurance
Company (JIC) (Quebec). Both ratings have been removed from under review with
negative implications and assigned a stable outlook.

These actions follow the March 29, 2010 sale of JIC by Kingsway Financial
Services Inc (KFSI) (Ontario) to The Westaim Corporation (Westaim) (Ontario)
(TSX: WED). Concurrently, A.M. Best has assigned an ICR of "bb" to Westaim, with
a stable outlook.

The ratings and outlook reflect JIC`s adequate capitalization, favorable
operating performance pre-intercompany reinsurance and its recent acquisition by
Westaim. These positive rating factors are partially offset by JIC`s negative
earnings trend, soft commercial lines pricing and strong competitive market
pressures.

JIC`s positive rating factors include various restructuring plans, cancellation
and run off of non-core lines of business prior to the sale, the assumption of
the business of its Canadian affiliate, Kingsway General Insurance Company`s
(KGIC) business with JIC and the commutation of all intercompany reinsurance.

The sale of JIC to Westaim helps to deleverage its balance sheet and allows JIC
to refocus efforts on underwriting its core business lines. JIC benefits from
the financial flexibility and implicit and explicit support of Westaim, which
further strengthened JIC`s balance sheet after the acquisition. Westaim is a
financial service holding company that is focused on the property/casualty
insurance industry. Going forward, direct premiums written are projected to
remain stable as non-core lines of business from KGIC are run off. Management
has undertaken significant underwriting initiatives to ensure any business that
is retained from KGIC meets JIC`s underwriting and pricing standards.

These positive rating factors are partially offset by the potential for
additional pressure on capitalization if there is continued deterioration in
JIC`s current earnings, additional adverse reserve development or if premium
growth exceeds projections. There also is an element of execution risk as JIC
refocuses on its core lines. A.M. Best believes improved earnings will be a
challenge in the near term due to soft commercial market conditions, strong
competition in the non-standard auto and commercial auto markets, a trend of
more frequent and severe weather-related losses and difficult financial markets.

For Best`s Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any
additional methodologies and factors that may have been considered, can be found
at www.ambest.com/ratings/methodology.

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 health care
system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts:
Jacqalene Catrino, 908-439-2200, ext. 5762
jacqalene.catrino@ambest.com
or
Joseph A. Burtone, 908-439-2200, ext. 5125
joseph.burtone@ambest.com
or
Public Relations:
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com

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