TEXT - S&P rates Crum & Forster units

Overview
-- Fairfax Financial Holdings Ltd. (FFH) wholly owns the core operating
companies of Crum & Forster Insurance Group (C&F).
-- We have assigned a financial strength rating of 'A-' and a positive
outlook to the operating companies.
-- We expect the operating companies to remain integral members of the
Fairfax companies.

Rating Action
On Dec. 3, 2012, Standard & Poor's Ratings Services assigned its 'A-'
long-term financial strength and counterparty credit ratings to Crum & Forster
Indemnity Co., American Underwriters Insurance Co., First Mercury Insurance
Co., Seneca Insurance Co. Inc., and Seneca Specialty Insurance Co.

Rationale
The ratings on Crum & Forster Indemnity Co. are based on its membership within
C&F's intercompany pooling agreement. The ratings on American Underwriters
Insurance Co. and First Mercury Insurance Co. are based on their 100%
reinsurance agreement with United States Fire Insurance Co. The ratings on
Seneca Insurance Co. Inc. and Seneca Specialty Insurance Co. are based on the
specialty business that the companies write, which is essential to C&F's
strategy of focusing more on specialty lines than the middle-market. These two
companies are managed as profit centers with other C&F insurance operations.

We consider C&F core within the FFH corporate structure. Since its
acquisition, C&F has been a significant source of dividends for FFH to support
holding-company debt service and expansion. C&F's focus on underwriting a
broad product mix of specialty insurance provides FFH a diverse source of
premium revenue. Management will leverage production relationships with
affiliate companies to enhance C&F's business prospects.

Outlook
The positive outlook is linked to our outlook on FFH. We expect the C&F
operating companies to remain core operations of FFH based on their
consolidated contributions to profits and gross written premiums, without any
material change to C&F's business mix.

Related Criteria And Research
Group Methodology, April 22, 2009

Ratings List
New Rating
American Underwriters Insurance Co.
Seneca Specialty Insurance Company
Seneca Insurance Company Inc.
Crum & Forster Indemnity Co.
First Mercury Insurance Co.
Counterparty Credit Rating
Local Currency A-/Positive/--

American Underwriters Insurance Co.
Seneca Specialty Insurance Company
First Mercury Insurance Co.
Crum & Forster Indemnity Co.
Seneca Insurance Company Inc.
Financial Strength Rating
Local Currency A-/Positive/--