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A.M. Best Upgrades Issuer Credit Rating of AMEX Assurance Company

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  Published in Business and Finance on Tuesday, August 23rd 2011 at 12:11 GMT by Market Wire
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OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has upgraded the issuer credit rating to aa+a from aaa and affirmed the financial strength rating of A (Excellent) of AMEX Assurance Company (AMEX Assurance) (Chicago, IL). AMEX Assurance is a wholly owned subsidiary of American Express Company (American Express) (New York, NY) (NYSE: AXP). The outlook for both ratings is stable.

"Risk Management and the Rating Process for Insurance Companies"

The rating upgrade reflects AMEX Assurancea™s strong capital position and continued trend of favorable earnings generated by providing insurance products to American Express cardmembers.

AMEX Assurancea™s strong capital position is reflective of its conservative investment risk profile and favorable operating results driven by solid profit margins. The favorable operating results reflect the companya™s low-cost, direct marketing strategy and its emphasis on travel related and other ancillary insurance coverages offered to American Express cardmembers.

Partially offsetting these positive rating factors is AMEX Assurancea™s limited business scope, as the majority of its products are primarily confined to American Express cardmembers and lack of growth in surplus levels as all of the companya™s prior yeara™s net income has been returned to American Express through stockholder dividends.

The principal methodology used in determining these ratings is [ Besta™s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: aRisk Management and the Rating Process for Insurance Companiesa; aNatural Catastrophe Stress Test Methodologya; aCatastrophe Risk Management Incorporated Within the Rating Analysisa; aUnderstanding BCAR for Property/Casualty Insurersa; a[ Rating Members of Insurance Groups ]a; and aCatastrophe Analysis in A.M. Best Ratings.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is the worlda™s oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].

Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.