A.M. Best Withdraws Ratings of Advanta Insurance Company and Advanta Life Insurance Company

A.M. Best Co. has affirmed the financial strength rating (FSR) of B+ (Good) and issuer credit rating (ICR) of "bbb-” of Advanta Insurance Company (AIC) (Phoenix, AZ), a wholly owned subsidiary of Advanta Corp. (NASDAQ/NM: ADVNA and ADVNB). A.M. Best also has affirmed the FSR of B+ (Good) and ICR of "bbb-” of Advanta Life Insurance Company (ALIC) (Phoenix, AZ), a wholly owned subsidiary of AIC. The outlook for all ratings is stable.

Concurrently, A.M. Best has withdrawn the ratings at the companies’ request and assigned the FSRs a category NR-4 and the ICRs an "nr”. These rating actions reflect the decision of Advanta’s management to withdraw from A.M. Best’s interactive rating process.

The ratings of AIC reflect an adequate level of risk-adjusted capital, favorable operating profitability and the benefits it derives through its relationship with Advanta Corp. These rating factors are offset by the company’s significant affiliated investment leverage, limited scope of business and its rather ancillary role within Advanta Corp. A.M. Best expects that AIC will experience positive operating results and maintain an appropriate level of risk-adjusted capitalization relative to its reduced premium volume in the near term.

The ratings of ALIC reflect the sufficient amount of capital for its insurance and investment risks along with the positive earnings results in recent years, which were primarily the result of premium refunds from a reinsurance agreement. However, aggregate earnings have been substantially reduced in 2008 as ALIC no longer benefits from this reinsurance agreement. The company does have the support of Advanta Corp., which acts as ALIC’s sole distribution source. However, premium levels have deteriorated substantially in recent years as other product offerings within the company have replaced its credit insurance products. A.M. Best expects ALIC’s premiums to continue to decline and earnings to remain modest in the near term.

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

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.