On June 7, 2005, Standard&Poor's Ratings Services raised its counterparty credit rating on Argonaut Group Inc. (Argonaut) to 'BBB-' from 'BB+'. At the same time, Standard&Poor's raised its counterparty credit and financial strength ratings on Argonaut Group Inc.'s operating insurance companies to 'A-' from 'BBB+' (see rating list). Standard&Poor's also raised its preferred stock rating on Argonaut by two notches to 'BB' from 'B+'. The notching between the preferred stock rating and holding company counterparty credit rating was narrowed to two notches in accordance with our criteria for investment-grade ratings. The outlook on Argonaut and its subsidiaries is stable. The upgrade reflects Argonaut's improved and strong capitalization as of year-end 2004, improved earnings, improved
