Financial Information

Dear Agents & Friends:

A.M. Best & Company has completed their annual review of The Gray Insurance Company and The Gray Casualty & Surety Company. While they have affirmed their ratings, they have changed the outlook to negative. The reaction of the Gray family has been to infuse $15 million into The Gray Insurance Company signaling their confidence in the Company as well as their commitment. This moves the Company from an A- VII to an A-VIII. The news release will express concern at the holding company level based on additional leverage taken on to support operations. To address this, the Grays have taken steps to more than offset this reasonable additional expense to insure the Company will come through this favorably. We will not let the temporary decrease in a quality investment that the company strongly believes in affect our rating outlook long term. We will be working diligently with A.M. Best & Company to make them more comfortable with our companies.

We offer, unedited, our year-end Management's Discussion and Analysis Reports of the last eight years and two five-year historical data links excerpted directly from our Annual Statements as testimony of our steady growth and steadfast commitment to our business model.