Correct: Fitch Places ERC/GE Global On Rating Watch Negative

Business Wire, July 2, 2002

Business Editors

(This is an updated version of a press release issued July 1, 2002, that modifies the timeline for resolving the Rating Watch Negative in the 4th paragraph.)

Fitch Ratings has placed the 'AA' long-term issuer rating of GE Global Insurance Holdings, Corp. (GE Global) and the 'AAA' insurer financial strength rating of Employers Reinsurance Corp. (ERC), GE Global's main operating subsidiary, on Rating Watch Negative.

Fitch believes that ERC is increasingly being viewed as a strategic rather than core operation of General Electric (GE), ERC's ultimate parent company. Today's rating action reflects this view coupled with ERC's recent volatile operating performance that has weakened ERC's financial profile when viewed on a 'stand alone' basis and has made GE's support increasingly important to maintaining ERC's 'AAA' rating.

On June 27, 2002, ERC announced that it was adjusting prior year estimates, including reserve adjustments, by about $350 million after tax, resulting in a loss of $240 million in the second quarter. Projected year-end 2002 results would be roughly breakeven, down from a previously expected $200 million.

Fitch anticipates resolving the Rating Watch Negative on ERC as early as the next several days in conjunction with a review of the company's relative importance to the GE organization and an assessment of GE's commitment to ERC.

NOTE: The noted ratings were initiated by Fitch as a service to users of Fitch ratings. The ratings are based primarily on public information.

Entity/Issue/Rating/Watch

GE Global Insurance Holdings, Corp.

--Long-term issuer 'AA'/Negative.

Employers Reinsurance Corp.

--Insurer financial strength 'AAA'/Negative.