A.M. Best Downgrades Ratings of Travelers Life & Annuity Companies; Places Other Citigroup Ins. Subs. Under Review Negative

Business Wire, Jan 31, 2005

OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength ratings to A (Superior) from A (Superior) of The Travelers Insurance Company (TIC) and The Travelers Life and Annuity Company (TLAC), insurance subsidiaries of Citigroup, Inc. (NYSE:C), following the announcement of a definitive agreement to sell the companies to Metropolitan Life Insurance Company. The rating change reflects A.M. Best's determination that these entities are no longer core to the Citigroup enterprise. The Travelers companies operate under Citigroup's global investment management business segment. The outlook for the ratings is stable.

The financial strength rating of A (Superior) of Primerica Life Insurance Company (Primerica) (Duluth, GA) and its subsidiary, National Benefit Life Insurance Company (New York, NY), has been placed under review with negative implications pending evaluation of whether the company meets A.M. Best criteria as a core subsidiary of Citigroup.

Prior to the announcement, TIC, TLAC, Primerica and National Benefit were considered core operating affiliates comprising the bulk of Citigroup's insurance operations. The A ratings of each of these entities reflected the strong, diverse earnings capacity and prudent risk profile of Citigroup's combined insurance operations, as well as the significant financial flexibility and market presence of Citigroup--a global financial services provider with operations in over 100 countries worldwide. A.M. Best had considered these insurance subsidiaries as core to Citigroup based on the substantial distribution platform they provided and their meaningful contribution to earnings.

The current A rating of the Travelers' companies reflects the strong market positions of these businesses, and their favorable trends in operating performance and financial strength. On a stand-alone basis, the above named companies maintain superior risk-adjusted capitalization supported by continued strong operating profitability and excellent liquidity in their investment portfolios. These insurance operations have established strong positions in their chosen markets, shown sound operating fundamentals and have leveraged the strategic and competitive advantages derived from Citigroup's diverse distribution sources, low-cost infrastructure and strong brand name recognition.

The Primerica Life companies are managed under the retail banking division of Citigroup. Their dedicated distribution source of over 100,000 agents in Primerica Financial Services (PFS) provides significant cross-marketing opportunities for Citigroup's consumer finance products including mutual funds, banking products and loans. Primerica has experienced favorable operating gains on its established term life operations, while maintaining superior risk-adjusted capitalization on both an individual and group basis, with strong liquidity in the investment portfolio.

Additionally, A.M. Best has taken rating actions on the following non-core subsidiaries of Citigroup. The financial strength ratings have been downgraded to A (Excellent) from A (Superior) of Citicorp Life Insurance Company (Arizona) and First Citicorp Life Insurance Company (New York) as these companies are also part of the proposed acquisition by MetLife. The outlook for the ratings is stable.

The financial strength ratings of A (Superior) for American Health and Life Insurance Company (AHL) (Texas), Primerica Life Insurance Company of Canada (Ontario) and Sears Life Insurance Company (Fort Worth, TX)--which will remain part of Citigroup's credit insurance operations--were also placed under review with negative implications pending evaluation of the ongoing role of these companies within Citigroup. The outlook for the ratings is stable.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.> A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.