A.M. Best Affirms Financial Strength Rating of Connaught Insurance Company Limited; Assigns Issuer Credit Rating

Business Wire, July 25, 2005

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B (Very Good) and assigned an issuer credit rating of "bbb-" to Connaught Insurance Company Limited (Connaught) (Guernsey), the captive insurance company of Thomas Greg and Sons Limited (TGS), a printing and security specialist. The outlook for both ratings is stable.

The rating reflects Connaught's strong risk-adjusted capitalisation and good operating performance. Offsetting factors are the volatile nature of the policies underwritten and the high concentration risk in the market in which TGS operates.

Connaught is integral in facilitating the operations of TGS as it provides the parent with insurance cover at better conditions than the open market. The company's portfolio has limited diversification and depends highly upon one South American state, resulting in a high concentration risk. A.M. Best expects stable premiums to generate a good profit of approximately USD 0.8 million in 2005, which is expected to further improve Connaught's strong risk-adjusted capitalisation. A.M. Best believes that the cash in transit policy is exposed to a high level of claims volatility despite a good reinsurance programme that limits potential losses to below USD 3 million. A.M. Best therefore expects the excellent loss ratio experienced in 2004 (approximately 12%) to deteriorate to approximately 40% over the next two years.

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 http://www.ambest.com.