Benfield and Merrill Lynch Announce Agreement to Offer Catastrophe Bonds

Business Wire, April 20, 2006

LONDON -- Benfield, the world's leading independent reinsurance and risk intermediary, has formed a relationship with Merrill Lynch to offer insurers and reinsurers catastrophe (cat) bonds as a form of alternative capital for peak risk exposures.

Recent hurricane losses, likely revisions to cat models and rating agency requirements have created more interest in cat bonds among primary insurers and reinsurers. Cat bonds can serve as a supplement to more traditional forms of reinsurance and retrocession capacity.

"Following two successive years of record catastrophe losses, many insurers and reinsurers are now exploring alternatives to traditional sources of capacity to protect themselves against losses from natural catastrophes. As a reinsurance intermediary, we are committed to being able to offer our customers the widest possible range of solutions to their risk management needs and this agreement with Merrill Lynch further extends our ability to provide contingent capital outside the conventional reinsurance market," commented Grahame Chilton, Chief Executive of Benfield.

Rob Bredahl, Chief Executive of Benfield Advisory, Benfield's specialist corporate finance and advisory business, commented: "Investors' appetite for insurance-related risk has grown over the last two years. We have seen a number of hedge funds move into this space to create insurers and reinsurers as well as participating more directly in the market. Cat bonds provide an excellent platform for a broader range of investors because they are rated securities that lend themselves to quantitative analysis for a more transparent evaluation of risk and reward. Investors have become more comfortable with investing in insurance-linked securities over the past several years as the structure of these securities has evolved, and investors have recognized the benefits of such non-correlated assets."

"Merrill Lynch's track record of innovative credit structuring and leading global distribution capabilities, coupled with the reinsurance program optimization, basis risk analysis and cat modeling capabilities of Benfield, is a powerful relationship which will provide the most effective cat bond solutions to meet the needs of insurers and reinsurers in today's business environment," said Bob Lyons, chairman of Capital Markets and Financing at Merrill Lynch.

"Merrill Lynch is a market leader in providing client solutions across the insurance industry, and the agreement with Benfield to offer catastrophe bonds is a natural outgrowth of our success in capital products innovation," said Teresa Radzinski, head of Insurance Debt Capital Markets at Merrill Lynch.

Notes to Editors:

About Benfield

Benfield is the world's leading independent reinsurance and risk intermediary. Its customers include many of the world's major insurance and reinsurance companies as well as government entities and global corporations. Benfield operates from more than 40 locations worldwide. The company is listed on the London Stock Exchange under the ticker symbol BFD. www.benfieldgroup.com

About Merrill Lynch

Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 36 countries and territories and total client assets of approximately $1.8 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world's largest managers of financial assets. Firmwide, assets under management total $581 billion. For more information on Merrill Lynch, please visit www.ml.com.