A.M. Best Assigns Ratings to Lloyd's Syndicate 1007

Business Wire, Jan 31, 2006

OLDWICK, N.J. -- A.M. Best Co. has assigned a Best's Syndicate Rating of A (Excellent) and issuer credit rating (ICR) of "a" to Lloyd's Syndicate 1007 (United Kingdom), which is managed by SVB Syndicates Limited (SVBS). (Please refer to A.M. Best's January 31 press release on syndicate 2147 for detail of ratings assigned to SVB Holdings Plc (SVBH), the non-operating holding company of the SVBH group of companies, and debt issued by SVBH.) The outlook for both ratings is stable.

The rating assigned to syndicate 1007 reflects support provided by the financial strength of the Lloyd's market. A.M. Best believes syndicate 1007's financial flexibility is enhanced by continued support provided by its parent, which may have the capability to raise additional funds if required. The syndicate's capacity for the 2006 year of account has been reduced to GBP 120 million (USD 214.8 million) from GBP 151 million (USD 260 million) in 2005. A.M. Best believes this reflects a prudent response to a decline in market conditions for the classes of business the syndicate writes.

A.M. Best believes syndicate 1007 is likely to produce solid returns for the 2003 - 2005 years of account and has begun to recover from poor results arising from discontinued U.S. liability business, which has negatively impacted the syndicate for several years. A.M. Best forecasts solid performance (after personal expenses) for syndicate 1007 of 20% of capacity for the 2003 year of account and 10% for 2004 (in line with the syndicate's September 2005 Quarterly Monitoring Return). An offsetting factor arises from the 2002 year of account, which remains open due to material uncertainty relating to reserves for discontinued liability lines. Future financial performance of syndicate 1007 is likely to continue to be supported by its strategy of trading in the areas where stronger rating conditions are experienced.

A.M. Best believes that the syndicate has been able to establish an excellent profile for certain specialist classes, which is demonstrated by the volume of business it leads (approximately 60% of its premium volume in 2005). Business is written in the following specialist units: financial institutions, professional indemnity, political and credit risks, management liability, specie, cargo and special situations. The account has a U.K. and U.S. bias (42% and 20% of gross premiums, respectively). A.M. Best believes that a disadvantage of the syndicate's specialist approach is the concentration of risks written in certain sectors, particularly business written for financial institutions.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit 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.