A.M. Best Affirms Ratings of Life Insurance Corporation B.S.C

Business Wire, July 13, 2006

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B (Very Good) and the issuer credit rating of "bbb-" of Life Insurance Corporation (International) B.S.C. (C) (LIC) (Bahrain). The outlook for both ratings remains stable.

The ratings reflect LIC's strong and stable risk-adjusted capitalisation, improving financial performance and strong niche position.

Strong and stable risk-adjusted capitalisation--A.M. Best believes that LIC's risk-adjusted capitalisation will remain strong and stable after the significant injection of BHD 5 million (USD 13.25 million) to shareholders' funds, which occurred early in 2006. Despite the relative weakening of technical provisions as compared to business growth, the company has a strong solvency margin (4.5% of the life fund). This is likely to continue due to stable technical profits.

Improving financial performance--A.M. Best believes the strong growth in net profits to BHD 4.9 million (USD 12.99 million) that the company reported during 2005, mainly driven by transfers from the life fund, is unlikely to be repeated in 2006. Technical profits are likely to improve slightly due to less capital intensive new business, while investment returns should nearly double given the significant expansion in the shareholders' funds.

Strong niche position--LIC has established itself as a niche provider of USD-denominated policies to cater to the insurance needs of the expatriate Indian population residing in the countries of the Gulf Cooperation Council. A.M. Best believes that gross premiums written are likely to continue to increase by a strong 15% in 2006 due to the continuing demand for protection products, especially amongst the middle to higher income earners and the opening of new LIC branches in the United Arab Emirates and Saudi Arabia.

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.