A.M. Best Affirms Ratings of Lloyd's Syndicate 33

Business Wire, Jan 10, 2007

OLDWICK, N.J. -- A.M. Best Co. has affirmed the Best's Syndicate Rating of A (Excellent) and upgraded the issuer credit rating (ICR) to "a " from "a" of Lloyd's Syndicate 33 which is managed by Hiscox Syndicates Limited. A.M. Best has also upgraded the ICR to "bbb " from bbb-" of Hiscox plc (Undited Kingdom) and subsequently withdrawn the rating. At the same time, A.M. Best has assigned an ICR of "bbb " to Hiscox Limited (Bermuda), the group's new ultimate parent holding company. The outlook for all ratings is stable.

The upgrade to the ICR of syndicate 33 reflects A.M. Best's expectation that the syndicate's earnings will improve and there will be a likely return to reserve stability following a period of reserve strengthening for the 2000-2003 closed underwriting years. These factors are also reflected in the upgrade in the Hiscox plc ICR because syndicate 33 is its principal source of earnings. The Hiscox plc ICR has been withdrawn and a new rating assigned to Hiscox Limited due to the re-structuring of the group under which Hiscox Limited has become the group's new ultimate holding company in Bermuda.

A.M. Best anticipates that syndicate 33 will produce a strong profit of between 15% and 20% on capacity (after personal expenses) when the 2006 year of account closes. This is expected to follow a relatively modest anticipated loss for 2005 despite the syndicate's substantial exposure to hurricanes Katrina, Rita and Wilma.

It is also anticipated that the syndicate will return to its historical long-term pattern of reserve stability, following a period of reserve strengthening for U.S. errors and omissions affecting the 2000-2003 underwriting years. A.M. Best believes that corrective action taken by the syndicate has, most likely, successfully addressed this historic reserving issue.

In A.M. Best's opinion, syndicate 33 has an excellent profile in the Lloyd's market. The syndicate is one of the largest in Lloyd's with allocated capacity of GBP 875 million (USD 1,706 million) in 2007. The syndicate underwrites a well diversified account both by business class and territory and leads a significant proportion of the business written (approximately 50% in 2005).

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.