A.M. Best Affirms and Upgrades Ratings of Lloyd's Syndicate 2007 and Novae Group Plc

Business Wire, July 24, 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 2007 (United Kingdom), in line with the upgrade on Lloyd's of London's ICR. At the same time, A.M. Best has upgraded the ICR to "bbb" from "bbb-" of Novae Group Plc (Novae) (United Kingdom), the ultimate non-operating parent company of syndicate 2007's

managing agent, Novae Syndicates Limited (NSL). A.M. Best has also upgraded the rating to "bbb" from "bbb-" on the GBP 50 million convertible bonds and to "bbb-" from "bb " on the GBP 100 million subordinated notes, both issued by Novae. In addition, A.M. Best has upgraded the ICR to "bbb-" from "bb " of Novae Holdings Plc (NH) (United Kingdom) and upgraded its debt issues as follows: to "bbb-" from "bb " on the USD 15 million and USD 10 million floating notes, and to "bb " from "bb" on the USD 11 million subordinated floating notes, all due in 2034. The outlook for all ratings is stable.

The ratings of syndicate 2007 reflect the financial strength of the Lloyd's market, which underpins the security of all Lloyd's syndicates. A.M. Best believes the syndicate's financial flexibility is enhanced by continued support provided by Novae, which raised GBP 100 million (USD 198 million) through a subordinated debt issue in April 2007. Capacity for the 2007 year of account is GBP 360 million (USD 713 million), which has increased by GBP 120 million (USD 238 million) following its merger with Lloyd's Syndicate 1007 (also managed by NSL). Although capacity in 2008 is likely to remain stable, A.M. Best anticipates a fall in gross premiums written from GBP 320 million (USD 634 million) to GBP 300 million (USD 594 million), reflecting maintenance of underwriting discipline in a softening market. A.M. Best believes that the merger has increased the diversity of syndicate 2007's overall account and enhanced its market profile.

In A.M. Best's opinion, the syndicate is likely to report a good return on capacity of between 12%-15% (subject to catastrophe experience) for the 2006 and 2007 years of account (combined ratio of 95%-100% in 2007 on an annually accounted basis). Performance will be supported by the strong rating environment in regions affected by the 2005 U.S. hurricanes and the syndicate's disciplined approach to underwriting classes of business for which rates are falling. This stronger performance in 2006-2007 is expected to follow weak performance for the 2005 year of account when the U.S. storm season is likely to result in a loss of approximately 10% on capacity.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.