A.M. Best Affirms Ratings of Brit Insurance Limited

Business Wire, June 24, 2009

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating (ICR) of “a” of Brit Insurance Limited (BIL) (United Kingdom). At the same time, A.M Best has affirmed the ICR of “bbb” of Brit Insurance Holdings PLC (BIH) (United Kingdom) and the ratings of “bbb-”on the USD 15 million floating rate subordinated notes and “bbb-” on the GBP 135 million fixed rate subordinated notes issued by BIH. The outlook for all ratings remains stable.

A.M. Best believes BIL will maintain strong risk-adjusted capitalisation in 2009. A modest increase in shareholders’ funds is anticipated, supported by positive retained earnings.

BIL is expected to produce good financial results in 2009, underpinned by solid underwriting performance (subject to normal catastrophe activity). Performance is expected to be supported by improving rates, particularly for catastrophe exposed business, within the global markets and reinsurance business units. However, despite rate improvements in certain classes of business, A.M. Best anticipates that the UK division will place upwards pressure on BIL’s loss ratio in 2009, due to the impact of continuing intense competition on the sector as a whole. A.M. Best anticipates an increase in the company’s operating expenses in 2009, reflecting a shift in its mix of business to classes where higher commissions are paid (particularly property business).

BIL benefits from the strong profile of the Brit group in the London Market and UK regions. The company writes a wide range of personal and commercial lines business through an expanding network of distribution outlets, which includes the electronic trading of smaller risks in the UK and local offices in the UK regional market.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.