A.M. Best Upgrades Rating of Gerling Canada Insurance Co.

July 11, 2003

A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) of Gerling Canada Insurance Company (Ontario), which will be known as GCAN Insurance Company in the near future. The rating outlook is stable.

The rating action follows the sale of Gerling Canada last month to a group of Canadian financial and other private equity investors. The sale removed the uncertainty surrounding the company while its former parent company reorganized its operations.

The upgrade reflects Gerling Canada’s superior operating performance, excellent capitalization and its well defined business position within the industrial insurance sector. The company’s underwriting results have consistently outperformed the industry. Gerling Canada further benefits from its conservative operating philosophy and experienced management team.

Partially offsetting these positive rating factors is the competitive market conditions in the Canadian property/casualty market. In addition, given the company’s reinsurance dependence, it will be challenged by raising reinsurance costs attributed to a hardening reinsurance market.

Going forward, the company will also be servicing new debt through planned dividend payments.

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