A.M. Best Assigns Rating to Transmonde Services Co.

July 25, 2003

A.M. Best Co. has assigned an initial financial strength rating of A- (Excellent) to Transmonde Services Insurance Company Ltd., Bermuda. The outlook is stable.

The rating reflects the company’s strong level of capitalization and
profitable operating results. Transmonde provides professional, general and pollution liability coverages as required by Societe Generale de Surveillance (SGS), to its subsidiaries and affiliates.

Partially offsetting factors are the captive’s reliance on a limited product offering, characterized by high severity claims, and the lack of business diversification driven by Transmonde’s status as a single parent captive. The rating outlook is stable given management’s intent to maintain a conservative operating strategy and a sound capital position.

Operating results have been highly profitable in recent years and
benefit from SGS’s effective risk management and tightened policy terms and conditions, despite an inherently volatile book. Additional concerns are the relatively high per occurrence retentions.

However, the volatility in all liability coverages is mitigated by established insured deductibles, conservative reserving practices and an apparent minimal exposure to pollution losses. Transmonde has no manufacturing or trading interests to contribute to pollution exposure. Transmonde also benefits from the financial flexibility and franchise value of SGS.

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