Best Affirms Zurich Specialties ‘A’ Rating; Assigns Stable Outlook

March 4, 2004

A.M. Best Co. announced that it has affirmed the financial strength rating of “A” (Excellent) of Zurich Specialties London Limited (ZSL); has removed the rating from under review with negative implications, and has assigned a stable outlook.

“The rating reflects ZSL’s strategic importance to Zurich Financial Services Group (ZFS) (Switzerland), its excellent capitalisation according to A.M. Best’s risk-adjusted capital model and ZSL’s business profile in specialist London market insurance sectors,” said the announcement.

Best noted: “Offsetting factors include the 2003 required reserve increase related to discontinued lines and the potential for further strengthening, although A.M. Best believes that measures undertaken by ZSL make this unlikely. A.M. Best will continue to closely monitor ZSL’s reserve position.”

The rating agency also indicated that it “expects stronger earnings in 2004 as ZSL’s net loss experience improves, leading to a strengthened stand-alone risk-adjusted capitalisation, assuming the current policy of not upstreaming capital is maintained.”

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