Best Announces Rating Actions on Converium

June 9, 2004

A.M. Best Co. announced that it has affirmed the financial strength rating of “A” (Excellent) of Converium AG (Switzerland) and its core subsidiaries. The outlook for all ratings is stable.

“The ratings reflect expected improvement in Converium’s consolidated earnings in 2004,” said Best. “This is expected to result from growth in net earned premiums of approximately 8 percent (driven by continuing rate increases for Converium’s casualty reinsurance business), a modest improvement in the company’s investment return and a higher level of funds available for investment derived from Converium’s growing portfolio of long-tail specialty business (total investments including cash are expected to increase approximately 15 percent in 2004). The company’s non-life combined ratio is expected to be broadly similar to the 2003 level of 96.8 percent, and the company’s life and health segment is expected to be profitable after taking into account additional reinsurance protection for the company’s volatile book of Guaranteed Minimum Death Benefit (GMDB) business.” Best said it “expects Converium to maintain its risk-adjusted capital at the current level.”

An offsetting factor, noted by the rating agency, “is uncertainty relating to reserving levels for U.S. casualty business written between 1997 and 2001.” However, Best said it “continues to believe that in 2004, any deterioration is likely to be outweighed by favourable performance from business written during the calendar year.”

In addition to affirming the “A” rating and “a” issuer credit ratings on Converium AG, Best also affirmed the ratings on its subsidiary companies as follows:
Issuer credit rating of “a” has been assigned for the following companies:
— Converium Rueckversicherung (Deutschland) AG
— Converium Reinsurance (North America) Inc.
— Converium Insurance (North America) Inc.
— Converium Insurance (UK) Ltd

An issuer credit rating of “bbb” has been assigned to — Converium Finance S.A.

The issuer credit rating has been downgraded to “bbb-“from “bbb” for –Converium Holdings (North America) Inc.

The following debt rating has been assigned:
Converium Finance S.A.– — “bbb+” to USD 200 million 8.25% guaranteed subordinated notes, due December 2032 (guaranteed by Converium Holding AG and Converium AG)

The following debt rating has been downgraded to “bbb-“from “bbb”:
Converium Holdings (North America) Inc.– — USD 200 million 7.125% unsubordinated senior notes, due October 2023 (originally issued by Zurich Reinsurance Centre Holdings, Inc and assumed by Converium Holdings (North America Inc.).

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