Best Affirms Rating for Infrassure Ltd.

May 23, 2005

A.M. Best Co. has affirmed the financial strength rating of B++ (very good) of Infrassure Ltd (Switzerland). The rating outlook remains positive.

The rating reflects Infrassure’s prospective excellent but potentially volatile earnings, change in reinsurance cover and adequate capitalization.

The rating reflects A.M. Best’s expectations of excellent but volatile earnings translating in a return of premium of approximately 25% in 2005, despite an anticipated deterioration of claims frequency which will be partially offset by the expected settlement of a previously reserved claim without payment. 2004 earnings were stronger with a return on premium of 75%, reflecting a low claims frequency and a significant reserve release for a non valid claim.

In A.M. Best’s opinion, Infrassure’s earnings will continue to be exposed to the volatility inherent in large engineering risks, which is likely to be exacerbated by the planned increase in net retention.

However, the company’s focus on smaller more diversified risks and prudent underwriting discipline is likely to limit the potential for any significant losses. A.M. Best expects the company’s risk-adjusted capitalization to remain supportive of the rating and anticipates further allocation to the equalization reserve from underwriting profit.

The current rating could be reviewed once Infrassure has shown sustainability of earnings.

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