Best Affirms FSR for United Insurance Co.

August 8, 2005

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of United Insurance Company Limited (Bridgetown, Barbados). The rating outlook is stable.

The rating reflects United’s solid capitalization on a risk-adjusted basis, consistently favorable underwriting performance, strong market profile and conservative reinsurance protection. United is a Barbados-based multi-island insurer of personal and small commercial lines throughout the Caribbean. Prudent underwriting strategies along with conservative risk management have resulted in consistent underwriting profit over the past several years.

United’s conservative selection of risks and comprehensive reinsurance programs have protected its capital from catastrophe losses prevalent in the region. Despite record hurricane activity in 2004 resulting in incurred gross losses due to Hurricane Ivan totaling Bds$25 million, United managed to post strong earnings for the year due to the favorable performance of its motor lines of business and investment portfolio as well as release of reserves from its captive reinsurer.

Partially offsetting these positive factors are United’s continued exposure to catastrophic events and the competitive market conditions in the Caribbean. Hurricane activity in the region has become more frequent in recent years and presents substantial risk exposure to the company and other insurers in the region. Catastrophe risk is mitigated, however, by United’s extensive reinsurance program.

Furthermore, United operates in a challenging Caribbean insurance market, which has become increasingly competitive as indigenous insurers expand to new territories challenging established companies to maintain market share.

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