Best Affirms FSR of Misr Insurance

October 14, 2005

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Misr Insurance Company (Misr) (Egypt). The outlook on both ratings remains stable.

The ratings reflect Misr’s good overall risk-adjusted capitalization, solid operating performance and leading business profile in the Egyptian market.

On a risk-adjusted basis, A.M. Best believes Misr’s capital position will remain supportive of the current rating although its exposure to unlisted equities and the concentration of its investments in Egypt impairs the quality of capitalization.

A.M. Best anticipates, at year-end June 2006, that the company’s combined ratio is likely to improve to approximately 85% following the increase to 110% forecast for 2005, which is mainly driven by the incurred losses from the Temsah natural gas platform fire in Egypt in August 2004. A.M. Best expects the life technical results to increase from the anticipated EGP 50 million (USD 8.7 million) in 2005 to approximately EGP 60 million (USD 10.4 million) at year-end June 2006, mainly driven by the surge in demand for life products in the Egyptian market. In A.M. Best’s opinion, Misr’s investment return at year-end June 2006 is likely to be the main contributor of the profit and expects it to be in line with the anticipated 13% in 2005 due to the high interest rate environment in Egypt.

A.M. Best believes that Misr will maintain its position as a prominent non-life and life insurer since the company is the leading insurer for many public sector companies. A.M. Best forecasts the company’s gross written premiums to continue increasing to approximately EGP 2.18 billion (USD 380 million) at year-end June 2006 from anticipated EGP 1.95 billion (USD 337 million) in 2005. A.M. Best believes that this growth is likely to be driven by aviation, energy, and life business.

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