Best Affirms FSR for Qatar General Insurance and Reinsurance Co. (S.A.Q.)

December 1, 2005

A.M. Best Co. has affirmed the financial strength rating of B++ (Very Good) and the issuer credit rating of “bbb” of Qatar General Insurance and Reinsurance Company (S.A.Q.) (QGIR) (Qatar). The outlook for both ratings remains stable.

The ratings reflect QGIR’s likely maintenance of strong risk-adjusted capitaliZation in 2005 and 2006, supported by a significant forecasted increase during 2005 in the company’s fair value investment reserves (market value less historic cost of the company’s investments) as a result of a rapidly rising domestic equity market. A.M. Best believes that the absolute level of capital and surplus will be sufficient to absorb the significant forecasted growth in net premiums written of approximately 55% in 2005, which will largely be the result of QGIR’s increased retention of gross premiums written.

A.M. Best expects that there will be an improvement in the company’s combined ratio in 2005 to between 75%-80%. This will be driven by an improvement in the loss ratio resulting from a relatively benign claims environment for QGIR during the year, while the combined ratio in 2006 will likely revert to around 85%, which is consistent with a more normalised loss experience.

A.M Best anticipates QGIR will maintain its very good business position in Qatar, with approximately a 30% share of the market during 2005 and 2006. In the medium term, however, the company’s business position may come under pressure from increased competition in the domestic market as Qatar opens up to other Gulf Cooperation Council (GCC) companies.

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