Best Places Germany’s WUBA Ratings Under Review/Negative

July 10, 2006

A.M. Best Co. has placed the financial strength rating of “B++” (Very Good) and issuer credit rating of “bbb” of German insurer Wurttembergische und Badische Versicherungs-AG (WUBA) under review with negative implications.

“The rating actions follow the announcement of WUBA’s planned acquisition of DARAG Deutsche Versicherungs- und Ruckversicherungs-AG (DARAG), a German medium-sized commercial insurer, “said Best. However the rating agency also indicated that it “believes that the acquisition of DARAG would provide WUBA with a good strategic fit as both companies target similar client groups.”

Best said it would “evaluate the financing of the deal and its impact on WUBA’s risk-adjusted capitalization, as well as the prospective dividend policy following the closing of the transaction.” It will also hold discussions with WUBA’s management about how the company plans to integrate DARAG into the group, and hopes to resolve the under review as soon as possible.

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