Best Affirms West of England Ship Owners Club ‘A-‘ Ratings

October 18, 2006

A.M. Best Co. has affirmed the financial strength rating of “A-” (Excellent) and the issuer credit rating of “a-” of The West of England Ship Owners Mutual Insurance Association (Luxembourg) (WOE or the Club). The outlook for both ratings is stable.

“This action removes the under review status of the ratings, which was applied on 16 May 2006 to enable A.M. Best to assess the impact of actions the Club was expected to take to address its weakened risk-adjusted capitalization,” said the announcement.

Best said it believes the “Club’s decision to make additional calls on the 2004-2006 policy years and other actions planned in advance of the 2010 deadline for Solvency 2 are likely to be sufficient to maintain the Club’s risk-adjusted capitalization at an excellent level.

“The Club’s management has elected to raise its current level of free reserves of $132 million by calling its current release calls, set at 15 percent for the open policy years 2004, 2005 and 2006, as additional calls.” Best indicated that these “additional calls will increase free reserves by over $65 million at February 2007. The rating also factors the Club’s decision to make a further release call on the 2006 policy year of approximately $55 million by 2010, if required.”

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