A.M. Best Places Ratings of Winterthur Swiss' U.S. Subsidiaries Under Review.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--March 21, 2003

A.M. Best Co. has placed the financial strength ratings of A (Excellent) of certain U.S. based property/casualty insurance subsidiaries of Winterthur Swiss Insurance Company (WSIC) (Switzerland) under review with

These rating actions follow A.M. Best's decision to downgrade the financial strength rating to A (Excellent) from A+ (Superior) of WSIC and the placing of that rating under review with negative implications pending the completion of an ongoing evaluation of WSIC's financial position.

The under review status of these domestic insurers recognizes A.M. Best's continuing evaluation of the U.S. based insurance operations given WSIC's deterioration in consolidated risk-adjusted capitalization, decline in earnings in 2002 and the challenges posed by the current volatile financial markets. A.M. Best is continuing discussions with WSIC management relating to its capital requirements supporting the current business plan and intends to resolve the under review status for WSIC and its U.S. based property/casualty insurance subsidiaries on a timely basis.

Concurrent with these actions, A.M. Best has lowered the financial strength rating to A- (Excellent) from A (Excellent) of members of Republic Insurance Group (Dallas). This action reflects a recent deterioration in that insurance group's stand-alone risk adjusted capitalization caused primarily by realized capital losses that resulted from WSIC's decision to reduce overall equity holdings. Simultaneously, A.M. Best has placed the financial strength rating of this group under review with negative implications, pending completion of an evaluation of the group's current capitalization and business operations.

The financial strength rating of A- (Excellent) of the members of Southern Guaranty Insurance Group (Montgomery, AL) is not affected by these actions.

Further, A.M. Best is in the process of completing its due diligence on all of WSIC's U.S. based property/casualty insurance subsidiaries. The ratings assigned to the U.S. operating companies have historically reflected their stand-alone position as strategic investments of WSIC.

For a complete list of Winterthur Swiss Insurance Company's financial strength ratings, please visit http://www.ambest.com/press/032103winterthur.pdf.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.