A.M. Best Assigns Rating to Western Isles Insurance Company Limited.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--April 7, 2004

A.M. Best Co. has assigned a financial strength rating of B++ (Very Good) to Western Isles Insurance Company Limited (WIICL) (Isle of Man). The rating outlook is stable.

The rating of WIICL reflects its

Stable risk-adjusted capitalisation--A.M. Best expects WIICL to continue to build up its capital from retained earnings in the near term. Although WIICL's risk-adjusted capitalisation is adequate, the absolute size of expected shareholders' funds (USD 6.2 million at year-end 2003) remains relatively low. WIICL has extensive retrocessional coverage and retains a small proportion of risks ceded from Soglasie (primary per risk retention of USD 200,000 for marine cargo and 1% of a hull quota share). However, "pay as paid" agreements with the parent company offset the counterparty credit risk.

Excellent underwriting performance--WIICL's excellent underwriting performance stems from its low retention levels and the absence of large claims in its marine cargo portfolio, which is exposed to high severity but low frequency losses. A.M. Best believes the company will continue to report low loss ratios (4% expected for 2003), although the final level of the loss ratio will depend upon the incidence of large claims.

Limited business profile--As a single parent captive, WIICL solely reinsures risks emanating from its parent company, and its portfolio consists mainly of marine cargo (shipping of non-ferrous metals) and marine hull (ships under construction). A.M. Best expects an increase in gross premiums to USD 15.5 million in 2003 mainly from a single USD 9.8 million contract under the marine hull cover. Marine cargo gross written premiums are expected to remain unchanged for 2003 at approximately USD 5.5 million.

For current Best's Ratings and independent data on the captive and alternative insurance market, please visit http://www3.ambest.com/captive/.

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.