A.M. Best Assigns B++ Rating to BEST-Re,Tunisia.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--April 12, 2000

A.M. Best Co. has assigned a financial strength rating of B++ (Very Good) to BEST-Re, Tunis, Tunisia.

The rating reflects the company's excellent capitalization, profitable underwriting, operating and financial

results and adequate balance sheet liquidity. The company has a conservative business strategy, focused on underwriting selectivity and earnings, supported by a prudent reserve position. Over the last three years, underwriting profit has increased steadily, the combined ratio has averaged 91% and financial performance has remained strong with good returns on equity and revenue. Capitalization measures are strong, particularly given the company's short-tail book of business concentrated in automobile and fire lines. Surplus funds--including contingency reserves--have risen to $36 million and are 1.8 times gross premiums written. In addition, share capital will be strengthened to $60 million in 2000 and $100 million by 2003.

The rating also reflects BEST-Re's image of reliability, quality underwriting and proximity to their client base acquired through stable relationships with over 300 primary insurers and brokers. Long-term relationships have been nurtured through frequent and direct contact with BEST-Re's underwriting team that provides tailor-made solutions beyond the reach of larger reinsurers.

As a small, regional reinsurer, the company derives competitive benefits from its dominant position in its niche market of the Maghreb region--Tunisia, Algeria and Morocco--and extended focus on Islamic markets such as Turkey, Malaysia and Indonesia. Furthermore, the company has successfully managed its net catastrophe exposure through prudent risk management strategies and adequate reinsurance protection provided by recognized global reinsurers.

Offsetting these factors are the company's limited worldwide market profile, operational size and capital base. BEST-Re, as a market follower, is susceptible to negative industry trends such as rate weakness and ceding companies' increased retention levels in a concentrated market. In addition, 1999 accounting year results will be negatively impacted by an increase in the frequency of large claims that include losses from the Turkish earthquake. The company is addressing these issues as part of a strategic development plan to be implemented by 2003. The main aspects of the plan include premium growth through geographic diversification, share capital increases and a planned partial-private equity issue. In 2000, the company will focus on building on its existing book of business and diversifying into primary lines of insurance.

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.