A.M. Best Affirms Rating for Mapfre Reinsurance Corp.

July 17, 2002

A.M. Best Co. has affirmed the A (Excellent) financial strength rating of U.S.- based Mapfre Reinsurance Corporation (MRC), Florham Park, N.J. The outlook is stable.

The affirmation reflects A.M. Best’s continued view of the company as being strategically important to its immediate parent, Spain-based Mapfre Re, Compania de Reaseguros, S.A. (A+ Superior), which, in turn, benefits from its core status to Mapfre Mutualidad de Seguros y Reaseguros (A+ Superior), the ultimate parent to the Mapfre Group, commercially known as Sistema Mapfre.

The rating also factors MRC’s increasing penetration in the U.S. market, the company’s experienced management team and maintenance of excellent capital via a net-worth maintenance agreement provided by Mapfre Re. In addition, the parent company provides an aggregate stop-loss agreement that mitigates MRC’s underwriting exposures. Adjusted capital and surplus increased marginally, after a $5 million contribution by Mapfre Re, to $102.5 million at year- end Dec. 31, 2001.

A.M. Best believes the current capital base is sufficient to support the company’s projected business growth over the short to medium term. No additional capital contributions are envisaged.

Offsetting these positive rating factors are the company’s limited track record and its relatively small size in a highly competitive U.S. reinsurance market.

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