S&P Downgrades Ratings of Trenwick Group

October 19, 2001

International ratings agency Standard & Poor’s announced that it has lowered its counterparty credit and financial strength ratings on “the core and strategically important operating companies of Trenwick Group Ltd. to single-‘A’-minus from single-‘A’-plus.”

The ratings change affects Trenwick America Reinsurance Corp., Trenwick International Ltd., Chartwell Insurance Co. (Lloyd’s), Insurance Corp. of NY, Dakota Specialty Insurance Co., and La Salle Re Ltd. S&P has removed them from CreditWatch, where they were placed last July 26.

S&P also lowered the counterparty credit rating of Trenwick Group Ltd. to triple-‘B’-minus from triple-‘B’-plus.”The ratings reflect weak operating performances at the core operating companies over the last few quarters, coupled with significant declines in capital adequacy following the second-quarter 2001 reserve strengthening and pro forma Sept. 11 losses,” said S&P. On October 4 Trenwick increased its overall net loss estimates from the attacks from $50-$75 million to $100 million.

Trenwick’s current outlook, according to S&P is stable. It observes that Group is well managed, and should be in a position to profit from hardening market conditions.

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